£16,000 debt, turning regret into positive action.

dionysia · 9 July 2017 at 7:45PM

It sounds like you're doing the right things and making real progress!

Well done on cancelling the holiday, a big decision but hopefully seeing that figure have a six in front next month will make it all worth it. Definitely agree on makeup, some items are fine cheaper but I've also had lots of £5 mistakes which add up!

LadyP01 · 9 July 2017 at 8:00PM

Hey! Yh iv become really determined and actually I'm in my 6th month and it's all starting to become very normal and everyday. Saying no I can't afford things are easier and giving things up and compromising is also a lot easier to do now.

infected.1994_ · 9 July 2017 at 8:11PM

Congrats and much respect for the way you have your expenditure under such great control!

I have a question though, is it worth paying into a pension? or is it better to build your own pension (a small business, a buy to let property etc?)

I'm 23 years of age, I would rather hold on to £20 per month, for the next 42 years and use the money to make me more money, or repay student loan or buy a house.

LadyP01 · 9 July 2017 at 9:42PM

Hmmm good question, I have a really good pension as I'm high up in my company so my company match whatever I put in even when it's over the minimum they have to pay. It's also pretty wealthy as I had that set up with my company years before it became the law.
This for me personally is something I feel I need. I lost a parent before they hit retirement so we got a big pay out from there pension and it really made a big difference so for me it's an investment in either my future or for my children if I don't make it. Little bit dark but the truth is if that time comes that money makes a big difference.

If you paid your £20 into a pension though it will convert to £40 as your employer needs to match it so it will double and you can get a pay out at retirement age and take a lump
Sum instead of a pension. I'm not well informed but I believe that's a rough idea of what happens.

I personally want to build my own pension aswell eventually. Like you say a small business or a small holding or stocks and shares. I'm years away from being at that stage but let's face it who woudnt want a healthy retirement.

LadyP01 · 10 July 2017 at 7:43AM

Today is going to be high on spends but all expenses.
And tomorrow even higher as I'll need lunch and dinner again on expenses.

Feeling the pinch this month and I think it's because of all of the expenses and stripping my budgets to minimum so the challenge is getting through it.

The oh has started to come around to the debt issues and face his own. It's tough and I can see it's a lot tougher for him then myself. It makes me happy that finally we are both clearing our debt so we can go into a house together debt free.

enthusiasticsaver · 10 July 2017 at 8:42AM

Looks like you are both tackling this with focus now. What I would say it will be easier to prioritise when you don't have debt so clearing this first is good. After that you will be able to decide whether holidays/meals out/new electronic goods or clothes are more important than saving for a house or starting a family. Both are enjoyable but it just depends on what stage of life you are at.

enthusiasticsaver · 10 July 2017 at 8:51AM

infected.1994_ wrote: »

Congrats and much respect for the way you have your expenditure under such great control!

I have a question though, is it worth paying into a pension? or is it better to build your own pension (a small business, a buy to let property etc?)

I'm 23 years of age, I would rather hold on to £20 per month, for the next 42 years and use the money to make me more money, or repay student loan or buy a house.

If you don't pay into a company pension you are effectively turning down a payrise as most companies match your contributions up to a point plus HMRC top it up due to the fact that tax is reclaimed on pension contributions. It is the most tax efficient way of saving for the future. My Husband had been doing a job with unpredictable hours and lots of travelling since he was 23 and we made the decision to pay into a booster pension (10% contributions) which the company matched. Now 58 he retired last year and effectively his pension is only £400 less than his salary was which is easily enough for us to live off especially with the large tax free lump sum as a savings buffer. I seriously doubt anything else would have brought the same returns without an awful lot more effort. Buy to let's are not tax efficient and you have to deal with non paying tenants who sometimes trash properties and ongoing maintenance issues.

LadyP01 · 17 July 2017 at 1:23PM

How wrong was I after my budget setting this month! I really thought I had squeezed myself dry with everything going on but I have managed to make some massive changes still.

PAID another £500 off so it's currently sitting at £8607.00 this is money from my holiday account as we are no longer going.
I have more in there but i have some expenses and the weekend away so I'm going to leave a little pot until I'm confident I won't need it.

6 months and I'm at £8607 I just can't believe that it's actually working. You have a dream and a plan to do these things and then something comes up and you always think o well i NEED this so I'll have to break the budget or borrow. Things have come up in the last 6 months. Iv had major car dramas that I have luckily already planned for and used my car money to sort. Iv had to purchase a new phone and repair an old one but I factored this cost in at the beginning knowing eventually the time would come to do so. These savings and forward planning made these hiccups effortless financially even if it gave me a headache finding the best deal.

Also this week I need to get myself some toiletries so I'm making a list today and I'm off to hunt down some bargains. I'll buy a few gifts while I'm in there so I can add to the stocking fillers.

Iv started planning out my august budget so I'm prepared for next month as it will be pay day in 10 days so won't b long and then I can make my next payment and get that debt figure into the £7000's

LadyP01 · 24 July 2017 at 10:42PM

Nearly at pay day... 3 full days to go. I have one weigh in, petrol for one day needed and maybe some food and that is it for the month. Friday will be the day to sort out what was left to add to debt at the end.

Purchased all my toiletries and was so disapointed with the cheap deodorant I got that iv had to buy another in the sale and I'll rotate the two until the cheap one runs out. Won't try that one again you live and learn, it was a big brand one at a reduced price but wasn't for me.

I'm really happy about July I think iv tackled a lot this month that will make a difference down the line.

enthusiasticsaver · 24 July 2017 at 10:57PM

It looks like you have really got on board with clearing this debt so well done on keeping focused. I think you did the right thing re cancelling holiday.

£16,000 debt, turning regret into positive action.

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