Words of encouragement & what to do next?

Wardee

Hi all, back in January 2019 I made a New Years resolution to get out of debt once and for all. What a horrible drawn out slog it has been but I am still sticking to it. Back then my debt was £22,499, fast forward to today and my debt is £8999. It feels like the final push as I have just paid my last loan payment and now it is just 2 credit cards left. Scarily I didn't even feel that joyous after paying my last loan payment like I thought I would as that 'saved' money is just going towards more debt. I know it will all be worth it in the end but it's a daunting thought to think I have still got at least another year left of chucking all my extra income at debt and leaving me with nothing for another recurring year

Anyone been in a similar position have any words of encouragement to get me through to that finish line?

Going back to the credit cards, my 0% rates have both ran out now. I promised myself to never borrow again so I don't want to apply for another credit card even though I know it would be a benefit by losing the interest payments. Although I don't expect to get two more cards at a 0% rate for £4k & £5k each so should I just grin and bear the 19% apr? Should I look at a loan? Should I apply for 0% credit cards anyway and see what I get?

bargainbetty

Look at options for 0% cards first - not paying interest would benefit you hugely! Do you have any accounts open from paying off old cards, or did you have good standing with any other provider? Just do one application at a time for now, as if you get one card balance shifted over, you might be able to move the second high interest card to the now-empty one, if that makes sense... 

Refinancing your debt at lower rates to pay off faster isn't the worst thing to do at this stage - it's less consolidation and more about saving money. If you did go for a loan, make sure you aim to pay off in the same timeframe and don't' extend it for ease - you'll regret paying it for longer later!

tacpot12

Good advice from bargainbetty. I know that feeling of having cleared a major debt, but not being able to feel excited about it. However, you need to praise yourself for having stuck to your plan. You have acheived something amazing, and in quite a short time!

Being able to develop a plan for your finances and to stick to it is a major life-skill; one that will continue to benefit you for many years. When I clearled my debts, I put the money towards clearing my mortgage, so I paid this off about 8 years earlier than intended, which allowed me to saving for my retirement. As a result, I was able to retire at 53!

I do also tell people that you do have to reat yourself occasionally. If you get a payrise or bonus, put a third towards your debt, a thrid towards your mortgage and pension and spend a third on yourself.

Well done on your success. Keep up the great work.

EssexHebridean

OK - there is good borrowing, and bad borrowing. "Good" is a mortgage, borrowing to fund education or training, of to fund the purchase of a car that is needed, for example to get to a place of employment. I'd also very much put looking to switch interest-bearing debt to a 0% card into that category too. Look at it this way - you're not "borrowing" anyway - you're simply moving the amount you borrowed previously into a different environment, where it will serve you better than it will serve the banks.

As you rightly say - this IS a slog. Accruing interest when you don't need to is simply going to make it harder, and why on earth would you do that to yourself? 

Take a look at the MSE Credit Club to give you an idea of what you might be eligible for - that will show you your likely acceptance rates. Even if the % chance is low, it's still worth trying - Martin told a lovely story some time ago of a lady who had only a tiny chance of acceptance for a BT card but applied and got it.  if you're not successful the first time, give it a couple of months and try again, and in the meantime see if there is anything in your credit file you can "tidy up" - cards that need closing for example. 

enthusiasticsaver

I would agree that looking to move the 19% debt to 0% is worth it if you have another year before it is all paid off.  Just think of it this way that you will remember the slog and hopefully not get yourself into that position again.  It isn't easy and is boring to throw all your spare income at debt but once it is gone things will be so much better. Just apply for one initially and as EH says use the soft search MSE credit club to check out the likelihood of you being accepted. 

tealady

Warde you have been given some great advice.
What I would suggest you give yourself a treat. It needn't cost much, maybe a bottle of wine, a nice bath bomb or a quality bar of chocolate.
Dont give up now, you have come so far. However it might be worth while to have another look at your budget to see if you could squeeze it a little more to make room for a small luxury occasionally.

Wardee

Thanks everyone, that is exactly what I needed to hear. Appreciate you saying I have come this far in a short period of time, it's definitely not been easy especially with life throwing little obstacles your way but I can see the light at the end of the tunnel.

I hope to be able to reverse this trend and save up enough for a house deposit by the end of 2024. That's the goal anyway, being 34 I hope I've not left it all too late.  I contribute everything to YNAB, without it I wouldn't have stuck to budgeting at all. I'm behind on retirement savings as well so that's another step I need to think about. My word if I could just reverse time and give myself a slap  

I will apply for a 0% card now see what offers come up for me, never thought to reapply with an old card if they offer a 0% transfer deal, great idea. 

powerspowers

Good look with the 0% applications. You’ve done so well so far, keep going 🙂

One-step-at-a-time

I would definitely go for a new 0% card -I did this a couple of times, when I was paying mine off. Because I wasn't using a card any more, a new one was just a tool to ensure that I didn't pay more for the debt than I needed to. These new balance transfer cards were closed as soon as they were cleared. I empathise with the slog (it took me a bit over 4 1/2 years) but it's absolutely worth it to get it all out of the way!

enthusiasticsaver

34 is not old and definitely not too old to get yourself a house and a decent pension.  Use the discipline and budgeting lessons you have learned to move forward once the debt is gone resolving never to be in this situation again.  

Aspiration

You’ve made great progress. I know it’s hard but you’ve been so consistent it shows you’ve got the conviction to continue your short term debt pay down and then exciting new chapter!