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  • FIRST POST
    • Sharon87
    • By Sharon87 15th Sep 16, 5:34 PM
    • 3,428Posts
    • 2,877Thanks
    Sharon87
    Keeping Motivated During Debt Free Journey
    • #1
    • 15th Sep 16, 5:34 PM
    Keeping Motivated During Debt Free Journey 15th Sep 16 at 5:34 PM
    I've been on these boards for a while now. I had my LBM earlier this year. I've started budgeting with YNAB and it has been an eye opener to how much I was actually spending.

    After 3-4 good months of paying off debt I feel like my debt free journey is going to take a while, and the temptation is always there to spend money on entertainment purposes.

    I have £12,800 worth of debt - which is all on 0% or low balance transfer of 4.9%. I am paying around £300/month to my debts - but obviously there's a small bit of interest on my 4.9% card. I am also building a small emergency fund for when I'm not in work - I work contracts. My savings account pays 6% and is locked in for a year. I also have £500 earning 3% which was what I saved up on last year's regular savings and is my emergency fund.

    I feel I don't have much money for entertainment purposes after my rent, food, bills and debt payments. I've given up some things including my personal training sessions, buying music/spotify.etc I did give up Sky for a while as well, but I have it back as I missed it.

    But I just feel it's going to take ages to pay off my debt. I do extra transcription work to get a bit more money, but I do find myself losing motivation sometimes, my social life suffers.

    I am also about to become an aunty, so I know there'll be lots of trips to visit my new niece, which will eat into my entertainment budget! (about £16 return for a day trip, a lot more for overnight trips!)

    How do other people keep motivated during their debt free journey?
Page 1
    • FinallyDebtfree2017
    • By FinallyDebtfree2017 15th Sep 16, 9:13 PM
    • 52 Posts
    • 36 Thanks
    FinallyDebtfree2017
    • #2
    • 15th Sep 16, 9:13 PM
    • #2
    • 15th Sep 16, 9:13 PM
    I think it is important to keep the end goal in mind and to split the full amounts into smaller amounts.

    When you achieve 10% for example treat yourself to something small to celebrate this victory.

    You need to still be able to live and enjoy life.

    Good luck on your journey
    • Sharon87
    • By Sharon87 15th Sep 16, 10:28 PM
    • 3,428 Posts
    • 2,877 Thanks
    Sharon87
    • #3
    • 15th Sep 16, 10:28 PM
    • #3
    • 15th Sep 16, 10:28 PM
    What kind of small things to use to celebrate? My perception of small may be different than yours! The thing is I try to stick to my entertainment budget each month (between £50 and £100 depending on what's planned and how much money I have), so whether that's a gig ticket or a trip to the pub. I do occasionally enjoy life, but I guess it's just I'm used to spending more - hence the debt!

    I know once the debts are paid off I now earn enough to do what I want. I am in the dilemma of wanting my debts off sooner but struggling with lack of social life! Last month I did pay off another £100 on my credit card.

    I do also have a holiday in 2018 I'm saving up for, I don't want to use credit cards for it! So I'm saving up for that every month too!

    I think maybe I just need to get back to the gym on a regular basis to keep myself occupied and get fitter again! I just wish I had a gym buddy to motivate me!
    • bettyboo71
    • By bettyboo71 15th Sep 16, 11:31 PM
    • 233 Posts
    • 353 Thanks
    bettyboo71
    • #4
    • 15th Sep 16, 11:31 PM
    • #4
    • 15th Sep 16, 11:31 PM
    If you miss the gym, look for cheaper alternatives - it is impossible to know what to suggest unless you say what you like to do at the gym?
    You could do an SOA, showing all your income and outgoings, so we could make suggestions, or you could keep a spending diary to analyse where your money goes.

    Motivation is a difficult one, and often the end goal seems too far away. Your holiday can certainly be seen as a 'reward/treat', and something worth focusing on. As you have chosen to get Sky back, you really do have to view that as a treat, otherwise you wouldnt have been able to give it up.

    I think the key thing that everyone on here comes to realise is that changing your habits to become debt free does usually mean a lifestyle change. You acknowledge that the lifestyle you had was not sustainable, so you need to change it - that has to involve sacrifices.

    And keep coming back here to read suggestions and success stories to help with the motivation :-)
    • tealady
    • By tealady 16th Sep 16, 5:29 AM
    • 2,608 Posts
    • 3,045 Thanks
    tealady
    • #5
    • 16th Sep 16, 5:29 AM
    • #5
    • 16th Sep 16, 5:29 AM
    Hi you say most cards are interest free, are you snowballing? If you are not it could bring your debt free date a bit quicker.
    Proud to be an MSE nerd
    Judge people by their achievements, not by their mistakes
    • chelseablue
    • By chelseablue 16th Sep 16, 10:19 AM
    • 1,848 Posts
    • 2,357 Thanks
    chelseablue
    • #6
    • 16th Sep 16, 10:19 AM
    • #6
    • 16th Sep 16, 10:19 AM
    Hi you say most cards are interest free, are you snowballing? If you are not it could bring your debt free date a bit quicker.
    Originally posted by tealady
    What is snowballing?
    Baby Boy born May 2014

    Mortgage starting balance 26.02.16 £231,294
    • tealady
    • By tealady 16th Sep 16, 2:06 PM
    • 2,608 Posts
    • 3,045 Thanks
    tealady
    • #7
    • 16th Sep 16, 2:06 PM
    • #7
    • 16th Sep 16, 2:06 PM
    Hi sorry I didn't explain.
    Basically it means paying as much as you can to the card with the highest APR and minimum payments to the rest. Then when you have paid off the first card start on the next.
    HTH
    Proud to be an MSE nerd
    Judge people by their achievements, not by their mistakes
    • Sharon87
    • By Sharon87 16th Sep 16, 11:49 PM
    • 3,428 Posts
    • 2,877 Thanks
    Sharon87
    • #8
    • 16th Sep 16, 11:49 PM
    • #8
    • 16th Sep 16, 11:49 PM
    Yeah. I've looked at snowballing but it's hard to work out which to pay off first sometimes! As I do have a permanently low balance card but some others expire in 4-7 months time and then I will need to find a new balance transfer at a low fee or risk paying 17.9%.

    I find snowball calculators unreliable as there's too many variables and took many 0% transfers on one card!

    I have a budget so can do an SOA to post. But there's not much I can change in terms of bills and my food budget is down to minimum without compromising on healthy food.

    Maybe I could give a break down of my debts and someone could suggest the best way of snowballing?
    • Sharon87
    • By Sharon87 17th Sep 16, 12:29 AM
    • 3,428 Posts
    • 2,877 Thanks
    Sharon87
    • #9
    • 17th Sep 16, 12:29 AM
    • #9
    • 17th Sep 16, 12:29 AM
    Here are my debts and savings:

    Tesco savings at 3% in Current Account: £500.88
    HSBC Regular Saver at 6% - locked until June 2017: £580
    TOTAL SAVINGS: £1080.88
    Monthly outgoing minimum: £30/month to regular saver

    DEBTS: (debt / credit limit)
    MBNA LOB 4.9%: £4665 / £6600
    Pay £45/month approx
    0% cards:
    HSBC: £1753 / £2000 (till Feb 2019).
    I pay £44/month approx
    Fluid: £1583 / £3300 (Till June 2017)
    Pay £25/month
    Halifax £2564.86 / £4900 (£1534.86 expires Jan 2017, £1030 expires Feb 2018)
    Pay £60/month (minimum is only 1% of balance though)
    Barclaycard £3350.32 / £5200 (£1131.90 expires April 217, £839.56 expires Feb 2017, £1387.86 expires May 2017)
    pay £75/month approx

    Total debt: £13923.80
    Total savings: £1080.88
    Net worth: £12842.92

    Blank credit cards:
    Tesco: Limit of £2000
    Natwest: Limit of £1700

    Now MBNA, Fluid, Barclaycard and Halifax all frequently offer me 0% deals. Halifax are usually the best 0% deals - they have offers usually 15 or 18 months for a 3% or a 1.5% fee, depends on the month. Fluid and MBNA aren't as great as the fee is 3.5% and Barclaycard is a bit hit and miss.
    Tesco rarely offer 0% deals and Natwest only do low life of balance transfer with a fee. I'm thinking of closing the Natwest one!

    Now I know I'm paying more interest on my MBNA than the money in my Tesco account, but that is my emergency fund, just in case I don't have a job and need to pay rent - I can't pay rent on a credit card.

    I just need to know with everyone's expertise what card is best to pay off first? All the interest rates are very similar after the 0% deals expire (between 15.9% and 18.9%). What should I concentrate on and should I try and do any more balance transfers from my 4.9% MBNA card if I get the right offer?

    Any advice would be appreciated. I will also post my SOA so you can see how much I hope to have for debt repayments!
    • Sharon87
    • By Sharon87 17th Sep 16, 12:57 AM
    • 3,428 Posts
    • 2,877 Thanks
    Sharon87
    Here's my SOA. My pay is based on working the average month, this month I got paid a bit more than that, not sure why! I sometimes also earn a little extra - between £50 and £250, sometimes nothing! But it's not consistent work so I've left it off. My month by month budget is slightly different as I don't always spend money on all items I've budgeted for every month, but it's more the annual cost. Like TV licence, I pay it up front.I will also get 2 council tax free months this month. I live with one other person who's a student, so that includes the 25% discount!

    I've just heard my housemate's planning on moving out at end of October, so I will try and get a non student to fill the room and then I can pay less council tax! And if I decide to live with a couple, they can pay a bit more rent and I can pay a bit less on my room and bills will be split more. So potential of more money if I want to live with a couple!

    Entertainment includes everything from meals out to pub to gig tickets. My savings are usually more than £30, I tend to put some of the spare cash either towards debt or savings or both! It's just how much do I save for the holiday in 2018? Ideally £150 a month, but then my debt takes a back seat... or do I pay off debt, then use credit to pay for the flights and pay it off before I go on holiday? Ideally if I ever use credit I would want to pay it off in full the next month. Otherwise I get into debt like I am!

    Statement of Affairs and Personal Balance Sheet

    Household Information

    Number of adults in household........... 1
    Number of children in household.........
    Number of cars owned....................

    Monthly Income Details

    Monthly income after tax................ 1929
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 0
    Total monthly income.................... 1929


    Monthly Expense Details

    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 730
    Management charge (leasehold property).. 0
    Council tax............................. 128
    Electricity............................. 20
    Gas..................................... 21.5
    Oil..................................... 0
    Water rates............................. 14
    Telephone (land line)................... 0
    Mobile phone............................ 20
    TV Licence.............................. 12.12
    Satellite/Cable TV...................... 21.99
    Internet Services....................... 10
    Groceries etc. ......................... 130
    Clothing................................ 25
    Petrol/diesel........................... 0
    Road tax................................ 0
    Car Insurance........................... 0
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 150
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 0
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 15
    Haircuts................................ 10
    Entertainment........................... 100
    Holiday................................. 0
    Emergency fund.......................... 30
    Gym..................................... 20
    Total monthly expenses.................. 1457.61



    Assets

    Cash.................................... 1080
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 0
    Other assets............................ 0
    Total Assets............................ 1080


    No Secured nor Hire Purchase Debts


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    HSBC...........................1753.13...44....... .0
    Barclaycard....................3350.32...75....... .0
    MBNA...........................4665.53...46....... .0
    Fluid..........................1583......25....... .0
    Halifax........................2564.8....26....... .0
    Total unsecured debts..........13916.78..216.......-



    Monthly Budget Summary

    Total monthly income.................... 1,929
    Expenses (including HP & secured debts). 1,457.61
    Available for debt repayments........... 471.39
    Monthly UNsecured debt repayments....... 216
    Amount left after debt repayments....... 255.39


    Personal Balance Sheet Summary
    Total assets (things you own)........... 1,080
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -13,916.78
    Net Assets.............................. -12,836.78


    Created using the SOA calculator at www.stoozing.com.
    Reproduced on Moneysavingexpert with permission, using other browser.
    • ani*fan
    • By ani*fan 17th Sep 16, 3:46 AM
    • 1,246 Posts
    • 2,897 Thanks
    ani*fan
    Hi there Sharon87

    You're budget looks good so you are absolutely on the right track. Well done for taking this in hand. Every day you don't increase the debt is a massive victory, reducing the debt is another huge score. You're doing it!

    About snowballing, I understand your problem. It sounds very easy to say 'pay down the highest interest debt first'. But if your highest interest debt is a low % for the life of balance, and your 0% cards are due to run out in a few months, then how do you know what to prioritise? I want to make a few suggestions.

    You said that your cards offer you lots of 0% deals. Great! I think you need to get ALL your debt moved to 0%. That way, every single penny you pay to it reduces the total. Take up an offer of 0% and get it shifted. Every penny really does count.

    I also think you could do with simplifying it all. Your debt is over 5 cards right now, your Halifax card has 2 different deals on the go. Could you use some of the credit still available on your cards to try and streamline it all a bit? And move the balance of one over to another? Just something to think about, it's a lot to keep on top of as it is currently set up.

    Once everything is on 0% your priority is the card where the 0% balance runs out soonest. You need to be confident that you can get another deal when the current ones end, which I think you can by the sound of it. Good. £1534.86 on your Halifax card runs out in January next year, that's quite soon. Once everything is moved to 0%, this one needs to be your priority. You then have £839.56 on your Barclaycard running out in Feb 2017. That needs to get targeted next.

    Only you will know if you can pay this lot off before the deals run out. Your extra income from work sound very handy indeed! And it depends how hard you want to go at it.

    About keeping motivated, yes it's hard, but the bottom line is that your previous lifestyle was not sustainable. Neither was mine. With our salaries, we will never be in a position to spend recklessly and not have to worry about it. Those days are gone and they were not real anyway.

    It is quite a skill to manage your money well. Not many people in our world can do that! Be proud. I think it's great that you're saving for a holiday, and that you have an emergency fund. Those are both great goals and very helpful. I take holidays too and have no intention of giving them up on this debt free journey. They mean so much to me and I guess what I'm saying is, figure out how you want your new lifestyle to be, what's worth the cost, and what is not and just sustain it. Don't punish yourself, just take sure the debt is going down, even if some months that is quite slow.

    Best of luck. I'll follow your progress.

    AFx
    Total debt at its highest £18,780/Total today £9,320.49
    • determined new ms
    • By determined new ms 17th Sep 16, 9:27 AM
    • 5,552 Posts
    • 29,431 Thanks
    determined new ms
    I read something recently that really struck a cord with me, to do with a "Not buying anything new for a year" challenge that I have embarked on 3 months ago, but applies equally to getting out of debt. It was this:

    The key is to find a different way of living your life that appeals and brings you joy rather than trying to live your old lifestyle for less.

    For me this has summed up why I embarked on this challenge. Over 3 months it has changed my outlook on life and I honestly feel very happy and content with my life now. I've also given up regular tv, I don't read magazines as I found they made me feel slightly dissatisfied and I always ended up purchasing new clothes/the next best beauty product etc. Living without marketing being forced on me on a daily basis I have had time to work out what's important to me and what I want to do with my time & disposable income, rather than being on a merry go round of mindlessly spending my time and cash on things that don't in reality bring me joy or contentment.

    I think if you can work this out then it doesn't feel like a sacrifice at all, in fact the opposite
    Debt to Bank of oh Mum: £4200/£5700
    Wombling 2016 £263.42 Roadkill £27.21
    • Sharon87
    • By Sharon87 17th Sep 16, 1:06 PM
    • 3,428 Posts
    • 2,877 Thanks
    Sharon87
    Thanks all, good to know you think I'm heading in the right direction. I always though I was in the past but my debt kept going up! But now it's going down and I'm learning to spend less.

    I have decided to put off some purchases, like I really wanted a new phone as mine doesn't have enough storage, but I guess I can live with this phone, it's still a good phone and earlier this year I replaced the battery in my iPhone 5 to extend its life as the battery life was terrible!

    I'm just hoping my work contract is extended or I get a job straight after it. My contract runs out end of November and that's the hard time of year to find a job! Or I'll be digging into my emergency fund!

    The don't buy anything new for a year is interesting, not sure how successful I'll be as you never know when things will break or you desperately need something. Like right now I really want a new bookcase as mine's falling apart. There's always something I want, I don't automatically buy it now like I used to!

    I understand about the snowballing and getting everything on 0%, but some of the % deals I get have a 4% fee, so I can't work out if it's cheaper to keep it on 4.9% interest for the year or the pay the 4% fee.
    I will concentrate on the Halifax, I'm already paying extra on my fixed monthly payments - £60 instead of 1% (£25ish). If I pay this off then I have more balance to do a balance transfer for my later cards like Barclaycard as Halifax have the best deals.

    Do you think it's worth closing down my Natwest credit card since they only offer a rubbish 6.9% life of balance with a fee? So if I want to apply for a new card in the future I have a better chance? My debt to available credit ratio is still good without it. I won't be applying for another card until next year as I have about 3 credit searches in the past 3 months (one was my HSBC CC).
    • Sharon87
    • By Sharon87 21st Sep 16, 5:00 PM
    • 3,428 Posts
    • 2,877 Thanks
    Sharon87
    Yay Tesco are offering a 0% deal till April 2018. I will put a bit of my 4.9% debt into there. Just what I think I will pay off on it as its a 2.99% fee.

    So maybe £500. At £25 a month for the direct debit that will pay almost all of it off.

    Also I've been earning cashback by booking hotels and car hire at work and the first of those are confirmed! So that's another £40 coming to me soon! That will go towards my Halifax or my emergency savings I haven't decided yet!
    • Sharon87
    • By Sharon87 25th Sep 16, 3:45 PM
    • 3,428 Posts
    • 2,877 Thanks
    Sharon87
    So I've taken the advice of some of the people here.

    I have done a new balance transfer to pay off some of the MBNA 4.9% card. I had a 15 months at 1.5% fee (3% originally, then a 1.5% refund) with Halifax.

    So I've done a £2000 balance transfer. Now I only have £2002 on 4.9% now. I am debating whether to use my Barclaycard to transfer another £1800 to MBNA but it's a 3.5% fee until 1st December 2017. I might need to save that for my Halifax transfers that expire in the new year! But then again MBNA are offering a similar deal (on money transfers not balance transfers) so I could use that instead.

    Too many balance transfers going on. I have a spreadsheet to keep on top of things and update it each month so I know when things expire. I did have one money transfer expire a while back and I was paying 20.9% on it for a few months!

    I have an expensive month next month - need to buy new household things with my housemate moving out, as well as things that are long overdue (new pillows, new book case - the other one is falling apart).

    Need to keep motivated and not spend money. I have overspent a bit this month, but not so much I spent more than I earned, just overspent what I budgeted! My downfalls appear to be eating out! I spent £122 on restaurants/takeaways (including going out at lunch), I budgeted for £60! I need to start keeping 'easy meals' in my freezer like pizza, otherwise I spend £17 on a takeaway instead of a £1-£3 pizza!
    • Sharon87
    • By Sharon87 15th Oct 16, 1:31 PM
    • 3,428 Posts
    • 2,877 Thanks
    Sharon87
    My motivation for debt free is slipping a bit. So with the cashback I've earned booking hotels and flights and car hire for work I decided to book a short getaway. I also managed to use 3 free hotels.com nights we earned at work (with my boss's permission) for my hotel! I sometimes get S.A.D during winter so I'm going Gran Canaria for 3 nights - at a cost of £192 plus spending money (maybe £150-£200 depending on exchange rate!!) I've earned over £800 in cashback at work, some of it has been confirmed and paid already, most of it I'm waiting for it. So I used my 'emergency/holiday' fund to pay that so far.

    I know it's not helping my debt free journey as that money could go on credit cards, but it'll help me mentally and that's more important, as a relaxed mind means everything else will fall into place and I'm not getting into further debt by going on this holiday either.

    Another reason for booking it is my work contract got extended, so I have work up until the new year now.

    I'm starting to learn to live within my means, not spending money on useless things like DVDs/takeaways and sticking to my budget for things like food and clothes.

    Now today's job is tidy the house, then get started on my self assessment so I know how much extra tax I might need to pay in January...
    • Sharon87
    • By Sharon87 15th Oct 16, 2:17 PM
    • 3,428 Posts
    • 2,877 Thanks
    Sharon87
    I've been transferring my MBNA to other 0% deals, Halifax offered me one for 24 months! But I didn't have any credit limit left, so I applied for an increase and got one! Not as much as I would like, but I managed to transfer another £500 to it.

    Good to know my credit rating is still good! And clearing my MBNA means they will probably offer me more 0% deals when I need them in a few months when a couple of 0% deals expire.
    • enthusiasticsaver
    • By enthusiasticsaver 15th Oct 16, 7:46 PM
    • 2,540 Posts
    • 4,354 Thanks
    enthusiasticsaver
    Good that you are living within your income now but I would strongly recommend you get rid of some of those credit cards. 7 is a lot and won't help your credit rating and also puts too much temptation in your way particularly as you appear to be in quite insecure employment. I would close both the Tesco and Nat West one. What does the Halifax interest go to in January when the 0% deal runs out?
    Debt and mortgage free and saving for early retirement
    • Sharon87
    • By Sharon87 16th Oct 16, 1:27 AM
    • 3,428 Posts
    • 2,877 Thanks
    Sharon87
    I now have transferred £600 on the Tesco card now - a new 0% deal, so can't close that. I don't actually know any of my card's pins anymore so can't spend on them in shops at least!

    I'm good at not spending on my credit cards now, I haven't actually spent on a credit card in over a year! But I did have to transfer money to a card from an overdraft (which is now reduced to only £100 for emergency)

    Halifax interest is 15.9%, but I always get 0% deals on my MBNA and Barclaycard, so once the first deal expires (will be about £1100) I can transfer it.
    • -taff
    • By -taff 16th Oct 16, 10:46 AM
    • 6,456 Posts
    • 3,727 Thanks
    -taff
    Look on your local freecycle for bookcases, or facebook selling pages, or ebay. You can pick up cheap or free ones, and if you're at all diy handy, borrow a drill and some screws and reinforce it.
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