Small Business, Big Debts

OldTimer2023

Hello all!

I finally did it!!!  I managed to pay off my first full balance this month :-)

Well, technically, this was the small amount remaining after a Balance Transfer, rather than the 'full balance', but it still feels really good to have finally(!) crossed a debt off the list, and I've already added the monthly repayment amount to my next lowest DD.

Alas it might not be very long lasting, as I think I will transfer my Halifax balances over to the newly-cleared MBNA card when the 0% deal comes up in July 2024, but I won't be taking on any new credit when I do this - so I'm classing it as a win!!!

	LBM Oct23	Mar-24	Repaid	Repaid %
Bank Loan	£12,263.16	£11,084.01	£1,179.15	10%
Bank CC	£971.95	£596.95	£375.00	39%
CC1 (Bcard)	£0.00	£0.00	£0.00
CC2.1 (Virgin)	£7,375.50	£8,076.02	-£700.52	-9%
CC2.2 (MBNA)	£1,470.00	£0.00	£1,470.00	100%
CC3.1 (Halifax)	£8,691.48	£8,829.99	-£138.51	-2%
CC3.2 (Halifax)	£3,697.40	£2,914.27	£783.13	21%
Bounceback Loan	£48,315.97	£44,962.89	£3,353.08	7%
TOTAL	£82,785.46	£76,464.13	£6,321.33	8%
Challenge Total	£34,469.49	£31,501.24	£2,968.25	9%
Emergency Fund	£1,000.00	£0.00	£0.00	0%

So there we go, still slowly chipping away at all of the Debts, and using the Snowball Method to focus on the lowest balances first.

The Bank Loan was taken out at the time when Interest Rates went a bit crazy, and I've noticed that the Bank's headline rate is quite a bit lower now, so I need to check whether I can refinance the Loan at the newer (lower) Interest Rate.  I wouldn't take on any further credit or increase the term, so that could save me £25 a month, which would be added straight to my Snowball amount.

I also reallyyy need to start thinking about my Emergency Fund, so rather than chasing the next lowest balance (Bank CC), my plan is to let that one run its course naturally (est. Sep 24, at 0% interest) and start to divert some money into the Emergency Fund.

I'm also feeling a bit sad that I won't really have any 'low' balances to chase once the Bank CC is cleared, but I guess that's just the nature of how these things work, eh?

I kinda always have 'mixed feelings' whenever I check these totals... On a good day, I'm really proud that I've managed to clear nearly £6.5k in 5 months... but then on a bad day I'm absolutely gutted that I don't have that money in my back pocket instead, and I can start to beat myself up for getting in this position (again!)

I guess I just have to use all of those emotions as fuel/motivation to get through this horrible debt pile as quickly as I possibly can, and know that all of that extra cash per month will be waiting for me on the other side.

So, here's to chasing the pot of gold at the end of the rainbow!

Hope everyone is having a great week,
Old Timer

WinterWarrior

Well done ⭐️

Lonelygambler

Good luck with your journey. 

I will be following. 

londoner2019

Look at that progress! Great work, well done!

I was the same as you re: emergency fund - it's exciting seeing the numbers come down on the CCs, but I'd prioritise building that buffer (for the next laptop-like malfunction). 

OldTimer2023

Thank you so much everyone for the lovely comments :-) It really is much appreciated, and definitely helps to keep me going, so thank you again.

Okkkk it's that time of the month!  All of my April payments have cleared, so it's time to take a look at the totals:

	LBM Oct23	Apr-24	Repaid	Repaid %
Bank Loan	£12,263.16	£10,848.18	£1,414.98	12%
Bank CC	£971.95	£496.95	£475.00	49%
CC1 (Bcard)	£0.00	£0.00	£0.00
CC2.1 (Virgin)	£7,375.50	£7,995.26	-£619.76	-8%
CC2.2 (MBNA)	£1,470.00	£0.00	£1,470.00	100%
CC3.1 (Halifax)	£8,691.48	£8,858.70	-£167.22	-2%
CC3.2 (Halifax)	£3,697.40	£2,770.25	£927.15	25%
Bounceback Loan	£48,315.97	£44,402.02	£3,913.95	8%
TOTAL	£82,785.46	£75,371.36	£7,414.10	9%
Challenge Total	£34,469.49	£30,969.34	£3,500.15	10%
Emergency Fund	£1,000.00	£0.00	£0.00	0%

Not much to report this month.  No overpayments or emergency fund, but it feels really good to hit the '10% repaid' mark on my challenge totals!  Ideally, I would have been a bit further ahead, given that I'm now 6 months post-LBM (how the time flies!), but 'welcome to the real world' and all that...

The next two months are going to be a bit tight, as I've got some big spend items due, so for now I'm focused on chucking my 'snowball' at my Bank CC and then I'm planning to divert that £100 to the Emergency Fund.  Even just having £500 tucked away would make me feel so much better and less anxious during the leaner months.

The Balance Transfer offer on my Halifax (CC3.1) expires in July, so I'll likely move that balance across to my newly-cleared MBNA card - though Halifax and MBNA are part of the same Banking Group, so I'm hoping that they allow in-house transfers.  I'd rather do this than take out a new card, as I want to do as much as I can to rehabilitate my Credit Score whilst clearing the debts.  For this reason, I'll also close my Bank CC Account once it has been paid off.

Once I have paid off the Bank CC and moved CC3.1 over to MBNA, this will mean that CC3.2 (~£2.5k) will become my next 'snowball' target - which feels like a nice-sized chunk to go after (anything above £5k just feels so daunting to me).

I know it's a bit too early to start thinking about the end of the year already, but if I could end 2024 with £500 in my Emergency Fund, plus the Bank CC re-paid and CC3.1 transferred, I can then put the £100 EF back into the snowball, and starting hitting that CC3.2 balance.

I guess the elephant in the room at this stage is that I'm definitely behind on my plan to clear my Challenge Debts by the end of 2025.  I'm 10% repaid after 6 months, so if we carry that trend forward then I'll only be 40% repaid by the end of 2025.

I'm confident that I can pick up the pace on repayments though, and as the saying goes, "shoot for the moon, even if you miss, you will land among the stars".

On that poetic note, I'll sign-off.

Wishing everyone all the best on their journeys,
Old Timer

Aimingforthegoodlife

Hey, just checking in and such great progress, no adding to your debt at all is incredible! Massive kudos to you! I like how you keep checking and revising your plans, such a good idea to keep this as fluid as possible as life is always moving. I would also allow yourself some compassion when you aren't managing OP, they are just a bonus, the real key is not adding to the CC which you are smashing! The EF will be a good focus to hopefully reduce the chance of needing any credit again. Keep up the great work!

Lonelygambler

Great month. Over £7k to debt! Great numbers. 

OldTimer2023

Lonelygambler said:

Great month. Over £7k to debt! Great numbers. 

Thanks LG!  That $7k is the total repayments though, since LBM, I wish I was in a position to pay-off £7k in one month 

Either way, though, it's a big old chunk of cash, and I don't think I give myself enough credit for getting in paid down - so thank you kindly for the boost there!

vampirotoothus

Hi do you know why the balances went up on two of the cards? If it is because interest is being added perhaps you need to look at them as a matter of urgency. Good luck with the rest of your journey. You are looking at this now, so things will improve and the debt will get paid off. Keep going V x

OldTimer2023

vampirotoothus said:

Hi do you know why the balances went up on two of the cards? If it is because interest is being added perhaps you need to look at them as a matter of urgency. Good luck with the rest of your journey. You are looking at this now, so things will improve and the debt will get paid off. Keep going V x

Hey V!

Thank you for your kind words of encouragement!

For the Halifax Card, yep, it is because of interest.  I have 2 x Balance Transfers on that card, so they allocate all of my monthly payment to the highest interest balance, meaning that the lower interest balance is not being paid off at all, and the 3.9% is being added on each month.  This should hopefully be resolved once I transfer that balance over to MBNA in July, and is DEFINITELY a lesson learnt for me going forward, to not 'stack' Balance Transfers on top of each other.

The Virgin Card is a bit different though.  This is because I made a Balance Transfer to that card in excess of the original balance on my MBNA card, so basically some of the ~$1.5k 'overpayment' on my MBNA card was actually 'moved' to Virgin, rather than being 'paid off'.  This will all come out in the wash, as they say, but it does look a little confusing on my totals, I agree 

The big focus for me now is getting as much of those messy Halifax balances as possible transferred then attacking whatever is left with a vengeance, whilst building up a small Emergency Fund once the FD Card is cleared in a few months.  That is the official plan of attack for 2024, to get me more on the front foot for 2025.