Bournemouth - The Promised Land

Tuesday 22nd July, 2008 - £8,810.98 in debt…

I recently asked around on some forums about services that make it easier to get out of debt, and was bombarded with links to Whatsthecost.com, which apparently is what all the cool people are using. I just went there for the first time, and I feel like I’ve arrived late to a party. A really nerdy party where the guests soberly calculate what order they should pay their credit card bills in, but a party nonetheless.

Just to recap, I have debts on:

1. Barclaycard
2. Capital One card
3. Tesco credit card
4. Barclays overdraft.

I’m paying off the Barclaycard first as it’s got the highest APR, and I’m paying a set amount on each of the others by standing order (£50 on Capital One, £75 on Tesco). I’ve been aiming to pay off £400 a month, but that’s not always possible.

Apparently, I’ve been doing it a bit wrong, but not too wrong. According to the snowball calculator on What’s The Cost, I should be setting up Direct Debits for the minimum on everything but the Barclaycard, and paying off £470 a month in total if I’m going to meet my deadline of the end of April 2010.

The best thing about the snowball calculator doo-dah is that it’s given me some fascinating facts to spur me on. For instance, if I pay everything off in my given time, in the right order, I’ll pay a total of £996 in interest. Horrified gasp. But, if I were just paying everything willy-nilly without (ahem) “snowballing”, I’d lose an additional £650.

The site has even done a good job of justifying my first act as a debt-payer-off: Getting rid of the comparatively cheap NatWest card debt first. “Sometimes, emotionally [rather than financially], it makes sense to pay off the smaller debts first. This can be a great incentive when starting to deal with your debt.”

The calculator is easy to use if you’ve got your debt information in front of you - interest rates, minimum payments, balances and interest-free periods. You’ll also have to tell it how much you can afford to pay back in total per month. By tweaking this, you can find out how much you need to pay to meet your debt-free deadline. 

The results page tells you exactly how much to pay off month by month on each debt. Supposedly, you can then login to save your results and come back to them, but this facility wasn’t working for me. Never mind though - I just saved the webpage instead.

The site is full of similar debt calculators and gadgets, and I can see it being really useful over the next 21-and-a-bit months. Now I’ve just got to encourage my friends to join me for a debt reduction party.

In other news…

Yes, I did sell my soul to the Mail on Sunday for £1.50, but it was worth it. I also got a bit carried away this weekend and fell off the wagon, budget-wise, when I booked two concert tickets. But, at least when I’m starting to chew my own knees off with boredom in November, having spent almost nothing for five months, I’ll be able to cheer myself up by seeing McFly in Bournemouth. Simple pleasures.

  Women being cock-a-hoop

Friday 30th May, 2008 - £8,920.19 in debt…

Look at that up there! That amount of debt! Under the £9,000 mark – WOO! I am literally cock-a –hoop. Yes, literally.

And I’m so proud of myself too. When my tax rebate arrived in my bank account yesterday, my first thought wasn’t “shoes!” or “Milkybars!” or anything deranged at all – it was “Now I can pay that amount off my Barclaycard – I can’t wait!” and I did it straight away.

This is a huge turnaround for me - a couple of months ago, I’d have gone out shopping with that money, but my attitude to money has completely changed and I’ll tell you why.

Originally I thought that writing this blog would be a good way to get tips and ideas about paying off my debt. And that’s exactly what has happened – thanks very much for all the help, by the way – but it’s had another, unexpected benefit…

Because I’m keeping track of my debt and writing about it, I’m constantly thinking about money. And I mean constantly: thinking about how I can save a couple of quid on a cinema ticket, how I can make a couple of quid on Ebay, and how I can roll around in piles of cash once I’ve paid my cards off because every penny I make will be MINE and I can goddamn do what I want with it. So there.

Yes, the rumours are true: paying off even a little bit of your debt is one of the best feelings in the world. Getting rid of my NatWest card was just the start of it, and making that payment today felt just as good as poking a Barclaycard staff member in the eye with a stick.

So, I’m one month into my debt-paying-off experiment and my debt has decreased by a grand total of £579.26. I’m not saying this is going to happen every month, but it’s a good start as far as I’m concerned. Please leave your messages of awed congratulations and worship below.

 Can’t you see i’m busy?

Tuesday 20th May, 2008 - £9,361.55 in debt…

Some people might say that quitting your part-time job when you’re over £9,000 in debt is a bad idea. But I’ve always flown in the face of convention.

Although I normally work as a freelancer from home, I got myself an emergency part-time temping job last year to improve my cashflow situation. It has done wonders so far: The freelancing is great, but it’s hard to budget and set up regular payments with that sort of job. An extra, reliable £200 a week came in surprisingly handy.

However, I somehow managed to land myself a job with a boss who makes George Bush seem like a perfectly competent leader. Since I started working for him, my thoughts have ranged from the murderous to the suicidal. Call me naive or incredibly lucky, but it’s the only job I’ve ever had where my whole Sunday has been spent dreading the start of the working week, but I stuck around because of my dire finances.

So, like the dutiful employee I am, I turned up for work at bang on 9.03am yesterday to find the boss in the foulest of foul moods. After a minor altercation over some work that was going to be a HUGE WASTE OF TIME, he asked me whether I was happy in the job.

The following discussion was short, loud and somewhat furious. I was out of there by 9.10am.

Normally, I would now be spending my days sleeping and eating Pringles in front of Diagnosis Murder, but unfortunately (and I don’t know if I’ve mentioned this before), I need money. So it’s a week of trawling the employment agencies for me.

In other news:

All of my Ebay buyers have paid up and the money has gone straight onto my NatWest card. So that card is one hundred percent taken care of, and that feels pretty good. As I was previously paying it off at £10 per month, I can now add £10 to my regular Barclaycard payment.

Since I’ve got some free time on my hands now, I want to use it for money-making purposes. As well as digging around in the loft for anything Ebayable, does anyone have any suggestions?

 £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.

 Olivia loved her new trampette…

Saturday 10th May, 2008 - £9.485.54 in debt…

This debt-paying-off malarkey isn’t all bad, you know. It’s not all about Economy tea bags and being beside oneself with fury. As it turns out, getting money for stuff on Ebay feels quite good.

On a scale of one to being in the front row of a Take That concert on the feel-good-ometer, I’d say it was about a seven.

Most of my listings have finished now, and I’m confident that I’ll be able to pay off the NatWest card when the money comes through. Here’s a breakdown of my successes and failures (Ebay-wise):

• About a third of my books and a few CDs didn’t sell, so I’ll re-list them next week.
• I got nearly £20 for a signed copy of a Mark Haddon book. That might not sound like much but, when I bought it, the shop was bursting with them. It’s probably rarer to find one he hasn’t scribbled on.
• The rest of the books and CDs went for anything from 99p to £7.10 each.
• A couple of rare-ish vinyl records went for about £25 each. Another one went for £18.

So far, that gives me a total of £112.57 (after listing fees and what-have-you). That’s about £10.50 short of my NatWest balance, but I still have one listing on the go, which I’m hoping will make another £30.

Unfortunately, that’s the lot. I have cleared my garage of everything that might be worth anything. Unless I can Ebay an old broom and a dead mouse…?

 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.

 Olivia Buck says ‘Hi’

Monday 1st May, 2008 – £9,499.45 in debt…

Let me introduce myself: I’ve just turned 28, I’ve been in debt for ten years, and now I’m desperate to pay it off. How did I get myself into this dungheap of a mess of a quagmire?

I’ve always been rubbish with money, and now I’m rubbish with debt. Being in the red was fine at uni - like so many students, I got used to spending money that wasn’t mine. After I graduated, I lived with my parents for two years and paid most of it off, but then I moved to London.

I’ll tell you this for nothing: Living in London is expensive. That’s the first of many shiny nuggets of wisdom you’re going to get from this blog, and I hope you appreciate it. It’s not like I was eating diamond-encrusted swans for breakfast, but an Ikea spree here and there soon adds up.

Over the last year or so, I’ve had the feeling I should be getting out of my debt-hole. My credit rating has gone past ‘high risk’ and into ‘extreme’ territory – only adrenaline junkies and the mafia would lend to me now - but mainly I want to cut up my credit cards because being in debt feels horrible.

So far, I’ve made the following efforts:

• Although I’m self-employed, I’ve got a second job as a part-time secretary. It’s almost unbearable, but it pays the rent.

• My biggest debt was on my Barclaycard at nearly 30% APR, so I’ve transferred half the balance to a Tesco card on an interest-free deal.

• After doing that, I cancelled my Barclaycard and set up a standing order to make regular payments. When I explained why I was doing this, the Barclaycard people were kind enough to drop my Standard APR by a couple of percent.

Even after that, I’ve still got credit card bills of £200 a month and those payments are covering little more than interest. I also have an overdraft limit of £3,000, which I was always straying past before I got the temping job (bad news at the time, but I might be able to claim back some bank charges – more on that later…).

So, here’s the bottom line: How much I owe.

Barclays overdraft: £3,000 (I’m always at the limit by the end of the month)

Barclaycard: £2,977.46 at 27.9% APR

Capital One card: £999.00 at 24% APR

Tesco card: £2,399.00 at 12% APR

NatWest card: £123.99 at 13% APR

That’s a total debt of £9,499.45 (plus interest), which I plan to eliminate completely by my 30th birthday at the end of April 2010. I then plan to fit Jupiter into a blender and become the first woman to unicycle across the Atlantic.

My first job is to pay off that pesky little NatWest card as quickly as possible. I currently pay off that card at £10 a month so, once it’s taken care of, I can add £10 onto my monthly Barclaycard payment.

I’m open to suggestions, so please help me out!

 I’ve got 24 months to get solvent and apart from Ebaying all my belongings and working overtime, I need to know: 

1. Can I make more money?
2. How can I save money so I can increase my card payments without feeling the pinch?
3. What have you done to pay off your debts?
4. What works and what doesn’t?

 Over the coming weeks I’ll be trying out any suggestions I’m given (apart from illegal ones) and regularly reporting back.