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  • FIRST POST
    • BabyStepper
    • By BabyStepper 8th Jul 18, 8:39 AM
    • 87Posts
    • 273Thanks
    BabyStepper
    Tidying up the mess
    • #1
    • 8th Jul 18, 8:39 AM
    Tidying up the mess 8th Jul 18 at 8:39 AM
    I am trying to find ways to get me and OH out of the debt mess we are in. I became self-employed a few months ago and my credit card providers wrote to me to reduce my credit limit to just above what I owe. This was worrying and I'm now thinking they might call in those debts at any moment. Me and OH then sat down for the first time to list everything we owe and figure out what to do about it. We are in it together to sort it out but this is where we stand just now.

    Hitachi loan 844 0%
    Lloyds cc 1,311.39 mostly 0 % but 403.68 @17.9%
    Overdraft 2,000 0%
    Santander cc 3,367.30 0%
    Halifax cc 3,242.65 0%
    Barclaycard cc 4,614.38 mostly 0% but 838.75 @ 16.9%
    MBNA cc 5,213.34 0%
    Student loans (1) 8,160 (currently deferred)
    Student loans (2) 27,190 (payment taken straight from wage)

    Total 55,943.06

    We spent 10k we didn't have when we bought our house, front and back doors, new windows and damp treatment. 3k is still to be paid off after our wedding 2.5 years ago. The Hitachi loan is carpets and lino. Student loans have never been on the radar as something to be paid off but they are now. Other than that we have around 6-7k that we both just maintained on cards, not to buy anything in particular, just spending and forgetting about it.

    I need a coffee after writing all that.
    Last edited by BabyStepper; 09-07-2018 at 6:37 AM.
Page 4
    • efes shareholder
    • By efes shareholder 12th Sep 18, 4:30 PM
    • 361 Posts
    • 982 Thanks
    efes shareholder
    Hi - just checking in

    Have you looked at ebay fo ladders for sale locally or gumtree

    Maybe you could resell once you have used if you purchase a set
    • BabyStepper
    • By BabyStepper 13th Sep 18, 4:49 AM
    • 87 Posts
    • 273 Thanks
    BabyStepper
    Thanks efes shareholder. After a quick look locally for ladders, they are all more expensive than the set I have seen in Argos. They might be cheap rubbish but they just need to do this one job. I think I could probably sell them easily once we're done, and maybe even for the same amount of cash we bought them for. I will get the quote from the decorator this morning so we'll see how much we can save doing it ourselves.

    OH has signed up to the local Uni's psychology dept to be a guinea pig, it involves a few tests and will bring in some extra cash. He was quite excited about it.

    I'm also wondering about getting the interest bearing debt moved to a new 0% card. We were trying not to apply for any more cards, but it is going to take a long time to knock the Barclaycard down and it might make sense to try and get the interest bearing part moved. I don't really want to, and am also not sure if either one of us have good enough credit, but it's something I'm thinking about.

    Nothing much else to report on at the moment. It's getting chilly here but we both have winter coats in good condition so that's an expense saved.
    Last edited by BabyStepper; 13-09-2018 at 5:09 AM.
    • GlendaSugarbean
    • By GlendaSugarbean 13th Sep 18, 7:00 AM
    • 262 Posts
    • 1,865 Thanks
    GlendaSugarbean
    Can you ask around to see if anyone has a ladder you can borrow? If not, an extendable ladder is actually a very useful thing to have in case of needing to patch up windowsills or clear the guttering. So worth the investment?
    • BabyStepper
    • By BabyStepper 13th Sep 18, 8:35 AM
    • 87 Posts
    • 273 Thanks
    BabyStepper
    Yes, borrowing things is something I'm definitely for and you've just reminded me my friend has a ladder, I'm just not sure if it's an extendable one. We have an ordinary A frame one, it's just not long enough for one small section of the hall, even when teetering on my tiptoes on the very top platform. All these high ceilings, how we loved them when we first looked at the house, what a hassle they are now. I'll ask my friend about his ladder in the next couple of days.

    I've also been doing some more sums about student loans. Sorry to bore you all with this, but I think the Dave Ramsey method does not translate over here regarding student loans. My previous calculations were wrong, OH won't be paying back until he retires, it'll only be until he is 58 then the loan gets written off. This means it would be very silly to try and pay the whole amount back and would cost us around 10 thousand pounds more than we should actually have to pay. Even with several pay rises, OH won't have to pay it all back.

    Executive decision made by me and OH to stop tracking the student loans for either of us, accept the hit from his wage every month and focus on the credit cards, overdraft and Hitachi loan. Realistically my student loan will have expired before I'm making enough to repay anything, but even if I did it would not be the full amount.

    We will need to redo our thermometer wall chart. And I am about to post a revised list of debts excluding the loans.

    Note to self: do not get caught up in indecision and change my mind about this. The decision has been made. The loans have been ignored for a long time, if it wasn't for Dave they would still be getting ignored, so just write it off. It was worth it so we could both have careers we enjoy, and we can be wealthy without paying these things off.
    • BabyStepper
    • By BabyStepper 13th Sep 18, 8:45 AM
    • 87 Posts
    • 273 Thanks
    BabyStepper
    Revised list of debts
    Hitachi loan 759.60 0%
    Lloyds cc 1,285.20 mostly 0 % but 403.68 @17.9%
    Overdraft 2,000 0%
    Santander cc 3,300.29 0%
    Halifax cc 3,177.69 0%
    Barclaycard cc 4,437.09 mostly 0% but 661.46 @ 16.9%
    MBNA cc 5,109.60 0%

    Total 20,069.47
    • Lydia42
    • By Lydia42 13th Sep 18, 4:08 PM
    • 105 Posts
    • 337 Thanks
    Lydia42
    Well done sticking with your diary and not smoking BabyStepper. Just seen your balance update. Wow that looks so much better excluding the student loans which as you say can't be dealt with at the moment. That must make it look more manageable :-)
    Total Debt October 2018: 23, 990
    • DD265
    • By DD265 13th Sep 18, 5:53 PM
    • 1,539 Posts
    • 3,427 Thanks
    DD265
    I think most of us ignore our student loans to be honest. Mine will be paid off in full in 9 years at the current rate of repayment. I guess at some point when I've sorted everything else out, I may consider overpaying, but given 'everything else' will involve credit cards, a house, a car and home improvements - plus potentially maternity leave - that might take 9 years anyway!

    Certainly my student loan is so cheap and because it comes straight out of my salary I don't notice it too much except when I give my payslip a cursory glance.
    • redmel1621
    • By redmel1621 13th Sep 18, 7:09 PM
    • 5,900 Posts
    • 25,623 Thanks
    redmel1621
    I agree about not counting student loans in your debt figure.

    1, it comes out of your pay the same as tax/NI so just count your net (after all deductions) as your income.
    2, It is wiped when you reach retirement age.

    There is no way I will be including our student loans in any calculation as it is about 100k. We will never, ever pay it all back.
    Unless someone like you cares a whole awful lot,
    Nothing is going to get better. It's not.

    • BabyStepper
    • By BabyStepper 14th Sep 18, 5:26 AM
    • 87 Posts
    • 273 Thanks
    BabyStepper
    Thank you everyone for your support around the student loan decision. It's a funny old system and I'm glad I investigated it. At least I better understand how it works now. If we paid it off in full we would be around 10k down for no reason. There will always be better things to spend that cash on, or we can save it, or whatever. And if OH lost his job then the payments just stop.

    The smoking situation is going ok but I'm now snacking more than I used to. Need to stop that.

    The quote for the hall came in at 550 plus the paper. Not a chance we are doing that. After a quick costing I think we can do it for less than 150 including paper and paint. It will need to wait until next month but I'm getting all the prep done just now. Stripping old wallpaper, radiators off the walls, filling little holes with polyfilla. It's going to look amazing.

    Yes the debt total looks better and the mini target is to get below 20k. Need to find 69.48 from somewhere. Me and OH are both in need of some clothes and shoes so will need to budget in that. I also want to start a hall carpet fund so will need to contribute to that.

    Why can life just not stop while we pay off debt? If we didn't need anything at all, this could all happen much faster.
    • jodles16
    • By jodles16 14th Sep 18, 8:29 PM
    • 1,369 Posts
    • 4,154 Thanks
    jodles16
    Hey babystepper,



    You are already making some great progress, I think it totally makes sense with the student loans, seems to make things more manageable.


    Best of luck, I will pop in again!


    Jodles
    MFW2017 #29 1200.24/4524
    MFiT #66
    Overall aim 10,124.20/21,743 (156,000)
    2016- Jan-177,472, Apr-173,195.04, July- 171,417.47 Oct- 169,366
    2017- Jan- 167,347.80 Apr- July- Oct-

    • BabyStepper
    • By BabyStepper 15th Sep 18, 8:47 AM
    • 87 Posts
    • 273 Thanks
    BabyStepper
    Thanks jodles. It's good to know others are in agreement with the student loan situation. It does make me wonder what the point is of lending students all that cash when it's not even going to be paid back.

    In the spirit of trying to calculate a DFD, I was looking at the ending date for all my 0% deals. I had been feeling pleased that some of them are very long (October 2020) but some are not so long (2,000 beginning to accrue interest as of next month). I had an idea that instead of snowballing, I could set all the DDs up with the right amount to get the card paid off in time before the deal ends. In my head I thought we had plenty of time and that we would never need to balance transfer again.

    However, this is what I've discovered so far. To get the Lloyds, Halifax, MBNA and Barclaycard paid off in time we would need to be paying 745 per month towards them. At the moment we pay 226 per month in minimum payments so we're looking at another 519!! FROM WHERE?!?! And that doesn't even include interest on the Barclaycard because it was too difficult to figure out.

    I have no idea when my Santander deal ends because it does not show on my online statement and the phone line charges a fortune so I've messaged them and am waiting for a reply. If I was being optimistic and my Santander card is 0% for 2 more years, the payment needed would be 138 per month (currently 33), overdraft 84 (currently 0) and Hitachi continues at 42 until March 2020.

    So in addition to the current payments we make, we need to find another 708 per month if this will be paid off in two years. Granted there would be a snowball effect as the ending dates are all different. But still. This is massive.

    This problem is far bigger than I could have imagined, even without the student loans to think about. I need more work, urgently. I'll be back in a minute with a plan of some sort.
    • BabyStepper
    • By BabyStepper 15th Sep 18, 9:05 AM
    • 87 Posts
    • 273 Thanks
    BabyStepper
    After a very strong coffee and a moment to gather myself I am back with some ideas.

    The first thing is that I won't tell OH about this. It will just panic him and he worries enough about things so I will keep it to myself and battle on.

    Secondly I want to have October 2020 as our potential debtfree date. I don't know how I'm going to do it but that is quite long enough to be living like poor people when we should actually be reasonably well off.

    Thirdly, it would only take 3 new clients for me to make up that overpayment amount. I have one almost in the bag already. 2 to go.

    Fourthly (?) I am going to try and take on a part-time evening job. Even at minimum wage this would boost our income and it might also mean we could remortgage next year when the time comes, to get a better deal and help keep costs down.

    Fifth (ly) I am going to keep a running total of how on/under/over target we are every month.

    So that's decided. Wish me luck.
    • BabyStepper
    • By BabyStepper 16th Sep 18, 5:55 AM
    • 87 Posts
    • 273 Thanks
    BabyStepper
    Morning everyone

    OH's MBNA card is offering 0% on spends until February 2020. We have no other deals available so I'm going to move 400 of the interest bearing debt onto MBNA. Over 2 months I'm going to take our 200 shopping budget, pay it off the Barclaycard, and then buy our shopping with the MBNA card (online, because the card is in 2 pieces!). 400 will be transferred to 0%, not amazing, but it's a start.

    Only 2,200 with interest to deal with, pay off or move. I'm on it.

    I got a job application in yesterday. Fingers crossed I get an interview.

    Not much else to report. I have the figure 708 whirling around in my mind. This is what I need to make extra, every month, for the next 2 years. Gulp.
    Last edited by BabyStepper; 16-09-2018 at 10:38 AM.
    • pidge04
    • By pidge04 16th Sep 18, 6:37 AM
    • 497 Posts
    • 1,391 Thanks
    pidge04
    Hello! Just read your diary for the first time. Well done you two for doing those jobs around your house by yourself. And well done for stopping smoking. Just wondered ... is your home big enough to maybe find a lodger or a student from a local language school (if you have a local language school!) to try and boost your income? You are making some significant steps in the right direction ... you can do this ... it sounds like you are a team. Love the debtometer your husband made!
    CC1 2400/422 CC2 3000/2269 CC3 600/0 LOAN 13,000/5008
    • enthusiasticsaver
    • By enthusiasticsaver 16th Sep 18, 9:20 AM
    • 7,280 Posts
    • 15,958 Thanks
    enthusiasticsaver
    I think removing the student loans from your targets is sensible. Many people will never pay them off.

    Thinking of the amount you need to pay monthly to clear them within the deal period can be daunting and setting an unrealistic target can be self defeating. Changing your mindset around budgeting and clearing debt can take you a year or more to get to grips with and you are coming up with the right answers but it is important to set a plan rather than rush headlong into paying every spare penny off debt. You are a DR fan so you know the way to success although his way is slightly different to the MSE way as he targets smallest debts first and snowballs whereas MSE targets most expensive.

    Firstly you need an emergency savings account. Maybe use your money saved from not smoking to build that up?

    I have not seen an soa for you and I guess being self employed makes budgeting more difficult. Is there any reason why you went self employed rather than sticking with a regular wage? Clearing debt and having just taken on a mortgage leaving a salaried job has made things a lot more difficult for you. Is this set in stone or is going back to a regular job a possibility? If not taking on a job in addition to self employment would seem a good compromise.
    Debt free and mortgage free and early retiree. Living the dream

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • DD265
    • By DD265 16th Sep 18, 2:03 PM
    • 1,539 Posts
    • 3,427 Thanks
    DD265
    Would you feel better if you broke the 'extra-required' down to 10% or 1% chunks? 7.08 feels a lot more achievable than 708 and personally I could easily save at least one lot of 7.08 in a week simply by not buying chocolate.

    I'm tempted to say that you should tell your OH about the extra. I know you say he'd worry, but if he knows that would give him an element of control which he might actually find helpful?

    I would be prioritising the most expensive debt, but I'd also make small overpayments on the credit card which currently has the most available credit, in the hopes that this will encourage them to give you a balance transfer offer in a couple of months.
    • BabyStepper
    • By BabyStepper 16th Sep 18, 8:59 PM
    • 87 Posts
    • 273 Thanks
    BabyStepper
    Hello! Just read your diary for the first time. Well done you two for doing those jobs around your house by yourself. And well done for stopping smoking. Just wondered ... is your home big enough to maybe find a lodger or a student from a local language school (if you have a local language school!) to try and boost your income? You are making some significant steps in the right direction ... you can do this ... it sounds like you are a team. Love the debtometer your husband made!
    Originally posted by pidge04
    Hi there, good to meet you and thanks for dropping by. You have just reminded me of something, I had a plan to let out the spare room for Air BnB once the renovations and decorating was a bit further on. Looks like we might be almost good to go. Thanks pidge04, great idea, I love it and so glad you reminded me.
    • BabyStepper
    • By BabyStepper 16th Sep 18, 9:22 PM
    • 87 Posts
    • 273 Thanks
    BabyStepper
    I think removing the student loans from your targets is sensible. Many people will never pay them off.

    Thinking of the amount you need to pay monthly to clear them within the deal period can be daunting and setting an unrealistic target can be self defeating. Changing your mindset around budgeting and clearing debt can take you a year or more to get to grips with and you are coming up with the right answers but it is important to set a plan rather than rush headlong into paying every spare penny off debt. You are a DR fan so you know the way to success although his way is slightly different to the MSE way as he targets smallest debts first and snowballs whereas MSE targets most expensive.

    Firstly you need an emergency savings account. Maybe use your money saved from not smoking to build that up?

    I have not seen an soa for you and I guess being self employed makes budgeting more difficult. Is there any reason why you went self employed rather than sticking with a regular wage? Clearing debt and having just taken on a mortgage leaving a salaried job has made things a lot more difficult for you. Is this set in stone or is going back to a regular job a possibility? If not taking on a job in addition to self employment would seem a good compromise.
    Originally posted by enthusiasticsaver
    Hi there enthusiastic saver

    Thanks for dropping in. I'm not quite sure how to respond to your comments, you seem to have missed quite a few important points about my diary!

    In post #38 I let everyone know about my 800 emergency fund. So I'm finished with the first step.

    Just tried to write something about the rest of your post but it's too much to try and wrap my head around. Suffice to say, no I won't be going back to my old job, I love being self-employed, my business is doing well, I won't be replacing my profession with a 'compromise' part time post, I will be adding to it, because like DR says, I want to pay down my debts as fast as I can.

    Thanks!
    • BabyStepper
    • By BabyStepper 16th Sep 18, 9:30 PM
    • 87 Posts
    • 273 Thanks
    BabyStepper
    Would you feel better if you broke the 'extra-required' down to 10% or 1% chunks? 7.08 feels a lot more achievable than 708 and personally I could easily save at least one lot of 7.08 in a week simply by not buying chocolate.

    I'm tempted to say that you should tell your OH about the extra. I know you say he'd worry, but if he knows that would give him an element of control which he might actually find helpful?

    I would be prioritising the most expensive debt, but I'd also make small overpayments on the credit card which currently has the most available credit, in the hopes that this will encourage them to give you a balance transfer offer in a couple of months.
    Originally posted by DD265
    Thank you for all of this. You comment about chocolate made me giggle...I buy mine in Lidl now where I can make myself feel sick for less than a quid...score!

    Breaking the amount down into smaller percentages is also a good idea. Lots of little 1% payments in a month would be great as an initial target. I think I'll start there, and not with the whole total.

    I told OH! He shrugged and said 'cool' and went out on his bike. Sometimes I get it all wrong with him. Good job he loves me anyway.

    Also great idea about the balance transfer and overpaying the card with the most credit. I had hoped to not be shuffling cards in this way, but now that I'm here, who cares. It's all helpful and I hadn't thought of that. Great, thank you.
    • BabyStepper
    • By BabyStepper 17th Sep 18, 9:27 AM
    • 87 Posts
    • 273 Thanks
    BabyStepper
    Good news
    The total credit card/loan/overdraft debt in my first post was 20,593.06. The total today is 20,069.47.

    This means 523.59 has been paid off already, roughly 2.5%.

    I'm really pleased with this. Progress!! It also means we have coloured in the first section of our revised (to exclude student loans) thermometer chart.
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