30 in age, 30 in debt

SunFlower

Hello h07_2012,

Well done on aiming to nip this in the bud before you get any further into debt.

Some questions to better advise you:

What are you interest rates on each card/loan overdraft?

What are your minimum payments to each debt?

Are there any special deals on any of the debts or part of the debts? (E.G. some of a CC might be on 0% and the rest on 20%.)

Are there any ways you can cut your outgoings?

Are there any ways you can increase your incomings? (Cash is lovely, obviosuly, but even vouchers from surveys etc. can help.)


Further observations:

@tacpot12 is not wrong about an emergency fund - it's an EXCELLENT idea! If you had an emergency tomorrow, how would you pay for it? I imagine that you would either have to use the excess in your budget (which is effectively the same thing) or resort to credit, which is not making anything better. If may feel totally counter intuitive, but putting £1000 in the best rate savings account you can find (see the main site - things have improved drastically there, recently) that you can use ONLY for proper, genuine emergencies, is a great idea. It helps to break the psychological dependence on credit as a way of solving all your problems. (Although I know it feels wrong when you think of what you could do in terms of reducing interest-bearing debt, but a big part of this is, as you have already noticed, about changing the way you think about money and credit, and it certainly helps.)

Do you have a budget? How well-developed is it? We can help if you need any tactics.

Your gym membership: although I know we live in the school of 'cut EVERYTHING back to the bone and don't spend any money on anything that isn't 100% necessary' mentality, I think having *one* thing that you can look forward to can be useful and motivating. If it's not exorbitant and you actually use it. But what about a social life? How much are you planning on putting towards one of those?

Christmas: it's coming. Have you budgeted anything for that? How many people do you have to buy for etc? Do you cook Christmas Dinner/go away for it/socialise a lot around it/have any other factors to consider around it that I have not?

Good luck. You can do this. Even if it takes a little longer than you hope it will, you are still on the path and that is a massive thing in and of itself.

You can do this! *Shakes pompoms and makes encouraging noises*

h07_2012

tacpot12 said:

Well done on the progress you have made. I wonder if you might find it also helps with your motivation to have a TOTAL amount owed figure in your report so that you can see the total amount of progress you have made? 

It us very hard to stay motivated, but looking back at the progress you have made is a great motivator to keep going - if you don't keep going, then all the previous pain and hard work was for nothing. While the numbers are still large it does feel like you are not making much of a dent, but the numbers will start to fall and all that you need to do is keep them coming down at a good rate, and soon you will see your list of debts getting shorter. 

I agree your target of clearing this debt by the end of 2023 is very ambitious, but you won't know what you can acheive unless you try, so good luck with your efforts.

Once you have cleared your debts, you will know how much disposable income you really have and can start to save hard into your LISA for your house deposit, and emergency fund. Your house deposit can also be your emergency fund, but if you do buy a house and you will need to think about how you replenish your emergency fund once you also have a mortgage to pay - no one said it was going to be easy, but the satisfaction to be had from acheiving your financial goals is great.

There is one further suggestion I would make and that it to change you mindset about credit being only for emergencies. I would say that credit should only be for emergencies IF you had not had the good sense to save an emergency fund. You already know that saving for emergencies is a good idea. Borrowing for emergencies is not a good strategy - in an emergency, you will tend to take the very first credit offer you are accepted for which might be very expensive and inflexible. Save for emergencies, and bigger purchases, and only use credit for spreading the risk of a big purchase - the lender is also responsible for you getting what you have (or will) pay for.

Thankyou for your words of encouragement. I forgot to include starting total and total now, so have added that I am looking forward to being debt free and accurately understanding how much disposable income I actually have and starting to save. 

h07_2012

SunFlower said:

Hello h07_2012,

Well done on aiming to nip this in the bud before you get any further into debt.

Some questions to better advise you:

What are you interest rates on each card/loan overdraft?

What are your minimum payments to each debt?

Are there any special deals on any of the debts or part of the debts? (E.G. some of a CC might be on 0% and the rest on 20%.)

Are there any ways you can cut your outgoings?

Are there any ways you can increase your incomings? (Cash is lovely, obviosuly, but even vouchers from surveys etc. can help.)


Further observations:

@tacpot12 is not wrong about an emergency fund - it's an EXCELLENT idea! If you had an emergency tomorrow, how would you pay for it? I imagine that you would either have to use the excess in your budget (which is effectively the same thing) or resort to credit, which is not making anything better. If may feel totally counter intuitive, but putting £1000 in the best rate savings account you can find (see the main site - things have improved drastically there, recently) that you can use ONLY for proper, genuine emergencies, is a great idea. It helps to break the psychological dependence on credit as a way of solving all your problems. (Although I know it feels wrong when you think of what you could do in terms of reducing interest-bearing debt, but a big part of this is, as you have already noticed, about changing the way you think about money and credit, and it certainly helps.)

Do you have a budget? How well-developed is it? We can help if you need any tactics.

Your gym membership: although I know we live in the school of 'cut EVERYTHING back to the bone and don't spend any money on anything that isn't 100% necessary' mentality, I think having *one* thing that you can look forward to can be useful and motivating. If it's not exorbitant and you actually use it. But what about a social life? How much are you planning on putting towards one of those?

Christmas: it's coming. Have you budgeted anything for that? How many people do you have to buy for etc? Do you cook Christmas Dinner/go away for it/socialise a lot around it/have any other factors to consider around it that I have not?

Good luck. You can do this. Even if it takes a little longer than you hope it will, you are still on the path and that is a massive thing in and of itself.

You can do this! *Shakes pompoms and makes encouraging noises*

Thankyou. I will try and post the interest for each one this weekend. I do have a partner who earns £3k -3.5k per month month after tax, so I am in quite a fortunate position that he is supportive and paying the majority of bills (including my portion) whilst I dig myself out of this. This is one of the main reasons I don’t wish to drag this out, so I can go back to paying my own way. I’ve relooked at my own income and it is just shy of £38k before tax (recent increase.) I’m feeling really determined to make as much of a dent in this as possible. I’ll try and post a budget too. 

I think I do need to prioritise an emergency fund, as we can never be sure about what is around the corner. 

Christmas is budgeted for as I hardly have anyone to buy for, just kids. 

Thankyou for your support! The diaries I’m reading in this forum are making me believe I can do this. 

h07_2012

Debt as of 6/11/ 2022 
Starting total 21/10/22= £27,524.35
Now 3/11/2022= £26,527

Starting amount owed / now
Barclaycard £2845.35 / £2850 
Fluid credit card  £3103/ £3148
Halifax credit card £910/ £889
Post office CC £427/ £413
Capital one £451/ £438
Tesco credit card £239/ £214

Updraft loan £4828/ £4663
Monzo loan £3388 / £3090
Monzo flex £1042/ £883

npower debt £500/ £480

Next catalogue £1150/ £1033
Very £1255 / £1255

car hp £3886/ £3671

Halifax overdraft £1500/
Monzo overdraft £2000/

h07_2012

Debt as of 11/12/2022 
Starting total 21/10/22= £27,524.35
Now 11/12/2022= £26,505

Starting amount owed / now
Barclaycard £2845.35 / £2828 
Fluid credit card  £3103/ £4251
Halifax credit card £910/ £912
Post office CC £427/ £409
Capital one £451/ £425
Tesco credit card £239/ £198

Updraft loan £4828/ £4663
Monzo loan £3388 / £2870
Monzo flex £1042/ £888

npower debt £500/ £460

Next catalogue £1150/ £1012
Very £1255 / £1634

car hp £3886/ £3455

Halifax overdraft (% free graduate account) £1500/
Monzo overdraft £2000/ £1000 (limit reduced)

I’ve put off posting as I seem to just have shuffled the debt around. In one hand and out the other. Priorities are to pay off the fluid with around £350 per month, as the one charging the most interest, followed by further reducing my overdraft to a manageable amount. By repaying and reducing the balance from £2k to £1k, I’m saving £25 a month interest. If, by the end of 2023, I’ve paid off all credit cards and the remainder of the Monzo overdraft, at present £10,028, I’ll be really happy. The rest, 2 loans and car, will naturally reduce through repayments by around £7200 over the next 12 months. The very is all buy now pay later, these are all due to be repaid 2023 so interest free (factored in the budget.) I am still quite optimistic that by the end of 2023 I will have cleared at least around 60-70% of this debt. I currently have no more balance transfer offers available so can’t shift to reduce interest. With the Monzo flex, once I make a payment I am reducing the available amount down to a sensible amount. 

AntoMac

Don’t underestimate knocking your Monzo overdraft down by a thousand pounds. Overdrafts can be very expensive these days. 

h07_2012

AntoMac said:

Don’t underestimate knocking your Monzo overdraft down by a thousand pounds. Overdrafts can be very expensive these days. 

Thankyou, in terms of interest it is the worst debt on my list. I did feel better once I’d paid and reduced the limit. 

enthusiasticsaver

I would prioritise the overdrafts.  Most of them charge around 40% interest these days. It might also be worth doing a full soa.  http://www.stoozing.com/soa.php

An emergency fund is also essential to stop you being forced to use  credit and undoing your hard work paying it down. 

Sarahwithlove

I agree do a snowball calculator so you save yourself as much as possible in interest. Hopefully as you start decreasing your debt you may get some balance transfer offers to help with interest rates. Have you looked at other ways to make money? do you have anything you can sell? surveys? receipt scanning? it all adds up

h07_2012

Debt as of 1/2/2023
Starting total 21/10/22= £27,524.35
Now 1/2/2023= £25,353

Starting amount owed / now
Barclaycard £2845.35 / £2839 
Fluid credit card  £3103/ £4236
Halifax credit card £910/ £993
Post office CC £427/ £495
Capital one £451/ £478
Tesco credit card £239/ £214

Updraft loan £4828/ £4333
Monzo loan £3388 / £2423
Monzo flex £1042/ £750

npower debt £500/ £420

Next catalogue £1150/ £929
Very £1255 / £1818

car hp £3886/ £3025

Halifax overdraft (% free graduate account) £1500/
Monzo overdraft £2000/ £900 (limit reduced)