Over the past few months, we’ve been really focused on saving money for our emergency fund and then starting to attack our debt ladder. It was a fantastic feeling when we finally paid off an overdraft on an old account that had been at the same amount for years.
And then to get rid of the small credit card felt truly amazing! Now we’re tackling credit card no. 2 and so this is where things stand with our debt ladder now.
- Overdraft from old bank account –
- Credit card no. 1 –
- Credit card no. 2 –
- Debt management plan consolidated debt:
A new debt total of £39,165 down from £41,489.22 – still horrendous of course but it’s going the right way at last with £2324 of it being paid off since February.
How did we pay off over £2000 since February?
After all our bills go out each month, we’re not left with much in the bank account and it’s very easy to go overdrawn. However, in March, April and May, we stuck religiously to our ‘get out of debt budget‘ and we saved every spare penny plus we didn’t have any major unexpected bills coming in.
I earned some extra money by taking on more work and we planned our meals around a a 4 week menu, cooking food in bulk and shaving £100 per month off our food shopping bills.
I checked the bank balance every day and couldn’t believe how the savings started to add up. With the minimum payments we were already making, this is how we managed to get the money together to pay some debts off. Also, we overpaid at the beginning AND at the end of those months once we knew whether we’d have any money left over or not.
Things have slowed down a bit with overpaying – this month, we’ve only managed to overpay £40 and next month we might not be able to pay anything off either due to some big bills coming in (car tax and business expenses to name a couple.) We just need to keep focused and if we’re not able to overpay anything next month, we definitely should be able to the month after!
We’re determined to get rid of credit card no. 2 by Christmas which only gives us six months in order to do so (and if working out equal amounts each month, this would be £749 each month!). Maybe we’re being overly ambitious about this but we need a high target to strive towards!
I’d love to hear your stories about tackling debt and how you manage to raise extra money to help pay it off.