Debt Free Diva (to be)

WantSome · 11 January 2012 at 2:02PM

Hello everyone. My name is WantSome (or Carin

) and I'm in debt.

They say facing up to the problem is half the battle so there it is. I'm just over £10k in debt and I'm not entirely sure how it happened… You see, I'm actually kind of blessed.

Currently I am working full time and studying one day a week. My package at work is nice. I don't get a lot of cash money but I do get a car, all the fuel, insurances, repairs, maintenance, MOT, all paid for me. Any other work travel I do I claim back on expenses. Of course, I do get taxed on this stuff but I don't think it's nearly as much as keeping a car for myself. Did I mention they're paying for university too? That means no student debt either.

So I'm not entirely sure how it happened, but I do know it's been a slow and steady spend here, holiday there, christmasses, etc, that carefully built up over 10 years or so until BAM! One new year, you sit down and look at your finances and almost fall over at the weight of your credit card.

I moved into a new home in August of 2010, and I was already in debt at that stage. Since I now live on my own I can manage my own finances - I don't have to stick to a particular energy supplier, I don't have to ask all my housemates if we can change something for savings. When I moved into my home I tried to use MSE for advice on the best deals and I think I have done pretty well. I don't think it's my bills that need changing, it's my habits. Although living on your own is obviously more expensive that sharing the costs!

I have been a subscriber to the money saving newsletter here for ages, and often apply some of the tips and tricks to managing my finances but it's so arbitrary that any benefit gained is swallowed up quite quickly when I fall back out of the habit. That's why I'm starting this DFD, to try and hold myself accountable and stick to my resolutions.

Anyway, the upshot of the story is I SHOULDN'T REALLY BE IN DEBT. I earn ok, I don't have huge expenses, so WHY is my wallet hurting so badly?

The demotivator was my answer. OMG I can't believe I spend so much on coffee and breakfast at work every year! What a shock!

So, I'm going to make some small changes in the hopes that they add up to a big change. I want to be debt free by Summer of 2013 (if not sooner). I'm going to find one of those count down timers online and stick it in my signature as a reminder and I guess I'll choose the 30th of June 2013 as a final debt free date!

My debts:
Jan 11 Total = £10109.51
Current Total = £10109.51 (updated 11th Jan 2012)

Made up of: (debt/paid)
Credit Card 1: £7009.62/0
Credit Card 2: £2658.91/0
Sofa: £440.98/0

So, here are my new commitments (wish me luck!):

I'm not going to buy coffee & breakfast at work any more. That's a saving of about £30 per month.
I will work out what the minimum payment on my credit card is NOW, and add £30 to that amount. I will then set up a consistent direct debit to pay the same amount into the card every month (rather than allowing payments to decrease as the debt is paid off). My other credit card already has 2 direct debits. One for the minimum amount, and one for an additional £5 for now so I always will pay the minimum +£5.
At the end of every month before I get paid and before my direct debits come off on the 1st of the following month, I will put any remaining funds into my most expensive credit card. Rather than thinking about spending it on new shoes.
I will not under any circumstances go into my overdraft (Halifax charges £1 per day for the overdraft :eek:).
I will change my current account becaue Halifax sucks a bit.
I will apply for a 0% balance transfer credit card after April. That will make it about a year since I last applied for a credit card (I was rejected!)
I will begin decluttering my house, and sell the items on ebay.
I will claim expenses for travel etc within a week of incurring the cost (I tend to save expenses up a bit).
I will try to get into the habit of bringing lunch into work. The days I don't bring lunch, I'll walk to the shop rather than spending at the cafeteria at work.
I will make myself a piggy bank, and put all my spare change into it every day. I'll crack it open when it comes time to buy Christmas presents this year.
I will only heat the rooms I use, that is, my bedroom and the living room. I will turn down the heater in the kitchen and spare room.
I will turn off at the wall all appliances before bed &/ before leaving the house every day.
I will get into the habit of planning more carefully my weekly shop so that I don't waste money in the actual shopping, and so that I don't waste food by buying items I don’t need, won't eat or can't use.
Obviously, I'll stop spending on my credit cards.

Reading that back I can see it's A LOT to think about all at once and I'll be adding to it as I think of more ways to spend less. But this is a process, not a starting point. These are the things I'm AIMING for. Because, I can't carry on this way!

WS

lolly_896 · 11 January 2012 at 6:52PM

Wow Carin, theres alot to be thinking about!! It is totally shocking how things add, we have (apparently approx £300 left at end of month) and not much of an idea where it goes but a take away once a week is £60 for the month!

I wish you all the best in your quest!

Lolly

WantSome · 6 May 2016 at 2:28PM

Okay so most of what is above is total fail (she says with 4 years debt reducing experience). There was no way I was going to achieve all that and pay off my debt in a year and a bit. Seriously I was naive!

I realised since posting the above it's not so easy to break bad habits and get debt free. I have, however, managed to half my debt in four years, rather than wipe it out like I aimed to do in 1.5 years.

Spending still happens, but being prepared to be flexible and agile with finances helps counteract this. I have moved my debt to different credit cards / loans as the deals moved around several times and aim to pay off as much as possible each month.

Current total debt is £5051.

Things that didn't work and things that did:

I still purchase lunch at the cafeteria, but I bring breakfast and make my own coffee every day. This is a habit of over 3 years now so I'll call this a success.
I moved current account - now using Santander 123 and it still pays more than it costs so I'll stick to it for now.
I am paying way over the minimum into my credit cards each month and have a direct debit to pay off my loan as agreed with the bank.
I do my weekly shop on the Tesco app and play a little game with myself after I have added everything to my basket I challenge myself to knock a tenner off somehow (finding other deals, purchasing other brands, changing my meal plan for the week to other items entirely etc).
I still save up expenses to claim them every other month (which means my money is sitting in the company coffers earning interest there, so I need to crack this asap).
I know we're supposed to pay off debt first, then save after, but my credit card is 0% (except on new spending) and my loan is set in stone. So instead I am putting money aside each month to save up for spending like holidays etc. I figured this would otherwise go on the credit card and it sits more comfortably with my life to do it this way. Probably a false economy but I figure it's working for me meantime.
I am now in the habit of heating only the rooms I use during winter and have managed quite well. I also switch off at the wall all appliances when I leave the house (except the fridge and freezer).
I failed at the piggy bank idea and putting any left over money into my cards at the end of the month.

Although I achieved some new habits and failed at others, my debt is steadily coming down. It's a long slow slog because spending still happens - holidays, Christmas, I got a dog and boy are they expensive to keep but I love him so won't change it! - but I have found a happy medium where the debt is reducing but I'm still living a comfortable life and am able to enjoy myself occasionally.

Here's to being debt free in another 4 years (or less, lets hope less!)
:beer: