Reducing Debt - being accountable and taking responsibility

Okay, here goes with the financials:

Current Credit Card Debt as of 22/8/17
- CC1 BoS: £1253.73 with £600 on 0% until 10/17; £618 on 0% until 4/18 and £34.59 on standard rate (this will be paid off on 1st Sept so not worried about that). Minimum payment is currently £12.99
- CC2 B4rclayc4rd: £9124 with £800 on 0% until 1/18 and £8200 on 0% until 6/19
- JL Card: £312 on standard APR. This is my food spend card and I usually pay it off fully each month but I put a birthday present on it a few months ago and I'm about 1 month behind. Will be paid off on 1st Sept.

Other Unsecured Debt
- Car Loan (PCP ended and I got a follow on loan to pay off the balloon payment. Currently sits at £1,894.92 at 7.9% APR and I pay £157.94 per month. This will end in August 2018. Car worth about £4100.

Student Loan
I did 3 degrees, one after the other (hence the username!) so didn't start repaying my student loan until 2008. Not sure on current balance but about £150 is taken from my salary monthly before tax. I don't treat this as 'real debt' since its all sorted through HMRC and my employer and I have never 'had' the money that is taken from me before tax. Is this wrong? Not sure on the interest rate, will have to check and get back to you.

Bank Accounts
- B4rclays bank account (no overdraft, its my ebay and paypal account). Had it yonks and it has £21.86 in it
- BoS current account. My salary account and direct debit account. Have been in overdraft since before time began but I've managed to stay in the black this month and will end the month with a few pounds in it. My priority is to never go in my overdraft again. Really bad habit since student days. Currently has £144.47 in it. All payments and bills done for this month. Full fridge and freezer. Should be good till the end of the month.
- Three BoS online savers: Emergency Fund £9.53; Car Maintenance £1; and Holidays & Presents £1.

Personal Savings
- Erm......
- I have £9.53 in an emergency fund (new habit!) and we have £1K put away towards a new boiler. I'm due around £500 for a work fee so that will go in presents envelope on YNAB

Income
- My net monthly pay is £2250 after pension, tax, NI and student loan payments.

Obligations
- Immediate obligations inc. mortgage, bills, mobile, broadband & car insurance are roughly £750
- After monthly expenses and filling my newly created YNAB envelopes (all the good budgeting practice ones), I reckon I can throw around £800 - £1000 at my debts.
- Will post up a SOA / YNAB later this week and perhaps we can chew over the figures and you can make me justify each number.

Reasons for Debt
- Poor money management and lack of budgeting
- Satisfying wants rather than needs
- Living beyond my means
- Self sabotage
- My DF earns more than me a year and has no debts - I graduated with cc debt and student overdrafts and went down the dreaded consolidation loan route and the rest is history. DONT DO IT PEOPLE!!!!! I've been living his lifestyle!
- And, finally, the usual 'oh, I'll stick it on the CC and deal with it next month' mentality

Things I'm focusing on now
- BUDGET, BUDGET, BUDGET :money: I've been using YNAB for the past few days and its a revelation. I can't believe how well I have done so far!
- using A*di for veg and fruit. Bit of an admission here - DF and I are Waitr0se stalwarts BUT we love to cook and enjoy our food and value quality. However, we've realised that there are things worth paying more for - we like organic meat and dairy, wine - but everything else is up for negotiation and I have to say, even DF is convinced by the savings to be had at A*di.
- As above, I'm sorting out an SOA but that's more tricky as DF does all the direct debiting and we also have a % split on bills to reflect our salary differences. Again, another nice thing that DF has done that, on reflection, has enabled me! Will do over the course of this week.
- Selling stuff on ebay - made £200 in the past two weeks!!
- Switching utilities - done today and saving £220 per year
- Switching car insurance - will do over the next week
- Being more efficient with food, using up what we have and freezing left overs. We cook from scratch anyway but we are guilty of throwing away food we don't use.
- Working at home more to save on petrol and parking costs

Back later!

enthusiasticsaver wrote: »

You are in a really good position to get rid of this debt if you make and stick to a budget and don't get distracted from paying it off.

Positives are you are on a fairly good salary and say you have around £800-£1000 per month to throw at your debts although I wonder if you are being overly optimistic there as presumably you have been spending this £800 to £1000 per month up until now? That is a large chunk of money to suddenly start throwing at debts so presumably you know where this has been going up until now?

I think having the large savings buffer your DF has and his higher income and you not getting involved in day to day bills has sheltered you a lot from having to live within your income. It is almost like you living at home and paying bed and board but not taking responsibility for bills etc. At some point you both having a joint account with you both paying a contribution in would make sense rather than him paying the majority and you responsible for just one or two bills although I note you do pay 40% of the bills and have been switching utilities since starting your diary. My DH and I always had a joint account for salaries and all bills and a personal spends account each which had the same amount going in to both. This overcame the problem of me having lower earnings due to childcare responsibilities and working part time. I always overpaid into my pension as well to compensate for earning less.

One thing I would say and please take this from someone who has seen people depend on their OHs for everything to provide for their financial security and then been badly burnt. None of us know what is around the corner so you are wise to get your own affairs in order. Don't let your DF get in the way of that by tempting you to overspend on things you don't need as he has the larger salary and substantial savings with more to come. Letting him know you are trying to clear debt is sensible as hopefully he will be more on board with you being a bit more frugal than you have been up to now. Spending outside your budget will delay you getting debt free.

The majority of your debt is interest free until 6/19 so that is also good news. I would not worry too much about your student loan. You graduated the same year as my daughter so are on one of the older schemes but may be worth checking the interest rate on it.

Your car loan is the most expensive debt at the moment but I think I would focus on the credit cards prioritising the ones with the interest free deals expiring first.

Thanks so much for reading and replying. These are really pertinent things to ask of me and you offer me some really excellent advice - I very much appreciate you taking the time to read and comment.

Something I've been thinking about recently and asking myself is what on earth have I been frittering away my income on? I can be quite faddy and certainly over the past two years I've got back into a few sports things and thrown money at them. Then there is the perennial clothes problem. And then I suppose it's spending too much on food. And the summer holidays. Then I got promoted at work and decided to spend proportionally even more. Also over the past few years we've bought a few new things for the house that we needed (okay, some were wants) and we decided on investing in 'quality' products (probably good examples of what you allude to about me buying into DFs 'affordable for him not me' way of life - I really liked that point you made as its so true). The big things got chucked on the CCs whilst I spent the monthly disposable income on living month by month.

But, that said, right now, I can look at where we are and what I've 'got' and very happily and contently consider myself as wanting for nothing. I've got everything I need (rather than want) to hunker down for frugal 9 months and get to a position where I can be saving rather than paying off debts. The long term rewards are more valuable than the short term, instant hit of spending money on stuff. Or in theory! I'm very motivated so I'm just hoping to keep the MSE spirit alive on here and making myself accountable to you all to keep me on track.

I agree with keeping the car loan as it is - I don't want to be credit checked in the next few months from getting a 0% BT CC as we're looking at getting the AIP in the new year. And, the car loan probably won't be included in the affordability calculations anyway as it'll have less than 6 months to run, so I'm happy clearing CCs as a priority and keeping out of my overdraft!

As for the student loan, I'll check the details but yes, I agree that keeping it safely tucked away where it is will probably be best.

Thanks! :beer: