Every penny helps!
Sunday 26th October, 2008 - £7,499.83 in debt…
It looks like I’ve started a trend - suddenly everyone wants to pay off their debts! It could be something to do with this recession we’re teetering on the edge of, but I think my influence should be taken into account as well. Increasing your monthly credit card payments is the new cool thing to do, and Primark is the new Armani.
According to the BBC, the number of people consulting Citizens Advice about their debts has risen by a third in the past year. Given that this means more people are searching for debt advice on the internet and finding this blog (bad luck, chaps), I thought I’d give you a quick run-down of the best sources of debt advice I’ve found so far in my quest for debt freedom.
1. Martin Lewis’s site, www.moneysavingexpert.com, is a very fine resource once you get your head around the somewhat busy homepage (and the fact that it’s two consonants away from ‘monkey shaving expert’). Martin himself might come across as an android with no spending urges whatsoever, but the forums (especially Debt-Free Wannabe and Up Your Income) are well worth checking out for advice from fellow humans. Receiving the weekly email updates is like having a relentless snapping terrier at your heels.
2. The Citizens Advice homepage is at www.adviceguide.org and offers simple, step-by-step guides to paying back your debts, negotiating with your creditors, dealing with mortgage arrears and so on. It doesn’t preach, but nor does it offer alternatives to the accepted methods, or advice on coping with the emotional side of things.
3. One site that does look into the psychology of debt is the very one you’re reading now. As well as my own blog, which was described as “helpful” by one reader and “very good” by another (high praise indeed), Consumer Choices also has a debt centre, featuring news, articles and consumer guides.
4. The National Debtline offers free, confidential advice on its website (www.nationaldebtline.co.uk) or on the phone (0808 808 4000, which is a freephone number). There’s a range of factsheets on the website, but National Debtline specialises in giving personal advice via email or phone. You can email an advisor by clicking here.
5. If your money problems could be solved by sorting out a dispute between you and a financial service provider (your bank, insurance company or PayPal, for instance) contact the Financial Ombudsman Service at www.financial-ombudsman.org.uk for advice. If you need to write a letter of complaint, use the FSA website (www.fsa.gov.uk) to find the regulations your service provider should be obeying and quote them.
6. If you’re paying off debts you’ll need to save money on some essentials: www.petrolprices.com will tell you which petrol stations in your area are offering the cheapest prices per litre. It’s not something I check every day, but you can sign up for weekly email updates. Use www.mysupermarket.co.uk to compare grocery prices before you do the food shopping. I saved about 13% of my food budget by doing this.
7. For some genuinely useful practical help, visit www.whatsthecost.com and calculate the real cost of your debts including interest. The amazing snowball calculator will also tell you which order to pay your debts in, how much interest you can save by doing it the right way, and how much to pay per month if you want to be debt-free by a particular date. I had no idea about this site until a few months ago, but it’s now one of my favourites.
8. The Consumer Credit Counselling Service is another charity that gives free and confidential advice. As well as offering a free helpline (on 0800 138 1111), the website (www.CCCS.co.uk) features a Debt Remedy service, which starts with a comprehensive 20-minute questionnaire (to establish the kind of mess you’re in) and ends with the CCCS sending you a Debt Remedy booklet. This includes your budget, a summary of your debts, and advice about paying it off. Beware though: If you’re self-employed the Debt Remedy service won’t apply to you, and you can’t ask the charity for help if you’re not a UK citizen.
If you’re in lots of debt and stuck for an answer, the best advice I can give you is two-fold: (a) talk to someone, and (b) make sure you’re talking to the right someone. Doing a Google search on ‘debt help’ is likely to throw up a lot of unscrupulous companies that are trying to offer you an expensive consolidation loan or IVA. These are often the wrong solutions to the problem: what you need is support and practical, impartial advice. Good luck.
Dunce
Friday 1st August, 2008 - £8,378.83 in debt…
Time goes so fast when you’re scrabbling around in the gutter for pennies and working 14-hour days, doesn’t it? I’m now at the end of my third month (or first quarter, in finance-speak), and here’s how it’s going.
I’m clapping my hands like a trained seal because…
1) I’ve learned that the best way to pay off your debts is to work until your brain bleeds and earn lots of money. This month has been my best so far in terms of workload, and I should be able to shift more than £1000 to my credit cards in total once all the money comes through. I’ve paid £605 towards my debts this month, which reduces what I owe by £472.15 when you take the interest off.
2) I saved £10 on my grocery shopping by visiting MySupermarket and then Asda. The Asda shopping experience was harrowing, to say the least, but I’m trying Morrison’s next month, which isn’t on MySupermarket but looks pretty cheap to me.
3) I also saved £7.45 by getting McFly’s latest body of work, Radio:ACTIVE, free with Beelzebub’s latest body of work, the Mail on Sunday.
4) I used the snowball calculator on Whatsthecost.com to help manage my debts better. It told me that, if I pay off £470 a month (including interest) in a particular order, I’ll clear my debt before my 30th birthday and save £650 in interest.
5) I received a letter confirming that I’d opted out of the Barclays personal reserve. I already knew that I’d done this, but it’s nice to be acknowledged.
6) I earned £118.50 mystery shopping for GfK, which is by far the nicest mystery shopping company I’ve worked for. It doesn’t bombard me with irrelevant emails, the jobs I’ve done are quick and easy, and it’s even paid for a lovely bowl of soup and a Cornish cream tea. Yum.
I’m slapping my forehead like a cartoon dunce because…
1) I spent £52.80 on one weekend in Nottingham, buying things I wouldn’t normally buy because my companions didn’t know about my debts. This has made me think about confessing to everyone, but there’s a very good reason why I haven’t done this yet: I’m ashamed. That’s normal, right?
2) What with temping up to five days a week, mystery shopping and disliking the idea of cabin fever, I’ve been filling up my car’s petrol tank every nine days on average. Because it’s a beautiful and tiny Daewoo Matiz, this only costs £35 a time, but it’s still about £46 per month over budget.
3) Speaking of budget, I might have also bought a couple of McFly tickets. And a ticket to a theatre adaptation of my favourite Edward Gorey book. But that’s all – I swear. Oh, and a ticket for Blood Brothers starring one of the Nolans. I just can’t help myself.
4) My eBay so-called “buyers” have been nothing but trouble, with four of them refusing to pay up. Hopefully I’ll be able to re-sell the stuff or settle on a good eBay alternative but, until then, I’ll wear a constant look of vague disgruntlement.
I’m jittering with anticipation because…
1) I can’t yet be sure whether I did the right thing switching to an E.ON capped energy tariff - this will only be worthwhile if all the other energy bills in the country rise by more than about 10%, which looks likely but you never know.
2) I’m not yet sure what kind of impact my bridesmaid duties are going to have on my finances. The next step is dress shopping with the other bridesmaid, who lives 40 miles away, and casually tossing around some hen-night ideas without sounding like I have a budget of £3.50.
Generally speaking, I can’t complain about how this month has gone. After last month’s disastrous performance, July’s sudden onslaught of evening work has given me a ‘get out of jail free’ card and got me back on track. And, although I can’t expect this level of work every month, at least I know that I can be trusted to put the extra money towards my debt when it does happen. Well, most of it anyway…
—
First quarter results:
Amount paid towards my debt so far: £1376.63 (average £458.88 per month)
Amount I’ve reduced my debt by, after interest: £1120.62
