The way forward....

in Debt free diaries
68 replies 3.5K views
Hi,
So I have been reading through these diaries for the past couple of years whilst managing my own debts along the way. Then middle of last year with more time to think due to lockdown I finally had my light bulb moment.
So how do things stand. Well I am married with a young daughter at school, both of us are in full time work and thankfully bring home good wages (circa 60k between us) per year.... but..... we still have little money left each month. Debts currently amount to £47000 mainly on credit cards and a couple of loans. Payments are made each month and they have finally started to go down slowly thanks to tips I have picked up along the way using these diaries.
The problem I have is that in 2 years time I will be out of work (my contract expires with no chance of renewal) but I get a big payoff from the company I work for. That means I have 2 years to clear my debts and is now the challenge I am setting myself...... the question is....... does anyone think it is actually possible for me to achieve this.
Most of my debts are on higher interest cards although I am slowly getting offers for interest free cards starting which will help me a lot. Thanks everyone.

Current debt paid (03/06/21) - £7900/£55500 - 14.23% paid since January 2020
2022 Pay Off 10k debt challenge - £0/£10000 - 0% paid
Emergency Fund / Savings - £621
Pension savings - £365,600
Share Holdings - £2279.02
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Replies

  • PaydaypayitbackPaydaypayitback Forumite
    39 Posts
    10 Posts First Anniversary
    Forumite
    So my day has been productive and I have made a great start on my debt busting plan. I have created an excel spreadsheet and put all my income and expenditure on there accounting for every penny. I have added up the total owed and it is 47883.
    I have minimal saving so I plan to get a small amount put to one side and then I have decided to use the avalanche method of paying my debts.
    My highest APR card is an extortionate 39.9% with 2600 outstanding on it - that will be my main aim to clear whilst paying minimum payments to the others.
    Is this a good idea / plan to follow?
    Current debt paid (03/06/21) - £7900/£55500 - 14.23% paid since January 2020
    2022 Pay Off 10k debt challenge - £0/£10000 - 0% paid
    Emergency Fund / Savings - £621
    Pension savings - £365,600
    Share Holdings - £2279.02
  • PaydaypayitbackPaydaypayitback Forumite
    39 Posts
    10 Posts First Anniversary
    Forumite
    My debt busting plan already hasn't got off to the best of starts. This morning my washing machine decided to make a loud banging noise and misty smoke started to come out of the door when I opened it. I switched it off and left it for a bit and strangely it now seems to be working fine. It had a rubber burning smell which also disappeared fairly quickly. Anyone have any ideas what it could have been? I will monitor it over the weekend and may have to resort to getting it repaired or possibly buying a new one. I could do without buying a new one as I will have to use one of my credit cards as I don't currently have the savings put to one side to cover it.... arrrggghhhh..... there is always something
    On more positive news I set up a 'save the pennies' setting on my bank account a while ago and the account it goes into now has £12.94 in it with 6p going in this morning..... pennies make pounds as they say.
    I have spent quite a lot of time looking at areas I can reduce spending and I think I have now got to the point where I have reduced everything as much as I possibly can. We have started making shopping list whenever we go shopping instead of just putting things in the trolley as we go around and I have done a complete overhaul of all our monthly subscriptions. We still allow ourselves some small luxuries such as Netflix otherwise I think we may just go mad...... 
    Current debt paid (03/06/21) - £7900/£55500 - 14.23% paid since January 2020
    2022 Pay Off 10k debt challenge - £0/£10000 - 0% paid
    Emergency Fund / Savings - £621
    Pension savings - £365,600
    Share Holdings - £2279.02
  • PaydaypayitbackPaydaypayitback Forumite
    39 Posts
    10 Posts First Anniversary
    Forumite
    So today has been a no spend day and I have received 17p back from my debit card as I receive a percentage back every time I spend on it. The 17p has now been credited to my save the change fund which now stands at £13.11 
    I have arranged for an engineer to come and look at my washing machine but they can't do this until Monday afternoon. Hopefully repair bill won't be too much - the old me would have just gone out and bought a brand new wachine machine so feeling positive about the debt busting new me.
    Current debt paid (03/06/21) - £7900/£55500 - 14.23% paid since January 2020
    2022 Pay Off 10k debt challenge - £0/£10000 - 0% paid
    Emergency Fund / Savings - £621
    Pension savings - £365,600
    Share Holdings - £2279.02
  • PaydaypayitbackPaydaypayitback Forumite
    39 Posts
    10 Posts First Anniversary
    Forumite
    Well today hasn't been too bad. Done our weekly shopping today and it came in under budget to what we expected so thats a win. 
    So we ended up getting a new washing machine which I got cheap from a friend for the bargain price of £70.... I see this as a massive win as I was expecting to be paying £200-300 for a new one. I know its £70 I unexpectedly had to spend but hopefully things like this will be covered by my emergency fund once I have saved enough into it. So tonight will be a free no spends movie night..... things are looking up.
    Current debt paid (03/06/21) - £7900/£55500 - 14.23% paid since January 2020
    2022 Pay Off 10k debt challenge - £0/£10000 - 0% paid
    Emergency Fund / Savings - £621
    Pension savings - £365,600
    Share Holdings - £2279.02
  • anjyeahanjyeah Forumite
    240 Posts
    100 Posts First Anniversary Photogenic Name Dropper
    Forumite
    As they say, it starts  with a lightbulb moment and then a challenge. I have been lurking myself before I decided to create an account here, it really does motivate you and I make it a habit now to check in. 
    I think starting with the card with the most interest is a good idea unless you can transfer that one on a card with 0%. But I'm no expert lol 

    Good luck! 
    My Debt Free Diary: Virgo In Pursuit
    Debt-Busting Progress: 2020: £13,200 | 2020: £9,200 | 2021: £4,900 
    2022: ongoing 
  • BadBookkeeperBadBookkeeper Forumite
    640 Posts
    Fifth Anniversary 500 Posts Name Dropper
    Forumite
    Good luck on your journey.

    Keep a spending diary and aim
    for some no spend days, have a look at the challenges, I’m part of a payment a day, 365 1p a day, NST 15 for February.  There are a few different ones I find it keeps the momentum going in between pay days! 
    Lightbulb moment - 17/08/2017 £17,033.  Current CC debt £6900 DFD 24/12/2024 23 months to go…. 100 weeks! 

  • PaydaypayitbackPaydaypayitback Forumite
    39 Posts
    10 Posts First Anniversary
    Forumite
    Thanks Anjyeah and Badbookkeeper I appreciate your comments. I am slowly paying off my debt, trying to increase my credit score which will hopefully mean I can transfer some of the debt to interest free offers. And Badbookkeeper I certainly agree that the momento is needed to be kept going between paydays. I find I get to the 10th of the month and I am counting the days to the next payday. Lol 
    Current debt paid (03/06/21) - £7900/£55500 - 14.23% paid since January 2020
    2022 Pay Off 10k debt challenge - £0/£10000 - 0% paid
    Emergency Fund / Savings - £621
    Pension savings - £365,600
    Share Holdings - £2279.02
  • PaydaypayitbackPaydaypayitback Forumite
    39 Posts
    10 Posts First Anniversary
    Forumite
    Well the start of another week and with the exception of the washing machine saga a fairly good debt busting weekend. Couple of minimum payments made on a couple of credit cards which reduce the balance slightly. Still paying interest on these two but at lease the balances are going in the right direction. Food shopping budget came in lower than expected and I also stayed within my petrol budget so all looking positive there. I have got a confession that we did have a takeaway on Friday BUT this was budgeted for in our weekly spends and was the first one we have had for quite a while. We have decided that whilst throwing whatever we can at the debt we still need to have the little rewards every now and again as long as I can cover them in my budgets - it certainly won't become an habit.
    Another 16p was transferred into my Save the Pennies account this morning with the balance now at £13.27. The rest of this month is going to be fairly quite so hopefully I can achieve a few NSDs and remain on target with my monthly budget. I know its bad to say and I don't like to wish time away but...... roll on payday. I get paid monthly and I love to see all my debt balances reduce after each payday and I must admit this debt busting has definitely got me hooked and I am determined to clear them ASAP. 
    Current debt paid (03/06/21) - £7900/£55500 - 14.23% paid since January 2020
    2022 Pay Off 10k debt challenge - £0/£10000 - 0% paid
    Emergency Fund / Savings - £621
    Pension savings - £365,600
    Share Holdings - £2279.02
  • PaydaypayitbackPaydaypayitback Forumite
    39 Posts
    10 Posts First Anniversary
    Forumite
    Hi Everyone. Today has been a pretty productive day. Not a NSD as I would have liked as I had to buy some milk but this will be out of weekly grocery spends and is budgeted for.
    I have been promoted on the forums it would appear and I can now add a signature so I spent a while working out how to do this. My debt reached a peak of £55000 in January 2020 but amazingly it took me another 10 months after this to have my light bulb moment. Since January 2010 I have managed to bring the debt down by just over 7k whilst not really trying to do so but now I am 100% focused on this debt busting and am throwing everything i can and have at getting that figure to 100% paid..... wish me luck....
    Current debt paid (03/06/21) - £7900/£55500 - 14.23% paid since January 2020
    2022 Pay Off 10k debt challenge - £0/£10000 - 0% paid
    Emergency Fund / Savings - £621
    Pension savings - £365,600
    Share Holdings - £2279.02
  • SarahwithloveSarahwithlove Forumite
    2K Posts
    1,000 Posts Fourth Anniversary Name Dropper
    Forumite
    Well done for having your light bulb moment it's such a great feeling when you start to see the debt go down. I would definitely pay off the highest interest ones first. Try and get balance transfer if you can but you will find that as you pay more debt off you will get more offers. 
    Have you had a look at your budget to see where you can cut back? What about phone contracts? TV? Are any insurances due for renewal soon? Maybe post a budget for people to give you some advise on? It's up to you but it will allow us to make some suggestions. Good luck. 
    *RBS credit card - £1930.50* - £0.00
    *Tesco Credit card - £3604.30* - £0.00
    *Finance - £581.91 - £0.00
    *Dad loan - £5300 - £3800
    *M+S Credit Card - £0
    *MBNA Credit Card - £1211.88 - £0
    *Virgin Credit Card - £3075 - £0
    *Total debt - £3800*
    *Sinking/Emergency Fund - £2250/£5000*
    *Mortgage Overpayment - £46.90/£1000*
    Premium Bonds - £100/£1000
    Facing Reality - My Debt Free Diary
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