Debt and Budget (Reset) plan

EssexHebridean

Absolutely the right thing to do - while a low life-of-balance rate is great, it is AWAYS trumped by 0%, especially if the 0% is likely to be long enough to get the debt mostly clear, or better still, entirely cleared! well done! 

shell16

EssexHebridean said:

Absolutely the right thing to do - while a low life-of-balance rate is great, it is AWAYS trumped by 0%, especially if the 0% is likely to be long enough to get the debt mostly clear, or better still, entirely cleared! well done! 

Thanks @EssexHebridean

The Interest applied out of £100 Payment was £19.15 on balance of 25.5% and £13.83 on balance of 3.9%.  I just thought why on earth am I paying this only for a similar amount of interest applying on the bigger balance!

It was a bonus with no fee too, Ive never had a card with a no fee transfer....ever!  So im taking this as a double win!

shell16

Wow its Friday again!  Been one heck of a week, lots going on at work, lots of online meetings!

On the debt busting front, I have already mentioned this in a previous post but have applied and have been accepted on a 0% interest for 21 months and nil fee credit card.  I was really disappointed with the interest I was paying on my Lloyds card with it having 2 interest rates.  I was fully aware my payments would be heading to the higher interest rate first but to see a very similar amount of interest applied to the lower interest rate with the higher balance just made my gut sink!

I think this year is going to be difficult enough with the energy crisis and spiralling payments Martin has been talking about.  So I want to ensure payments which I make are actually going to make a good enough dent into the amount I owe. So I think the following will apply once everything gets transferred over:

Virgin 0% until Sept 22 with £888 owing, payments set to clear balance within timeframe
Lloyds 3.9% until April 24 with £3120 owing
Sainsbury's 0% until (I think) Sept 23 with £2300 owing
Lloyds Loan will clear by Dec 22

I will look into what my minimum payment is on new CC when I get it and then work on a plan of action to get this debt gone in the shortest timeframe possible.

Here are my figures from the last 7 days 

Total at LBM August 2021 - £14370.70
Virgin CC1 - £2641.94/£888 (66.4% reduction)
a) 26.55% - £495 Paid off 04/10/21 
b) 0% - £2146.94 now £888
Lloyds CC2 - £5727.43/£5417.91 (5.3% reduction)
a) 25.55% - £1178.62 now £855.27
b) 3.9% - £4548.81 now £4562.64 (0.3% Increase)
Loan - £6001.33/£4172.77 (30.5%  reduction)

Total = £10478.68 paid £3892.02 off debt)
27% Reduction since LBM
DFD - October 2023
PAD Started 06/10/21 - £744.22 Extra paid off Debt

08/2021 Starting Debt Total - £14370.70
2022 Starting Debt Total - £10752.40

To summarise:

• I have paid £134.59 in PAD payments over last 7 days
• Overall reduction in debt by 1%
• £273.72 debt cleared this year

That's about all for now, have a great weekend everyone!

EssexHebridean

Suggestion - once the earliest 0% is cleared, divert everything in terms of overpayments to the low interest rate card  in spite of the new 0% ending sooner - it’s highly unlikely you’ll not get another 0% when you need one, as by that stage your credit file should be even healthier than it is now. (I suspect there may not be a huge amount of debt to transfer by that time anyway! )

shell16

Morning and Happy Friday!  Its been one of those weeks already!!

An update on the last week of debt busting.  I now have my new Sainsburys CC and the transfer has gone through, totals below are as of now, and I have now got a fair chunk of CC debt onto 0%.  My Lloyds card balance is now sat on 3.9% interest so I would like to get that balance down this year.  I'm just waiting for confirmation as to the minimum payment on my new CC so I can add that to my handy little app, add in any over payment for the month and hope my DF date will move forwards!

It was payday for me and OH this week so Loan payment has gone out and has broken the next thousand barrier, which I'm happy about.  Visually looks better and so motivating.  When my Virgin and Lloyds payments come out first week of February, my total debt will drop below £10K.  Really happy with the progress so far.  I've had wobbles on my journey, its not all been plain sailing, and as the saying goes, its a marathon not a sprint!  That's certainly right, but I'm so happy with my progress so far.  During 2022, my Virgin and Loan payments will finish, I'm also hoping my Lloyds balance will have reduced significantly.  Anything left on my Sainsbury CC (0% until October 2023) will roll over into next year and I can then start to tackle that balance. 

Budget wise, I'm doing ok although last month was a write off on the Grocery front in view we had to cancel our plans away due to covid in my family.  Plus one of our cars failed its MOT and needed 4 new tyres and something else technical which came to £290 including fee for MOT.  I have moved on from that, totalled up over budget, but I am starting this pay on a clean slate.

We have another car due its MOT on 5th February and that needs 2 new tyres too!  I have budgeted for this though so I will still be ending the month on a hopefully positive note!

Birthdays galore in our family this pay period.  I have 2 birthdays end of January including a meal out with my sisters and mum and dad, 2 in February (1 is mine, other my youngest daughter).  I have booked a long weekend away in our motorhome in February to the seaside, its all planned budgeting and is fully paid for too.  Usually would just book and take no notice if we could actually afford it!  Going to the cinema and bowling for DD birthday whilst away and a meal out for my birthday. I'm looking forward to that due to having to cancel our plans during Christmas and New year.  

Here are my figures

Total at LBM August 2021 - £14370.70
Virgin CC1 - 0% - £2641.94/£888 (66.4% reduction)
Lloyds CC2 - 3.9% - £3096.63/£3095.15
Sainsburys CC3 - 0% - £2300
Loan - £6001.33/£3802.71 (36.6%  reduction)
Total = £10085.86 paid £4284.84 off debt)
30% Reduction since LBM
DFD - October 2023
PAD Started 06/10/21 - £766.98 Extra paid off Debt
08/2021 Starting Debt Total - £14370.70
2022 Starting Debt Total - £10752.40

 To summarise:

• More debt moved to 0%
• Paid £392.82 from debt total this week
• Debt reduction increased by 3%

Thats about all for now until my next update.  Have a great weekend!

shell16

Afternoon, cant believe its Monday already!

An Update on Debt..  I have transferred £500 to an overdraft on my OH account which I didn't know about.  Apparently its been sat there for a while and OH didn't think the overdraft charge was 'Too Bad' until I explained a few pounds here and there charge wise really mount - The interest is sky high, plus the bank can call this in at any time!   I have transferred to my Virgin CC, have 0% agreed until end of Jan 2023.  So instead of having this set to clear by Sept 2022, it will now clear Jan 2023.

I have also been waiting for my Sainsburys CC statement to confirm what my minimum payments will be as I wanted to tackle my Lloyds CC with the low interest rate as other 2 on 0%.  My DFD will very much likely go into 2024 but only by 2 or 3 months.

I have decided to allocate the following:

Virgin - £1408 Balance - 0% until 31/01/23 
12 x £117, then will be clear (Feb 2022 to Jan 2023)

Lloyds - £3095 Balance - 3.9% until 30/04/24
12 x £114 = £1368 (Feb 2022 to Jan 2023)
10 x £172.50 = £1725 (Feb 2023 to Nov 2023)
(Will need to check after Nov 2023 payment what will be left to set final payment to clear)

Sainsburys - £2300 Balance - 0% until Oct 2023
12 x £50 = £600 (Feb 2022 to Jan 2023)
9 x £108.50 = £976.50 (Feb 2023 to Oct 2023)
Balance - £723.50 after 0% expires

Lloyds Loan - £3803.24 - This will clear naturally by Nov 2022 which will be my last payment.  Once this is clear we have already allocated the payments used to pay off the loan elsewhere so I cant include this Extra in my debt payments.

Anything left on Credit cards after 0% expires I will get these onto a balance transfer at 0% - Likely Virgin as they always offer me deals.

So not the news I hoped to be putting on here, Its an additional £500 I need to clear, but its done and dusted, and I just need to get on with clearing as much as I can when I have anything spare.

Thats about all for now. 

Bizzywizard

Hi Shell,

Looks like you are doing really well and have planned out all of your 0% and loan deals.

One thing, I did that really helped was switching bank accounts (went from HSBC to Nationwide Flexdirect) They gave me £125 for switching bank and I had a 0% overdraft for a year, that I paid off with a week or so to go. I switched banks along with my husband. We also switched our joint account to RBS (they were having a similar deal at the time) we made £250 off Nationwide and think it was £150 off RBS....so this could help you with the extra £500 you need. Please note you need to qualify for the banks deal, but well worth looking into it. Martins (MSE) bank deal page will show you the best deals.

I also pay my council tax over 12 months, not the normal 10, just call the council up and they will sort it out. This helps me budget as the bills are roughly the same each month. The two FREE months used to really screw me up.

My husbands debt (in turn my debt) was cira 20k we are now completely clear, so keep up the good work.

Bizzy

shell16

Thanks @Bizzywizard, thankyou for stopping by and taking the time to leave a reply for me

I can honestly say when I had my LBM, it definitely didn't flicker!  I have tried so very hard to plough as much as I can to debt and have made great progress.... I know I have, and its been extremely motivating to see that balance reduce in just 6 months.

Bank switches are definitely an option in the future.  I'm conscious I have opened a bank account towards end of last year with Starling as I liked the idea of the 'Saving Pots system', and then I have applied for another Credit card this year.  My credit score has already dipped due to these new accounts so I will look into bank switching in the future.

The Council Tax idea is also really good, but we have a Motorhome in Storage which is due beginning of April so we use the 2 free months council tax payments to pay for the year, without getting into further debt.

Im really happy to see you are now Debt free after clearing £20K debt, I know it can be done, and I like most on here want it cleared in the least possible time.  I just need to keep reminding myself its a marathon not a sprint.  If only we could get out of debt as quick as it takes to get into debt! 

EssexHebridean

The different ways of doing things on the council tax can work for different people - the way you're doing things Shell with having a confirmed use for that money for those two months is great, it's hen it gets left in the bank and people just think they have more than they realise it can be an issue. Our free months used to go towards the mortgage, now we allocate a savings pot for them to end up in and I just transfer them straight out when the month's month lands so they can't get frittered! 

That's a pain about your OH's overdraft but well done for both sorting it out and hopefully educating him about OD's at the same time! So many folk don't realise about the risk of it just being called in!

shell16

@EssexHebridean, 
Our Motorhome storage is about £400 a year so my council tax payments pay for this in April and will have around £120 left which is going towards OH golf membership which also renews in April.  Its timed well i must admit!

Booked hols for Summer in the Motorhome too.  We are staying in the UK again but have decided rather than going south like we usually do, we are heading North into Scotland.  We are staying at several sites, Jedburgh, Berwick Upon Tweed, Edinburgh, St Andrews and Loch Lomond.  Its actually quite cheap in our Motorhome.  Works out at £10 per night per person for 16 days (Me, OH and 2 DD's), plus our fuel and spending.  Not too bad for height of season and during school hols!

We are also heading down to Cornwall end of May into June taking advantage of the bank hols and only having to use 3 days holiday at work.  Again in Motorhome, this is good value too at £175 for the week, plus fuel plus spends.  Lots to look forward to, and all budgeted for.