My Debt Free Journey

abaka

I’m leaning towards not doing the pension scheme lower payments.  It will save me around 70 I think.  But I’m not going to use that option until I have no choice.  By no choice i mean that if I don’t  get another extension or keep the non permanently Job ar work or if I can’t get a balance transfer OR face with a mortgage rate that doubles.

it’s at least good to know I still have some tricks up my sleeve.  

I’ve said this before but im so glad I had my LBM when I did.  Previously I wouldn’t be on top of my own finances let alone be thinking about  gas/electric and mortgage increases for our household finances:  
I know I’m doing my wife’s head in with my worrying, but I’d rather be worrying like I am now than being blind and making the situation worse like I was a few months ago!!

was so depressive, after my night out.  I asked my brother to pick me up as he owed me a favour as I dropped him off when he went out last night.  But I stopped off to get milk on the way home and there was such a large queue of people looking to purchase gas too ups….it was similar to queues I stood in for nightclubs in my student days and here was people queuing just to save money on household energy bills. I really do despair and pray for better days 

abaka

Ok, first of the month update for me.

Halifax Loan -   6737    6729     6529       6431       6332 

Halifax -            4941    4850     4801       4751       4240

Virgin -              4191    4099     4049       3999       3959

Virgin -              3748     3648    3598       3548       0 (Transferred to MBNA)

Lloyds -             2947     2712    2682       2655       0 (Transferred to MBNA

MBNA -                                                                    2560
MBNA -                                                                    3672

So my total debt at 1 September was £21,384.  1 October total debt figure is £20,763.  I unfortunately had to pay near £500 in transfer fees last month for switching the Virgin and Lloyds around so this should have been lower.  However it now means the only debt I'm paying interest on is the Loan to Halifax.  I'm not really focusing on that as it is a fixed payment and I can't really do anything with it whilst the credit card debt is so high. 

So if I look at Credit Card debt only, £14431 is my credit card debt, back when I started this was closer to £25,000 on cards alone.  So that means all my cards are on 0% until at least Sept of next year, apart from the Halifax Card which expires in Feb.  I have two Lloyds cards and a Virgin Card with high enough balance to transfer what will be on it (I'm currently showing an 11 month 0 balance transfer on Virgin and 12 months on one Lloyds and 14 months on the other Lloyds, and I imagine as my debt reduces I might see better offers....5 months ago I had no offers, and 3 months ago I was only getting 6-9 months offers.

I have a budget/plan which means I should have completed wiped out the £2560 on MBNA by Feb.  However, I am mindful that I might have to put more money into our joint account to account for increased costs on food/energy etc....But I'm hopeful this won't be necessary.  I have switched my plan of reducing the Halifax first as I firmly believe snowballing with the smallest debt is the best method for me to keep my discipline!!!!  Plus If I focused on the Halifax, 4-5 months time I'd have it reduced but still larger amounts on the other balances....Clearing the ones I can as fast as possible is going to best for me!

Also today - We have put deposit down for a Cruise in Feb 2024.  Another family holiday - wifes parents, and my brother and sister in law and their two kids plus our daughter.  My inheritance has paid for the deposit.  And my wife has told me not to worry about the payments as she will cover it from a combination of her/out savings....When I'm debt free to the banks I'm going to owe myself a fortune!!!  But I'd rather owe myself thousands of pounds than owe these banks another penny!!!

I also sold another item this week so friend is giving me £130 in two weeks time

Squirrelz92

Such incredible progress you are making @abaka! You have come so far in such a short space of time. Very excited to continue reading your diary and watch that debt of yours disappear! You have a great plan and snowballing sounds like the best plan for you if you like to see your debts vanish entirely one by one. Well done you 🎉🎊

abaka

Thanks!! Yeah - I have experimented with a few ideas and I do believe the snowballing from the smallest will work best.  Frustrating I have been so indecisive with this approach as I’ve paid over £200 quid to my Halifax CC in the last few days before deciding to settle with going from largest to biggest.  Doesn’t matter in the grand scheme as it’s still money off debts.

Still worrying about energy costs, i topped up our Electric this morning.  £20 is estimated to give us 11 days so if that does work out to be the case we should only be paying an extra £10 a month before yesterdays price rise (our electric rate has risen by 34.7% in N.Ireland.

I’m very skeptical that the meter saying 11 days for £20 is true...if it is true, I’ve greatly over estimated the fear of the energy price rises!!!  

Our previous usage in August (we were away for a week in Sept so I can’t compare Sept usage) was around £50 so the 34.7% increase is gonna bring our bills in for electric to undee £70, I was dreading electric usage being £150-200 a month!!

abaka

Joined the payment a day challenge.  So made £5 payment to my MBNA.

vampirotoothus

Hi you are doing really well, so a big well done from me. With regards to your mortgage maybe do some calcs about how much your early repayment charge is and how much the interest rate increases would affect you. At some point it may be cost effective to remortgage. Effectively you would borrow more from a new lender to include your ERC (this would reduce your loan to value). Just thinking though that this may be a good option now and offer you security going forward more than 1 year.

abaka

Hi.  Thanks for commenting!!

I have put the mortgage to the back of my mind if I’m honest.  I don’t really want to take 3k which is my ERC charge out of my household savings. Not when things are so uncertain right now.

I suspect with my debt I have at present.  Remortgaging would be difficult.  So not worth the risk as the rate might be higher than whats typically offered right now.

Looking at what our mortgage balance will be come next October, and even if the rate was to increase to 9% it would be just about affordable, even if the worst happens with my job and I’m back in my substantive post.  If I’m still in my current job or have got it permanently by then, it won’t be an issue at all.

As long as I stay on the straight and narrow with regards my current borrowing.

Obviously there’s a lot of risk involved here.  Things could be worse now than what they are predicting.  However one thing to consider is my daughter will HOPEFULLY be in Nursery next year and we won’t be paying as much for childcare, and again even if she doesn’t get a nursery place next September.  She will be starting school in Sept 24, so we only have to scrimp and save to get through the first year of mortgage repayments.  I doubt our families would stand back and let us get into any financial difficulties with the mortgage so I do believe we are in a better position with the mortgage than I realised in my panic last week and a lot of other people might not be as able to ride the storm like we are.

LittleMissDetermined

There's a lot to be considered from your latest post, although it does highlight that as much as we try to plan, we can't predict everything. 
LMD x

abaka

Yeah.  There’s risk on both sides of not fixing vs fixing now.  But I’ve looked at it from the perspective if I don’t keep the job I’m in now beyond March and have to revert to my original post and the numbers add up and it’s workable.  

My focus over the next 12 months is fixing my own personal finances so that if the worst happens with mortgages I can afford extra repayments by now throwing them at debt.

My repayment of 130.38 came out today for my loan so taking that as my PAD for today!!

Mliz

Hi Abaka, just found your diary and settling in for a read and wishing you happy thoughts and good luck 😊