Ditching the Debt

anjyeah

The joy of spreadsheets! (And I'm not even a spreadsheet type of person before). I have a basic spread that just tracks my progress so far - once in a while, I check the boards or money journals/logs inspiration and see if I can accommodate it to mine. Well done!

Fluid reminds me very well of the MSE episode last night where one application for a 0% balance transfer no matter how short the duration of the deal made all the difference in someone's debt. So good luck on your applications - don't lose hope.

bigbeff

I just wanted to say hi! I have recently started my journey too. I'll be subscribing and cheering you on. We can do this together

GinoOhGinoGinelli

Hi everyone,

Happy Friday! I hope you're all having a good week. I'm glad to have survived (dry!) January and now we're in February it feels one step closer to the longer days and better weather!

Hello and thank you @bigbeff, and well done on starting your debt repayment journey too - good luck, we will get there!

Thank you @astrocytic_kitten for your support and kind words. I'm definitely dreading when my early enthusiasm wears off and I hit the 'long slog stage'!

@GeorgianaCavendish, thanks so much for the helpful tips! I've been working my way through your really inspirational diary from the start. Your profile pic and username caught my attention as I absolutely loved the Amanda Foreman book too! To the point that I had to visit Chatsworth, watch the film, and read lots of other books about the time period . She was such a fascinating character. That's a really good idea about creating a loan repayment calendar too!

I haven't received either of my refunds yet, and I've been told that my tax won't be refunded until my next payday. It's quite frustrating as this has dragged on for a few months now and let me in my overdraft over Christmas which cost me daily fees. Anyway, hopefully, it's finally all sorted and I'll get the money in a few weeks. I've also chased up the pet insurance company so fingers crossed that will be paid in the next couple of weeks.

In the meantime, I've been trying to stick to my plan for achieving my two big goals of ditching the debt and losing the lockdown pounds I gained! I'm going to allow myself a treat each month at the end of the month, so for January I went for dinner with friends. As I'm not drinking at the moment I was able to save quite a lot of money, plus we travelled by bus as that was cheaper (and good for people-watching!) and chose somewhere not too expensive. After eating sensible healthy meal-planned food all month, it was excellent to pig out on a delicious calorific meal! 

I'm planning a fairly quiet weekend this week. Hope to go for a run for the first in absolutely ages... but I'll see what the weather is like!

One idea I had was to pull together a list of all the amazing free museums in London, including several we've never been to. I thought this would a nice idea for something MSE-friendly to do, especially on rainy days. There are so many wonderful museums and galleries in London so we really should make the most of it!

Does anyone having anything nice planned for the weekend? 

GinoOhGinoGinelli

Hello again,

I thought I should update on where I am on the debt repayments too. I still need to re-do my monthly budget in light of not receiving my refunds but I've been monitoring it closely and have been rounding up all my pennies. Since my previous update, I have:

• Applied for a Fluid card and was accepted with 9 months 0% and £1,500 balance and 4% fee to transfer. APR after that ends is shockingly high! The balance isn't enough to clear any of the other cards, but I could transfer a chunk from one of my Halifax credit cards that has the second-highest APR. I'm going to mull it over while I wait for the card to arrive.
• I've been using my rounded-up pennies to pay towards my Amex.
• I used various vouchers to save money on my weekly food shopping, planned all my meals, and did some batch cooking. Hoping to cut my food shopping amount even further as we're vegan and have an Oddbox so it can be done quite cheaply, for the most part.
• Paid more money into my Amex card (£870 in total, since one of my loans doesn't start until next month). 

When I took out my Zopa loan I used most of it to 1) clear my most expensive APR card at the time (MBNA), 2) clear my overdraft and 3) used the remaining chunk towards my Amex. However, I'm kicking myself because I should have prioritised clearing the Amex first, even though it had the 2nd highest APR. I knew that most balance transfer offers don't apply to American Express, but completely forgot! So, I just need to prioritise paying that off slowly since I won't have the chance to transfer the balance to another card at any point.  

My challenges is that, because I have multiple balances to juggle, and the loans have high fixed payment amounts, I'm finding my many credit card payments are spread quite thinly. It's hard to see how I can pay much to really target a specific card, such as Amex. Ideally, I'd like to pay just over the minimum amounts to the other cards, while throwing as much as I can at Amex.

I'm currently weighing up whether to do the Fluid transfer to save on some interest fees - or leave it as it is, and have slightly more money freed up (from being spread across fewer cards) be able to spend more on repaying the Amex.

I'm leaning towards doing the Fluid transfer though, as that is probably most sensible, but it's tricky! Hearing the difference these transfers can make is appealing though. Thanks @anjyeah for sharing the story of another MSE poster who found that taking up a 0%, however short the duration, made a big difference.

LittleMissDetermined

If you do the transfer and it has high rates after the 9 months, can you afford to set a payment rate to clear it completely by month 9?  If the 4% is cheaper than the interest you'd pay over 9 months on your Halifax card it's worth doing.  My guess is that it will be a lot cheaper! 

Let us know how you get on

anjyeah

You're definitely keeping the enthusiasm and hopefully won't get to feel the "long slog." Well done on the 0% balance transfer - I'm assuming you'll be able to clear the £1,500 within the 9 month period? There was a calculator on here once that could estimate how much you'll save just by having no interest at all even if you add in the 4% transfer fee. Just in case you need some good news to motivate you further . 

PS: The MSE story was from the live episode from last week I think. See how the numbers go. Good luck! 

GinoOhGinoGinelli

Hello everyone,

I briefly started a diary at the end of January this year but I never kept it up. I've been following other diaries on and off since then, but decided it's time that I rebooted my own diary. I need the accountability and hopefully it will help keep me sane over this seemingly endless journey towards being debt-free!

I've been making regular payments and focusing on debt-busting but I've been struggling a lot in other ways. I feel really trapped in my current situation. I'm fortunate and grateful to have a decent job that pays fairly well for what it is - especially when so many are in a much more difficult situation - but I'm utterly miserable. I'm desperate to change career, and this aspiration has been what's kept me focused on the debt. It just feels so far off though, and I'm not getting any younger! 

I've been steadily trying to pay off what I can. I managed to move some debt to a cheaper loan and some 0% balance transfer cards. However, I also had expensive course fees and a pretty expensive family trip I was already committed to. This of course resulted in me not having cleared as much debt as I would have liked!

The course fees are to retrain as there's no short cuts into my new career unfortunately. I've done lots of research and gained lots of experience to help me make the right decision in terms of career direction. I just wish I could make the change now, as I'm itching to get started! But I can't afford to lose my current salary with so much outstanding debt to clear, and I can't find any other job that wouldn't just be more of the same as what I'm doing now.

Sundays are particularly miserable but I feel really fed up most days. It feels like such a long, endless slog. I've been in my current job for almost two years and I really don't know how I'm going to manage another year. I've tried slightly different jobs and different sectors etc, but at the end of the day this just isn't the right line of work for me and there's nothing much I can do about it at the moment.

It would probably be sensible to postpone my course until I've cleared the debt, but at nearly 40 I really don't want to delay further as it will take me a few years to retrain. Plus it would take away my focus - and at least studying itself is a cheap hobby! 

I hope everyone who was kind enough to post on my diary the first time round has been really successful in your debt-busting journey and well on your way to being debt-free!

GinoOhGinoGinelli

I should probably start with the numbers. Looking back, my first monthly round-up at the end of January came to a total debt of £31,249, eek!

My most recent end of month round-up is below. Comparing this to my original one, it's pretty scary seeing how much the interest rates have increased across my credit cards. One of them is above 30% now which is extremely worrying.

End of September 2022 Debt Breakdown 

• AMEX credit card: £3,900 (30.6% APR) 
• Halifax credit card 1: £2,760 (23.54% APR)
• Halifax credit card 2: £1,000 (27.34% APR)
• Fluid credit card: £170 (0% APR until end Oct 22)
• Bank of Scotland credit card: £2,540 (0% APR until June 23)
• Virgin credit card; £2,250 (0% APR until Sept 23)
• HSBC personal loan: £13,980 (5.9% APR) - Monthly fixed payment: £538, (4/30 payments made)
• TOTAL CURRENT DEBT: £26,600
  

So in the eight months since I last posted I've cleared £4,649. It's depressing to look at, as the total would now be around £23,700 if I didn't have the course fees! All going well, I anticipate my end of October debt balance to be around £25,300.

I've actually being paying off a big chunk every month, but so much gets swallowed by the extremely high (and increasing) interest fees which have increased even higher. I'm not currently eligible for any more 0% balance transfer cards but will try again at the end of January, as it would be great to shift some of it over.

I'm undecided whether to try and clear the Halifax cc 2 first as that has a lower balance but is still high interest. I'll be able to pay more than usual from this month onward as I have just paid my final student loan repayment. Plus the Fluid card will be paid off at the end of this month, so that will be extra to pay toward another debt. I'm tempted by this approach as a snowball would be quite motivating. And it means that once that Halifax cc 2 is cleared, I'd be able to combine all these payments to pay around £650 per month on the Amex card from that point onwards.

Alternatively, I think should probably focus on paying as much as possible toward the Amex card first as the interest is painfully high! While it will take longer to clear, this interest has increased the most so I'm throwing away a lot of money on this one each month.

Certainly gives me lots to think about over the next couple of weeks! 

GinoOhGinoGinelli

Since my last post, I've taken a few small steps on my debt-free journey. I've got two bank account switches currently in progress, which should give me a nice boost once paid. I plan to use the incentive to balance out my Christmas spending (which I'm massively cutting back on this year). Then the remainder will be used towards my highest interest credit card.

I've also run the numbers through a couple of online snowball calculators and have decided to tackle my Amex debt first since the APR is astronomical. I do worry that it will feel like a bit of a slog because it will take a few months to clear, whereas Halifax cc 2 could be cleared much sooner and boost my momentum. I'm going to stick with the sensible approach though. At least my Fluid card is paid off this month and gives me a snowball, just in time before the 0% deal ends.

jokono

Welcome back Gino!
Great to hear you managed to move some credit to 0%, it all helps. I would be tempted to clear Halifax 2 as the rate is not that much different and as you say, it owuld give you a boost.

Good luck with your new carrer plans!