Dan's desperate dash towards solvency

triple_choc_chip · 15 September 2017 at 1:29PM

Considering the figures you're dealing with an emergency fund seems a bit redundant - you can pay all your bills and expenses, pay all the minimum debt repayments and you still have in excess of £2000 each month to enjoy however you choose - there's your emergency fund right there! You get to choose whether you use it to pay more debt, have a busy social life, buy 'stuff', replace white goods/boiler in an emergency or, (drum roll) save it for a rainy day/ mortgage deposit / new car / holiday. :beer:

Suffolk_lass · 15 September 2017 at 4:13PM

Hi Dan, I've been working so hard this week I only checked who had been posting this morning. Good to see you back and posting.

I don't agree with triple choice chip about emergency fund. The idea is to build up approximately six months of expenses so that if you had an emergency where you were not earning, you give yourself a window of time to sort things out before you get back to work.

I am with Essex on a target to clear that interest-paying debt as soon as possible, and then start overpaying the 0% cards in the order of expiry of deal date. I always think when that part is done you will have the bug and want to start overpaying that mortgage.

I've just cleared my 0% card debt that expired on 1st September so now my only debts are another year on the 0% double glazing loan and the mortgage. I took that card deal as a cash transfer when my husband wrote our commuting car off last September and it meant I could pay cash for the replacement car with no interest - just the £76 fee. The rest came from my incomplete emergency fund. Had the emergency fund been big enough I could have avoided spending that £76. Against £7,500 I realise it is small but it could have been zero.

worriedDan · 17 September 2017 at 3:13PM

I suppose subconsciously we know that we have my wifes 14K that we could potentially use if we lost our jobs. I have mentioned this money in several of my previous posts so I won't bore you all with the details, but in a nutshell, this is money that my wife's family gave her that we are keeping tucked away and not touching.

I would like us to build some additional savings though that we can draw on if we needed to. The reality for us is that even after we have made our debt overpayments, Paid all of the other bills, bought our food and filled the cars, we are left with over 1K a month. We really should be saving a significant proportion of that money OR perhaps we should pay some more off our debts?

I have set myself a target to pay off a further 7K by the end of this year and I am determined to do it. This will give us a total of £16119 paid off since the start of our journey in March of this year.

I am planning ahead a little as I am conscious that some of our 0% rates will come to an end around February time. We have started receiving 0% offers for other accounts that we have paid off etc, so there is no reason why this should be a problem, however, me being me I need to know the worst case scenario if we couldn't obtain a new 0% offer. I have used a snowball calculator and have identified the 'damage' if ALL of our 50K debt reverted back to a standard rate of around 20% - In reality this won't happen as a large chunk is on long term 0% deals and a chunk of our debt is at 6.9% for the life of the balance BUT I wanted to know just how bad it would be if this happened......Here are the results..

If ALL of our debt was at 20% it would take us 33 months to clear it all based on us paying 2K per month.

Based on our current interest rates it will take us about 26 months.

This isn't anywhere near as bad as I thought. I know that the interest that we would pay would be horrendous but our journey would be just 7 months longer. I expected it be be years more! I think that I can live with that 'worst case scenario'. It just shows that getting rid of debt, even at high interest rates is possible.

motivated · 17 September 2017 at 5:55PM

Hi Dan

Just popping in to say you are doing so well and the change in your posts now and your positive attitude is amazing. It's great to see you are tackling this head on and you are so focussed. Keep going and I can't wait to see you posting on the Debt Free thread. :T
M

worriedDan · 17 September 2017 at 8:28PM

Thanks Motivated!

I am feeling more positive compared to the start of my journey. I still think about money a great deal and there are still the odd moments when I feel my stress levels rising, but overall I feel positive that I am able to deal with it. Hope all is going well for you.

motivated · 17 September 2017 at 8:32PM

worriedDan wrote: »

Thanks Motivated!

I am feeling more positive compared to the start of my journey. I still think about money a great deal and there are still the odd moments when I feel my stress levels rising, but overall I feel positive that I am able to deal with it. Hope all is going well for you.

I don't think you would be normal if you didn't have the odd wobble Dan. I've had a few since starting

. I also think about money and debt quite a bit but I try to think positively rather than negatively. Easier said than done sometimes but planning and budgeting is what keeps me going.
Things are a lot calmer here too. Just plodding along and one day we will get there
M

worriedDan · 21 September 2017 at 10:09PM

Hi Everyone,

Tonight we have been to my wife's brothers house for a birthday celebration. I always come away from there feeling a little deflated; not because of anything they have done, but because their house/lifestyle makes me feel like a failure.

They are a little older than us, in their early forties. They both made sensible financial decisions when they were young and single and as a result they both had their own houses when they met, purchased for relatively low prices compared with today. They have worked hard, saved and sacrificed and now they are 6/7 years older than us, living in a lovely big house in a nice area, with a relatively low mortgage and no other debts. My brother in law is even able to work part time! Their income is way less than ours but they are far more financially secure. Don't get me wrong, I love both of them and don''t begrudge them a thing. They have worked hard and deserve everything that they have.

So as I drove home, I am ashamed to say that I had the same feeling that I always have after I have visited them - 'Why didn't I make better choices', 'Will I ever have their level of security', ' Why was I so stupid in my younger years'... It's a horrible way to think and I must admit that it is probably the part of myself that I like the least. .... So I have had to have a little word with myself and remove myself from the self pity party!

I have thought about the family that I work with who have spent the last few nights sleeping in their car after the council housed them in an absolutely filthy B&B. I reminded myself of my hard working younger colleagues who have little chance of even getting on the property ladder any time soon. I reminded myself of my lovely hardworking parents who have grafted all their lives, just to be mortgage free before they are 70. I thought about families I know who have to choose between eating and heating. Suddenly my little bit of envy seems very silly!!

I am going to adopt this approach if and when these thoughts plague me again. All of a sudden, the fact that I am not currently able to upgrade my very comfortable 3 bed semi for a four bed detached with a garage seems very unimportant.

plush_2 · 21 September 2017 at 10:52PM

worriedDan wrote: »

I have thought about the family that I work with who have spent the last few nights sleeping in their car after the council housed them in an absolutely filthy B&B. I reminded myself of my hard working younger colleagues who have little chance of even getting on the property ladder any time soon. I reminded myself of my lovely hardworking parents who have grafted all their lives, just to be mortgage free before they are 70. I thought about families I know who have to choose between eating and heating. Suddenly my little bit of envy seems very silly!!

I am going to adopt this approach if and when these thoughts plague me again. All of a sudden, the fact that I am not currently able to upgrade my very comfortable 3 bed semi for a four bed detached with a garage seems very unimportant.

We'll always find many others in a better situation - luckier, smarter, richer, thinner, less indebted

And much more people in a worse situation, just look at household income statistics.

Just wanted to stop by and say you're doing great in spite of the debt level. I'll be following with interest!

PS. Had no idea that average household debt was £13K. I'm at £14K (single parent household though).

System · 22 September 2017 at 7:48AM

Dan you are doing so well after your first initial postings , you should be proud of what you have achieved to date.

Why don't you and your OH set yourself some goals for after you are debt free i.e. Retiring early , how you would go about it etc.

Sadly we only have one life , what is done is done . A wealthy friend of mine has a saying that I think of if I feel like you did coming away from your relatives . "Money only makes misery more acceptable " Being comfortable in life is wonderful but not everyone has the opportunity as you have pointed out . Plus your in laws may envy you for something they think they haven't got and you have .

Your doing a great job . Have a great weekend Dan .

enthusiasticsaver · 22 September 2017 at 8:18AM

No point in looking back Dan. You have a high income and are bringing the debt down and once it is cleared this period of regret will be a distant memory. You could say it has been a life lesson which has taught you never to take good financial handling as carelessly as you have in the past. Comparing your lives to others is never useful whether it is aspiring to their lifestyle (plenty of people in debt due to keeping up with Jones's) or in your brother in laws case, financial security. Just resolve going forward to carry on as you have over the last few months to keep on getting the debt down and then, I cannot stress this too much, do not go back to your old ways of spending without budgeting. Start your early retirement or saving for university savings pot. Loosen the reins a little but don't go mad.

Dan's desperate dash towards solvency

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