Time has come to take action

Jopanni

So pleased I have come across these threads, my debts are constantly in my mind, I want to clear debts as soon as I can and understand this will take a long time. I have no savings, no emergency fund and live month to month,therefore the time has come for us to address these and start clearing.

  All payments are made on time and are up to date, we each have a  fair credit score which has reduced lately due to taking on debts, we were unable to get credit ourselves for such a long time (these things bite you in the butt and stay for years what feels like forever). A consolidation loan isn’t an option, however I am not sure this is an option I want to explore as really want to chip away.

I have been looking for a snowball calculator as useless with math but all I find is US ones, would these work the same ? 

 I knew our debts were high but did not realise how high until I wrote them all down this morning - eeeek. 

We have £67,077 of unsecured debts which are credit cards, car loans for partner and kids and various bits and pieces. Paying £1827 pm. Now I’d rather that was in my account

here ia all that is outstanding, my plan is to clear the lowest balances first and snowball or should I concentrate on the higher interest ones.  Listed below is in order of which I think it should be done and what is currently paid each month .

Any advice gratefully received 😊

watch balance £224.00 0% pay £116pm - plan to clear this this payday and start snowballing from here 

CC1 £200 37.9% £30pm
CC2 £450 37.9% £50pm
CC3 £450 37.9% £50p
CC4 £2000 37.9% £100pm
Argos card £1758 34% £60pm
CC5 £2000 13.6% £100pm
car loan £6000 5.87% £260 pm (due to end oct 2023 with £4k lump sum due)
car loan £11,300 8.9% £240pm
car loan £20,000 6.9% £436pm
tesvo loan £20,000 2.8% £420 pm
HP £2686 0% £105pm due to end Oct 2024.

it’s a lot I know !! Never been more determined to start clearing. The Tesco loan above was used to consolidate last year, should have cut the cards up but no we used them until they were maxed !!!

thank you so much 

Jopanni

Sorry that should  have said don’t have any savings at the moment 

fatbelly

Snowball calculator here

https://www.lemonfool.co.uk/financecalculators/snowball-calculator.php

It's a companion to the statement of affairs calculator, and we'd need one to give more detailed help

https://www.lemonfool.co.uk/financecalculators/soa.php

How have you got three car 'loans'? Have you got three cars on finance?

Have you tried to get any of those cards on to 0%?

https://www.moneysavingexpert.com/credit-cards/balance-transfer-credit-cards/

Andyjflet

That's a lot of debt, and on metal which is a complete waste. Don't consolidate it just shows you have performed the cardinal sin of borrowing again after consolidation. 
I did the snowball method too and have now transferred the remaining debt to a zero percent card. So I no longer pay any interest on consumer finance just my mortgage.
Just start with clearing any overdraft and building an emergency fund, then start with the smallest debt first and work to clear it, you dont need a snowball calculator just get stuck in. 

DrEskimo

It looks like around 60% of your debt is just on cars. It's also not clear why you are paying for car loans for your kids?

You could look to sell them all, pay off the finance as much as possible and replace with much cheaper alternatives. It will do a lot to reduce your overall debt burden and get you debt free quicker.

It all depends on how much you value them over getting debt free quicker.

At the very least, the £20k loan at 6.9% is an obvious candidate to tackle...

Jopanni

hi fatbelly. I’m sorry I don’t know how to reply to individual posts. Thank you for your reply. Yes we have 3 cars on finance and the loan was to consolidate my car and smaller items together, thank you for the calculators I shall have a look at them.

as my credit score has slipped I cannot get a 0% interest one although my mother said she can for me but I don’t want to take her up on that.

Hi Andyflet, it certainly is a lot, you know I knew it was a lot but not quiet as much as it is, thank you for your feedback and great to see it has worked for you 👍.

Hi DrEskimo. Thank you for taking the time to reply, we agreed to help the kids with their first cars, great idea at the time but it’s a real pain in the butt. When they decide to change them they are in their own. 

DrEskimo

Helping them with their first car is fine, but not when it results in £10k+ worth of debt. That’s something you can’t afford. My first car was £2k and lasted me 5+ years and was perfectly adequate. 

Given that the £20k Tesco loan is largely your car loan, that actually means 95% of your debt is cars, and amounts to ~£1,300 of your £1,800 monthly repayments. 

As a thought experiment what are the valuations of each car (if you plug each reg into WeBuyAnyCar, you’ll get a thought idea) relative to the outstanding finance? You could then look to see if there is any surplus and then use that to buy cheaper cars. That will dramatically change your position in a very short space of time. 

EssexHebridean

My first car was £100 and got me through the first few years driving cheerfully enough - and for avoidance of doubt, I paid for it myself - parents view was that if I was old enough to want and be able take responsibility for a car, I was old enough to pay for it as well! 

"Helping the kids with their first cars" shouldn't mean "paying for expensive vehicles for them" - no new driver needs a new or nearly new car - far better to have something where the odd scrape doesn't feel like a massive deal!

madaboutspots

Completely agree re kids cars. It’s just a lump of metal. My little £500 1st car is still a fond memory. It was mine and gave me freedom. It was cheap to run but I was skint so I remember with fondness going from the bottom of the red to the top of the red on the fuel gauge and that was my version of “filling up” 🤣

As a treat, my bf would put an entire tank of fuel in now and again. The height of luxury. 

If your kids won’t accept your help if it doesn’t get them what they actually want then they would do better to learn the value of things and how money is found/earned to buy things. Buying their own car is a good way to bring their learning up to speed on this. If it’s simply that you wanted to buy them a nicer car then please accept that they don’t need you to put yourselves in debt to make them happy. Teach them to face facts and make do or live without - these a hugely more valuable than having a new car car. 

I couldn’t afford to fix mine when the brake calliper seized- walked 5 miles to work and back every day for 2 months. Bought a manual, went to a breakers’ yard and learned the workings of a brake calliper as I followed the manual and fixed it myself. So proud. Still the only girl I know who stripped and repaired her own car brakes. That as a sense of pride and valuable lesson is still worth more to me than a fancy car or bank of M&D bailing me out.