One £ at a Time

Viki2410

Hi everyone,

Long time lurker on the DFD Boards but first time poster. 

After a whirlwind 3 years of saving and buying a house and getting married, my husband and I have managed to run up some debts and with the cost of living on the rise in all areas, we're finally pulling our heads out of the sand and tackling them. 

We recently looked at remortgaging before our fix is up next year to secure a rate now and pay our Help to Buy off, but the jump in monthly payments was a shock and made us realise that we should have a lot more surplus money than we have and we should have less debt! It's still an on-going discussion of should we or shouldn't we, but we've decided the most important thing for now is to tackle the debt in the short term, even whilst we decide. 

I won't be listing the mortgage as a debt for now, as the short term I want to focus on my credit cards and loan, which I'm ashamed to say there are a few. Frivolous and sometimes necessary spending when the money in the bank won't reach the end of the month. They are below: 

Loan - £690.60 balance - £103.54 per month
Catalogue - £499.78 balance - £15.81 per month
Credit Card 1 - £609.25 - £30 per month
Credit Card 2 - £878.27 - £27 per month
Credit Card 3 - £971.05 - £37 per month
Credit Card 4 - £2398.80 - £70 per month
Credit Card 5 - £3073.20 - £31 per month 
Car Loan - £15,367.22 - £320.15 per month

A grand total of £636 a month on debt repayment, which is crazy. Imagine what we could do with that money. Don't get me wrong, we are in an extremely fortunate position that we can afford to pay our bills and have a few luxuries, but we've let the luxuries get out of hand and it's time to reign it in. My other half has around £13k on his cards and is tackling the payments on those too. 

I'm posting here to be accountable and to learn from all you knowledgeable and inspiring people. We're going to be tracking NSD's and also making a more conscious effort to eat out of the freezer and plan the meals in advance. I will also be looking to do some PAD'ing where possible too.

We won't be cutting things like the Gym and Sky TV etc, because we still want to have nice things, which I appreciate means will take longer for us to pay the debt back, but we have identified where the money is "wasted" and that's the first big step.

Look forward to riding this rollercoaster with you all!

VW 

RobM99

EEK! That's £20,000 of (I assume) high interest debt. (gasp).

Obvious things first -

1. Stop spending! Make the distinction between "need" and "want".
2. Tackle highest interest debt (cards?) first.

Also put together a spreadsheet to log your costs - certainly an eye-opener.

Welcome to your new life-style!

Viki2410

Hi @RobM99

Thanks for your comment. Yep it's a high number, but we're ready to tackle it down. We have a few existing commitments (a honeymoon and a holiday) which we will still need to have some spending for, but we are definitely reigning in the spending. 

The loan and car loan are on reasonable interest rates, so I am happy to leave them ticking over. 3 of the cards are 0% and the other 2 are a higher interest, so focusing on paying those off. 

Appreciate your advice  

Martico

Hi - I got to a similar kind of spread. Definite yes on only going for the min on the 0% ones. 
Are any of your cards offering new 0% deals at the moment? Or are you able to apply for another 0% transfer card to pull down the debt on one of the high interest ones? 
I also, during my journey, successfully got a 24 month 0% spend card from M&S (still one of the top rated on the main board). So for a couple of months I put all my daily spending on that, and was able to use my current account to pay down ones of the pricier CCs.
Obviously ONLY do this if you are confident that you can be responsible with the payments and clear that card before the 0% deal expires, otherwise you'll just be getting deeper. I realise that is not a solution for everyone.
Good luck.

Viki2410

Hi @Martico

Nothing available for 0% at the moment, so will plug away at the higher interest ones. I think it's because of the balances, so hopefully as things start to reduce they will become available. 

Best of luck to you!

Viki2410

So I've made my first PAD. Just £1 to CC2, but it's a start. 

We have a busy weekend with prior booked engagements and today is food shop day, so Monday looks to be the first NSD. We're going to aim for 10 this month and see how we get on!

Sewn

well done Viki, it's all relative to be honest I don't think £20k unsecured debt is 'that bad' if you still have enough to cover all your bills and luxuries, our joint debts are just below that now and I'm on cloud nine that they are compared to what they were a few months ago. I'm also of the opinion that cutting out everything leads to a very miserable existence and taking a longer approach whilst still having some luxuries is not a bad option, I also think that yes its one thing looking at what you need as opposed to what you want and certainly if you're using credit to fund wants as opposed to needs thats a problem that requires a mindset change but if you're paying your debt down and are in control, using your own funds for a few wants is what keeps life a bit more enjoyable, good luck in your journey

Viki2410

Hi @Sewn, thank you very much. 

I don't think our debt is "that bad" but bad enough that we need to tackle it now before it gets to a point we can't. We are both in steady well paid jobs, we've just let things get a little bit out of hand. 

You are totally correct that it will take a mindset change and we are ready to do that. We're in a lucky position that at the moment there is nothing we absolutely need. Of course there are want's, but they have been put on the backburner for now. 

Looking through your diary and your signature you have done amazing, good luck and long may it continue for you  

Viki2410

It won’t be a NSD today. I’m off to the city with friends for someone’s birthday. We’ve already paid for train tickets and the escape room, just need money for food and drinks, which my work expenses repayment that I received yesterday will cover. 

£1 PAD made to CC2 again and I’ve put a chicken curry in the slow cooker for tea so we’re not tempted by a takeaway later. 

Have a good day everyone. 

Sarahwithlove

well done on taking the first steps. unfortunately mortgage rates are only going to keep increasing over the next 12+ months so if you can fix it may be worth considering doing. at least you would know what your payments will be for that time and can work on paying off other debts first. whilst I agree its good to still have the quality of life, you also need to have the balance of paying off debts etc. what you don't want is to be in position that you have to take on more credit in future because cost of living is rising so much. do you have a monthly budget for yourselves? you say you don't want to cut down on TV, but sometimes a call to the companies to renegotiate is a good place to start. consider going onto sim only for example if you have phone contracts for 12-24 months to help bring costs down etc. do you have anything you don't use any more that you could sell?

Viki2410

Hi @Sarahwithlove

we have an appointment with the mortgage advisor next week to discuss best options. I work in an industry where I see the cost of living going up probably more so than others. 

We pay £41 a month for the TV which is not bad at all. That was only negotiated in April, as should have been £85. We have to have a separate internet supplier as we live on a new build estate and as the builder owns the fibre cables and won’t sell, we’re stuck with them at £35 a month. That said it’s reliable and we rarely have outages and as I work from home occasionally we need the fibre option and for it to be reliable. 

We do have a monthly budget for ourselves yes, starting this month. As it’s month 1 we will see how we get on and adjust accordingly. I don’t expect everything to be perfect from the start. Also, I don’t pay for my phone, it’s a work phone so all expense covered and DH is on a low contract til May which he will then switch to sim only. 

We probably do have things we can sell yes and I will get to that but first and foremost being accountable and accurate on where we spend our money is top priority as we will be able to pay the debts down quicker by not wasting. 

Thanks for your advice and best of luck on your journey