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:
- Barclaycard
- Capital One card
- Tesco credit card
- 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.
