Refresh: My 6 year journey from -5 figures to +5 figures (it was 4 years, but I messed up)

ellipticalorbit

Coffeekup said:

Hi welcome to the forums and congrats on your LBM. That's some big numbers you have there fortunately you have an income most can only dream of. I'll note things that have flagged up to my eye's.

Your mobile ...which you've addressed.
Buildings and contents...appears way high especially as you split the bill's with your partner.
Credit score is meaningless it's your history that the lenders look at, lenders don't see your score.

You said in a post you have some other things that come out of your account could be cancelled or cut back on. Personally i would post a full SOA, then others could give you better/more accurate advice/information on what to do moving forward, the picture becomes clearer once things are written down. 

Is your husband a big earner? Is he aware of your debts? Does he have any debts? Does he have any savings? If so could he do an interest free loan to help pay reduce one of the debts or even pay one off?

3-4 years may seem like a long while but it'll soon pass, it took me 7 years to pay my debts off although not as big as yours I earned far less, setting "mini goals" helped me.
I'll presume your paying the minimum payments on all c.cards (never a good thing).
I'd up all minimum payments to the nearest £50 in your case...

Description...............Debt.....Monthly...... New set monthly payment (through direct debit)

Credit Card 1..............12864.....384.......£400

Credit Card 2......................4830.....136.......£150

Credit Card 3...................11987......321.......£350

Credit Card 6....................7484.......187.......£200

Credit Card 5....................9922.......278.......£300

Credit Card 4....................4946.......132.......£150
The "mini goals" to help keep me motivated, would be throw any spare cash at c.c.2 once that's paid off, put £100 extra on to the highest Interest debt (c.c.1 in this case), and use the extra £36-50 to nail down the next mini goal (which for me would be) c.c.4. Once this has gone re assess what you owe and set yourself another mini goal. (I'd also do another soft search for 0% transfers by this time)
Granted doing the above you may pay a bit more interest over the next 3-4 year's, but in the grand scheme of things it'll be minimal and help keep you focused and reduce the stress.

Having different pots for future outgoings/expenditures helped me (and still do)...i.e. holiday's/car/breakdowns/Xmas and birthdays/emergency fund and in your case maybe a pot for next year's taxes?.

I wish you the best of luck and don't stray, hope to see u in the mortgage free wannabe forum soon.

Hi Coffeekup, thanks so much for your advice - there are lots of really helpful points in your post.

I'm incredibly grateful I've got the income I do as without this I think I'd be drowning, however conversely I think had I not had this income I wouldn't have allowed myself to rack up such a high number in the first place. You live and learn.

You're right my building and contents insurance is extortionate, and I've been thinking about this too. I need to explore how I can reduce it. It's so high for several reasons - I've got high value contents insurance as I have some pretty expensive pieces of art which need that level of cover and quite a bit of expensive jewellery, handbags etc covered by the policy - although I'm planning to sell a lot of the bags so this should in theory reduce the level of contents needed a little. I've also got cover for my belongings while out and about. And finally I've got legal cover added to my policy, which I'm keen to keep in place. I was thinking maybe I just half the amount of contents cover I have - if we ever needed to claim and start from scratch I'm pretty sure I'd make different life decisions now anyway as I've seen the light of a more minimal way of living.

I've cancelled the other things that came out my account - Experian, National Lottery and I'd previously cancelled all other subscriptions I had, like Microsoft. I genuinely think the SOA now covers everything but I'll go through my statement to double check and repost if I find anything else I haven't accounted for.

My husband earns a decent salary but he wouldn't say he's a big earner - he earns around £45k. He is aware of the full extend of my debts and has been very supportive - I've made it very clear it's my problem to fix but I do use his council while I've been considering the best way to tackle it and plan for clearing it. He is now debt free completely - he recently cleared his own credit card balance, which is a massive accomplishment for him as it's something that was weighing over him for longer than we'd have liked. He does have a savings pot which we won't touch - this is a non-negotiable for us as this is his safety net if he ever lost his job and if I ever lost mine we would absolutely need to tap into it (until I build up my own small pot next year). He could probably do an interest free loan, and honestly it has crossed my mind. If he offered I'd do it in a heartbeat but I really can't ask him to do that for me. I know it will seem stupid but I just feel it's too much to ask even though I'd be the one paying it - our Hire Purchase agreement for my car is in his name (this is the main family car) and a loan on top in his name feels too much, at least just now.

I like your suggestion of "mini goals" - really good idea. I was paying the minimum payments on all credit cards, but I've now changed to a fixed amount each month which is the maximum I can afford at least for the next year. I should be able to increase this though by spring 2022. Great idea about having different pots too - I do have a few savings accounts for different purposes, but to be honest I don't really use them for that at all as if I have anything set aside I tend to just chuck it in my investment ISA. I think learning to use these would be a good discipline for me to get into. Everything I have spare this year has and is being chucked in the tax pot with a plan to clear it and thankfully they're my last tax bills which is why from 2022 I should be able to up the ante on clearing the debt faster.

Thanks for the encouragement - will defo be in the mortgage free wanna be forum soon as I get the debt cleared!

ellipticalorbit

Coffeekup said:

Hi welcome to the forums and congrats on your LBM. That's some big numbers you have there fortunately you have an income most can only dream of. I'll note things that have flagged up to my eye's.

Your mobile ...which you've addressed.
Buildings and contents...appears way high especially as you split the bill's with your partner.
Credit score is meaningless it's your history that the lenders look at, lenders don't see your score.

You said in a post you have some other things that come out of your account could be cancelled or cut back on. Personally i would post a full SOA, then others could give you better/more accurate advice/information on what to do moving forward, the picture becomes clearer once things are written down. 

Is your husband a big earner? Is he aware of your debts? Does he have any debts? Does he have any savings? If so could he do an interest free loan to help pay reduce one of the debts or even pay one off?

3-4 years may seem like a long while but it'll soon pass, it took me 7 years to pay my debts off although not as big as yours I earned far less, setting "mini goals" helped me.
I'll presume your paying the minimum payments on all c.cards (never a good thing).
I'd up all minimum payments to the nearest £50 in your case...

Description...............Debt.....Monthly...... New set monthly payment (through direct debit)

Credit Card 1..............12864.....384.......£400

Credit Card 2......................4830.....136.......£150

Credit Card 3...................11987......321.......£350

Credit Card 6....................7484.......187.......£200

Credit Card 5....................9922.......278.......£300

Credit Card 4....................4946.......132.......£150
The "mini goals" to help keep me motivated, would be throw any spare cash at c.c.2 once that's paid off, put £100 extra on to the highest Interest debt (c.c.1 in this case), and use the extra £36-50 to nail down the next mini goal (which for me would be) c.c.4. Once this has gone re assess what you owe and set yourself another mini goal. (I'd also do another soft search for 0% transfers by this time)
Granted doing the above you may pay a bit more interest over the next 3-4 year's, but in the grand scheme of things it'll be minimal and help keep you focused and reduce the stress.

Having different pots for future outgoings/expenditures helped me (and still do)...i.e. holiday's/car/breakdowns/Xmas and birthdays/emergency fund and in your case maybe a pot for next year's taxes?.

I wish you the best of luck and don't stray, hope to see u in the mortgage free wannabe forum soon.

Okay, bit of an update since this morning. I've swallowed my pride and asked Mr Elliptical if moving one of the debts to 0% in his name would be a palatable option. He's completely open to it and thinks it's a good idea to move a debt to a 0% card in his name, he'll pay it off monthly in full during the zero % period and I'll pay the equivalent monthly amount into our household bills each month to keep things balanced between us. Amazing! I'm glad you made the point as I wouldn't have asked otherwise.

We're trying to sort the house out today as suspect labour may be imminent (although it could just be Braxton Hicks) but we've agreed we'll look at the figures and offers tomorrow together. I feel like there is more light at the end of the tunnel. Hopefully this will shave off at least £100-200 of interest I'm paying a month just now and have the upside of reducing my credit utilisation, which will positively impact my credit report and hopefully help get another 0% offer sooner. Feels like progress.

elbree

That's amazing and could be a massive saving for you in interest, both in your monthly cash available and long term. Well done! Good luck if the twinges turn out to be the real thing! 

dawnybabes

That’s a brilliant idea 😀

ellipticalorbit

Just a small update this evening. We've made some progress today...
The good: My other half has applied for a card to help me do the balance transfer to 0%. We're just waiting for the email confirmation to see what credit limit he's been offered, assuming he is approved. I don't rationally see any reason why he wouldn't be approved - he has no debt and a good credit report and rating, but he does have 2 credit cards with £0 balances so I guess there is every possibility he may not be offered a new card. I guess I'm now used to there being nothing available for me personally.

I've also managed to get approved for a £5k loan just now, which if I'm honest has an extremely high APR, however the APR is lower than two of my credit card APRs so I figured using the loan to pay off the balance of one means slightly less interest over the same time period (only marginal) but will help me clear a card completely and means I won't keep spending on it. I have a much better track record with loans as you can't keep spending the same money and they are paid off so plan is to pay one card off completely once the money lands in the account and cut up the associated card once it is paid off so it is dead to me. In my head I figured that reducing credit with set payment terms will look better on my credit report than revolving credit with no set reduction plan. I guess I'm hoping that between this and if I can move something to 0% then it'll all help reduce my utilisation and in time open up some 0% offers which I can use to help reduce the interest and clear the balances faster. That is if I can stay in control... see the bad and the ugly below....

The bad and the ugly: I had a bit of a slip up this morning. I needed to get a couple gifts which I've been putting off and as money is tight this year with next to no buffer, I gave in and charged them to the credit card. I also bought a pair of leggings for postpartum comfort and something for the baby on the credit card. So the good saving I put in this month on that card to reduce the balance a small amount has been demolished. I feel unbelievably guilty about it. I'm so upset with myself and can't believe I've done that after fully realising the extend of the damage I'm doing through this behaviour. I need help. I have a problem.

How do you cease bad habits? Genuinely interested in what has worked for others who previously shopped as they wished. It's a slippery slope and I want to move forwards and upwards not backwards and downwards.

elbree

Is that a new baby @ellipticalorbit? If so, congrats! It IS hard when you've spent something you feel you shouldn't  but I think you're being a bit too harsh on yourself right now. You needed the gifts, right? So that was planned. The leggings I would imagine are almost vital and something for the baby a treat. If you've just given birth you deserve a bloody gold medal so one small gift isn't the end of the world. A wise friend once told me that in his business (massive financial company) they never wring their hands over money already spent, whether they *"#£_& it up or not. It's gone and can't be changed. However, you do need to make steps to stop yourself having to do this next time. You know when gifts will be needed so start a fund for the next occasion right now. Even if you put in a few pounds a week it will soon add up. Think about what you're going to need for you and the kids in the next 3 months as well, start a new pot for that. Then you can look forward to buying things guilt free and won't touch the cards. Once you've started shopping on the card it's all too easy to add more items to the basket! One tiny slide is no avalanche so forget about it and move on. 

ellipticalorbit

elbree said:

Is that a new baby @ellipticalorbit? If so, congrats! It IS hard when you've spent something you feel you shouldn't  but I think you're being a bit too harsh on yourself right now. You needed the gifts, right? So that was planned. The leggings I would imagine are almost vital and something for the baby a treat. If you've just given birth you deserve a bloody gold medal so one small gift isn't the end of the world. A wise friend once told me that in his business (massive financial company) they never wring their hands over money already spent, whether they *"#£_& it up or not. It's gone and can't be changed. However, you do need to make steps to stop yourself having to do this next time. You know when gifts will be needed so start a fund for the next occasion right now. Even if you put in a few pounds a week it will soon add up. Think about what you're going to need for you and the kids in the next 3 months as well, start a new pot for that. Then you can look forward to buying things guilt free and won't touch the cards. Once you've started shopping on the card it's all too easy to add more items to the basket! One tiny slide is no avalanche so forget about it and move on. 

Thanks Elbree, really appreciate the wise words and the reply this evening - you've really helped me stop beating myself up about it quite so much. The baby is due this month, not here quite yet although I think it's only a matter of days at this point - I was just getting a little ahead of myself thinking something comfy postpartum would be a good idea given how uncomfortable everything feels at this point in pregnancy. You're right, the gifts were both needed (birthday presents for my two best friends - they'd already spent money on me before I had a chance to suggest we skip gifts this year so I really did feel a need to reciprocate for them, I will however try my upmost to enforce no gifting next year given every penny saved can be thrown at reducing the balance). The baby thing was just something super cute which had been on the radar for a few months. I'll stop fretting about the money spent but I do need to figure out how to survive this year without resorting to using a card here or there. I guess I need to get the right balance of a pot for known additional costs like gifts and the baby, rather than throwing them on a card when I run out of money. I guess I've got some more budgeting to do tomorrow for life costs as opposed to just regular bills and expenses.

On another note, I've also enquired today to get a painting I own valued as it's something I've been thinking about for years and it doesn't feel sensible to have expensive artwork hanging on the walls when it's not something I would choose to invest in myself now and costs a lot to insure. A decision to sell it would be a longer term one than for the purposes of helping reduce the debt, but depending on the valuation, it may well help a good way towards it - that is, if it sells. Not a quick win as these things take time but it's the first step. I think it's also time I started listing some of the other things I have sitting idle for sale - a plethora of handbags which I no longer use - as those sales would massively help. Feels like tomorrow will be a new day, and hopefully a more productive one!

Scott_Weiland79

My five penneth re the SOA  i agree with alot thats being said, re experian and equifax bin it use Clear Score and Credit Karma i work for a bank and its who i use.

Next is this Pet insurance/vet bills............... 50 bin it,

pet insurance companies are ridiculous alot have a silly excess and if you do have to claim you will find your premiums will rocket. As i said i work for a bank and have lost count the number of times i have had clients that have being screwed over after years of paying into a policy. I have a friend with dogs who lost 2500 because they wouldnt pay out when her dog needed surgery because my mate had missed out the dogs annual booster jab. My advice open a savings account and put 40-50 a month into a savings account. That way if anything happens you have the money there.

Or if your adament you wanna to keep the insurance policy get on top cashback and try and find a cheaper policy. I speak from 18 years working for a bank and they are next on my pet hate list after payday loan companies.

elbree

That's a good idea @Scott_Weiland79 a friend of mine puts her 'pet insurance' money in a Moneybox (app that invests it for you) when her dog got so old it was going to cost £100 a month! She now has a couple of grand in there + interest. She might need to spend it - in which case it's there - if not she hasn't wasted it. 

elbree

ellipticalorbit said:

elbree said:

Is that a new baby @ellipticalorbit? If so, congrats! It IS hard when you've spent something you feel you shouldn't  but I think you're being a bit too harsh on yourself right now. You needed the gifts, right? So that was planned. The leggings I would imagine are almost vital and something for the baby a treat. If you've just given birth you deserve a bloody gold medal so one small gift isn't the end of the world. A wise friend once told me that in his business (massive financial company) they never wring their hands over money already spent, whether they *"#£_& it up or not. It's gone and can't be changed. However, you do need to make steps to stop yourself having to do this next time. You know when gifts will be needed so start a fund for the next occasion right now. Even if you put in a few pounds a week it will soon add up. Think about what you're going to need for you and the kids in the next 3 months as well, start a new pot for that. Then you can look forward to buying things guilt free and won't touch the cards. Once you've started shopping on the card it's all too easy to add more items to the basket! One tiny slide is no avalanche so forget about it and move on. 

Thanks Elbree, really appreciate the wise words and the reply this evening - you've really helped me stop beating myself up about it quite so much. The baby is due this month, not here quite yet although I think it's only a matter of days at this point - I was just getting a little ahead of myself thinking something comfy postpartum would be a good idea given how uncomfortable everything feels at this point in pregnancy. You're right, the gifts were both needed (birthday presents for my two best friends - they'd already spent money on me before I had a chance to suggest we skip gifts this year so I really did feel a need to reciprocate for them, I will however try my upmost to enforce no gifting next year given every penny saved can be thrown at reducing the balance). The baby thing was just something super cute which had been on the radar for a few months. I'll stop fretting about the money spent but I do need to figure out how to survive this year without resorting to using a card here or there. I guess I need to get the right balance of a pot for known additional costs like gifts and the baby, rather than throwing them on a card when I run out of money. I guess I've got some more budgeting to do tomorrow for life costs as opposed to just regular bills and expenses.

On another note, I've also enquired today to get a painting I own valued as it's something I've been thinking about for years and it doesn't feel sensible to have expensive artwork hanging on the walls when it's not something I would choose to invest in myself now and costs a lot to insure. A decision to sell it would be a longer term one than for the purposes of helping reduce the debt, but depending on the valuation, it may well help a good way towards it - that is, if it sells. Not a quick win as these things take time but it's the first step. I think it's also time I started listing some of the other things I have sitting idle for sale - a plethora of handbags which I no longer use - as those sales would massively help. Feels like tomorrow will be a new day, and hopefully a more productive one!

Great idea on getting the painting valued and maybe selling some handbags etc. Stuff can weigh you down when you're trying to pay back debt. It just represents a big pile of cash you wish you had! Don't go too mad and regret it though...make a 'maybe' pile and come back to review later.