Going for gold

Tuesday 29th July, 2008 - £8,428.07 in debt…

I don’t like being told what to do, I don’t like being shouted at, and gentle persuasion and nagging don’t normally work either. But, for some reason, a combination of these methods and some sort of Jedi mind trick from Martin Lewis have finally made me switch to a capped energy tariff. Where’s my medal?

You’ve probably heard that energy prices are set to rise by anything up to 70% (the amount depends on the paper you read) by the end of the year and, according to some sources, EDF’s price hike has sent energy consumers UK-wide scuttling dementedly from their houses and straight off the nearest cliff. I think I read that in the Mail.

So, yes, I’ve decided to switch to a tariff that promises my bills won’t rise until Autumn 2009. One of the reasons it’s taken so long for me to do this is because the energy bills are in my boyfriend’s name but, after receiving some sage advice from a wise friend, I nicked his chequebook and took the bull by the horns.

Switching to a capped tariff is entirely different from my previous experience of switching, where the aim was to save money straight away. I know that my new tariff won’t save me any money right now - in fact, it’s more expensive than my current one by £41.49 per year - but I’ve just got to gamble on everyone else’s bills shooting up if it’s going to be worth it.

But the switching process itself is as easy as it’s ever been if you use a good comparison service. Just a few questions to answer, as the service establishes how much I currently spend on household energy. And then a few bank details to fill in (hence the chequebook), as it signs me up for a Direct Debit (saving about a tenner a month on my bill).

The tariff I’ve chosen is from E.ON (formerly Powergen): the Energy Saver Version 4 Dual Fuel. This gives me the security of the fixed price, but without a cancellation charge if I decide to leave earlier than planned. According to the E.ON website, “If our standard prices go down, your prices could too”, and I get a free energy monitor. And a Tesco Clubcard point for every pound on my bill! Get in!

Why didn’t I do this months ago…? And where’s my MEDAL? 

 Numbers, numbers, numbers…..

Thursday 29th May, 2008 - £9,341.19 in debt…

A year or so ago, I heard about an amazing thing I could do to claw some money back from my bank – I could just make a list of all the charges I’ve had to pay over the last six years, and be reimbursed for all of them! Good idea, right? Then my mum told me I should do it, and all of a sudden I lost interest.

But finally, this week, I made myself go through my statements. I’ve got a fair amount of time on my hands, and apparently now is the time to get my claim in so I’ll be near the front of the queue if my bank does end up paying out (although that could be up to two years away). There’s an article here that explains the background to all of this.

So, all I had to do was look at my bank statements for the past six years and add up all the charges (for going over my overdraft limit and bouncing cheques). Then I had to write to my bank with a breakdown of these charges and the total I wish to reclaim, using one of the template letters from Martin Lewis’s website. Simple or what?

Not so simple when all your bank statements are in various piles of miscellaneous paperwork, but I needed to get all of that sorted out anyway. Four hours of bank-related nostalgia later (“ooh, I remember that cashpoint in Turkey!”; “did I really spend that much in Ikea in 2003?”), I had a claim of £1,540.00 on my hands. And now I play the waiting game…

Has anyone else done this recently? Should I expect some acknowledgement from my bank that they’ve received my letter? Anyone have any success stories from making claims before the process was put on hold?

 £163? On Milky Bars? Oh, alright then….

Friday 16th May, 2008 - £9,443.29 in debt…..

Imagine you’re having a quiet drink with Paris Hilton, discussing the usual things: make-up, pedicures and handbag-sized hounds. Suddenly, you throw in a question about particle physics: imagine the expression on her face.

Multiply all that confusion, panic, sadness and resentment by one million. That is exactly the expression I was wearing fifteen minutes ago, when I completed the budget planner from Martin Lewis’s website.

It’s not that the planner is hard to use – quite the opposite. The problem was that, when I got to the end, it told me that I was in a positive financial situation. In fact, at the end of an average month, I apparently have £163 left to spend on Milkybars or throw out of the window or whatever.

This is clearly not the case, so I went over it again with a couple of bank statements sitting next to me. And here’s where I realised why I am in so much debt: I just don’t notice the money going out of my account.

The edited highlights:

• I spend at least £20 a month more than I think I do in Boots.

• I think that my boyfriend and I spend £100 on food in a month, but the actual figure is closer to £200.

• And since when did anyone pay £150 a year to maintain an eight-year-old car? My last MOT bill was easily double that.

The fact that I don’t know what I’m doing with my money isn’t entirely unexpected. But the fact that I spend £235.15 more than I earn, EVERY SINGLE MONTH, was a very forceful punch in the face.

The moral of the story is: If you’re thinking about getting out of debt, given the current climate and what-have-you, download the budget planner from www.moneysavingexpert.com and prepare to be brutally honest.

It’s the first time I’ve ever taken a serious look at what I spend, and it’s been a huge eye-opener. Which is why, when the cheques for two of my Ebay sales cleared today, I transferred the £42.25 straight onto my NatWest card within seconds. And it’s also why I’m hyperventilating with panic.

 …i need a desk tidy

Thursday 15th May, 2008 - STILL £9,485.54 in debt…..

It takes a human being two years to turn from a dribbling, incompetent baby to a bawling, incompetent toddler; it took me two years to “study” for my A-levels; and it took Take That two years to go from spreading jam on their bums for attention to releasing their first UK number one single.

But two years isn’t very long when you’ve got nearly £10,000 of debt to pay off. I’ve been happily plodding away for the last fortnight, Ebaying things here and there, musing about maybe switching lights off when I’m not in the room, blah, blah, blah… But nothing is really happening.

If I’m going to manage this, I will need to pay at least £400 towards my credit card bills every month. I currently pay £200 but, if I’m honest, I often re-spend some or all of that balance. My Barclaycard is the only one that I don’t re-spend, because I’ve blocked it. Or I thought I had…

As you might remember, last week I was furious with Barclaycard. Having called them in January to block my card and decrease my interest rate, I was told last week that neither of these things had been done.

While they couldn’t now decrease my rate (rage, fume, etc), they would block my card and send out another one. “No - don’t send another one. I just want to block it so I can’t use it”, I said. “No problem”, they said.

Yesterday, I received a text message from Barclaycard: “Your new card is on its way.” Why, thank you very much, Barclaycard. Thanks for both keeping your promises and listening to your customers’ wishes. I love you almost as much as I love the idea of being locked in an Austrian basement for 24 years. With Jeremy Kyle.

I’ve always been told that it’s best to block your card, as cutting it up doesn’t necessarily mean it can’t be used and, even if it goes in the bin, it can get into the wrong hands. Or, even worse, I could give into temptation and start using it again.

But the card issuers don’t exactly make it easy to be sensible with your money. I’m giving up – when it arrives, I’ll just cut it up and eat it. Or force-feed it to anyone who works for Barclaycard.

Sorry – I digress. The fact is, I’ve got to start doubling my card payments. I’ve also got to stop maxing out all my cards every month.

This month, with my Ebaying success, I’m on course to pay £330 towards my debt, but this isn’t enough. I’m going to use Martin Lewis’s website to work out my budget for the next two years, and bite the bullet: those shopping sprees will have to stop. When will I learn that it’s not my money to spend?

 Yessss…i won that 1989 Shane Ritchie annual

Tuesday 6th May, 2008 - £9,485.54 in debt…..

Ebay is a funny old thing. How on earth does anyone make any money on it? Really? It takes me a day to take photos of all the stuff I want to sell, a further day and a half to list them all, and a day at the end to wrap it up and post it. And that’s assuming all my buyers pay up in the way they’re supposed to and I don’t have to enter into a week-long email conversation about why I don’t accept credit card payments.

So how much does the average person earn on Ebay, when you take all this into account? About 7p an hour, I reckon, but it’s better than nothing so here I go. I could report myself for exploitation.

Last time I sold anything on Ebay, I got into so many wrangles with buyers that eventually I gave up. It just didn’t seem worth the stress or hassle… maybe I have anger issues that should be dealt with. But now, I have a mission and a huge debt to pay off, so I’m giving it another go.

I’ve created a pile of things I can live without (CDs, books – including a couple of signed ones - unwanted presents, etc). By the end of yesterday, I’d calmly photographed and listed them all (complete with a slightly gruff “NO CREDIT CARDS” disclaimer), and I’m looking forward to getting rid of them and making some cash.

If I sell everything for the amounts I’m hoping for, I’ll be able to pay off my NatWest card within a week.

If you remember, my NatWest card is the one with only £123.99 on it. By paying it off first, it’s one in the eye for Martin Lewis and anyone else with half a financial brain, as the interest rate is by no means my highest. So why am I doing it?

Well, it seems like an achievable goal; it means I can add £10 to my monthly Barclaycard payment; and it will mean fewer cards to manage. I’m also doing it to prove that I can be sensible, bite the bullet and pay off a debt without spending all my so-called “disposable” cash on shoes. Hopefully. As soon as the NatWest card is paid off, I’ll start chipping away at them in the right order.

My listings end on Friday – I’ll keep you updated.

In other news…

After my last posting, I received a few comments about my credit card suppliers, telling me I should try calling them and asking if they can drop my interest rates. I had no idea that could be done, so I’ll be calling all my card issuers this week – watch this space.

By the way, you might have noticed that my debt has decreased since my last posting – YESSSS!!! This is because I’ve just received my Barclaycard bill. Last month I made my usual payment of £75, but my interest payment was so extortionate that my debt has only gone down by £13.91. Yes, it has cost me £75 to decrease my balance by less than £14. This has got to stop.