Got to get a grip of this...

E2006

Ive started a new diary, although I know its not yet the New Year. The reason is because I had completely lost focus, stopped posting as regularly in my old diary, and have slipped back into old ways of spending. I need a fresh start..

As the title says, I need to get a grip of this. My previous LBM has been truly outshone by the one I had recently. I had been bumbling along in the belief that this journey was purely about getting rid of the debts. Everything would be ok once the debts were gone.....

What I hadn't taken into account was that if DH and I dont truly change our ways, dont learn new habits, dont learn to set and stick to an appropriate budget, we will never have any money. We may manage to pay off the debts...eventually... but we will never have any money behind us. This has never been clearer than seeing recently how quickly we maxed out a CC (lower balance card, but credit nevertheless) by just failing to budget properly, and slipping back into old habits of spending [read: wasting] money that we dont have.

Current debts are as follows:-
Barclaycard: £6658 (was previously £7200, reduced to £4600 but then we recently transferred a balance from another card we have incurred recently)
Santander: £2450
Virgin: £500
Total: £9608 (all of them are currently 0%)

We pay £800 per month to the debts, so should be paid off in 12 months providing everything goes to plan. The only thing that may affect that is if either DH or I are made redundant (both work for local authorities - next round of cuts are looming - cant even think about that!). We also want another little one (we have a 5 year old) and obviously if I went on maternity leave at any point that would affect what we could pay off.

The plan therefore, is to budget budget budget. Throw any spare bit of cash at the debts and try to build up an emergency saving fund (the budget should allow around £200 per month to be saved, but from that birthday pressies etc will need to be bought).

The ultimate plan however is to learn to be a true MSE.

E x

E2006

The plan is to tackle the virgin card first, that will be paid off this month and the account closed.

Next one I will tackle is barclaycard, as thats the highest balance and the interest free period ends in June 2012. £700 of the £800 allocated debt repayment will be paid to that monthly) If all goes to plan the balance should be £3000 by then, and I shouldnt hopefully have too much difficulty transferring that to another 0% deal. Once transferred, that should be paid off by September.

Santander should hopefully be down to £1450 by then (if I pay £100 per month to it), and paid off with my November pay.

After juggling the figures, it looks like we can save £250 per month. DH has a halifax account that he doesnt use - we will put the money into there.

The food/petrol/entertainment budget is tight at £125 per week for all three, but it can be done. £55 of that will be petrol, and a further £3.50 school costs, so that leaves £66.50 for food and entertainment. Ive recently become a huge fan of Al** and get the majority of my shopping there. When I meal plan properly I can usually bring the food shop in at less than £40 per week, which leaves the remaining £26ish for entertainment. We hardly even go out, although DH goes to the football approx twice per month, but he doesnt spend much and gets a lift there and back.

Anything left from the weekly budget will go into a linked online savings account, and wont be touched (unless we have absolutely no option) then when its built up a bit, will either be paid off one of the cards, or will simply be left as a further emergency fund.

Any extra money we receive (i.e I get travel expenses every couple of months, although the amount varies) will be paid straight to whichever card we are focusing on at that time. Hopefully we can bring the debt free date forward a bit.

Phew, so thats it. Payday in 10 days. It cant come quick enough....

wannabee_in_credit

Good luck...

E2006

Thanks wannabee.

Hubby and I have had a heart to heart today. Its been a real struggle the last few months, and we just havent left ourselves enough to make ends meet. Because we're so desperate to pay off the debt ASAP, we have slashed the budget massively. Instead of planning a realistic budget, then working out whats left over for debt repayments, we've been working on a figure that we want to pay off the debts monthly, then trying to make whats remaining fit the budget. Really, its a back to front way of doing things, and its left us far too short.

We've decided that we need to do this properly from now on if we are to succeed. So the debt repayments will be slightly less that we had planned (£200 less per month), but what that means is we will have enough to last us the month, and wont need to use credit to get us through. Ultimately, the debt will probably be paid off as quickly, if not sooner doing it this way, as we wont be adding to the debt in any way.

I feel like a weight has been lifted. It feels like our life has been on hold because we have just been so broke.

Pay day in 4 days :j

E2006

We've had a fab Christmas, and we all did so well, but what Im enjoying more than anything is the fact that the spending has stopped! I love to give gifts, and I absolutely love Christmas, but I was starting to feel out of control with the spending (despite having a budget for it). Ive sorted out the rest of the money for the month (I dont get paid until the 3rd week in January),l and its all in little pots in the kitchen cupboard, petrol money in one, 3.5 weeks worth of DS's lunch and snack money in another, and money for our NYE night out on another. The remaining food budget is in the shopping purse, and we have a little left over in the bank to pay for DS's birthday party in January. Its all accouted for, and will be tight, but [STRIKE]if[/STRIKE] when, we get through to next payday, it will be such an achievement! December is always going to be one of the hardest months and if we can stick to budget through that, then we can do it anytime!

We've looked at our budget for the next year and have tweaked it to make it more realistic/manageable. The cc repayments will be £700 per month, and weekly food/petrol/entertainment budget will be £150 per week rather than £125 which we had originally planned. On these figures the debts will be paid off within 14 months, however, I f can manage to 'find' an extra £75 per month, they will be paid off within 12 months, and on an extra £145 per month will be paid off in 11 months.

I periodically get travel expenses from work - these can go straight to the debt. Im also going to ebay as much as I can, and again, the proceeds can go to the debts. Im a bit anal about the figures being rounded to either £100 or £50, so will probably put the extra money into a spare savings account we have until it builds up and I can pay lump sums off.

Ive started my 'gift box' again already. Ive bought a lot of items for birthday pressies/next years christmas pressies from the next sale (like nightwear and slippers) and from the boots sale, and DS has ended up with x3 copies of 2 different books (gruffalo and smartest giant), so 2 copies of each of these have also gone into the gift box for school birthday party gifts. I did this this year, and it not only saved a fortune, everyone got better gifts because the money went further.

Anyway, that was a long post so best get on...

E x

Hiddenidenity

Well done look forward to reading x

*subscribes* x

twinmum07

Hi

You are so lucky to have everything on 0% so you can actually tackle the debt in full rather than blooming interest as we have to.
I like your thinking on the gift box for duplicated pressies. Our kids have a couple of duplicated books so I will do the same. I bought some good bits and bobs in The Book People sale today to get my box back up and running.

E2006

Aw thanks, and hello for popping in hiddenidentity and twinmum07. Its lovely to have some 'company'.

E x

[Deleted User]

Good for you hon - I have about the same amount as you & this should be gone by 1st December 2012 aswell

D xxx

copperjar

You look like you've got a good plan and everything is under control! Good luck - will follow your diary to see how you're doing.
I was the same with paying off too much at the beginning of the month then struggling to live on what I had left - so dipping into the credit cards again. And when you've done it once, it's easy to fall into bad habits so I think you're definitely right to up your weekly budget a bit. Mine was probably too generous, but I quite liked having some money left over at the end of the week which could be paid towards the debts. A little added bonus but without the pressure of being overly frugal!

banwa

Good luck E2006