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  • FIRST POST
    • ani*fan
    • By ani*fan 10th Jul 17, 7:41 AM
    • 1,497Posts
    • 3,642Thanks
    ani*fan
    Ditching the last of the pizza debt
    • #1
    • 10th Jul 17, 7:41 AM
    Ditching the last of the pizza debt 10th Jul 17 at 7:41 AM
    Hi everyone

    I'm an old-timer around here and have managed to reduce my debt from £18,780 in February 2014 to £6,750 today. That's £12,030 paid off and I could not have done it without the help of Martin and everyone on here. Thank you, lovely people!

    I thought I'd start a new diary as my circumstances have changed considerably since Feb 2014 and it feels like a whole new stage of life. I'm about to be married; this is all saved for, who knew I could save? I've also bought a flat with OH; the deposit and fees were all saved for with some help from future in-laws too, who knew anyone would ever give me a mortgage? I've finished my training course, who knew I could do that? Things are good right now and the final hurdle is getting rid of this debt. OH refers to it as 'pizza debt', the debt I have nothing to show for, when I bought stuff I didn't need, for no reason, like takeaway pizza. It made me laugh and it's absolutely true.

    So, the debt looks like this:

    HSBC £4,950 0% 'til October 2018
    Overdraft £1,800 0% 'til September 2020

    HSBC is the target debt and I pay a fixed £150 every month towards this, roughly £20 over the minimum amount. The overdraft is not being paid off at the moment, other than once a month when my wage goes in. I discovered my credit is good when we got the mortgage and I'm trying to keep it that way.

    The flat we bought was an absolute bargain and has the potential to be beautiful but is in serious need of repair. This is the main ongoing financial concern at the moment and I am on it to keep costs right down. So far so good, but we'll see.

    A few things I've discovered along this debt-busting journey:
    • I've become quite good at managing money, but it can all go to bits in a moment so I still need to work hard at keeping on top of it.
    • Getting my debt on 0% was the single biggest factor helping to reduce the debt.
    • Car free living was the second biggest factor and I hope to never own a car again.
    • Keeping living costs down is very satisfying.

    So that's where I'm at. Feel free to comment, advise, whatever. It's lovely to be sharing this last part of the journey with you all.
    If you know you have enough, you're rich.
Page 1
    • ani*fan
    • By ani*fan 10th Jul 17, 8:22 AM
    • 1,497 Posts
    • 3,642 Thanks
    ani*fan
    • #2
    • 10th Jul 17, 8:22 AM
    Emergency fund
    • #2
    • 10th Jul 17, 8:22 AM
    In our old rented flat we had no emergency fund. I had a think about it, but felt that because any flat repairs were covered in the lease and I had no car therefore no surprise bills, I didn't need one. This was mostly true.

    When we started saving for the wedding and for a house, I thought these pots could double as an emergency fund. In the excitement and general disorganisation of the move a couple of months ago, I forgot to shift cash around in time and missed a payment on a CC, therefore losing the 0% deal. This was indeed an emergency so I paid it from the wedding fund and the previous flat deposit. Crisis averted.

    Now I'm a flat owner, I definitely need a proper emergency fund. The house pot is spent (obviously). I still have the wedding pot but that will also be spent quite soon leaving us with absolutely nothing. This is not a little bit scary.

    At the moment our disposable income after all living expenses is around £1,100. For the last 2 months this has been used for wedding savings, furniture and essential repairs to the flat like electrics. There are many more repairs that need to happen but we are almost sorted for furniture (the spare bedroom can wait).

    I need to decide how much to save every month, what the target should be and where to put it. I have a present pot, £50 per month to cover all gifts for the year. Could I just stick it in there? I also have an account with the TSB for my monthly spends, mostly to get some extra interest, maybe I could put it in there?

    The emergencies I'm thinking of could be fridge/freezer, boiler, cooker or heating breakdown. Would £1,000 be enough? More? What else could go wrong?

    I'll maybe start with £200 per month. All advice gratefully received.
    If you know you have enough, you're rich.
    • in need of direction
    • By in need of direction 10th Jul 17, 9:31 AM
    • 4,569 Posts
    • 25,601 Thanks
    in need of direction
    • #3
    • 10th Jul 17, 9:31 AM
    • #3
    • 10th Jul 17, 9:31 AM
    Hello, followed you over. I asked the same question in a thread on here a while back. Advice was between 3 and 6 months expenses so I looked at what outgoings would be if I wasn't working and multiplied by 4.5 and went with the nearest round number. I still have things I'd like to buy and work I'd like to do to the house but that fund has only been dipped into twice and has been replaced both times. Can't remember why the first time but the second was to repair OH's macbook.
    Anyhow, great to see such a positive start to the new diary. Can't wait to continue to be inspired by your progress.
    Mortgage at 01.01.14 £119,481.83 today £81,750.18, target £75,000 by 31/12/17 Offset fund today £3,975.43 target £5,500 by 31/12/17
    Emergency fund £5.5k & £200 cash.
    Current weight loss 1/34 by 28 feb 2018
    determined to stop defining myself by my mistakes.
    Progress not perfection.
    • hiddenshadow
    • By hiddenshadow 10th Jul 17, 11:17 AM
    • 2,221 Posts
    • 10,040 Thanks
    hiddenshadow
    • #4
    • 10th Jul 17, 11:17 AM
    • #4
    • 10th Jul 17, 11:17 AM
    At the moment our disposable income after all living expenses is around £1,100. For the last 2 months this has been used for wedding savings, furniture and essential repairs to the flat like electrics. There are many more repairs that need to happen but we are almost sorted for furniture (the spare bedroom can wait).

    I need to decide how much to save every month, what the target should be and where to put it. I have a present pot, £50 per month to cover all gifts for the year. Could I just stick it in there? I also have an account with the TSB for my monthly spends, mostly to get some extra interest, maybe I could put it in there?

    The emergencies I'm thinking of could be fridge/freezer, boiler, cooker or heating breakdown. Would £1,000 be enough? More? What else could go wrong?
    Originally posted by ani*fan
    First, I would definitely NOT just stick the money in with presents. It could live in the same bank account, obviously, but you need a way to know that £X of that account is your EF vs £Y for gifts. Otherwise you run the risk of saying "ooh, I could buy OH a £2k computer for Christmas!" (not that I've ever done anything like that......).

    Various rules of thumb re: EFs that are out there:
    - £1k as a "baby" EF, with the aim to build it higher once debt-free (Dave Ramsey)
    - 2% of house value saved each year towards maintenance (not strictly an EF, but if relating to house expenses vs job loss, it's an OK rule of thumb)
    - as INOD said, 3-6 months of expenses (I factor this as "if I'm sitting on the couch unemployed, thus not commuting or buying goodies, how much do I need to feed myself and pay the bills?", not "let's replicate our take-home pay" levels)

    As your 0% deals are quite long-term, if it were me, I'd probably go with:
    - save £1k ASAP to handle basic things
    - whenever that's done, calculate how much per month you need to pay off HSBC (say that's in Oct, I guess it'd be ~15 months to pay off within 0% period, so ~£300/mo...schedule that as a Standing Order so you can't deviate from it (you could also set this up as a regular saver and earn a bit of interest, since there's no advantage in paying it directly to HSBC before 0% ends)
    - then figure out whatever's left of your disposable income, and how much you want to/are able to devote to beefing up your EF. We went with the "jump in at the deep end" approach and decided to just try saving half our take-home pay, and figured we'd adjust if that felt super crazy/uncomfortable, but it's worked so far. You could do the opposite approach, though, start with £100 and increase by £10/mo until you feel like you don't have any spare to go into savings. Whatever works for you.
    - long-term I'd shoot for both the 3-6 month EF and the 2% house value saved separately, so that your house maintenance pot doesn't double as your EF pot
    Last edited by hiddenshadow; 10-07-2017 at 12:58 PM. Reason: typo
    MFW: Dec '13 £197,100 / Dec '14 £180,691 / Dec '15 £161,669 / Dec '16 £119,669 / Sept '17 ££107,383
    Payment 44/84 / 2017 MFW #56: £12,285/£20,000 61% / MFiT-T4 #15: £52,116/£90,000 57%
    • EssexHebridean
    • By EssexHebridean 10th Jul 17, 12:27 PM
    • 7,753 Posts
    • 40,184 Thanks
    EssexHebridean
    • #5
    • 10th Jul 17, 12:27 PM
    • #5
    • 10th Jul 17, 12:27 PM
    I'd second the thing of having a dedicated amount for your EF - it's safer that way.

    I'd also say start with £1k as a priority - then switch your priority back to the debts - perhaps allowing a token £50 a month to continue to trickle into the EF so you keep it growing a bit. Once the debts are gone then any surplus can be redistributed to savings - we use a combination of regular savers (1 each which so long as there is financial trust is better than a single joint one) which each let us save £500 a month - anything over and above that goes into the ISA. The regular savers we have each run for a year paying 5% interest - when they mature we've always transferred the money to the ISA although that may change this year sometime if we find somewhere paying better interest. Essentially our ISA doubles as our EF.

    As you have a mortgage you may well choose to look towards overpaying - but read carefully what you're allowed to do and how you need to pay it on that - if you're on a fixed rate deal there will almost certainly be some form of restriction.
    MORTGAGE FREE 30/09/2016
    Sainsbugs 0% card: 22/12/16 £1229.00/£504.92 (29/08/17)
    • ani*fan
    • By ani*fan 10th Jul 17, 1:19 PM
    • 1,497 Posts
    • 3,642 Thanks
    ani*fan
    • #6
    • 10th Jul 17, 1:19 PM
    • #6
    • 10th Jul 17, 1:19 PM
    INOD and hiddenshadow...glad you could make it over here! And hi EssexHebridean.

    OH just said exactly the same thing about 3-6 months living costs as an EF...now I feel like a part-timer, dipping my toe in with a plan for £1k when I should be aiming a bit higher! Saying that, whatever the target is, it will reach £1k before it gets any bigger. I just need to start somewhere.

    EssexHebridean, I've had a linked saver for the wedding pot that matures this month. It was just a test run as I'm not used to saving yet but it really worked for me. The cash went out by standing order, just like paying the bills, no hassle. And yes, OH is completely on board and we trust each other entirely so it's all good there, thankfully.

    Hiddenshadow, EF separate from the pressies, of course, thanks for the reminder. I think I'll get another linked saver to start the EF. You're right about the 'paying off HSBC' dilemma. Do I divide it up by monthly payments, or save it separately to get some interest and then pay the card off in a chunk? It makes sense to get some interest, but I do really enjoy seeing the balance on the card go down and at the minute, all overpayments go to that card. Hmm.

    Mortgage overpayments definitely need to start in good time for a big amount to be paid off before we remortgage. But at the minute, the renovations are a priority. Hopefully this will help too with a better L to V ratio when we remortgage. I'm desperately wishing for some carpets but it's just not time yet, too much to still be done.

    Thanks for the help, I'm away to update my spreadsheet, inform OH of the plan and decide on a monthly EF savings amount.
    If you know you have enough, you're rich.
    • dionysia
    • By dionysia 10th Jul 17, 4:27 PM
    • 63 Posts
    • 125 Thanks
    dionysia
    • #7
    • 10th Jul 17, 4:27 PM
    • #7
    • 10th Jul 17, 4:27 PM
    It's really inspiring to see your new diary with all the progress you've made and going forward into this new stage of your life!
    June 2017: owe £16,818.
    • mfmaybe
    • By mfmaybe 10th Jul 17, 4:37 PM
    • 980 Posts
    • 3,084 Thanks
    mfmaybe
    • #8
    • 10th Jul 17, 4:37 PM
    • #8
    • 10th Jul 17, 4:37 PM
    Joining you over here from your last diary.

    On the card debt vs savings, how about saving your money for now (other than minimum payments); but working out your net debt position. So card balance less the (very clearly ring-fenced ) stoozing money. That said, it depends just how much interest you would be losing out on. Given current low savings rates, I might still be tempted to keep paying off the card.
    Create credit card buffer fund £12.93/£1000 1.4%paid. Pay by Christmas 17

    Other debts paid since 1/1/14: £17,005
    • EssexHebridean
    • By EssexHebridean 10th Jul 17, 4:38 PM
    • 7,753 Posts
    • 40,184 Thanks
    EssexHebridean
    • #9
    • 10th Jul 17, 4:38 PM
    • #9
    • 10th Jul 17, 4:38 PM
    If you need the motivation of seeing a balance drop then maybe continue to make the OP's as you have been and just get it gone sooner - 0% deals are great but the one I have currently, I never had any intention of letting it run to the 11th hour - it was always in my game plan to chip away at it via "free money" - surveys etc - and see it drop. The money that the items it was used for would have cost me is sitting in a bank account waiting to go off it if needed, but the more I can get gone via the free money route, the better!

    Alternatively - and my current favourite debt busting method - set the DD to the level of the current minimum payment and let it run at that level - that way each month's DD has slightly more of an effect as the capital balance drops but you never notice any more of an impact on what comes out of your bank - plus because the DD isn't dropping each month you don't get into a situation where money gets left in your account to be frittered!
    MORTGAGE FREE 30/09/2016
    Sainsbugs 0% card: 22/12/16 £1229.00/£504.92 (29/08/17)
    • hiddenshadow
    • By hiddenshadow 10th Jul 17, 4:54 PM
    • 2,221 Posts
    • 10,040 Thanks
    hiddenshadow
    Debt-wise I default to paying the debt rather than stoozing, just for psychological reasons. (I say that after we've just spent the last year stoozing, but I had to set up my spreadsheet very carefully so that I could still see motivating numbers! And now that we've actually used our stoozed money for something else I'm sad to see the "true" mortgage balance again.)

    As mfmaybe said, these days the interest you'd earn isn't really relevant, so if you get more motivation from a debt number going down, I'd say go for that. (For me, I'm way more motivated to save extra if I know I can OP it, but if it's going into savings I'm more like "meh, maybe I'll do it.")
    MFW: Dec '13 £197,100 / Dec '14 £180,691 / Dec '15 £161,669 / Dec '16 £119,669 / Sept '17 ££107,383
    Payment 44/84 / 2017 MFW #56: £12,285/£20,000 61% / MFiT-T4 #15: £52,116/£90,000 57%
    • Chandelier.
    • By Chandelier. 10th Jul 17, 8:07 PM
    • 492 Posts
    • 1,338 Thanks
    Chandelier.
    Happy shiny new diary

    Isn't it amazing how things change over time. I'll subscribe and look forward to seeing your updates.
    Check out my Diary
    • misstara
    • By misstara 10th Jul 17, 10:11 PM
    • 2,358 Posts
    • 16,334 Thanks
    misstara
    Just popping over to say hi and subscribe to your new diary
    Debt at LBM Jan 2014 £10458.09 Now £0
    New flat debt Jan 2017 £2302.75 Now £1525.60 (33.7% paid)
    Mini Targets
    Exercise target - Run 3/8, Gym 1/4. Groceries target £101.46/£150. NSD target 7/18.
    • ani*fan
    • By ani*fan 11th Jul 17, 5:10 AM
    • 1,497 Posts
    • 3,642 Thanks
    ani*fan
    It's really inspiring to see your new diary with all the progress you've made and going forward into this new stage of your life!
    Originally posted by dionysia
    Thanks dionysia. I'm glad to have inspired you, I've certainly had enough inspiration from this place over the years, it's great to give something back.


    On the card debt vs savings, how about saving your money for now (other than minimum payments); but working out your net debt position. So card balance less the (very clearly ring-fenced ) stoozing money. That said, it depends just how much interest you would be losing out on. Given current low savings rates, I might still be tempted to keep paying off the card.
    Originally posted by mfmaybe
    Ooh, net position, that's an interesting one. My share of the deposit and equity in the flat is £4,100, minus the debt of £6,750, net position is -£2,650. That looks so much better than just the debt figure!

    I know interest rates are not great, and even in my linked saver at 5%, because I've been saving £200 every month and not in a big lump sum, the total interest at the end of the year is only £60. I'm still practicing at saving, it's not something I'm familiar with, maybe worth doing to get into the habit?
    Last edited by ani*fan; 11-07-2017 at 6:02 AM.
    If you know you have enough, you're rich.
    • ani*fan
    • By ani*fan 11th Jul 17, 5:53 AM
    • 1,497 Posts
    • 3,642 Thanks
    ani*fan
    EssexHebridean and hiddenshadow...all good points about the pros and cons of stoozing vs paying off the card. This is what I've decided:
    • I'll keep the DD to HSBC at £150 for now.
    • I'll put £200 per month into a linked saver.
    • Over 12 months, this leaves £490 still to pay. I can continue making small overpayments and knocking it down when I can.
    • This means I can practice saving, see the debt go down faster, and HSBC will be paid off by July next year.
    • Good plan?

    About the EF:
    • I'll put £200 per month into my TSB account.
    • This will earn 5% if I remember to do the £500 transfer every month.
    • In October I'll add in an extra £200 that I usually pay to the wedding fund as the wedding will have happened by then.
    • £1,000 plus interest EF saved by the end of October, then reassess.

    So I need to open a new linked saver. I'm going to go with my own bank after the 20th of this month when the old one matures, nice and easy to keep track of. Then set up 2 standing orders from my account, one to the TSB and one to the linked saver. This should leave our disposable at £700 per month for flat repairs. I'm off to check my spreadsheet and make sure I've got that right.

    Thanks everyone. Loads of heads are always better than one when figuring these things out.
    If you know you have enough, you're rich.
    • ani*fan
    • By ani*fan 11th Jul 17, 6:01 AM
    • 1,497 Posts
    • 3,642 Thanks
    ani*fan
    Happy shiny new diary

    Isn't it amazing how things change over time. I'll subscribe and look forward to seeing your updates.
    Originally posted by Chandelier.
    Thanks Chandelier. Yes it is amazing, and I might not even have noticed how dramatically things had changed if it hadn't been for my diary on here.

    Just popping over to say hi and subscribe to your new diary
    Originally posted by misstara
    Glad you found me misstara! I have to say, your signature is looking amazing! Well done!
    If you know you have enough, you're rich.
    • Hiddenidenity
    • By Hiddenidenity 11th Jul 17, 10:15 AM
    • 4,743 Posts
    • 20,610 Thanks
    Hiddenidenity
    A lurker following you over

    You've done amazing! x
    DFW £1313.71/£7348.71 Rent Arrears £466.28/£3381.28

    Rock bottom became the solid foundation on which I rebuilt my life.
    • ani*fan
    • By ani*fan 13th Jul 17, 6:14 AM
    • 1,497 Posts
    • 3,642 Thanks
    ani*fan
    Thanks Hiddenidentity, I really appreciate the encouragement.

    This month's minimum payment has gone out so the debt today stands at £6,600

    Smaller than it's ever been but still some ways to go. I'm on it.

    Me and OH are off work now and had some ambitious plans for what to do to the flat during that time. I have squeezed our budget every which way I can, but it's not going to stretch quite far enough so we have decided to slow the pace slightly. Everything is still moving forward though.

    My mum is visiting tomorrow and bringing her old garden furniture for us. I don't know what condition it's in now, but anything is better than nothing so gratefully received.

    Happy debt busting day everyone.
    If you know you have enough, you're rich.
    • Igamogam
    • By Igamogam 22nd Jul 17, 4:01 PM
    • 5,420 Posts
    • 43,512 Thanks
    Igamogam
    Found you! I will catch up later but congrats on passing the study..........Dr Ani*fan yes?? I am right in thinking it was a PhD?
    Be the change you want to see -with apologies to Gandhi
    In gardens, beauty is a by-product. The main business is sex and death. ~Sam Llewelyn
    'On the internet no one knows you are a cat'
    • Hiddenidenity
    • By Hiddenidenity 23rd Jul 17, 8:17 PM
    • 4,743 Posts
    • 20,610 Thanks
    Hiddenidenity
    Hope you've had a lovely day
    DFW £1313.71/£7348.71 Rent Arrears £466.28/£3381.28

    Rock bottom became the solid foundation on which I rebuilt my life.
    • ani*fan
    • By ani*fan 5th Aug 17, 6:27 AM
    • 1,497 Posts
    • 3,642 Thanks
    ani*fan
    Found you! I will catch up later but congrats on passing the study..........Dr Ani*fan yes?? I am right in thinking it was a PhD?
    Originally posted by Igamogam
    You are correct Igamogam, thanks for remembering! I probably won't have a graduation ceremony until next year, and who knows what's happening with a job, but all the hard work is over and I'm delighted to have made it through.

    In the meantime, furry purrball has thyroid problems. He's ok, I think we caught it in time, but he looks like a bag of bones and can't stop eating. I've been very worried for him. Also, the costs of blood tests and meds really do add up. Once we've worked out the strength of meds he needs, I'm going to try and buy them cheaper online. Anyone have any experience of this?

    The garden furniture is perfect. So pleased my mum brought it. MSE score.

    This month we have a fireplace being dismantled, a wall being built, windows and a door being fitted and some more work done on the electrics. Me and OH are on the strictest frugal month ever to try and get through. Oh, also we're getting a sander to sort out the floors. Wish us luck, i think we'll need it!

    Happy mse weekend everyone.
    If you know you have enough, you're rich.
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