Best way to get out of debt

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kellyoak
kellyoak Posts: 7 Forumite
in Debt-free wannabe
Hi all,

Really need advise on best way to get out of debt: total debt is £40k. We have £800 left pm after bills. We own a house worth £175k, mortgage remaining is £132k. Because we are able to pay our bills and have money left over, I gather that there aren't many options for us? However I do have a family loan I have to pay back in 2 years for 10k. Please any advise much appreciated.

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  • lindens
    lindens Posts: 2,870 Forumite
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    The best thing to do is gather all together your debts - total o/s, interest rates, monthly payment, and details of all of your other incomings/outgoings. Then go to the sticky at the top and fill out an SOA. If you are brave you can post it here and people will be lovely and non judgemental and will advise you.
    Even if you don't want to post it, it's very necessary and actually therapeutic, and will put you back feeling in control again
    Lastly visit whatsthecost.com and fill in the snowball calculator, playing around with amounts etc until you come up with a plan to pay off those debts. Some people pay off the highest interest rates first, some people pay off the small debts first, to psychologically feel better.
    You're not your * could have not of * Debt not dept *
  • ReadingTim
    ReadingTim Posts: 3,970 Forumite
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    Complete a statement of affairs (SOA) to see where it should go, and a spending diary to see where it actually goes. Be accutate and truthful when completing both. Then, once you've got a picture of where it should be going vs where it needs to go, you can tweak things accordingly.

    The good news is that it's really simply to get out of debt - you just have to spend less than you earn. The bad news is that there's no magic wand you can wave to make it happen. It's a long and hard process which is going to involve some painful decisions and belt tightening for you, your OH and the entire family (assuming you have them that is!).

    Good luck - it's not going to be easy.
  • Grumpelstiltskin
    Grumpelstiltskin Posts: 4,243 Forumite
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    See OP's other thread.

    https://forums.moneysavingexpert.com/showthread.php?t=5929542
    If you go down to the woods today you better not go alone.
  • The_Only_Girl
    The_Only_Girl Posts: 873 Forumite
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    Hi I find that the best way to pay off debt is the debt snowball approach. Lots of videos on youtube about it. And when you’re ready to tackle it using the snowball calculator that linden has recommended is a good one.
    "There is Life AFTER DEBT."LBM 2009 Total Debt £49046.24 Debt Free as of 27/08/2015
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