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    • Kevvlar
    • By Kevvlar 18th Oct 16, 4:35 PM
    • 106Posts
    • 385Thanks
    Note to self: Stop Spending Money You Fool!
    • #1
    • 18th Oct 16, 4:35 PM
    Note to self: Stop Spending Money You Fool! 18th Oct 16 at 4:35 PM
    Well, hello I suppose. Iím starting a thread here in the hope it will allow me to record my journey towards a debt free life.

    Debt has been a part of my life for 10 years now, when I was 21 I stupidly (stupid, stupid boy) wanted a brand new fast car. I took out a loan that I could barely afford (shocking now to think the bank gave me a loan that was 120% of my annual salary) and I bought the damn thing. For a year or so I was the man, I had the shiny new fast car. The negative impact of this was I was using credit cards to top up my salary in order to afford both the car and a social life. A few years later, realising how stupid I was, I sold the car. By then, I was in the debt spiral (get loan to pay off cards, pay off cards, re-spend on cards, get top up loan to pay off cards etc etc)Ö.

    Thankfully, I never missed a payment on my cards and loans but the debt was causing me issues with my health. I never told anyone, my parents thought that when I sold the car it cleared my outstanding debt. The worry, keeping secrets, covering my tracks, it grinded me down till the thought of debt made me feel physically sick.

    Iíve had a number of LBM, each time Iíve faced up to my debt and figured out a plan to get rid, over time though old habits returned and I end up back to where I was. This has been going on ever since.

    A positive in my journey has been meeting my OH, I was able to come clean to her and tell her about my debt, what a relief that was. We were able to get a mortgage together and have now been on the property ladder for 18 months.

    My current situation is;

    Credit Card: £5000 Ė MBNA (Interest free till 2018)
    Loan: £8750 Ė Nationwide
    Bank of Mum&Dad - £10,600 (was £14,000 but paying back steadily)

    Total Unsecured: £24,450

    We are okay (just okay, not great) financially, we are both in full time employment and earn slightly above average wages. Once all household bills/debts are paid, we both have a leftover chunk of money.

    How am I going to tackle this debt?

    1: Proper budgeting, I am going to give YNAB another go
    2: Overpay Loan, even if it's only £25, this will reduce both the time remaining and will save on interest.
    3: Selling unwanted items, Iíve already made some money on house clutter so will go searching for more.

    This was a bit of a brain dump so apologies if it's a ramble.

    Thank you if you have read my post, I will update my sig with my numbers. Appreciate any support, advice, constructive criticism. Phew!
Page 1
    • Purplemumof2
    • By Purplemumof2 18th Oct 16, 8:07 PM
    • 6,071 Posts
    • 22,306 Thanks
    • #2
    • 18th Oct 16, 8:07 PM
    • #2
    • 18th Oct 16, 8:07 PM

    Welcome to the boards.

    Good luck on your journey x
    Official DFW Nerd Club - Member no. 791 - Proud to be dealing with my debts
    MBNA: £6350.00 Cap 1: £407.72 BC: £6224.59
    AFD xxx LTW 4/17
    POAMAYC 2018 #041 PD £5970.32/£7000
    Savings for Christmas £161.42/£365
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    • Bobarella
    • By Bobarella 18th Oct 16, 10:34 PM
    • 10,472 Posts
    • 69,775 Thanks
    • #3
    • 18th Oct 16, 10:34 PM
    • #3
    • 18th Oct 16, 10:34 PM
    Good luck Kevvlar.
    " Your vibe attracts your tribe"

    Debt neutral 27/03/17 from £40k in the hole 2012.
    Roadkill 17 £56.58 2016-£62.28 2015- £84.20)
    RYSAW17 £1900 2016 £2,535.16 2015 £1027.20
    • EssexHebridean
    • By EssexHebridean 19th Oct 16, 10:40 AM
    • 8,682 Posts
    • 45,754 Thanks
    • #4
    • 19th Oct 16, 10:40 AM
    • #4
    • 19th Oct 16, 10:40 AM
    Well done on the LBM but more importantly on acknowledging where you've gone wrong both in the first place and since. You're far from the first to have done something daft with money when you were younger - and you'll be far from the last as well, I suspect. The key thing is that you're tackling it. One thing - remember that feeling of how sick being in debt above your head was? Hold that thought - and when you note any habits starting to slide, revisit it and remind yourself why you never, EVER want to go back there.

    Is there any repayment penalty for paying off the loan early? More to the point do you get back any interest on it if you do so? That may make a difference to whether you're better to let that run its course and tackle the MBNA card first. Assume Bank of Mum & Dad is at 0%?

    Budgeting is vital so big well done on that step too. Before you start paying for YNAB can I suggest that you put together a proper Statement of Affairs (SOA) and also perhaps work through the MSE Budget Brain tool - both are great ways of getting all your spending down in black and white in one place - and will also let you see what you *should* have spare each month.

    We find that what works for us is money arriving centrally in one place - our spending money then diverts off to our own accounts and everything else is dealt with from the central one. We also use lots of savings accounts which run off our current account to budget for the less routine stuff like car costs, holiday, household expenses (insurance/replacement of small appliances), and that sort of thing. It means that the "splurge" money is kept totally separately to that which is required to meet bills, and also that when things like car insurance renewals etc come up, the money is there waiting for them.

    Good luck with getting sorted on this - it sounds like your head is in the right place to tackle it properly and see it through this time!
    MORTGAGE FREE 30/09/2016
    Sainsbugs 0% card: 22/12/16 £1229.00/£944.19 (15/05/18)
    SOA Calculator for DFW newbies: SOA Calculator
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