Changing for good!

[Deleted User] · 26 July 2018 at 11:14AM

Hello MSE!

Not my first time posting a DFD, but hopefully the last. I did originally have a few grand knocked off of my debt total which I was really proud of, but in trying to keep up with my partner and be able to keep doing stuff with my life I ended up with a few more short term loans and credit cards, and looking at the fact my debt repayments will now be around a third of my wage for at least the rest of this year, I've had enough. My partner and I are due to have a serious conversation about things in general tonight so will just tell him I really cannot afford to keep doing things the way we are, so for the time being we need to be frugal together but he can do as he wishes the rest of his time.

Currently as it stands I have:
CC1 - £1380 paid at £60pm which just about knocks some money off every month
CC2 - £117 which gets around £15pm and slowly decreases
CC3 - £234 £25 pm paid
Lantern - 2 defaulted debts from 2014 ish paid £5 p/m each until I can offer settlements - combined £628 but know I can settle for £300 maximum combined
Satsuma (I know) - 2 loans total £1396 paid at £149 pm
Myjar (I know) - £297 paid around £50pm
Family Loan - £821 repaying £121.50 pm

There is also another old debt kicking around but it's not with the phone company and the debt collection company they said they sold it to have no knowledge of it, just waiting for that to finally surface with the debt collection company then will deal with that one.

So there we have it.... £4873. At £430 per month that's just over 11 months but even that is too long. I have considered approaching all the lenders and explaining I am in financial difficulty but I don't know where that would get me, and also the effect it would have on my credit file, but that to be honest is trashed anyway but I would like to avoid anything new because as it stands it will be clean in 4 years and I am hoping to be able to keep it that way to work towards a mortgage.

I have tried saving with online savers but it's too easy to ping the money back over straightaway when I want to buy something, so I have joined my local credit union and will save £50pm for the time being.

As it stands I'll be debt free within a year as long as I don't take out any more credit. I just need my partner to be on the same level with understanding I really need to not spend any money unnecessarily, which he should get on board with.

That's enough of the essay for now, time to look forwards, join some challenges and smash this debt! :cool:

enthusiasticsaver · 26 July 2018 at 11:21AM

On the positive side your debt is less than £5000 and should take less than a year if you continue to pay the £430. Which are the most expensive interest wise?

[Deleted User] · 26 July 2018 at 11:29AM

The first two cards, the one with the highest balance I used to pay more off but find myself short and spend again so have tried to strike a balance where I pay a small enough amount that I don't spend on anything else, but do also pay off of the balance and not just interest. The smallest CC is high interest so will overpay that and then use the extra £15 per month onto the first one to get a little more off each month.

The short term loans are all just fixed repayments, wouldn't be able to save money there unless I could settle them in full early.

enthusiasticsaver · 26 July 2018 at 11:36AM

If the defaulted debts are already frozen why not try the snowball effect and clear CC2 first, then move on to CC1. Can you reduce the family loan repayment until the other debts are gone? I would use the £10 saved on the defaulted debts, reduce CC3 payment to minimum and agree a lower repayment on the family loan and clear CC2 in the first month if possible and then move to CC1. Let the Satsuma and My Jar loans run until CC1 and CC3 gone and then focus on them and the family loan last.

[Deleted User] · 26 July 2018 at 11:41AM

Yes that was my plan to clear CC2 then add the payment onto CC1.
I'm wary about asking to reduce the amount on the family loan it was a money transfer from a CC and the rate I pay now will get it paid off before the 0% ends on the deal that they got so I don't want them to start paying interest because of me

I can definitely get CC2 clear in 2 months max if I am strict, CC3 is already on minimum payment (I think, anyway, I'm sure Tesco say £25 min)

I know I can do this as long as I don't add to the total, only CC3 is still intact and not cut up as going forwards I would like to use it for my petrol to get points, so at least I definitely can't add to the high interest CC balances...

NelliePie · 26 July 2018 at 11:53AM

Have you done an SOA? Whether you post it on here for advice or just use it for your own knowledge, it is great for seeing where you actually spend, where you can cut back and working out what your budgets are etc. I'm sure someone will be along soon with the link, but if not have a search in the forum and you'll find it. My advice is try to be as accurate as possible and fill in what you actually spend (look at bank statements and/or receipts) and don't fill it in for what you'd like to spend.

It might also be worth having a look at the snowballing calculator (again search and you'll find it). Pay around with the numbers to see find the best order to tackle your debts.

I know you're going to want to throw all your spare cash at the debt but having an emergency fund and paying into it every month, no matter how small to begin with, can help prevent you getting further into debt because you won't have to put life's unexpected expenses on credit again.

Having a serious talk with your OH seems like a good place to start. Getting his support will make your journey much easier.

Good luck!

[Deleted User] · 26 July 2018 at 11:55AM

Yes I've got a SOA sorted for myself and have cut down where practically possible, other than my debt repayments car insurance rent and petrol not a lot else goes out, it's just debt payments!

Yeah I realised the EF is one of the biggest things to make sure I don't add to my debt. Hopefully by paying it into a CU instead of an easy access saver, I should be able to keep it there

lonelyrat · 26 July 2018 at 1:15PM

It's so hard finding a balance between everything... It's something I struggle with a lot! It can be easy to want to throw everything at the debt to clear it asap but then you may end up short one month and have to rely on credit again (I've been there, done that, got the t-shirt (on a credit card probably) :rotfl: ) Don't worry about debt creeping back up a bit... You have a new plan which sounds solid and hopefully after the conversation with your OH things will be a bit easier.

Something that I found really helped for me at first was getting a Monzo account and using that for all my monthly spending (other than bills)... Each week I transfer in what I can spend that week and then that's that. It's helpful for me and OH as well as I can just check it quickly and go "well, if you want to do that then we only have a fiver for groceries this week". Makes it a bit easier for me anyway!

The past few months I've been slipping too... I've gone into one of my overdrafts a few times. Something that's going to help (I hope) is deleting my banking apps from my phone (apart from Monzo). That way it's slightly harder for me to transfer money around for spending. Bit of a shame I have to manipulate myself like that, but if it works it works!

I will subscribe to cheer you on

[Deleted User] · 26 July 2018 at 2:26PM

lonelyrat wrote: »

(I've been there, done that, got the t-shirt (on a credit card probably) :rotfl: )

That's great :rotfl:

Yeah I probably need a completely separate account for spends as I know what my bills etc come to so it's not hard to work out what's left it just soo easy to spend

doingitanyway · 26 July 2018 at 3:12PM

Good luck with your diary.

It took me 2 years to get a separate account for spends to help with budgeting. Don't be like me. Doit sooner

[Deleted User] · 26 July 2018 at 3:38PM

doingitanyway wrote: »

Good luck with your diary.

It took me 2 years to get a separate account for spends to help with budgeting. Don't be like me. Doit sooner

Downloading Monzo as we speak

Changing for good!

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