Shaking off the debt

ShakeItOff

At nearly 39 years old, I am ready to experience life, debt free. Can I be debt free by my 40th birthday?  I doubt it, but let's see what we can do!

I cannot remember the last time I didn't have any debt, and I've decided that, for me, at nearly 39 years old, this isn't how I want to live. 

I want to document how I feel right now, in the hopes that actually writing it down might help me to remember why I don't want to feel like this.  The shame and embarrassment that I feel today is quite something, especially combined with how anxious it makes me feel.  Technically, I earn the most I ever had, I owe the most I ever have (looking at just one of my credit cards alone tells me this), and I have the least disposable income I've ever had.  I've not kept grip on one of the fundamental things of being an adult, and I am ashamed.  I was paid 5 days ago, and by the end of this week, I will have around £100 to last me until next pay day on 27th July.  That is a sorry place to be. 

I've spent (and spend) beyond my means on silly frivolous things which have then caused a significant issue when the "real" expenses came along - we had to repair our roof last year, which came in much higher than the original estimate because it turned out to be a bit of a Pandora's box.  Then my car went fut. 

This isn't my first rodeo at attempting to pay off debt.  I've fallen into the trap of consolidation loans, which have never worked for me, because I never changed the underlying habit that got me there in the first place.  I have also tried the Dave Ramsey approach, which I couldn't (or perhaps didn't want to) sustain at the intensity prescribed.

In terms of tools I have available to me, I used to have the free version of YNAB, and that was probably when my money was at its healthiest. Since YNAB4 stopped being supported, I have the mobile app, but have struggled to stick with it consistently. Every now and then, I consider changing it for something else but so far, I've not made the switch. I've been a long time lurker on this forum, though go in fits and starts of motivation. 

What's the plan? I want to set myself some small weekly challenges / tasks, as I know I'm in it for the long haul, and I need to change some habits along the way. 

If you've read this far, thank you! I hope you'll grab a cuppa and chat life-during-and-after-debt with me. 

ShakeItOff

Task number 1 - work out how much debt I actually have. 

• Natwest - Overdraft of £1,500 which I use every.single.month
• Barclaycard - 0% BT credit card (need to check when the end dates are, this never gets used for purchases) - £5,242.42
• Tesco Credit Card - £9,420.22
• Novuna Loan - £8,598.43 (37 payments left, ending in July 2027)
• Northridge Finance - £15,584 (due to end around October 2027 but need to check - side quest is to get set up online for this account)
• Consumer Credit Finance - £2,152.33 (due to end in January 2027)

Drum roll please.... 
My total is: £42,497.40.

Now I feel a little sick and should probably go to bed...

pink_fluffy_sparkles

Stopped to say hi and give you a follow  

Good luck x 

_Dolly_Rocker_

It's only going to get better from here - you've taken the hardest step!

Well done. 

BadBookkeeper

One thing I did that helped me was moving my overdraft to 0% credit card & paying it off within the interest fee period.  It helped me plan my budget better. I also started an emergency fund to use instead of overdraft or credit card.  Good luck on your journey. 

PermacultureGirl

Well done for posting SIO, hope you are feeling a bit better for writing it down. Following

birdsfoottrefoil

Hi! Well done for starting out, it’s quite scary listing all your debt. I used to try and think of it all separately which didn’t help as I didn’t fully realise how much I had.

ShakeItOff

Thank you all for the warm welcome, I really appreciate it. It's a surprisingly vulnerable place to be, so the welcome is nice.

The figure was definitely more than I was expecting, but you are right Dolly Rocker - that's the hardest bit done.  Thank you for sharing your diary journey too, I really like how you've set out your goals.

BadBookkeeper - I've considered that, though is something I have done before and not sustained the habit of keeping out of it.  That said, I will be looking for ways to make the debt a bit cheaper, I've just got to work out what would benefit the most from that approach. 

birdsfoottrefoil - you are spot on! I think this is part of the reason it has rocketed over the last 18 months or so - some of the debt has been for specific reasons (thanks, roof!) and other is just simply living beyond my means, but turns out the whole is greater than the sum of its parts. Or something like that!

ShakeItOff

Happy Wednesday all!  I've decided that I am going to try and work a little every single day on my debt.  Some days that might be big actions, and other days, it might be smaller actions, but I am hoping to keep a focus going and strive for progress. 

Today, I have looked at what my debt is costing in terms of interest rates and expiries of deals.  I have:

• Natwest - Overdraft, with a typical rate of 39.49% EAR
• Barclaycard - 0% BT credit card - 0% until 1 February 2025, and then reverts to a standard rate pa of 24.6% (compound equivalent).  With a balance of £5,242.42, and 7 months left, I would need to be paying £748.92 pcm until the end of the deal, which is just over £350 what I am paying now, so I need a plan of attack for that. 
• Tesco Credit Card - monthly interest rate of 1.941%, which I think is 25.95% as a compounded APR.  At the moment, I've had to revert to paying minimum payments. 
• Novuna Loan - 5.6% APR. This is a fixed DD each month. 
• Consumer Credit Finance - 0% and due to end in January 2027. This is also a fixed DD each month. 

At the moment, I've not missed any payments or have any issues with paying these, so that's something.   
I've also asked Northridge if they can confirm my agreement number so that I can set up my account.  I don't know why I hadn't done this before, and it's annoying as I cannot see how long I had got the car on finance for (seriously... what was I thinking?). 

Today, I have learnt that:

1. I am not quite as good at holding and filing all of my adulting paperwork as I thought I was.  I do have a fireproof box for my important docs (woo), but that not all of my important docs are in there (boo). My emails could also do with a serious tidy. 
2. I don't understand credit card interest rates and need to learn that. 
3. I have options, and I am lucky to have them.  I do feel like I could be on the brink of very serious issues, but right now, I feel more hopeful than I did yesterday. 

Hope you've all had a great day!

birdsfoottrefoil

I think credit card interest rates are just like electric bills and are written in a way to confuse you as much as possible, so you don’t look into things too much. 

Have you done a SOA yet, I found that really helped.

Well done so far and on contacting Northridge 

joedenise

An easy way to make small payments is to round off your bank accounts to an even £5 or £10 and send those small payments off.  This is known as Tilly Tidying on the forum!  I used this when I was debt free to help reduce my mortgage.  It's amazing how much difference it makes.

I think the first thing you need to do is an SOA as already suggested and then to clear that overdraft - it's costing you loads in interest.

Good luck.