6 months to freedom / Race against the bank

littleweasel

Hello Longtime MSE lurker here, although my lightbulb moment in relation to my debt was quite recent. I don't have loads of debt, relatively speaking, but a lot of it is in the form of an old student overdraft for which I'm now getting charged hefty fees on top of the interest. I'm worried the bank will get fed up and demand the whole thing back at once, and so I'm going on a mission to pay everything off! I should have done this ages ago, but was too busy wasting loads of money on unnecessary things. :mad: I've wasted so much money it's embarrassing - I live in London, and it's easy to spend money on 'lifestyle' stuff here, but I also wasted loads of money paying for a bank account with insurance I never used, spending £10/day on food through not being organised...you get the idea. Anyway, I think I'm a reformed character now, and ready to get on top of the debt! I'm hoping to clear it by the end of March 2013. After that, I will switch to saving as it might be nice to buy a house in the distant future.

Today, I used a little bonus to pay off £254 to my Barclaycard, which was at £393, and so far have paid £150 to the offending overdraft. I plan to make another payment of £150 towards the end of October if I can keep my budget under control - have transferred it to an instant access savings account where I keep my holiday funds so I'm not tempted to spend it.

So my debts are at:
£139 (Barclaycard)
£1450 (Smile overdraft)
£155 (Oasis card) - I know I should prioritise clearing this, the interest is high and I don't even know why I have the stupid thing! - but the overdraft has to go first.
Total £1744

And a rough SOA is as follows:

Income: 1700/mo

Monthly payments
£9.99 Spotify Premium
£20 Naked Wines
£6 Oasis card (this is just more than the minimum)
£120 bills
£620 rent
£15 gym
£25 phone
7.50 bank acc fee (this is worth having now - includes mobile phone insurance and gadget insurance, both of which I use. I was paying £25/mo before! :mad:)
= £825

So that leaves £875 for food, doing things, paying off debt, disposable stuff. I hardly spend anything on travel as I walk to work so don't budget separately for it.

I plan to pay £300/month towards the debt, £100 into my holiday fund. Then the breakdown of the remaining £475 (£115 pw) is as follows:

-100 food (28 coffee, 60 2 Tesco shops, 12 misc -£25pw )
-50 eating out/drinking/socialising (£12.5 a week - averaged)
-325 misc (£80pw - averaged)

I realise this is still quite a generous budget including lots of luxuries - but I don't want to set myself up to fail, and I've typically been managing to spend almost the whole of the £875 that 'remains' once my regular payments, bills etc are deducted. :eek: I don't even know how, as I don't buy loads of clothes or gadgets or anything!

I'll post a more detailed weekly budget breakdown in another post. I'm also doing the 5:2 diet as I am about 6 pounds heavier than I was when I was at uni, and I'd really like to get back to that weight! So a lot of my posts might be me whining about how hungry I am on 'fast' days

Anyway, that's enough for now!
~littleweasel

littleweasel

Already a good MSE day :T I spent £1.40 on coffee (this is in budget, and I ain't giving it up ) and put 60p in our honesty box for tea/coffee at work, which will cover the next few days. Then went to the library to pick up a book I'd reserved (£1) and saw a nice copy of the Grapes of Wrath on sale for 10p! So I was going to buy it, only the guy didn't have any change, and gave it me for free .

Brought lunch in, so no money spent there. I have a piano lesson later but have already paid for it - so will only spend £3 today. I was thinking about making the most of the Boots voucher deal which is in the MSE email but if I'm honest I don't need anything at the moment - maybe a few bottles of cheap bubble bath and a mascara, but I can buy them more cheaply later in the month. So I'm not going to do it because I don't need it.

Don't anticipate spending very much, if anything over the weekend, as I have a lot of studying to do (work is paying for me to do a masters degree). I have budgeted £135 to take me up to 8th October - this includes:

Next week's piano lesson £15 (a friend is teaching me; mates' rates )
Gift wrap and card £5 (should be less than this. I already bought the present)
Clothes swap next week £10 (£5 entry, plus transport - should be slightly less)
Work drinks 4th October £20max
Friend's birthday 5th October - bowling and drinks £30max
Food £34 (£7 coffee, £1.40 a day + £27 Tesco delivery)
Xmas savings £7
Savings for Paris £12.50 (I am going to Paris in November- the tickets are bought, this is spending money)
= 133.5 / 135.

I might buy a coffee or something over the weekend (I like sitting in coffee shops when studying...) but hopefully can cover the cost of that by slightly underspending on some of the things listed above. I don't tend to have unanticipated expenses as all the bills are on direct debit from a separate account, and I rent so my landlord covers any disasters like the boiler or the washing machine breaking. To be honest, unanticipated expenses only arise when I do something stupid like go on spontaneous work drinks, get drunk, buy rounds for everyone and spend £80 :eek:

So currently at £3/ £135 on week 1's budget. I can see that keeping track of this is going to get quite addictive!

littleweasel

Day 2 of newly virtuous path (financially, at any rate).

Went to the Caffe Nero round the corner to study today as I find it's more productive than trying to study at home. Somewhat ironically, the degree I am doing is in economics.:o Anyway, did a good bit on that and also finished one of my library books (Margaret Atwood, Oryx and Crake, really good!). Spent £2.60 on an Americano and a little chocolate while I was there, which I am allowing myself for the moment. Perhaps once the frugal gene kicks in (if I even have one) I will think twice about buying expensive coffee but at least I'm not buying it 3 x a day like I used to...!

Also bought some milk from Sainsburys on the way back (49p) and naughtily, 3 packs of sweets (£1). So in total have spent £4.09 today, taking me to £7.09 out of the £135 I have budgeted to last me until Monday the 8th. These little bits do add up, I mustn't forget about them.

Good MSE things:
- discovered I have over £6 on my nectar card, which I hardly ever use as I mainly shop at Tesco. Must be one of the few good things British Gas have done for me
- found a load of wrapping paper and sellotape hidden under a bookshelf, so don't need to buy any Still need to buy a card for my friend's birthday, but am hoping I can find somewhere that sells them cheaply. I should actually buy all three friends cards, as they're having a joint birthday party...hmm.

Tomorrow will be another quiet day I think.

Bowski_1011

Just thought I'd pop in and say Hi :wave:

A diary is a good way to keep on track... I look forward to following you on your road to becoming debt free... Good luck

littleweasel

Thanks Bowski

A good MSE day today, as I didn't spend anything at all:money: Had a lovely toasted tuna sandwich for lunch, and am making a pasta thing tonight from which there'll probably be leftovers. It was almost scuppered, as my housemate suggested going out for a meal, but it turns out she has too much work to do, so we're just going to watch a film and perhaps drink a bottle of wine which I already have (leaving me with only 8 bottles! )

I also need to correct my balances- my Bcard is slightly more than I thought (£149.75) and my Oasis card slightly less than I thought (£149.60). I'd like to start making additional payments to these too but the overdraft is costing me an absolute fortune in fees. Eg. last year

interest on my Bcard was about £140
interest on my Oasis card was about £72
interest, charges, 'account fees' etc on my overdraft account was £600:eek:

Anyway, I have got to get rid of it. If I had managed my credit properly I would have had over £800 extra to do what I wanted with. Instead I spent it on nothing :mad:

Decided I am going to have a go at making cards for my 3 friends who are having the birthdays next week, so that will be £5 completely saved. I am going to pay it towards the monstrous overdraft on Monday Every little helps!

Bowski_1011

Crikey... that is alot of interest but you're in a great position and you're now making the most of it so no looking back, just forwards

Thats a good idea about making your friends cards, I don't have that option as I don't have a creative bone in my body

Hope you have a lovely night in with your housemate!!

littleweasel

Thanks Bowski, it was nice, and I didn't spend a penny!

Been doing some financial shuffling this morning. Spent £1.40 on coffee, which I can't live without - it will be my only spend on a 'thing' today, as I've brought lunch in. I was naughty and got the bus to work as it was drizzling...barely drizzling really, I could have walked.

Then transferred £6.94 to my friend to pay for bowling on Friday, transferred £7 for Christmas savings into my instant access account, and paid another £9 off the overdraft to cover the money I didn't spend on gift wrap plus a bit extra to make my bank account a nice round number My bank is going to think I've gone insane with all these weird transfers between accounts!

So I am at £23.43/£135 with £111.50 of things still to pay for this week. That leaves me within budget, just! I have allotted £20 for work drinks on Thursday and £20 for friends' birthday drinks on Friday...if I can stick to these limits then I should be OK.

Still to pay for:

Tuesday: nothing
Weds: Piano lesson (£15) and Tesco delivery (£27) (I did save £5 though and got free delivery :T)
Thurs: Work drinks (£20)
Friday: Birthday drinks (£20)
Saturday: Clothes swap (£10)
Sunday: nothing! But I plan to pay £12.50 into my instant access account as savings for Paris.

Other good MSE things: I got round to emailing the ICA (a gallery where I have membership). It's a good membership to have because they often have free events with free drinks, cinema screenings for free or £3...etc. Anyway, they never sent me a new membership card so I presumed it had not been renewed...but checked my bank details and they did take a direct debit in December last year. I asked nicely if they could send me a new membership card valid from October 2012 as I haven't been using it because I didn't think the membership was active.

I also plan to write to Tesco as they keep on doing this annoying thing whereby they send me free delivery/extra Clubcard vouchers which then don't work when I try and apply them. I already got an £5 voucher to replace one of the codes that didn't work, but there were more of them. Hopefully a vaguely complaining letter will yield another free delivery and some more Clubcard points.

Happy Monday :j

Bowski_1011

Crikey Littleweasel thats some MSE day

It's amazing how motivating these diaries are.

Good luck with the responses from ICA & tesco... if you don't ask you don't get and all that!

littleweasel

Another day...

Not much to report on the MSE front today. I spent my usual £1.50 on coffee and also £1.20 on three figs. Won't spend anything else so the total stands at £26.03/£135. I can't wait until it's next Monday and I can throw some more at the overdraft...!

The most interesting thing about today is that I'm not really eating anything! I'm doing the 5:2 diet (featured on Horizon a while ago) and today is a 'fast' day, so I have to eat under 500 calories. I've got 3 figs (120 calories) and 2 apples (120 calories) with me to munch at work, and then will have to find something around 200 calories to eat at home later - perhaps soup. Hmm, I might have to go to the supermarket to get this, although I can use Nectar points. Hopefully I'm not going to feel too hungry :-S

littleweasel

Ugh, stressful day, at least I'm sticking to the diet!!

Really scared I am going to get defaulted on this overdraft account It's my own fault for just keeping it ticking over and paying the interest and charges rather than making a concerted effort to reduce the balance. (Although in fairness I paid over £800 into this account over the last year, and it only reduced the total balance by about £300...) The bank were spectacularly unhelpful when I called them today. Anyway, I transferred the other £150 I had earmarked for the end of the month payment out of my instant access account and made the payment now, plus a little extra. That means the total outstanding on this is now £1250. I wonder if I could somehow go super frugal and just clear the stupid thing before Christmas...I've not had any sort of letter from the bank calling the overdraft in, but I think it's only a matter of time based on today's telephone call. Ugh Surely they can't dump it off to a debt collection agency if I'm constantly reducing the balance on the account?

On the plus side, the payments I made today mean my total debt is now £1546, which is £602 off my total debt since I even started this diary. I'm so stupid for not having done this before...

The other consequence is that I've sort of messed up my budget with the extra payments (the £150 I paid today was accounted for, but I also paid a little extra to make a round number). I will have to work a new, more frugal one out later. Maybe I should totally suspend my holiday fund and throw everything at the debt? I have to book an April holiday in January, but hopefully it's just the deposit.

Also a semi-stressful work situation going on with a department I almost got a job in. The job would have been an insane pay rise (amongst other things) but I messed up part of the interview. However, I did well enough that they asked me to go on secondment there, which my home department wouldn't permit :mad: Now they're advertising again for that role, only a couple of months after the failed interview, and I'm not sure what to do...I want to apply, I am technically eligible, and I was close...but maybe the failed interview was just too recent.

littleweasel

Feeling a bit less panicky today although the bank really scared me yesterday. I think I have to clear this overdraft before they call it in and try and default me (though that seems ridiculous because I've constantly been making payments and paying £20 of interest a month). I'm going to throw everything that I have at it, pretty sure I can clear it by Christmas, if not earlier, if I really set my mind to it.

Did a new budget. I have £496 to last me until payday on the 31st, which includes about £85 of direct debits. Out of the £411 that remains, I anticipate the following:


3rd October: [15 Piano] - my friend has cancelled, I am going to put this towards the evil overdraft. Perhaps I'll pay £1 a day to p!ss them off.

4 October: £15 work drinks. Mustn't spend more than this.

5 October: £20 friends' birthday drinks. Again, mustn't spend more than this. I already paid for the bowling so hopefully can just have a couple of beers and eat when I get home.

6 October: £6.35 Clothes swap - includes £5 entry and £1.35 bus fare home, I'll walk over there. Might not go at all if it rains, in which case I'll put this towards the overdraft.

11 October: £15 piano lesson.

12 October: £40, friend visiting. This is a generous estimate but I don't know what my friend will want to do. I'll cook her dinner on Thursday but pay for the ingredients with my £6 worth of Nectar points.

14 October: £17 train fare to Tunbridge Wells. Wish I could cancel this, I am reading at a literature event. Hopefully there won't be a taxi fare on top of it...

18 October: £15 Piano

19 October: (or thereabouts) £25 Tesco. Should last me til the end of the month.

21 October: £8.50 train fare to a 10 mile race.

25 October: £15 Piano

= £234.

Realistically I'm going to have other things to pay for even if I give up little luxuries like coffee. I think if I allow myself about £100 for other stuff that should be OK -although I owe a colleague £9 and need to pay £10 for a Christmas lunch deposit - so it's more like £80! That would allow me to pay another £125 to the evil overdraft.

Have been thinking also that I do have £607 in savings although I really don't want to touch this - plus another £150 if I need from my everyday bank account. I'd get charged interest on that, though, and I really don't want to dip into overdraft on another account, it would feel like robbing Peter to pay Paul. If the bank did decide to demand it all back, though, I could potentially pay it off through using all of that plus another £350 from next month's payday. It'd be terribly tight but I guess I do have some room on my credit card so I wouldn't starve. Will think further on it. :-/

This diary should be retitled 'race against the bank'! It's quite therapeutic to write it all down, though, I was feeling so panicky yesterday. I know it's my own fault for just letting the overdraft tick over but they were so unhelpful on the phone...essentially saying 'we can demand it back whenever we want'. Yeah, thanks.