Taking charge of my debts!

copperman05 · 8 February 2017 at 6:58PM

Hi, I just thought I'd start a diary of my intention to be debt free. Unfortunately Ive been here before and so should really know better. Back then however it was a modest £8000 credit card debt which I paid off in a couple of years.

Gotta say I'm pretty angry that I ended up in a worse situation now years later. Unfortunately once again I started using credit cards to pay for holidays, flights and lots of the living expenses whilst making little to no effort to pay any of them off and just sticking to the minimum payments. I also got a car on a PCP 3 years ago, which looking back I really couldn't afford as its meant that my debts have just stagnated over that time.

I decided in Oct last year that the only way to attack my debts was to lose the car (its not required for work and has only ever been an expensive toy as I'm a self confessed petrol head). Last month I finally managed to sell it and whilst I had to find a shortfall due to some negative equity I'm finally in a position where I can now start making worthwhile inroads on debts owed.

A check of my outgoings has also highlighted how much of my money it just spent on crap each month. I have a decent job with decent pay so I'm hoping that with some careful and strict budgeting I can be debt free in 2-3 years. Gazelle intensity!

So for I've managed to knock 26k off the total but most of this was tied up in the equity of the car, now the hard part of paying the remaining 25k starts!

Anyway, just thought I'd post this up as it may keep me in check over the coming months....

Cheers

copperman05 · 9 February 2017 at 10:50PM

Must say I've just stared using YNAB, I think its great and for any of those who havent tried it yet its well worth a go. I like the fact you can set goals to pay off debts/fund things and it will let you know how well you are doing. Properly budgeting like this and knowing EXACTLY where all your money is going really helps, also I find myself more likely to use 'extra' money found wisely than just using it up as I've tended to do in the past.

Cheers

copperman05 · 26 February 2017 at 5:53AM

Quick update:-

Loving YNAB so far, I've signed up for the year already, I think I actually enjoy using it, its great the way it makes you protective of money assigned for debt payment, etc.

I also found undebt.it which is another online debt management tool, its free too. Its essentially a tool for snowballing your debt, you enter in each debt, interest rate, etc and it will calculate the best method to use to pay off, debt snowball, debt avalanche, etc. It will also track your progress, give you your debt free forecast, all very useful. YNAB is great for day to day cash flow, but undebt.it used in addition allows me to really focus on debt repayment, and prioritize each debt.

I started out with a monthly budget (for 1) of food for £165, which I now think is way too much. I have lowered it to £80 (I used to be a chef so should be able to make it last) and will see how I get on. I'm sure some could do it for even less but I'm restricting carbs at the moment so some cheaper foods like rice and pasta are off the list. So its offal and slow cooked meats instead!

I'm also reducing my budget for socialising and removing work meals as I'll be making all of them myself and taking them to work. I know I will need some fun time, and I will still have some but I realised that if I allow an amount each month then I'll just spend that amount anyway. Wheres as if i don't have a larger budget for it I cant spend it.

Hoping the above is going to save me another £115 a month, if it gets too austere I can adjust later to adapt.

I'm having to say no more this month, no to going out, no to more frivolous spending, I find minimalist living a challenge I enjoy, I've learnt that you dont always have to do without (making tasty meals for example) you just need to be a bit more intelligent about your spending. Its going to be a long slog before I get this 25k paid off but now is the time to hit it with full intensity, I like Dave Ramsey's analogy, Gazelle intensity, (I'm not religious but it makes a lot of sense!) if you want to get out of debt you need to run, RUN, RUUUUNNNN!

Well I'm legging it now!

copperman05 · 26 February 2017 at 11:31PM

Just realised my loan on Noddle hasnt updated its amount since Nov 16 so I'm a few months payment better off than it indicates. I'll take that thanks..

BettyBones · 27 February 2017 at 8:29AM

Hi Copperman :wave: I love Dave Ramsey! The way he calls people 'stoopid' all the time makes me laugh out loud :rotfl: but I've done what he said and have been Gazelle intense this last 18 months or so and it's really paid off. I'm now just 13 weeks away from being debt free :j Keep your head in that Gazelle mindset and you'll be debt free before you know it. Good luck! I've subscribed

copperman05 · 4 March 2017 at 10:00AM

BettyBones wrote: »

Hi Copperman :wave: I love Dave Ramsey! The way he calls people 'stoopid' all the time makes me laugh out loud :rotfl: but I've done what he said and have been Gazelle intense this last 18 months or so and it's really paid off. I'm now just 13 weeks away from being debt free :j Keep your head in that Gazelle mindset and you'll be debt free before you know it. Good luck! I've subscribed

Thanks BettyBones, yes Dave is great for a motivation pick me up when I feel like I need a boost. I strongly agree with his opinion on debt and how and how it should be attacked with maximum effort.

copperman05 · 4 March 2017 at 10:08AM

Being more frugal recently has made me think about how important the simple things in life are, things we often overlook. Yet here we are, most of us in the modern western civilised world, in one of the richest countries in the world and here I am with a !!!! load of debt. How did that happen? What the hell am I doing? Its a shame it took me this long to get to my light bulb moment but I'm so determined to rid myself of this burden, to get free of this ball and chain.
If I keep it up I might even be able to save some extra money for retirement, I'm realising the past is just that, the future is where its at, hopefully one that's debt free, worry free and mentally a bit lighter!

copperman05 · 4 March 2017 at 2:01PM

No fun for me?

I'm not budgeting for 'fun'. I had a !!!! load of fun stacking up 25k of CC debt and yes it was fun but now is the time to man up, wise up. I cant go out drinking and socialising, eating out and paying for holidays, those days are gone with this amount of debt. Now is not the time for 'fun' now is the time to find every pound and every penny towards ridding myself of this debt.

Anyway who needs a budget for 'fun', if I make a budget for fun I spend the budget for fun, if I don`t I wont... simple. I can go for a walk, thats fun, spend time with loved ones, thats fun, play my guitar, thats fun, cook a delicious meal for 2, thats fun. Na, I'm done spending money on 'fun', the best fun is free....

copperman05 · 4 March 2017 at 2:11PM

This money makeover I'm going through is like a detox and I actually quite like it, funny as I thought I would hate spending so little but actually the feeling of total control and power over ones finances, finally making significant inroads on debt is really quite life affirming, corny perhaps, but also true.

angelpye · 4 March 2017 at 2:53PM

Hi copperman05, I get what you mean about enjoying the control. I have definitely felt more a peace since I have sorted all the figures and made a plan. YNAB has really helped me with this too - I love reconciling and knowing its all in hand.

This is my third debt free journey but also a time when I am on low income due to choices. I caught the debt early this time though so the lowest amount out of my three LBM. I have been on the road of minimalist living for a while now and feel taking control of my money and living within my means has really stepped that up. I feel like this LBM is a totally different kind, its not just about debt but about how I run the whole of my life.

I havent checked out much of Dave Ramsey, do you listen to pod casts? Where can I find them?

Keep up the positivity! I think thats half the battle!

copperman05 · 4 March 2017 at 3:33PM

Hi angelpye, I have the same feeling re changing how we run our lives, I hope it lasts.
I watched a fair few of Dave's video's on youtube, he has his Money Makeover 7 baby steps.

Step 1 save baby emergency fund £1000
Step 2 Pay off debts with Gazelle intensity
Step 3 save 3-6 months living expences as emergency fund £5-15K
Step 4 Start making money grow and invest
Step 5 Invest in college fees
Step 6 Pay off mortgage
Step 7 Give (some) money to good causes, friends, family, church, charity, etc.

Its a basic plan but it works, I love the gazelle intensity analogy. RUN! I'm not particularly religious and Dave's advice stems from his religion but it does make sense and its pretty motivating none the less. Look it up...

Taking charge of my debts!

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