Debt free by my 26th birthday ambition!

bunnyhop_2

Hello!
I've decided, like others, to get myself in financial shape this year and want to keep a record of my progress so i can stay on the stright and narrow with it. I graduate from an MA in a few months (total waste of time and money, I did it because I could not think what I wanted to do) and am now applying for jobs and studying a part time graduate diploma in law so that I can get a decent job in the end (ha!)
My ambition is to be clear of all my debts by the time I'm 26 (I'm 24 1/2 now) so that I can leave home and be properly independent.
My current position:
1. debt to my parents - interest free but I feel obliged to pay it off because we don't always get on. Both of us need to have a relationship uncomplicated by financial issues. At the moment I feel (and rightly so) that I have to be obedient to them in areas of life that I would be free in were it not for the money, e.g apply for jobs that I would not suit to show that I am making effort, never go on holiday as it would, in effect, be their owed money I was doing it with.
I owe them £9,640.

2. student loan from gov't - £9,112

That makes an eye watering total of £18, 752.

I do have savings of £14,200 but they are in an ISA and because I will not be able to regain the tax efficiency I do not want to use that. Also, it's my house/ flat deposit fund.

Progress so far -
I have had a job for 3 months, which is poorly paid. I do my £6.90/ hr student job but more hours) I spent my disposable income for these months on...
april - interest free student overdraft, paying off completely as it was about to kick into an interest rate.
may - £200 to dad in 1st installment of repayment
june - £230 2nd installment to dad
I also pay £35 a month student loan repayment, but this does not really touch the loan amount, just covers the interest and stops it becoming a larger debt. I think the capital sum has reduced by about £17, lol.

I also have an academic fee coming of £1,800 of which I have saved £450 so far (it's due in december).

My only real asset is a car, which I do need and was bought cheaply, second hand from a friend.


My plan is that by my 25th birthday in mid Nov) I will
1. Have saved the whole of the amount for my academic fees
2. Have reduced my student loan co debt to £8,000
3. Reduce the amount I owe my dad to £9,000.
I know this doesn't sound like much of an in-road, especially to those who earn that easily in a month, but it will require me to save £3,102 on a salary that gives me little disposable income until I get a better job.

I'll let you know how it goes!
Bunnyhop x

novagirl

Good luck with it all!
(Did think you were 19 for a second then )

bunnyhop_2

Update!
I haven't written anything in a while because nothing to report. I am pleased to say that I now have GOT A JOB (a proper one. not my silly student one) although I don't start until January. The salary is graded and my first year as a trainee will only net me £15.7k but, on the other hand, I am lucky to have a job to go to at all in this recession that we're not formally in :rolleyes: and nearly all of the money, except that needed to finance running a car and buying suitable clothes for the office will be disposable income.

Haven't worked it out properly yet, but it should be about £1k a month, which will be great at helping me get debt free, plus house prices are coming down FINALLY! Hopefully I will be able to put a 25% or more deposit down on a small flat y the ned of next year.

In terms of what I wanted to save by 25, I'm not going to reach my target. My academic fee savings have gone up to £890, leaving me with £910 to find by Dec, but I'm going to put £250 in my account later this month after I've paid my MOT and car tax charges (my 1 litre is £120!!!)

I think the key thing is not to up my standard of living because I earn more, and then I will save loads of salary. It's amazing how you get used to having as much as you have, and begin to regard it as just about enough when you used to cope with less. It's a mental trick to keep thinking £100 is a lot of money and not (as did occur to me) "I wonder if I can treat myself to a Vivienne Westwood coat when I'm earning"!

I have a frivolous list of stuff I want (but won't let myself be daft enough to buy!)
1. teeth whitened, a la simon cowell
2. designer coat
3. new laptop to replace one from 2004 which is on its last legs but will do

Contrast with stuff I have actually bought to celebrate:
1. pack M&S sushi
2. "best of Smash Hits" book edited by Mark Frith

See, restraint!
Bunnyhop x

bunnyhop_2

Hi!
I've just had my second full time working salary and am now in reasonably good shape. I have paid off my overdraft and credit card which I ended up with due to the period of under employment.
Jan = paid Dad back £100 (paltry, ok, but I did start!)
paid off £500 credit card bill, total balance.
paid £350 overdraft back, so I now don't have one.

February = put £600 into ISA (total for this tax year now £1,200. Won't make my full allowance, boo!!!)
Paid £110 credit card bill covering last bit of January before I got my first salary. I haven't spent on it since, so I hope for a zero bill next month.
Paid £380 car insurance. Such a lot for a tiny 1 litre car!

That's my spending so far. I think I've been sensible with what I've spent on, but it never goes as far as you think. I don't think I'll be debt free by 26 afterall, although I will be able to manage being in the black over all, as in owing less than I have. I get a pay rise on October but it's only about £500 before tax, lol.

I also owe mum £88 which I hope to pay back this month, but might not have enough left.

Cyril

You are doing really well, you are wise to be debt free at a young age as I would have done a lot of things differently if I knew then what I know now but I also know I am a lot luckier than sum. The only thing I would do differently I think to use is clear the debt to your Dad as that will ease that tie as family obligations can be tricky.