Aiming for debt free in four years

VioletNewStart

Hello - new to the board but likely to be around for a while! I’m determined to tackle my unsecured debt. I have a lot - (47k - equivalent to a year of my salary). I’m at the point where I can no longer switch any more onto 0% cards until I get my total borrowing down. But the interest is high and so if I don’t tackle it now I’ll be in real trouble. I’ve got a plan worked out and if I stick to it, I should be able to clear it in four years. It means living very frugally in the mean time! 

Brie

Well done for getting the determination going!!   

Would posting a statement of accounts be helpful?  If only for yourself so you can put a budget together or you can post it here for suggestions on where extra frugals lay!!

VioletNewStart

Thanks for commenting and for the suggestion. I’m not sure it would be helpful at this stage as most of my costs are fixed. I’ve got them all on a spreadsheet and have also downloaded the snoop app so I can see my spending over the past year. After covering my credit card bills and fixed costs I will have around £20 / £25 a day for everything else (groceries, travel, toiletries, entertainment etc). That also allows me to put a small amount of money aside each month for any emergencies so I don’t end up taking on even more debt.

VioletNewStart

Hi all - I’m now two weeks into my debt pay off plan. I decided i should include my overdraft in the record of my overall starting point. 

And so my debt at 26th December was just over £50,110k. 

I’m aiming to clear it in four years by paying off 12k per year - through fixed payments each month. I’m hoping to have it down to £38k by the end of this year. 

I also want to build a small savings fund to cover unexpected expenses but also to cover things like dentist/opticians/car service/MOT etc. I’ve committed to taking on no more unsecured debt (unless it’s a balance transfer).

The last couple of weeks have been tough. Partly stress about the debt itself. Also, there’s been a few times where I felt the urge to pay for something on a credit card. But I’ve resisted and just a week to go now until payday.

Am finding everyone’s diaries helpful and inspiring. And also the challenges. Am going to sign up to a couple more of those. 

Less_Talk_and_More_Action

Hi @VioletNewStart.  I hope it’s going well - I have found posting on here and getting advice has helped me massively.  I have had debt levels as high as yours and have started at about £30k this time.  

I am focusing on small consistent actions and changing the mindset. 

If you can do it, I think building a small emergency fund is definitely a good plan. That habit of reaching for the credit card is key to moving forward (in my view) and any kind of emergency plan helps with this.  

Good luck. 

L x 

VioletNewStart

Less_Talk_and_More_Action said:

Hi @VioletNewStart.  I hope it’s going well - I have found posting on here and getting advice has helped me massively.  I have had debt levels as high as yours and have started at about £30k this time.  

I am focusing on small consistent actions and changing the mindset. 

If you can do it, I think building a small emergency fund is definitely a good plan. That habit of reaching for the credit card is key to moving forward (in my view) and any kind of emergency plan helps with this.  

Good luck. 

L x 

Hello, LessTalkandMoreAction … thank you so much for your comment and encouragement. A massive well done for clearing so much of your debt. It’s encouraging to know it can be done. I swing between feeling positive that I have a plan in place and then to feeling overwhelmed again. 

Thanks for your advice re an emergency fund. I’m really seeing how it’s important to do that.
Good luck with your debt clearance this year.

CMD79

Hi VioletNewStart,

Well done for taking the first steps towards sorting this out. There’s lots of us here who have been where you are. 

In terms of your repayments, have you used a debt calculator to calculate the  interest and help you prioritise your extra payments? I use whatsthecost snowball calculator. Particularly if you have some still on 0%, so it focuses you on hitting the ones that will cost you more in the long run. I’m presuming you need to make some big overpayments to repay your debt in 4 years? Can you do this with your income or will you need to make extra money each month?

There’s lots of challenges I’d recommend:

Payment A Day will help you to keep the focus on your debt and remind you to not take more debt
Make £10 A Day if  you need to make more to make overpayments and keep yourself going through the month
2024 Grocery Challenge if you could do with reducing the supermarket spending to help 
Monthly No Spend Day Challenge
And I started one this year called 100 Steps to Debt Free By Xmas 2024 - For your level of debt, you’ll need to take a smaller portion of your debt to make it work, which others are doing really well. My own debt is now around £10k.

Wishing you lots of luck on the journey. I’m sure you’ll get lots of support here x

Aimingforthegoodlife

Welcome, sounds like you have some great plans going forward! I look forward to seeing your progress.

VioletNewStart

Thank you CMD79 and Aiming for the GoodLife.

It’s good to see your comments today as I’ve been feeling overwhelmed by everything the last couple of days. 

I keep telling myself it’s under control and I have a plan and then I look at all the figures again and feel sick.

CMD79 - yes I’ve got all my totals etc on a spreadsheet, the different cards and interest rates and payments etc. And I’ve also downloaded an app DebtPayoffPlanner. According to the planner I should be able to clear the debt in four years using the avalanche method and just over four years using the snowball method. (Paying around 1500 per month). So I’m going to alternate between the methods. My priority over the next six months is to get it down as much as possible and reduce my utilisation amount in the hope that I get some more 0% offers.

I’ve signed up for the Payment a Day Challenge and I’m going to track any additional payments I make (likely to be small payments), on top of my direct debit debt fixed payments each month. I’ve decided to alternate my PAD payments between creating a savings fund and making debt overpayments. I remember seeing the 100 steps one. Yes , I’ll have another look! I’ve not seen the grocery one so I will check that too.

Thank you again. 

CMD79

VioletNewStart said:

Thank you CMD79 and Aiming for the GoodLife.

It’s good to see your comments today as I’ve been feeling overwhelmed by everything the last couple of days. 

I keep telling myself it’s under control and I have a plan and then I look at all the figures again and feel sick.

CMD79 - yes I’ve got all my totals etc on a spreadsheet, the different cards and interest rates and payments etc. And I’ve also downloaded an app DebtPayoffPlanner. According to the planner I should be able to clear the debt in four years using the avalanche method and just over four years using the snowball method. (Paying around 1500 per month). So I’m going to alternate between the methods. My priority over the next six months is to get it down as much as possible and reduce my utilisation amount in the hope that I get some more 0% offers.

I’ve signed up for the Payment a Day Challenge and I’m going to track any additional payments I make (likely to be small payments), on top of my direct debit debt fixed payments each month. I’ve decided to alternate my PAD payments between creating a savings fund and making debt overpayments. I remember seeing the 100 steps one. Yes , I’ll have another look! I’ve not seen the grocery one so I will check that too.

Thank you again. 

It sounds like you've got everything in your head straight and are ready to go at it. I'm sure at least half of us on here will tell you, that feeling of overwhelm, particularly early on, but probably comes back periodically when something happens, or our mood dips, is all part and parcel of living in debt. Just remind yourself often, you will be okay, because you have started to deal with it before it's insurmountable. And your support group (AKA, this forum) will also remind you. You will be okay.

I'll take a look at that App! I've not actually heard of avalanching before, so thanks for the tip! Payment A Day is a lovely group!! I think that's a really good idea to alternate. I have never got on with savings for emergencies, it just doesn't happen, but even I have now started, which.... well, I didn't think I was physically capable!

Keep your chin up, and try to think each day, what am I doing about this debt? Did I make an extra payment? Did I manage to get my groceries within my budget? Did I manage a No Spend Day? etc.

Best wishes,

CMD

FacelessNumber

Just wanted to pop on and say good luck! I think lots of people find posting here good for motivation and accountability.