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    • Debtfreein5yrs
    • By Debtfreein5yrs 11th Mar 17, 2:31 PM
    • 62Posts
    • 185Thanks
    Debtfreein5yrs
    Determined to be debt free in five years!
    • #1
    • 11th Mar 17, 2:31 PM
    Determined to be debt free in five years! 11th Mar 17 at 2:31 PM
    Hi everyone
    I'm guessing the title of this thread and my user name says it all.
    After nearly 10 yrs of fighting debt I'm now determined that we will be debt free within 5 yrs from now.
    Over the past 10 yrs we have had taken out a huge secured consolidation loan (massive mistake) and been in a DMP with Payplan.
    We are now self managing our DMP and at last I hope there is some light at the end of the tunnel!

    Currently we owe around £21,000 on the mortgage, £52,0000 on a second mortgage (used for consolidation) and around £25,000 on unsecured debt. That's a massive total of around £98,000 of debt. I'm just in the process of establishing the exact figures for each which I will post in a signature when I have all the info.

    Now for the positives
    We both now earn really good incomes so the debt should be manageable.
    Our son finishes Uni in June so we will no longer have to support him financially which means we will have even more to throw at our debts.
    Most of our unsecured debt is interest free as it has been sold on to debt companies many years ago.

    By my calculations we will be able to clear all the debts, including the mortgage and secured loan within the five years and still have a reasonable standard of living.
    Once the debt is paid we then intend investing the money we've been using to pay into a retirement fund.

    Decided to start this diary to chart our progress. Hoping it will inspire me to keep going to achieve our goals.

    I have been a 'lurker' on these forums for a long time so it's definitely time to say a big 'HELLO' to everyone
Page 1
    • Cumbria lass
    • By Cumbria lass 11th Mar 17, 3:00 PM
    • 305 Posts
    • 655 Thanks
    Cumbria lass
    • #2
    • 11th Mar 17, 3:00 PM
    • #2
    • 11th Mar 17, 3:00 PM
    Hello and welcome to the diaries . You are in the right place, I am sure there will be more experienced posters who will offer you good ideas etc.
    July 2017 CC1 3769 CC 2 1150 Emergency Fund £1150

    Debt Free Nov 2019: earlier if I have my way
    • Debtfreein5yrs
    • By Debtfreein5yrs 11th Mar 17, 3:20 PM
    • 62 Posts
    • 185 Thanks
    Debtfreein5yrs
    • #3
    • 11th Mar 17, 3:20 PM
    • #3
    • 11th Mar 17, 3:20 PM
    Thank you for your welcome Cumbria Lass. Looking forward to getting to know everyone on here
    • angelpye
    • By angelpye 11th Mar 17, 3:43 PM
    • 988 Posts
    • 3,655 Thanks
    angelpye
    • #4
    • 11th Mar 17, 3:43 PM
    • #4
    • 11th Mar 17, 3:43 PM
    Hi and welcome!

    Good luck on your journey. Well done for making it so far already, a think a diary will help to stay on task. Keep posting
    Happiness is wanting what you have...
    Debt Jan 2017: £2589.22 DFD: Sept 2022 April 2022 but this Marching Minimalist can beat that!
    Use it or Loose it gym target: Feb'17 5/6 Mar 4/6
    EF £0/£4200
    • Debtfreein5yrs
    • By Debtfreein5yrs 11th Mar 17, 4:09 PM
    • 62 Posts
    • 185 Thanks
    Debtfreein5yrs
    • #5
    • 11th Mar 17, 4:09 PM
    • #5
    • 11th Mar 17, 4:09 PM
    Thank you angelpye for your welcome. Really excited now about debt busting. Makes me feel like I'm back in control
    • moneyfacts
    • By moneyfacts 11th Mar 17, 4:28 PM
    • 67 Posts
    • 109 Thanks
    moneyfacts
    • #6
    • 11th Mar 17, 4:28 PM
    • #6
    • 11th Mar 17, 4:28 PM
    mortgage free in 5 years! That's a good achievement indeed !
    • Debtfreein5yrs
    • By Debtfreein5yrs 12th Mar 17, 11:51 AM
    • 62 Posts
    • 185 Thanks
    Debtfreein5yrs
    • #7
    • 12th Mar 17, 11:51 AM
    • #7
    • 12th Mar 17, 11:51 AM
    Thank you moneyfacts. If we do achieve it it will be amazing. It will be the first time in the whole of my adult life that I will be totally debt free. Have had a mortgage since I was 19 so been paying one for over 30 yrs!!
    Our current first mortgage has 5 yrs to run so will be paid off without making any overpayments. The second one is the one we need to throw extra payments at as it's at a much higher interest rate and is over a longer term.
    Currently working on the calculations
    Going to be difficult but I'm now really committed as I don't want to spend all my life in debt
    • Debtfreein5yrs
    • By Debtfreein5yrs 21st Mar 17, 9:32 PM
    • 62 Posts
    • 185 Thanks
    Debtfreein5yrs
    • #8
    • 21st Mar 17, 9:32 PM
    • #8
    • 21st Mar 17, 9:32 PM
    Good evening
    For various reasons and despite my best intentions I've had very little time in the last couple of weeks to focus on my debts.
    My immediate goal now is to sort out my SOA before the end of the month so that I can start my debt busting for real on the 1st April.
    • Debtfreein5yrs
    • By Debtfreein5yrs 27th Mar 17, 11:52 AM
    • 62 Posts
    • 185 Thanks
    Debtfreein5yrs
    • #9
    • 27th Mar 17, 11:52 AM
    • #9
    • 27th Mar 17, 11:52 AM
    Good morning everyone
    I've now decided to tackle my debts one at a time. Going to make minimum payments to everything other than the debt I'm currently trying to clear.

    Have signed up to YNAB and it's amazing what a difference it's now making already. The figures at the moment are in red because of the overdraft but the plan is to tackle that debt first. Can't wait to see the 'to be budgeted' bit turn to green.

    The overdraft has to be the first debt to go as it's costing us around £40 a month in fees and interest.

    At the end of February our overdraft was maxed out to the tune of -£1900. At the end of March this will be down to -£1300.25. Can't believe we've managed to pay off almost £600 in one month by careful budgeting, making a few extra £'s online and some overtime.
    Just a month ago we would have frittered that money away without a second thought!

    Really excited and pleased with what we've achieved already
    Last edited by Debtfreein5yrs; 27-03-2017 at 12:16 PM.
    • Debtfreein5yrs
    • By Debtfreein5yrs 27th Mar 17, 12:04 PM
    • 62 Posts
    • 185 Thanks
    Debtfreein5yrs
    Just added a signature to my account
    Total Debt April 2017 = £98086.93 May 2017 paid back £678.63/£97943.93 or 0.69%
    Short term financial goal :-
    Clear £7107.78 of high interest debt (includes clearing overdrafts)
    April 2017 £0/£7107.78 paid. May 2017 £678.63/£7107.78 paid (9.54%)
    Weight loss goal:- Lose 30lbs by Christmas 2017 April 2017 1/30 lbs lost
    • angelpye
    • By angelpye 27th Mar 17, 12:25 PM
    • 988 Posts
    • 3,655 Thanks
    angelpye
    Hi, YNAB lover here too! Gives me no option but to be truly honest with myself but also keeps money related stress at bay due to being able to see where I am at all times. Sounds like you have a plan in place and its great you are already at 32% of target 1! Well done!
    Happiness is wanting what you have...
    Debt Jan 2017: £2589.22 DFD: Sept 2022 April 2022 but this Marching Minimalist can beat that!
    Use it or Loose it gym target: Feb'17 5/6 Mar 4/6
    EF £0/£4200
    • Debtfreein5yrs
    • By Debtfreein5yrs 28th Mar 17, 12:15 PM
    • 62 Posts
    • 185 Thanks
    Debtfreein5yrs
    According to a debt tracking app that I'm now using my debt free day is 10th Feb 2023. This is nearly a year longer than I aiming for !
    Will have to find ways to cut back further and earn some extra money. Still determined to be debt free in 5 yrs
    Total Debt April 2017 = £98086.93 May 2017 paid back £678.63/£97943.93 or 0.69%
    Short term financial goal :-
    Clear £7107.78 of high interest debt (includes clearing overdrafts)
    April 2017 £0/£7107.78 paid. May 2017 £678.63/£7107.78 paid (9.54%)
    Weight loss goal:- Lose 30lbs by Christmas 2017 April 2017 1/30 lbs lost
    • Debtfreein5yrs
    • By Debtfreein5yrs 28th Mar 17, 12:20 PM
    • 62 Posts
    • 185 Thanks
    Debtfreein5yrs
    Thank you angelpye Only just started using YNAB myself but I'm really liking it already.
    You look to be doing really well at reducing your DFD
    Total Debt April 2017 = £98086.93 May 2017 paid back £678.63/£97943.93 or 0.69%
    Short term financial goal :-
    Clear £7107.78 of high interest debt (includes clearing overdrafts)
    April 2017 £0/£7107.78 paid. May 2017 £678.63/£7107.78 paid (9.54%)
    Weight loss goal:- Lose 30lbs by Christmas 2017 April 2017 1/30 lbs lost
    • Debtfreein5yrs
    • By Debtfreein5yrs 31st Mar 17, 4:25 PM
    • 62 Posts
    • 185 Thanks
    Debtfreein5yrs
    Well I've now spent a whole week (literally because I've been off work on annual leave) reading about how to manage finances and become debt free. I've read books including ones by authors such as Dave Ramsey and Tony Robbins, read articles on the internet, signed up for YNAB and read literally hundreds of threads and diaries on this forum.

    Everything I've read has convinced me that it can be done provided the motivation remains strong.

    Whilst I love the idea of following Dave Ramsey's model of 7 baby steps I have to admit I'm not entirely comfortable with paying off small debts that are currently on 0% interest before paying off larger debts that are having large amounts of interest added each month. One of my first goals will be to build an emergency fund but I don't see the logic in transferring the money into a savings account that pays next to nothing in interest whilst paying £40+ per month in overdraft fees?!
    I fully understand that the bank can pull the overdraft if they want to but they haven't up until now after many years of debt so I think I'm going to take the risk that it won't happen until we've paid off the overdraft and then built up a separate emergency fund. Hope this makes sense?

    As I've already said my conclusion after so much reading is that it's actually the motivation that's the key to success. This has made me more determined than ever to track every penny that we spend and to budget for everything that we need. My plan is going to include using YNAB on a daily basis and snowballing methods but to also adapt the plan as I go along when other 'debt busting' opportunities come along

    To maintain my motivation therefore I intend doing at least one 'debt busting' task every day (hopefully more) and to record what I've done in this diary.

    For example today my 'debt busting' tasks have included :-

    Formulating my plan ..... clear OD first, then save £1000 as emergency fund, then start tackling
    highest interest rate debt first.

    Contacting one creditor who had sent me a offer to knock 60% off what we owed a few months
    ago. It's only a very small debt of £52 from several years ago which has been passed to Lowells so
    I decided to be really cheeky and offer them just £10 which is a discount of 80% to clear it once
    and for all. It's the first time I've ever made a full and final settlement offer so I just want to see if
    they are prepared to go so low. If they do then the £10 won't make a huge difference in the time it
    takes to pay off my overdraft and if they don't then I've still got the option to offer them the £20 that
    they wanted at a future date.

    To be honest I'm not really comfortable with making full and final settlement offers. Almost feels like I'm doing something unethical. After everything I've read though I'm now convincing myself that the original creditors have had much more back than what I ever borrowed in interest and charges and that the debt collection companies will have bought the debt for next to nothing?

    In other debt busting news I've also baked a couple of cakes!! Had lots of ingredients that needed using up sat in my cupboards so decided that I could save a few £'s on the shopping bill and have a treat at the same time
    Total Debt April 2017 = £98086.93 May 2017 paid back £678.63/£97943.93 or 0.69%
    Short term financial goal :-
    Clear £7107.78 of high interest debt (includes clearing overdrafts)
    April 2017 £0/£7107.78 paid. May 2017 £678.63/£7107.78 paid (9.54%)
    Weight loss goal:- Lose 30lbs by Christmas 2017 April 2017 1/30 lbs lost
    • enthusiasticsaver
    • By enthusiasticsaver 31st Mar 17, 5:10 PM
    • 3,684 Posts
    • 6,649 Thanks
    enthusiasticsaver
    I think getting rid of the overdraft first is a good strategy. Having an emergency fund is important and will help with budgeting but if you are paying £40 a month for the overdraft it is more critical to get rid of that first.

    £52k is one large consolidation loan!! Did the debt arise for a specific reason? Home improvements, new cars or just general overspending? You are obviously aware now but all consolidating debt does is delay you actually dealing with repaying the debt. Glad you have realised this now and hope you manage to bring your dfd nearer than 2023. How much are you paying off the debt in total each month?
    Debt and mortgage free and saving for early retirement
    • Determined diva
    • By Determined diva 31st Mar 17, 5:43 PM
    • 584 Posts
    • 2,723 Thanks
    Determined diva
    Hi Debt free

    Good luck in your journey - I am going to subscribe to your thread!

    What debt tracking app do you use? This sounds interesting!!

    Thnaks

    DDx
    3-6 Month Emergency Fund Challenge!! #68 (£1,050/£2,000)
    Pay ALL your debt off by Xmas 2017 #92 (£0.00/£7.000)
    The "Save 12k in 2017" Thread! #TBC (£1,050/£2,000)

    • Debtfreein5yrs
    • By Debtfreein5yrs 3rd Apr 17, 6:10 PM
    • 62 Posts
    • 185 Thanks
    Debtfreein5yrs
    I think getting rid of the overdraft first is a good strategy. Having an emergency fund is important and will help with budgeting but if you are paying £40 a month for the overdraft it is more critical to get rid of that first.

    £52k is one large consolidation loan!! Did the debt arise for a specific reason? Home improvements, new cars or just general overspending? You are obviously aware now but all consolidating debt does is delay you actually dealing with repaying the debt. Glad you have realised this now and hope you manage to bring your dfd nearer than 2023. How much are you paying off the debt in total each month?
    Originally posted by enthusiasticsaver
    Hi. Thank you so much for your reply and comments.
    The consolidation loan arose for a number of reasons. Basically I unexpectedly had to work part time for over 5 yrs due to unforeseen circumstances. This was never in our plan and the financial loss of over half of my good salary hit us really hard. At the time our focus was on other things (health related) and so money was the last thing we worried about. We knew that when things improved I would be able to work full time again but we didn't expect it to take so long. By the time I was able to return to full time employment we had racked up huge debts and at the time the consolidation loan seemed like the best way forward. In hindsight it was the worse thing we could have done.
    Now we are both back to earning really good salaries we are hoping to be able to throw in an extra £800 per month to clearing our debts in addition to the £1200 we already pay to the mortgage and secured loan. We might even be able to pay a bit more depending on overtime payments but we're not taking them into account as it's not guaranteed.

    Thankfully the health issues that started the debt in the first place resulted in a happy outcome so to be honest we don't regret my years part time. Just wish we had handled it better at the time
    Total Debt April 2017 = £98086.93 May 2017 paid back £678.63/£97943.93 or 0.69%
    Short term financial goal :-
    Clear £7107.78 of high interest debt (includes clearing overdrafts)
    April 2017 £0/£7107.78 paid. May 2017 £678.63/£7107.78 paid (9.54%)
    Weight loss goal:- Lose 30lbs by Christmas 2017 April 2017 1/30 lbs lost
    • Debtfreein5yrs
    • By Debtfreein5yrs 3rd Apr 17, 6:16 PM
    • 62 Posts
    • 185 Thanks
    Debtfreein5yrs
    Hi Debt free

    Good luck in your journey - I am going to subscribe to your thread!

    What debt tracking app do you use? This sounds interesting!!

    Thnaks

    DDx
    Originally posted by Determined diva
    Hi DD
    Thank you for your lovely comments and for subscribing to my diary

    The app is called Debt Payoff Assistant which I'm using in conjunction with YNAB.
    Both have really helped in sorting out our plans
    Total Debt April 2017 = £98086.93 May 2017 paid back £678.63/£97943.93 or 0.69%
    Short term financial goal :-
    Clear £7107.78 of high interest debt (includes clearing overdrafts)
    April 2017 £0/£7107.78 paid. May 2017 £678.63/£7107.78 paid (9.54%)
    Weight loss goal:- Lose 30lbs by Christmas 2017 April 2017 1/30 lbs lost
    • Debtfreein5yrs
    • By Debtfreein5yrs 3rd Apr 17, 6:43 PM
    • 62 Posts
    • 185 Thanks
    Debtfreein5yrs
    Not had chance to post for a couple of days but still working hard at sorting out our budgets and debt busting.
    Had a meal out yesterday with a family member that we don't see very often. It had been planned for ages and we didn't want to cancel as family are very important to us. We did change the venue however so that we could use a loyalty voucher that we have had for ages. This covered the total cost of one meal and all the drinks so reduced the bill by over £25. In the end the total bill for 3 of us was less than £35. The main thing was that we had budgeted for it. We also parked the car further away and saved the £3 that we would normally have paid to park

    We've also not done a grocery shop this weekend other than picking up a few bits of fresh food. My debt busting task for today is to meal plan for the week based on food we already have in the freezer and cupboards. In this I'm also going to plan packed lunches for both of us. Hopefully this will save us quite a bit and we will eat healthier!!

    In other news I've also decided that we need to have a massive declutter! Our house is full of stuff we never use or need (another reason why we're in debt) so it's time we sorted it all out. Unfortunately there's nothing individually of great value, just general clutter, accumulated over the years from a growing family but we should be able to raise some extra funds by doing some car boot sales etc in the future. In the short term as time is tight at the moment my goal will be to sort the 'rubbish' and get rid of things bit by bit. I'm going to aim for at least one de-cluttering task a day as well as one debt- busting task on the basis that little and often will make a difference.

    Today's tasks that have been completed are :-
    Debt busting - sorted bank and set up all new standing orders for debt repayments
    - meal plan for the rest of the week including packed lunches from supplies already in
    house.
    - NSD
    De-cluttering - sorted one cupboard
    - thrown away 2 bags full of recyclable packaging
    - one bag empty glass jars ready to go to tip

    I'm sure this diary is going to keep me motivated
    Last edited by Debtfreein5yrs; 03-04-2017 at 7:40 PM.
    Total Debt April 2017 = £98086.93 May 2017 paid back £678.63/£97943.93 or 0.69%
    Short term financial goal :-
    Clear £7107.78 of high interest debt (includes clearing overdrafts)
    April 2017 £0/£7107.78 paid. May 2017 £678.63/£7107.78 paid (9.54%)
    Weight loss goal:- Lose 30lbs by Christmas 2017 April 2017 1/30 lbs lost
    • Debtfreein5yrs
    • By Debtfreein5yrs 29th Apr 17, 1:40 PM
    • 62 Posts
    • 185 Thanks
    Debtfreein5yrs
    It's been 26 days since my last post. During that time things have happened that has made me more determined than ever to be debt free. I'm not going in to what has happened as things are now hopefully back on track but it has set my debt free journey back by a month. Thankfully not a huge amount of damage financially, more the time aspect of 'debt busting' that's been affected but it has opened my eyes even further as to how important it is to be debt free.

    Today therefore is a new start. I'm going to put the past month behind me and restart my budgets

    I'm also determined to improve my health. I've realised that there's no point in becoming debt free and planning for retirement if I'm not going to be fit enough to enjoy it!
    Going to plan to eat much more healthily, cut down on the alcohol that I drink (not that I drink excessively currently!) and find ways to do some exercise.

    Going to be a long haul but it's got to be done
    Total Debt April 2017 = £98086.93 May 2017 paid back £678.63/£97943.93 or 0.69%
    Short term financial goal :-
    Clear £7107.78 of high interest debt (includes clearing overdrafts)
    April 2017 £0/£7107.78 paid. May 2017 £678.63/£7107.78 paid (9.54%)
    Weight loss goal:- Lose 30lbs by Christmas 2017 April 2017 1/30 lbs lost
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