Back in Debt, a bump in the road

Mimi_Arc_en_ciel · 10 January 2020 at 11:20PM

Back on here again! This post is more of a sound board for me so i can track what I'm doing, what i need to do and how i am going to do this. Feel free to add advice, feel free to ignore the thread - either way I have hit a low point and I'm climbing back up now.

After a very nasty break up I messed up and took my eye off of things, splashed out to compensate being "unhappy" (eating out etc) and in general, screwed my finances up.

I'm not posting a full SOA for a few reasons but in all honesty - everything has been whittled down to the lowest amounts as possible and I've cut everything that we don't "need". - Plus the link doesn't work on the main board anyway!

So - Here's my "what am I going to do plan"

I work part time. I have done for a very long time (over a decade) whilst my children were growing up. I know work could do with me working extra hours so I have spoken about this to my boss who was quite happy - he asked "how much" salary did i want. I've ran some figures and asked for an amount, hopefully this will mean I'm around £500 after tax better off. This is not including any tax credits i may be entitled to

Spending - my biggest spend, without a doubt, is my children. They are spoilt and quite frankly, I cant afford it. So whilst it would be nice to put savings into their accounts and pay for everything, I cant.

So I've stopped their savings (for now - but when I'm dead they get the house so I'll try not to feel too bad!) instead of paying for everything for them I am going to give them a small amount of pocket money each and they need to pay for their activities with this (instead of me paying) - This will save me approx £50 a month per child. i know - ridiculous right. It'll also teach them the value of money. This is a good thing surely. I'm not asking them to stop their activities - they shouldn't suffer because I've been a clutz.

Eating out - will now only happen on a immediate family members birthday. Theres no need to eat out - I have a chest freezer full of discounted food as well as the fridge freezer. Stop being a lazy cow and start cooking. Better yet, let DD1 loose (supervised!) in the kitchen and she can learn to cook. This will be useful, when i left home i couldnt cook!

Debts. These need clearing. I've tried to swap them on to 0% cards but then ended up using the bloody card again! I actually only use 1 card (barclay card) - I'm not cutting this up, but I have removed it from Paypal etc and told DD1 to hide it and only give it me back in a dire emergency. Shes laughing, shes not going to give it me back ..... (good girl!)

So, lets break it down then. No payment has been missed. I have 3 CC that are 0%, and one which needs paying as I'm being charged interest.

MBNA - 0% ends 14 AUG 2020, current balance is £4973.50
Lets be realistic, This wont get cleared before Aug. Plan is to pay as much debt off, help my credit score then move this to 0% in August. Hopefully....

M&S - 0% ends 11 AUG 2021, Current balance is £1105.30 - not TOO worried about this, its 0% until next year so i have some time. Carry on paying minimum until all others are sorted.

Fluid - 0% but only for around 5 months, i need to check! Current balance £1069.2. This needs paying off "second" - pay minimum but try and kill the barclaycard first as that is paying interest.

Barclaycard - this is the big boy. This is your priority as its chargeable and the current balance is £2863.8. This needs paying ASAP!!! SOO: I have a bonus this month of £400 from work, this can go straight to BC. Try and squeeze cash from bank account (for example, do i REALLY need to spend £150 on food when we have food in freezer? Try downshifting, although most things are value anyway! and stop unnecessary spending). Flog things on FB (no selling fees) - Its my birthday in Feb, ask for cash if poss!

Then there's the bank loan that i needed to pay for my car:
Tesco - 3% final payment 1st July 2023 - Current Balance £5654.50. I'm not too worried about the car. This was taken into consideration and looked into thoroughly before i took the loan out so for now, although its a debt, I'm going to carry on paying the minimum amount as required.

Haven't screwed up as badly as I thought but still, It's been a long time since I've been in debt.

Here goes nothing......

Willing2Learn · 10 January 2020 at 11:26PM

Mimi_Arc_en_ciel wrote: »

I'm not posting a full SOA for a few reasons but in all honesty - everything has been whittled down to the lowest amounts as possible and I've cut everything that we don't "need". - Plus the link doesn't work on the main board anyway!

The old link has been broken for a while. But not to worry! There is a new link for you

https://www.lemonfool.co.uk/financecalculators/soa.php

And I think you are being too harsh on yourself when you refer to yourself having "screwed up". We cannot always keep moving forward. Sometimes the road ahead is full of winding turns.

You can do this!!

Mimi_Arc_en_ciel · 11 January 2020 at 12:08AM

Thank you

The problem with an SOA is that we have horses. The problem with horses is there's a cost ... . In my defence, the cost is usually manageable - I have no rent/mortgage, I don't smoke, I don't drink, we don't go out. They are our companions, they know our secrets and they help settle me when I'm having a meltdown. Realistically, if I got rid of the horses, I'd be debt free very quickly. But then we wouldn't have anything to do. We've had them a number of years now, I thought about selling them once, I cried solid for a month. I have kept their cost down as much as I can though just recently so we can still keep them.

I realise I'm not in a bad position re:debt, I know there are so many worse off (and believe me, I've been there. 13 years ago my ex dropped the bombshell we was in £34k worth of debt) so I know this isn't Rock bottom. But I'm trying to prevent any further spiralling because I know how quickly debt gets out of hand.

I should probably re-word the title of my first post. Having written everything down it's not as bad as originally thought

I've got this 💪

WhenIam64 · 11 January 2020 at 7:30AM

I have no rent/mortgage

Do you own your property outright? If you do it narrows down your options if things go off the rails later.e.g. drop in income/hours

You might want to think about starting some sort of emergency fund.

monetxchange · 11 January 2020 at 1:27PM

Just popping in to add my encouragement. You know what to do. You’ll do it!

A good thing to do would be to start eat through the food in the freezers. There’s no point buying cheap food and storing it away and not eating through it, because then you’ll end up buying more to actually eat! Buying discounted food instead of cooking from scratch can be a false economy sometimes, so quickly weigh up the sums before you buy. Definitely worth letting your kids learn to cook! I couldn’t at all when I left home either. I got to the point where I couldn’t face another meal of dry pasta with tuna stirred into it and used to live off takeaways. Start of a debt spiral and would be great to instil the frugalness of cooking into your kids early!

Good luck

Mimi_Arc_en_ciel · 11 January 2020 at 2:27PM

Yes, house is owned outright. I did have savings but these were used a while ago so this is something I know I need to do but I want to clear, at least the Barclays card before I look at savings - best case, I'll not need any, worst case I'll go and creep to bank of dad

I've been and closed some bank accounts this morning that were unused and received a £350 bonus today which I've whacked straight into Barclaycard

My friends an accountant so I've had a quick chat with her too, she's coming round later to recheck all my figures.

I can, and I will!

(Thank you for your replies, hope you've all had a lovely weekend!)

CreditCardJunkie · 11 January 2020 at 11:35PM

Just wanted to wish you good luck!! I also have a little debt and a horse who I've had for 13 years. I just see his costs as money I never had at this point. He's saved my sanity on many many occasions!

Mimi_Arc_en_ciel · 15 January 2020 at 2:03PM

So little update

I thought I'd give it a go and apply for a 0% card to debt shift my last bit of "chargeable" debt but unfortunately this was declined. Looking at my credit report this was because of "Debt to income ratio" and "Credit utilisation" - ah well, it was worth a try!

I've also messaged my employer and asked to increase my hours which is something they have been after me doing for a while now. They've agreed to increase my hours from February, we are just wrangling out the pay/how many hours. If I get what I've asked for - I should be at least £500 better off a month - fingers crossed. It's been confirmed I will also get a (small) bonus at the end of the month but this is better than nothing.

With us eating from the freezer this month I've saved on our shopping bill (£200) so I've whacked that on the Barclay card. I was also given some xmas money which I've added to the BC too.

SO what else am I going to do that's money saving. Well I've flogged the kids (unused!) outdoor toys for £100. I've put a bike and a wendy house for sale on FB so hopefully someone will buy them! I also cleared out my garage, which needed doing! and whilst I didn't have anything in there that I could sell, I have managed to start a little log storage space so I can FINALLY cut up the logs I have and use them on the fire instead of putting the heating on / burning coal

I've also ran through my excel sheet that I have for mu income/outgoing and checked everything is correct. By doing this I've forecasted that this month, I can pay an extra £100 towards my CC.

Baby steps people, baby steps!

EssexHebridean · 15 January 2020 at 5:12PM

On the cards that you are not using and are currently paying minimum payments on - a trick for you. Set the monthly payment direct debit to an amount slightly above the current minimum - so maybe round up to the nearest £10. Then just leave that payment going out every month. It doesn't fall over time in the way that one set for "minimum" would - and this has two advantages - the obvious one being that you pay off slightly more each month than the one before, and secondly, that you don;t end up with a small amount of additional money being left behind in your current account each month that tends not to get noticed, and so gets frittered rather than being put to use... This ONLY works for cards that you aren't using though! Stealth debt repayments - can't be beaten!

Andyjflet · 15 January 2020 at 5:31PM

Agree with the post above, snowball your debt, usually I would advocate smallest first for quicker "wins" and motivation. However you may as well use the last few months of 0% on the other cards.

Then set the minimums on the other cards and throw everything at the BC, then snowball to the next one.

Mimi_Arc_en_ciel · 20 January 2020 at 9:35PM

Thanks for the replies:

So whats happening at the moment is that all the payments come out of my maid account and go into a "bill" account. This was set up a while ago, i havent adjusted the standing orders. Once the payments have come from the "bill" account, at the end of the month, what ever is left is getting thrown at my Barclaycard.

Back in Debt, a bump in the road

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