The amazing shrinking debt!

abba1772

just read your diary with great interest and have subscribed, you're doing really well, keep it up x

dreamdreamer

Thanks abba.

Finally got OH's payment through for the month for mortgage/bills - phoned up Nationwide and overpaid the loan by £1550 this afternoon, which I've been saving since October. Total debt is now £5272, so come the 25th I'll be under 5k!

I also accepted 5 overtime shifts from work that they offered me, in addition to the 2 I already had. I've now got 5 in February and 2 so far in March, which get paid a month in arrears. This means I should be able to overpay the loan by £400 on 03/03, by at least £700 on 03/04 and by at least £400 on 04/05. I should be below 3k by May and I'm on target for my DFD of 25th September!

:j:j:j:j:j:j:j:j:j

dreamdreamer

So, I've been doing some backwards thinking and some forward planning this afternoon. I was thinking back to when I took out all these bloody loans and credit cards in '05-'07. My idea of being financially prudent then was to make sure the loan term ended before August 2014, when I turned 30. I wanted to be debt free when I turned 30. Then once I sorted myself out, consolidated, cut up the cards, upped repayments etc my DFD was March 2013 (new loan term end). Now with some serious debt-busting it's down to Sept 2011, I'll have just turned 27. Taken 3 years off my original "life plan".

So then I got to thinking what I could do in those 3 years to put myself ahead of schedule...

I'm going to start paying £500 a month from my basic salary into a savings account or ISA from October 2011. This will be our wedding fund - we'll be off to Vegas followed by Hawaii or the Caribbean - we have priced this up at £7k + £3k spending money. OH will save the same, so it should take 10 months. This can then sit dormant for whenever we decide to do it. During that time any overtime or extra earnings from amazon etc that I am currently paying to my loan will go into another savings account, the maternity fund. This will be anywhere from £0 to £800 a month depending on how work-shy I'm feeling, but should average out to around £300 a month I would think.

So in 18mths time we should have the wedding/honeymoon paid for and around £3.6k of maternity fund. If I take 9 months off on ML my pay will drop by £360 a month for the whole period (you have the option to spread payments equally over the months to lessen the blow when you drop to SMP). So I'll need £3240 saved to maintain current pay rate. We've also decided we'll put £100 a month away in a child trust fund from the day he/she is born which will return around £30,000 on their 18th birthday.

I'm pleased with our plan! I'm a planner by nature and it's nice to see that we'll be able to manage comfortably. I'm also feeling very grateful that we're both in extremely stable jobs that aren't going anywhere!

dreamdreamer

Well, some VERY good news today, OH had a letter through today from his work pension scheme stating that his "lump sum" pension payment on retirement will now be £50k instead of £35k! He gets this lump sum when he retires in 5 years time (at the tender age of 40!). Not sure what we'll use it for yet, OH wants to extend the house, I want to overpay the mortgage (it's only a £116k mortgage so it'd take 12 years off our mortgage!).

abba1772

wow that fantastic news x x x I would pay the mortgage off personally x

saorsie

Fantastic Dreamer ~ what a lovely letter to receive :j

Definitely overpay IMHO ~ reserving 10% to have a holiday of a lifetime, naturally!

-s-

dreamdreamer

Well we have 5 years to argue about it hehe, but it suddenly occurred to me that this £1k a month we're planning to save come September would be much better off paying off the mortgage. We're thinking of moving to a One account at the end of the year anyway, OH did this on his last house and got £35k equity in 5 years from overpayments.

dreamdreamer

Paid another £50 off this morning as decided I could live on £215 until payday (2.5wks away) since it's just me to feed etc. Debt now: [STRIKE]£15800[/STRIKE] £5222

This is 67% paid.

dreamdreamer

Not very MSE of me but I'm seriously considering buying a kindle at some point in the next few months. Reading is my main hobby but we've totally run out of bookshelf room now.

[Deleted User]

dreamdreamer wrote: »

Not very MSE of me but I'm seriously considering buying a kindle at some point in the next few months. Reading is my main hobby but we've totally run out of bookshelf room now.

I'm the same Dreamdreamer
I had a play with a Kindle a few weeks ago, I am now saving so I can hopefully get one soon!
P
X