Paying Off My Debt

Not working, having children, spending as if I’m still bringing home a decent income… these things have left me in a mess.

Financially, things are not good. Ha!

That’s OK, because I’ve been here before.

After completing my second degree, over 10 years ago now,  I took a programming job which meant a move across the UK. My salary at the time was less than my monthly outgoings. I had to rent a flat AND buy a car, and I had a huge student loan to pay off. In the first six months I had to supplement my income with credit cards, simply so that I could make ends meet (I wouldn’t advise this).

Luckily, my job prospects were good, and payrises and bonuses meant that within a year I could actually live within my means. Three years later, not only had I cleared every debt, including my student debt, but I’d also saved enough for a house deposit with the husband (then boyfriend).

I vowed I would never get into debt again.

But that was before motherhood and the transition to being a stay at home mum (something I never even imagined I would do).

So, after keeping my head in the sand for the best part of 4.5 years, I’ve finally taken stock.

I owe, today, £5786.06.

Ouch!

One of my 12 goals is to pay this off within 5 years, which means a monthly commitment to at least £96.44 each month towards my debt. That’s almost double what I currently pay back.

Initial problems are that:

a) I’m also paying around £25pcm in overdraft charges. This is £300 a year. I know this figure will reduce as I reduce my overdraft, but by shifting this debt onto a long term 0% credit card, the transfer fee (<£100) will easily beat the overdraft charges, and leave me with more available cash. I’ve made an application, but for the first time in my life I am not sure if I will be accepted. Having to put “homemaker” in the employment field doesn’t fill me with confidence. So, we shall see.

b) Aside from my massive overdraft, I have one other credit card, which actually contains the debt from some work we had done on the house last year. This has been at a 0% rate for 18 months, but runs out in July. This is bad news, as I’m not sure if I can obtain another card to shift this debt to (see above).

So, action points:

  • Wait for card application result (not hopeful, as these things are usually instant).
  • Either shift debt around, or replan budget.
  • Finish monthly budget and consider withdrawing cash at the start of each week rather than using cards.
  • Set up payments to meet at least the minimum repayments.
  • Start selling on ebay!
  • Commit to a monthly summary, to track debt reduction.

 

5 thoughts on “Paying Off My Debt”

  1. This is very familiar. 🙁
    It looks like you’ve got a good plan in place. Question: why not put your husband on the new CC application to remove the “homemaker” concern?
    Good luck Rose!

  2. As a single parent who only works for herself my income is pretty low. I get a govt payment to help (also very low) and child support from Monkey’s dad. I get all these deposited into one account which I can only access online. I then have a direct transfer set up from that account every week into my “everyday” aact so I effectively “get paid”. That’s what I live off. That account has a debit card attached to it so I can still use a debit card and don’t have to carry cash around but I have no access to other funds easily. Good luck!

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