Small Steps Out Of Massive Debt!

GeorgianaCavendish · 27 January 2017 at 6:30PM

Hi Everyone,

I'm so glad that I've found this website because I really need to get serious and DO SOMETHING about my debts. I thought that keeping a diary on this forum would keep me accountable.

I have taken stock and I have over £35,000 of personal debt on loans and credit cards, which does not include my Student Loan (around £18,000 but I need to check the last statement). I have no savings at all and am living pay day to pay day. I have a pension, which is probably the only semi-financially responsible thing I've done in my whole life.

I have always had a problem with spending money. I never knew when it was time to stop spending. The idea of a budget was a foreign concept. I'd spend until everything had gone, whether that was my wages, student loan payments or birthday money. I go through phases of pretending to be responsible and looking at debt consolidation, but what usually happens is that I don't close the old accounts so a few months down the line I end up spending money on the cleared card.

I know that I need to sort out my spending and to take a brutal look at the state of my finances and what I spend money on. I need to stop seeing credit limits as targets to reach (!!!!) and start seeing them for what they are - invitations to get into debt!

This is what I have outstanding:

£13000 on personal loan
£10500 Barclaycard
£8000 MBNA
£2500 HSBC
£870 on catalog
£800 left on furniture (this one is interest free, there are 9 repayments left)

I've been reading the advice for newbies threads so this weekend I am going to go through my last bank & cc statements with a fine tooth comb to work out what I am spending money on, and I'm going to find out the interest rates on all my credit accounts.

Thanks for reading and wish me luck!

PS. My forum name is from a Duchess in the 1700s. She was so bad with money that after she died her husband found out she was around 4 million pounds in debt. Sadly I could imagine this happening to me if I had access to that much credit

Poor_Single_lady · 27 January 2017 at 7:45PM

Hello Georgina Cavendish. Just wanted to drop In, say hello and offer my support.

I believe I am also a Georgina Cavendish myself. Good luck for your journey. Hope the diary helps. xx

Bobarella · 27 January 2017 at 8:22PM

Loving the historical Nom Dr Plume

GeorgianaCavendish · 28 January 2017 at 1:06PM

Thank you PoorSingleLady and Bobarella!
I'm at my in laws this weekend so will be updating with exact balances & interest rates on Monday (and doing the dreaded budget!).
I've just been thinking about my direct debits, the amount I spend on debt repayment each month could pay for a holiday or a fancy handbag. Not that I want to buy a Mulberry bag every month but it makes me think, there are things that I've always wanted to do but can't because I have no money (e.g. Travel or buy a house!) and yet I am spending so much repaying the money I've borrowed over the years for trivial or inconsequential things. It is really putting my spending in perspective.

Bobarella · 28 January 2017 at 1:19PM

Yes it's a sobering reality isn't it. But it's fixable so that's the good thing.

GeorgianaCavendish · 30 January 2017 at 11:21AM

So, here I am at the start of what will hopefully be my first week of tackling my debt!
My first step is to get accurate balances for all my credit cards. Some of these cards have 0% interest on part of the balance, is it possible for the credit card company to give me a breakdown of the various parts of my debt and would it be possible for me to pay off the higher interest parts first?

I feel like such an idiot for asking this but I honestly have no idea how it works!

GeorgianaCavendish · 30 January 2017 at 12:36PM

I've checked all my balances and interest rates, total debt (excluding Student Loan) is £ 35,923.17

HSBC Personal Loan - £13,634.53 (interest rate is 8.9%)

Credit Card Balances

HSBC £2411.95 @ 21.9%

MBNA £7927.97
Breakdown as follows
£3,717.36 @ 23.9%
£4,210.61 @ 27.9%

Barclaycard £10,192.01
Breakdown as follows :
£1,106.04 @ 27.6%
£9,085.97 @ 18.6%

Catalog £781.71 @ 17.9%

Furniture Finance £775 @ 0% (9 monthly repayments left)

Holiday £200 left to pay (0% interest but must be paid by 25th April 2017)

GeorgianaCavendish · 30 January 2017 at 12:50PM

I've never broken down my debt like this and looked critically at the interest rates I'm actually paying on each credit card. Up until now, I've had a blindly optimistic "oh, it was 0% at some point so it is probably still really low", whereas all my 0% periods have actually ended and I'm paying well over 20% interest on each one.

This already really helps me with deciding which debt to prioritise! Next step, finding out Student Loan balance and doing the SOA based on my last bank statement. Eek!

MrsTinks · 30 January 2017 at 12:59PM

Firstly fill in the SOA - it does help clarify tings

http://www.stoozing.com/calculator/soa.php

Then look at the snowball calculator

http://www.stoozing.com/calculator/snowball-calculator.php

That will tell you how to snowball most effectively

kittykatneedscash · 30 January 2017 at 1:01PM

Hi GC well done to facing up to your debts and finding out exactly what you owe and what the interest rates are. A lot of your repayments will be just going on interest and not actually reducing the balances but looks like you can do a lot to improve your situation. If you manage to transfer any of the onto 0% you have to be strick with yourself and close the old account or at least cut up your cards to you aren't tempted to spend on them. Having a diary on here really does help also read as many as you can. It's amazing what you can pick up on the forum. It might help to write yourself a list of goals. Why you want to reduce your debt so if you are tempted to continue to spend on credit you have something to look back on and remember the reasons you are doing this in the first place. Also set yourself small manageable challenges, maybe pay back a set amount to your highest credit card in the next month, take your lunch to work everyday, aim for as many no spend days as you can in a month etc. Good luck and well done on facing up to your debt

Siebrie · 30 January 2017 at 1:34PM

What an interesting lady, this Georgiana Cavendish!

Do you buy a lot of stuff online? It may help to clear all the cookies, so that the prefilled payment boxes don't show, and you have a threshold to actually pushing 'buy'.

Dave Ramsay has a lot of sensible stuff to say about debt and debt reduction, which I think will help you (just read his debt snowball plan - don't buy anything). There are plenty of others who have sensible advice, but I think Dave is a good start.

Small Steps Out Of Massive Debt!

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