The Ultimate Incentive to get debt free… again. Dinah & NIM go head to head!

Dinah93

Well I knew it was going to happen! After doing a huge amount of work on our new house (yet it still is largely uninhabitable), and having the wedding of his dreams and the honeymoon of mine, we’re back in debt. The main reason this came about though is I was off work for 8 months after doing in my knee and driving being an essential part of my job meant I was signed off. I had the operation about 3 months ago, and I’m hoping to be driving again by Christmas. However a few months on half salary caused a pretty sizable dent in our savings ability.

A quick reccy this morning tells me we owe:
NIMs CC (0% until September): £1500
Dinah’s CC (0% until January 10th): £4000
OD (19.9%): £1000
Barker & Stonehouse (0% until August): £2400
Loan (3.4%): £8500
Student Loan: £7800
Total: £25,300

Even to me this is a fairly sizeable chunk of debt, and I’m one of those people who view anything below £500 as pocket change, and I want it gone as quick as possible. This is the first time I’ve ever counted my student loan in our debt, but I figure we might as well clear it all this time, especially since there is all this talk of commercialising the loan book. In my first diary I cleared over £16,000 of debt in 9 months – working out at over £65 a day, which was amazing. This time I’m not sure I have as much stuff to sell to get us there! The first time I was clearing debt it was all mine, and in my first diary my ultimate incentive to clear the debt was that NIM had offered to move from Ireland to England to be with me once I did. 18 months later we were married.

So the debt explained. The credit cards and the overdraft are for work to the house, some second hand furniture, loss of wages, and the wedding costs we didn’t in any way expect! The loan was to get a more reliable car for work, my work is around 50 minutes away and I have to drive for my job – in winter the old car used to get stuck on the moors and I had to get towed out, so we decided to get a 5 year old 5* safety rated diesel 4x4. In addition I’m currently setting up a new business which needs a bit of boot space, and reliability is essential. We’d have gotten a £1000 volvo or something except my work offers insanely cheap car loans (yes, that is 3.4% per annum not per month!) which are being withdrawn soon, so we decided to get something that will last us a few years.

The Barker and Stonehouse bill… well this is furniture our grandparents bought us for our wedding, however given they offer 0% for 10 months we took it and used the actual money to pay off wedding stuff that was not at 0%. So while I’m not happy about having a furniture bill as debt, the grandparents wouldn’t have given us the money if it hadn’t been going towards something specific.

Some of the numbers are a bit guesstimated, like the student loan company can only give me my balance in March 2009 so that’s an estimate and the loan is a bit vague too.

It does bug me that if we’d skipped the honeymoon (or the wedding!) we’d have no credit card debt at this point. But I think there is no point dwelling on it, I love seeing new places and we had a fantastic time, and I love having our own home and being his wife, so now its just time to pay for it all.With the wedding certainly we did try to be sensible and not go overboard, and did a lot of it ourselves, over half the cost was the venue, but it still added up.

NIM thinks we can clear the debt by the end of the financial year, I think next Christmas is a lot more likely! I’d still be chuffed to pay off nearly £25,000 of debt in 14 months, as that’s around 2/3 of our take home pay we’d make in the same time period. If we made the £65 a day I averaged last time we’d finish at the end of November 2011. If we made the £65 each a day, well, NIM would be about right and we'd finish somewhere around the end of April 2011. However we’re both VERY competitive sorts, so we’ve decided to turn this into a race. All our money is joint anyway; credit cards are just in different names because they’re with the same bank. So it’s not a race to see who can clear their debt first, it’s a race to see who can clear the most!

A lot of people will have tried the £10 a day challenge, I always aimed for £20 and always beat it. As I say, competative even against myself.

The aim of the race is every month we start afresh, whoever makes the most money in that month ‘wins’. Money can be made in any way above normal earnings, we both know we prefer different ways of making money, we both enjoy matched betting, but I tend to hit eBay and Amazon pretty hard in times of need, while NIM goes for the surveys. However he says he has a plan this time, but won’t tell me what! So I’m very excited to see what he gets up to.

I always like to challenge myself, so my ‘medals’ challenges I set for this year will still continue through to the end of the year.

Despite outward appearances, I’m a bit of an old DFW-er (links to all my previous diaries in post 2), so I’m not going to post a budget – I know to change energy providers, car insurance, wear jumpers instead of heating etc, and we don’t even have a telly so far from cutting down sky there isn’t even a tv licence! We try to eat vegetarian 5 nights a week, take leftovers as packed lunches and only ever buy meat on offer/reduced. Our holiday next year is coming courtesy of Tescos. Where I fall down is on using the tumble drier (excuse: it’s dark when I leave home in the morning and come back on an evening, and it rains in between. And our house is such a state we only have one radiator currently fitted), putting on the heating (excuse: I have Reynaulds disease and wearing gloves indoors is inconvenient), online shopping for clothes, event tickets, books, dvds, homewares etc (I have no excuse) and baking (excuse: it’s tastier and healthier than shop bought cakes/cheesecake/bread and so on).

As well as setting up what shall for the moment be known as business A, we’re both enrolled on a bookkeeping course to help manage the accounts of that business. Hopefully when we’re fully qualified at the end of January we can look to set this up as a small business to bring in a few extra pennies. We’re also looking to see if we can’t set up a small business doing cupcakes (which is what I’m known for) for weddings, events, fairs etc.

I have some very loyal followers and friends on my thread, and they really pushed me to clear the debt last time, so I’m hoping they’re going to keep being my driving force for the next year or so. I plan to update at least once a day with what I’ve done that day to make some pennies to help keep me focussed. I’m going to include a list of our moneymaking ideas in one of the posts below, as a few people have asked me how I make so much extra income, and maybe this will help someone. The race runs from the 25th to the 25th of every month (as that’s my payday so easiest for me to keep track of) so the race officially begins on the 25th October.

On your marks, Get Set, GO!

Dinah93

Reserved for previous diary links

Dinah93

Reserved for monthly totals

Dinah93

Reserved for money making ideas and challenge tracking

Poolie

Time to put the kettle on. I have the chocolate hob nobs, anybody want one?

Dinah your SLC loan will be 1.5%. I have a spreadsheet which is very accurate in work out student loan since it was a copy of their spreadsheet as i got a copy before I left.

Dinah93

Ooooh, so if I found out exactly how much I was at in March 2009 your spreadsheet could tell me what I'm at now and in the future?

And I'm always up for hobnobs. Which reminds me, I need to make some more of Twinks.

Poolie

It certainly can Dinah. The spreadsheet is usually within 1 or 2p of SLC if that is accurate enough for you.

If you PM me your March 09 balance and your total for 2009/10 tax year along with any deductions you've had since March 2010 and when you stopped paying I can work it out for you. Will take less than 5 minutes.

Dinah93

You just said a whole bunch of stuff I don't understand but I'll have a look for my old payslips and see if I can come up with some kind of useful figure. Thanks Poolie x

Poolie

I'll make it into a list for you:

1 - SLC March 2009 Statement Balance
2 - Deductions listed on P60 for 2009/2010 Tax Year
3 - Deductions so far this year (2010/2011)
4 - When did the deductions stop from your salary

Dinah93

Oooh you know me so well, I do love a good list!

I can cross number 4 off right now, they're still taking my loan off me in random amounts every month! Can be anywhere from £90 to £112 and yet my salary never alters.

Poolie

If they are still taking then give me a break down from April 2010 till your latest as the spreadsheet will average out over the year like SLC do.