Driving Down Debt

ThatKiss

Accountability: reminder to self.

One of the most frustrating things about paying down debt aggressively is the lack of freedom; all your spare cash is spent paying for past you and it means you maybe neglect other areas. Getting out of the cycle and suddenly seeing x amount of “spare” money makes it really tempting to rush out and start to make up for lost time.

Now that I’m not paying out hundreds every month on credit cards, the temptation is to start to tackle areas that have been neglected; things I’ve not bought for the flat, clothes I’ve worn out and needs replaced etc. 

I need to remember that although I’m not currently directly paying down debt on cards or whatever, any extra money I spend now means I have to borrow more to pay the car balloon payment off in a couple of months time. With the aim being to subsequently clear that off by the end of 2020, it’s not yet the time to loosen the purse strings and even when it is, not everything needs to be done at once.

ThatKiss

Out of curiosity (and I guess to remind myself of the motivation for the above post) I checked the offers on my credit card account, and the money transfer offer that will fund the car balloon payment is there, 0% until the end of February and a 2% fee, valid until the end of next month. 

I've still to check when the balloon payment comes out my account so will get that done this week so as to know when to apply for the money transfer.

ThatKiss

Payday! Road tax was paid last month out of general spending and still managed to save some cash from that account. Service and MOT are due in July which I intend to fund the same way. This will be the last time these expenses come out of "general spends" as they'll be saved in advance going forward!

Balloon payment fund is up to £2300, so by the time payment is due at the end of next month, it'll be over £3k - almost half of the balloon! If I can pay down the money transfer at a similar rate (plus what's currently being paid to the finance company), I'll be free of all debt bar the mortgage in November.

And then the home improvement starts!

ThatKiss

I'm officially in debt again!

Well, I say again, I dug out the paperwork relating to the car and subsequently applied for a money transfer to re-finance part of the balloon payment. While I was paying off the credit cards I wasn't counting the car towards my debt as such, however it's now the only thing, mortgage apart, I owe any money on. 

As mentioned previously, just under half the balloon is coming from savings so while this is "new" debt on the credit card, It's far less than it could have been and I should be able to pay it off by the end of the year - though it's interest-free until the end of February so I have a bit of leeway in that regard.

I must admit I keep getting distracted by shiny things to spend money on - I definitely need a wardrobe refresh and some new bedding, and I'm starting to think about decorating the flat - that said, I also need to think about getting a new bathroom and kitchen in. And windows. And a new boiler. And, and, and...

ThatKiss

Payday once more. I'm feeling flush looking at my savings account today, but I'll need to transfer the final car payment later in the week so it's going to be a very short-lived feeling!

I still feel like I'm in a sort of holding pattern. Having cut costs drastically in 2019 to pay off the credit cards, I feel like I'm back in the same position, albeit what I'm now working on was always there and I've saved up to pay off nearly half in advance of refinancing. It's kind of pleasing and disheartening at the same time if that makes sense.

I guess the positive is this is the last debt other than the mortgage, and it's once it's gone there's nothing else hanging over me so I'll be able to start looking at the goals mentioned in my last post. Just have to keep the motivation going for a few more months!

ThatKiss

Checking in as payday was at the end of last week, and we're now into the first month with no PCP payment.

I've paid £1340 off the credit card, aided by a small tax rebate. My side gig has kicked back in, so there'll be another £120 paid in the middle of the month. I'm not expecting to be able to continue paying down the credit card at such a rate, but it's on course to be cleared come the end of November as planned.

Onwards!

ThatKiss

£120 from side gig received and passed on to the credit card. Crazy to think thats almost £1500 paid down already! I’ll be over halfway to paying this short-term debt at end of this month and well on track to having the debt cleared at the end of November.

welshspendthrift

well done , that must be a great feeling . I’m going to read your diary from the start to see how you did it to motivate me! 

ThatKiss

Hi @WelshSpendthrift and thanks for your comment - it's good to be reminded I'm not talking to myself sometimes! My diary is really in two parts, the first nine pages are pretty boring and, looking back, I don't think I'd had my lightbulb moment at that point. The real action and tackling a (new!) debt comes from page 10 onwards

ThatKiss

End of September and another chunk paid off the target card. It's now below £2k, though I did notice that my home insurance renewal came off that card rather than from my current account - I must have used the card to pay last year (shopping around was going to save me around £3 so it was more hassle than it's worth to change insurers!).

Still on course to be clear of this card by the end of November, though I've hit the point where being so close to having everything paid feels demotivational in an "are we there yet?" kind of way. I guess it's just so close and yet the things I want to do with my money when I'm not paying debt anymore still seem so far off. Oh well, only 59 days to go!

I've started picking up some small items of furniture to try to tidy the flat up a bit - it's amazing how adding something you "don't have room for" can make such a difference in terms of clearing clutter and buys more space than it takes up, especially in a small flat! Maybe that extra space will help keep me motivated as I think of ways to make the flat more of a home.