The road to victory

capuchin

Hi All,

After starting a thread in the main DFW forum and getting some great help some weeks ago, I've been lurking a while reading many of your inspirational threads. It's really helped, so I thought I'd start one myself.

I'm over 30 now, and in the unfortunate position of around £15,000 debt. However in the fortunate position that I can probably handle it. I've gone against advice of taking more debt and taken a 18 month loan of £5,000 with a 6 month moratorium @ 3.4%. The current plan is to use this 6 months to try and pay off Lloyds and as much of MBNA as possible. Then from April focus on paying off the loan within 12 months.

My initial information wasn't totally accurate, however I've gone through it all now and it's spot on. I really like the method of @EssexHebridean and others of assigning money to different pots, so I'm attempting to do that, slowly at first and then faster.

The good parts: I pretty much spend nothing, other than around £100 a month on food and stuff. Outgoings are currently as per the debt spreadsheet below, but with £80 for energy, £26 for phone/broadband, £15 for water, £38 for insurance and £45 for phone contract (ending next month yay!). This comes to £210 a month+ the debts. There's no rent to pay currently (until around the end of my loan). This means my main account must have around £500 in it at all times. Any excess can go into the debt paying. My post tax income is around £500 a month, though once the social worker feels its ok I'll take on an extra 8 hours a week from home meaning around £400 pre tax income monthly.

I've decided to pay £100/week into my other current account for 'weekly expenses' - I'd like to get more discrete about exactly what this is for further down the line but for now it's working. In the next year or so I'll need to have the following capital expenditure: clothes, bed, monitor, fridge/freezer, and £1500.

I used the £5,000 as follows:

- £1950 - Paid overdraft

- £1100 - Paid AMEX and closed account. It also transpired I had a charge card costing me around £300 a year. I closed this too. (That account had a 'hidden' credit limit of £900, which I was paying £300 a year for. Criminal ..... When I opened it I did as it had a £20k limit.)

- £1300 - Paid Newday and closed account.

- £550 - Paid Barclaycard and closed account

Here are my debts:

Note the interest rates are a little off what I'm actually paying for some reason. (the numbers are higher) I took the spreadsheets from Vertex42 and haven't had the energy to troubleshoot. Most are about right, but the loan interest is way over what it really is.

So the priority for the next 6 months is to pay off Lloyds and then MBNA or Paypal and part of MBNA. It will be tough, but if I can wipe those out my income essentially rises by £130 a month, and the interest I'm paying becomes under £100 a month in total. Neat. I made a strategic error by closing the Lloyds and AMEX accounts as I didn't know about 'debt utilisation' causing credit rating. Should have left them open probably. But it is what it is, and it felt good.

Once the loan becomes payable I'll put my focus into paying that, and moving the other debts onto 0% cards.

I have a spreadsheet I will use to track my weekly progress.

Currently still waiting for my uptick in income to come through, but should stabilise in the next month or so. My spending account has £250 interest free on it, so it's tempting to use that to pay off some debt, but it feels like it would be tempting fate....

In terms of daily living, I almost starved. So I must now watch my weight and eat enough else the social worker shall not be amused! (This is partly why food/daily budget is quite high) We'll sort out clothes soon I suppose, and I could possibly have some PPI check I didn't cash. Does anybody know if there's a way to get them to resend the cheque??? I believe I also might have a little money spread through Finspreads, ETX, and assetz capital. I need to work on regaining access to those accounts and seeing what is going on there.

savingholmes

Good luck on your journey

EssexHebridean

If the £250 interest free you speak of is in the form of an overdraft, which it sounds as though it may be, absolutely do NOT use that to pay off credit card debt! 

On your phone contract, assuming that you are happy with, and want to stay with, your current service provider, then here's a plan for you. First up - if you're with one of the "mainstream" providers like EE, O2, Three etc, then find a really REALLY good SIM only deal from one of the providers who "piggyback" off those services - for example Sky Mobile run through 02 - I think Tesco do as well. Plusnet are through EE... then call up your existing provider and tell them your contract is about to end, and as much as you like their services you're going to have to put a cancellation in place ready for the end of the contract as they are too expensive. They'll stick you through to someone who they will call "cancellations department" but actually, that person's task is to retain you as a customer, and they will be keen to know how much you really want to pay. You quote the really REALLY cheap deal from elsewhere, and the person on the other end gets quite twitchy, as mobile providers really don't like losing people to piggyback providers... Chances are that they will offer the same price or even undercut a bit to hang on to you - it's worth agreeing to a 12 month SIM only deal if the price is right. You can do this in reverse too - by looking for a cheap deal from a mainstream provider to wave in the face of the "piggyback" companies. It's worth making sure that the deal you're quoting is one you really would be happy to switch to though - it's far more convincing if you're prepared at any stage to stand your ground and insist you're leaving.  The advantage of doing this now is that they may well waive the final month of the contract and just swap you straight to the new deal rather than risking you changing your mind if they give you another month to think about it...

If it helps at all, my current EE SIM only deal is just under £9 a month for 10gb data, unlimited calls, unlimited texts.
 

capuchin

Thanks for the replies guys.

I suspected this about the overdraft, (you're correct, it is) and shall not do so, tempting as it is!

O2 [my provider] have finally given up trying to buy out my contract and sell me a new one, and instead have offered me £6 a month for 12gb data, with unlimited calls and texts. I've had a quick look around and will likely take them up on this!

Still not discovered how to get my PPI check rewritten. No idea who even sent it to me! Did find out I have a pension of some kind with standard life, so that's good. Also discovered a few 'hidden' expenses which I pay annually. Amazon prime can stay, but the other is a consideration. I pay around £45 a month for a safety deposit box which has some antiques and my old collection in it. Theoretically I could buy a safe, insure it all, and be done for cheaper, but not sure how comfortable I'd be with everything sitting at home in my flat.Would it be intelligent cost cutting, or cost cutting for the sake of it? (Not to mention, I'm unsure how cheap insurance would be.)

The next thing I'm pondering is my fridge/freezer situation. I'm unable to get out very often so currently run 2 freezers, an under counter and a chest freezer in the cloak cupboard, as well as a very old fridge that may be on its way out. The energy efficiency of them overall is rather terrible, so I'm considering one very large new fridge freezer with around a 150L capacity freezer on it, then decommissioning my current devices. The cost is around £400 for this, so I'm not 100% sure it's a priority. I probably need to buy a couple of the 'energy reading' plugs to determine exactly the deal. We shall see.

Will soon start batch cooking - I've hired somebody (another expense ) to help me with cooking etc a couple of hours a week so we'll get cracking on that. Spag bols, fish cakes, mushroom soups, and I have no idea what else at this point! I assume it will be quite some up front cost buying everything and getting it done for a month or so. 

capuchin

Paid off another £100 from the Lloyds card, down to 810 on it now! £175 in my spending account and £210 in my main one for bills. Hoping to have Lloyds card paid off by 25th November. (may have to 'borrow' some money from my spending account, but I want it gone.)

Phone contract ending on 3rd November - I'm moving onto an £8 a month tariff with unlimited data, texts, and 12gb data! (apparently the loyalty discount doesn't include this deal so its 8 not 6 grr)

Safety deposit box has to stay, I'll just have to eat the cost.

My sister MAY have a fridge freezer for me, so we'll see what transpires in the next few months!

In other news I managed to get outside for some air this week, and didn't lose any weight   Oh and presents for xmas are done, at a net cost of 0!

Take care all

capuchin

Last overdraft interest payment came out today of just over £50. Grrr, never again.

 November’s goals: pay off the rest off the Lloyds card.

capuchin

Working through creditors slowly today with my support worker. Very emotionally draining but I'm actually making progress!

Natwest - Goodwill gesture £101.23

MBNA - Goodwill gesture £94.32

Just paypal to do today and then I'm done for the week.

capuchin

Didn't manage paypal in the end. We'll try next week.

My spending this week has been absolutely ridiculous  

£133 - new bed

£39 whiskey gift boxes x3 ????  (it was a great deal though!)

£27 shopping groceries

£6 for a photo (photo booths cost £6 now???)

£6 for 2 coffes at a café

£60 for £70 of amazon vouchers

£20 for xbox ultimate 3 months

and £75 for presents

My coin pot had £179 in it,so that brings me to a total cost of £187! Paid for it all though from my spending account, so it's ok. Helps that my total spend for the 3 weeks prior was around £25.

Lifestartsat40

Do you have Christmas almost sorted now then? 
I have been trying to budget better for Christmas and I also have 4 x birthdays in a 2 week period as well 
at least if you underspent the past few weeks you can factor a big spending week in 

capuchin

Yep Christmas is pretty much sorted I think. I keep wanting to buy more stuff for my little nephew, but am resisting so far.

All NSD's since my last post, and hoping to continue that streak until 10th. I will need some more milk but that can come out of my little coin pot.

Funny story to tell, I now have 9 free bottles of whisky! Absolutely free, sitting in my cabinet. Basically the gift sets I ordered, amazon delivered loose bottles, then again twice.... on the 3rd try they gave up and refunded me. But you can't return alcohol, so I kept the bottles lol. That's gifts for a couple more people sorted!

Weekly accounts:

Main: £140.64

Spending: £51.41

Gross debt: £14,402 (Monthly interest cost £130)

Not sure if I'll get to see family for xmas. Train costs are way up.

GeorgianaCavendish

Sounds like you are already making great inroads with the debt, good luck with tackling the rest! 

Although it is hard, try not to worry about the ding to your credit score from closing those cards. The same thing happened to me at the beginning of the year but it does build back up. 

Great news on the Goodwill gestures from those lenders. I am a big fan of complaining to lenders (where justified!) as they do give goodwill / compensation payments quite often. 

With your annual expenses, try to think of the next few weeks as being in a discovery phase. Keep a note of them as well as the renewal dates and then you can work out the monthly cost between now and the renewal date so that you’ve got the money ready and it isn’t an awful surprise when you get hit with the renewal. Then you can budget a little bit every month for the subsequent renewals. 

I have a spreadsheet for Christmas presents, I keep track of what I’m planning to buy, what I’ve bought for each person and the cost. I have overspent in this category before - I am always buying “just one more” present. The spreadsheet helps me stay on track and not overspend, plus I can make notes about discount codes or special offers. I’ve got a few things left on my list but waiting to see if there are any offers this month. Don’t forget about cashback sites to get some money back when buying presents!