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    • DrSpendLittle
    • By DrSpendLittle 22nd Aug 17, 4:30 PM
    • 69Posts
    • 147Thanks
    Reducing Debt - being accountable and taking responsibility
    • #1
    • 22nd Aug 17, 4:30 PM
    Reducing Debt - being accountable and taking responsibility 22nd Aug 17 at 4:30 PM
    Hi everyone!

    DFW newbie here! Been a lurker for a while but have been so inspired by reading others' DFW diaries - it's literally all I've done this weekend! - that I decided to take the plunge and join in the fun. Now's the time. Had my LBM a few weeks ago and can't wait to get started

    So, a little about me before I state my financial situation and my goals:
    - a happy, healthy and engaged homeowner
    - settled in my career with a fairly well paid job & annual increment
    - looking at starting a family soon as time is ticking!
    - enjoys sports and the outdoors and a healthy approach to life
    - has just started using YNAB
    - has a 'secret' unsecured debt of just over £10k (2 x cc's)

    About DF
    DF is debt free but doesn't actively save. He seems to spend what he earns which isn't great since we have a tiny mortgage and lowish bills. He had family money passed on to him a few years ago on the advice of his mother's accountants - she would NEVER give it away otherwise but that's a whole other story I'm sure we'll get into those MIL from h£ll stories in the coming months . This dosh acts as a financial cushion for him .....and, admittedly, me gosh, it really has meant I've been a wee bit lacking in the old saving malarkey Time to banish this false sense of security!

    About DF and I's financials
    DF and I don't have a joint account. All bills / mortgage come out of his current account except car insurance and broadband/phone which I'm responsible for paying. I give him £465 every month towards bills (includes a deduction for car insurance) and he gives me half of whatever the broadband phone bill is. This arrangement is, on reflection, part of my problem as I have too much 'distance' from the reality of bill payments and direct debits etc etc etc I'm sure you all know the score....

    DF knows I have some debts but isn't really aware of the current status of my 'net worth' He's one of life's worriers so I am taking this DFW journey alone for now. I'm completely settled and happy with this idea and I have been managing it all on my own thus far, so no need to change. I got myself into this situation so I'll be getting myself out of it.

    Why the DFW diary?
    Well, we're thinking of moving home since we could take a few leaps up the ladder. Its time for our dream home. This has caused my LBM. I want my dream home and the only thing stopping me is my poor money management skills! Its also time to move. We've been here a while and have never fully settled.

    My interim goal?
    To clear £4K of debt by January so when we put the house on the market, my debt levels are lower. I obviously also want to make sure we can maximise our borrowing, so I want to demonstrate good money management skills and a good pattern of spending and saving.

    My overall aim
    But, more than this interim goal, I just want to be in control of my money and no longer feel guilty for spending it. I want to save up for things and have that lovely 'I deserve this because I saved for it' feeling when I buy something. I want to be responsible. And, I am here to become accountable.

    My plan of action!
    So....this diary is my way of sharing my story, being accountable for my actions, taking responsibility and doing all this whilst my other half is oblivious!

    I hope you join me on my journey and I look forward to joining you on yours.

    My current financials
    I'll post my current financial situation later today - got some work things to get done before close of play. Its been one of those 'working at home' days which have largely comprised of obsessing over YNAB and lurking on DFW diaries, oh deary me A hint of my procrastinating / self sabotaging ways......

    Last edited by DrSpendLittle; 11-09-2017 at 5:08 PM. Reason: I'm a formatting perfectionist :)
Page 5
    • redofromstart
    • By redofromstart 12th Sep 17, 8:13 PM
    • 316 Posts
    • 1,376 Thanks
    Its an interesting one. There was a thread years ago by memorygirl that was called something like '47p and three nappies'. The bank pulled the plug on her business overnight, all credit stopped, all accounts closed and she was left with just that, single mum on her own with nothing. That is one argument for an emergency fund, kept somewhere away from your main banking facility.
    Her blog is, some useful resources and recipes.

    I used most of our emergency fund to clear the last couple of debts so that we can remortgage, but I am focussing on living well within our means to build it back up as quickly as I can. I can't assume that credit will still be freely available if the fiscal famine hits the Redo household again.
    • enthusiasticsaver
    • By enthusiasticsaver 12th Sep 17, 10:06 PM
    • 4,263 Posts
    • 7,693 Thanks
    How much your emergency fund should be depends on circumstances. I think in your situation a small one is ok initially as you have your DF to call on so I would prioritise the debt.

    Good call on upping the pension. Most effective way of long term saving and after a while you won't notice.
    Countdown to early retirement on 21.12.17 3 months to go.
    • DrSpendLittle
    • By DrSpendLittle 17th Sep 17, 1:51 PM
    • 69 Posts
    • 147 Thanks
    Dear Diary
    Just checking in to wave hello - I've been reading diaries over the past few days but completely failed to update mine!

    Not much to report - having that 'middle of the month' feeling where my account balance seems low but static. Every £ is doing its job, but I don't feel any particular progress is being made. Itching to get to payday.

    Still, were over the hump now, and I've managed well thus far in my first full month on budget as a debt slayer.

    However, I'm struggling to reconcile with that impatient voice in my head that realises paying off debt faster equals the speeding up of time. I don't want to wish time away - life is too precious and full of joy - but I do want to be debt free now now now! Impatience has always been my downfall. I suspect this is the bigger lesson of my personal debt free journey. I'm happy with that.

    For some reason, I'm itching to make a big purchase - a home desktop computer. Very easily justifiable in all but monetary terms. It's a phase and will pass, but this time last year, I suspect I would have already bought and financed it using store 0% credit. It's nice to see how my mindset is changing, but the old emotions are still very much there. Gotta play the long game. I'll save up and buy one next year.

    This month's budget is still on track. Might need to shuffle some money around my ynab categories as my food budget is looking low and my fuel budget is looking flush. But, all doable within the ££s I have left til payday.

    CC1: £254 / £1,253.73; CC2: £297 / £9,124.13; CC3: £312.34 / £312.34; Car Loan: £157.91 / £1,894.92
    Emergency Fund: £84.21 / £1,000; Short Term CC Goal: £863.33 / £4,000 by Jan 1st 2018 (21.6%)
    • Mummy_bear
    • By Mummy_bear 17th Sep 17, 3:13 PM
    • 204 Posts
    • 825 Thanks
    Hi, newly subscribed. You've done so well so far.

    Re. Dave Ramsey I kinda skipped steps so to speak. I just wanted to get cracking with my debt busting. But I eventually started putting bits away in my Emergency Fund, small amounts like you have. Was so glad I did as when we had an actual emergency end of July beginning of Aug it was a Godsend. Now building it back up again.

    Look forward to your updates.
    My LBM May 2017, DH LBM July 2017- Total Debt (not Including Mortgage) £37139.86
    £4434.13/£37139.86 11.93% paid
    Estimated DFD JUNE 2020 (calculated July 2017)
    Debt Free by Christmas Challenge
    Total cleared £2823.49/£9091.72 31% paid
    • DrSpendLittle
    • By DrSpendLittle 18th Sep 17, 2:47 PM
    • 69 Posts
    • 147 Thanks
    Hi, newly subscribed. You've done so well so far.

    Re. Dave Ramsey I kinda skipped steps so to speak. I just wanted to get cracking with my debt busting. But I eventually started putting bits away in my Emergency Fund, small amounts like you have. Was so glad I did as when we had an actual emergency end of July beginning of Aug it was a Godsend. Now building it back up again.

    Look forward to your updates.
    Originally posted by Mummy_bear
    Thanks Mummybear! We sound in a similar frame of mind with wanting to pay off debt as quickly as possible. I could have put the £883 I paid of my debt this month into an emergency fund, but I just am too impatient to get started debt busting! Look forward to catching up on your diary too!

    CC1: £254 / £1,253.73; CC2: £297 / £9,124.13; CC3: £312.34 / £312.34; Car Loan: £157.91 / £1,894.92
    Emergency Fund: £84.21 / £1,000; Short Term CC Goal: £863.33 / £4,000 by Jan 1st 2018 (21.6%)
    • DrSpendLittle
    • By DrSpendLittle 18th Sep 17, 3:06 PM
    • 69 Posts
    • 147 Thanks
    Using CCs for monthly spends & paying off in full each month.....?
    Checking in to say hello and keep up to date.

    Working from home today so no fuel or car parking costs. NSD so far but we have no clue what to have for dinner. We have stuff in but not too sure on a recipe just yet.

    Super busy at work for the next two weeks, so hoping time flies by to 29th when its payday! Whoooo!

    No movement on debt or spends since I last updated.

    I've been using my JL partnership card for all food spends this month. The money I assigned to my groceries budget in ynab on 1st September is still sat in my current account. I will pay off the full balance of the card on the 30th using said funds. I do this because I like getting the Waitr0se £10 vouchers. But I also like the comfort of knowing I have the ynab groceries money sat in my current account as a buffer against any unforeseen direct debits (there are none, I'm 100% sure of this, but I just can't shake that old debt fuelled anxiety of having no money in my account to cover DDs). Totally psychological, but it works for me!

    I'm tempted to do the same for fuel spends too. That way, I keep the assigned money for both categories (around £300 per month) in my current account until the last day of the month to alleviate random debt anxiety hangover, and then pay off in full on the last day of the month. Positives to this are that I will get more £10 JL vouchers and demonstrate good use of credit. Negatives are what Dave Ramsey always refers too - you spend more using plastic than you do using real money. Plus, it can encourage that 'buy now pay later just this once' mentality which invariably leads to the debt spiral we all know and loathe.

    With all that said, I'm confident that I can stick to my budget and only spend what I have assigned that month. I guess I could pay half off half way through the month as a temporary measure / precaution? Does anyone else use credit cards like this to generate cashback? What lessons have you learned? Would you recommend it? Are you really against this practice? Let me know

    CC1: £254 / £1,253.73; CC2: £297 / £9,124.13; CC3: £312.34 / £312.34; Car Loan: £157.91 / £1,894.92
    Emergency Fund: £84.21 / £1,000; Short Term CC Goal: £863.33 / £4,000 by Jan 1st 2018 (21.6%)
    • wishingthemortgaheaway
    • By wishingthemortgaheaway 18th Sep 17, 4:16 PM
    • 307 Posts
    • 1,248 Thanks
    If you are using YNAB though, you won't get into trouble or pay out more than you have. When you register a spend, it reduces the balance on the (for example) groceries budget, but you can record it to the credit card 'account' when you pay off the credit card just do a transfer from the correct account to the credit card to make everything balance properly.
    (Or have I missed something about the way you use YNAB?)
    The 100 payment countdown (each payment = £400)
    July : £36,800 8/100
    August: £36,411.85 8/100
    Term Mortgage free date: October 2029
    Current mortgage free date: April 2025
    • ChasingSunshine
    • By ChasingSunshine 18th Sep 17, 5:21 PM
    • 90 Posts
    • 725 Thanks
    I also pay for pretty much everything on my credit card for the cashback. Only starting to get to grips with YNAB as this is my first month using it. I think as long as you are recording the transactions and the money spent transfers to the credit card account in YNAB then it will no longer be available in your petrol or groceries categories and you shouldn't overspend
    • CP2016
    • By CP2016 18th Sep 17, 6:25 PM
    • 82 Posts
    • 170 Thanks
    My partner uses his credit card for buying fuel. It's budgeted for and when we enter the transaction in YNAB the budget moves from the petrol category to the credit card category. I think the trick is only spending according to your YNAB budgets and ignoring the bank balances when deciding if you can afford it. If you do that you should always have the budget in your credit card to clear it each month.
    “Have nothing in your house that you do not know to be useful, or believe to be beautiful.”
    Wiliam Morris
    • glass_half_full
    • By glass_half_full 19th Sep 17, 7:29 AM
    • 153 Posts
    • 392 Thanks
    Hi DrSpendLittle,
    Love your diary by the way. I heard Martin Lewis on R5L yesterday talking about using a charge card to generate cashback, the example he gave was the Am*x. I think once the discipline of budgeting and spend control is well established, it could be a good idea. I haven't used a credit card since my LBM but I think I am going to give this a go since it is effectively free money.
    Total unsecured debt - £8,417 (September 2017) - Debt free Target March 2018

    No alarms and no surprises
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