Looking forward - Debt Free in 4 years

mizmir

Well - it has been a while and I am embarrassed to say my situation is worse than last time I was here. I am not going to recount the ins and outs of what has happened since I was last here as this new diary is about looking forward. I have spent the past couple of days trawling through accounts, adding up debts, sorting through expenditure and - although it has been quite a challenge - I now feel I know where we are, what we need to do and how to move forward. I have a snowball and a new budget and am gradually working through all our outgoings to find better deals.

The picture is not pretty. Including overdraft and car loan but not mortgage we are £58507 in debt. We are meeting our minimum payments and our outgoings but only just. We have tried to become debt free for years but I don't think took the situation seriously enough as we had two good incomes from pretty secure employment (as far as any job is secure). That is no longer the case.

My partner still has a good income but I am now self employed and just building up my business (I had to leave my job when we relocated) - and I need to make a minimum income to meet our outgoings and overpay on the debts. Its going well so far and I am managing that but I need to build it up and increase income and security. So my efforts will be focused on thatvas well as money saving and finding other ways to bring in cash.

So is this a real LBM? Definitely. I've been having sleepless nights over this. We are on a bit of a knife edge now and have been in denial for the past few months. But that is past. OH and I are going to sit down over the weekend and plan how we move forward. The snowball gives us a DFD of January 2018 so that is what I will aim for. I have a tendency to get carried away - be over ambitious then fail to deliver. This time I am aiming for steady progress.

mizmir

Well first things first. OH and I have just sat down with the budget and agreed to it. We've made the decision together to cancel some things that we can live without and to switch to Virgin for TV/phone/broadband (from BT). Plus I discovered I ha counted something twice! So over breakfast we've reduced our monthly costs by £100!

We are both going to keep a spending diary and use cash as much as possible so we can control it better. I need to do our tax accounts to see how much we owe there - we have money out away for this but if we owe less than expected we may have a little to put towards debts.

mizmir

Things I am going to do to tackle this debt:

• Check all utilities and make sure we have the best deals
• Cancel unnecessary subscriptions and memberships
• Get OH to take lunch to work (I work from home)
• Shop around - go to cheaper food shops and use up what we have in the cupboards
• Meal plan to avoid waste
• Revisit the Old Style board for ideas for frugal living
• Don't buy any new clothes for a year - did well at Christmas for clothes - don't need anything - and if I do - go to charity shops.
• Start growing some vegetables
• Save small change and £2 coins
• eBay at least once a week
• Get back into Matched Betting (have moved house so a new bank account and email address will allow me to start again from scratch!)
• Look into mystery shopping - have never done it but have flexibility to do it now
• Continue to build my business
• Keep diaries of income and spending - and update my snowball each month
• Post each day here to keep me accountable!

mizmir

Feeling a bit lonely here but will keep posting as it is a help to just get things down. Yesterday's list focused on the overall things to do. But to achieve those I need to make progress each day - I know that in the past I have fallen by the wayside because I have tried to do too much and then got discouraged. So I am joining in the daily DFW thread to post the small things that will help me make steady progress. Today's is:

• [STRIKE]Check position in contract with BT - want to switch to Virgin and cut our costs in half[/STRIKE] Have a quote for a much better deal with BT so need to weigh up against Virgin. Need reliable broadband for the business (do a lot of it online) so now checking reviews as costs are getting towards comparable - and I think I can get them down a bit more!
• [STRIKE]Cancel magazine subscription (save £19 a quarter)[/STRIKE]
  Done - plus cancelled other membership Direct Debits so saving over £100 a year.
• [STRIKE]Set up spreadsheets for our income (self employed and extra earnings) and spending[/STRIKE] Done - now just need to keep them updated. Will be useful to see everything at a glance.
• [STRIKE]Do 4 hours paid client work[/STRIKE] Done - and money already in the bank.
• [STRIKE]Find 5 things to put on eBay[/STRIKE]Done - but I made the mistake of pulling out books - then discovered they would cost more to post than I could get for them - even on Amazon. I think I may need to car boot some of these - or try a second hand bookshop.

I like having things to cross out!

timetogrowup89

Hello,

Welcome back... Glad youve found the LBM again! Your sounding motivated

Do you have a plan? You attacking one debt at a time or all together. I found it easier paying off a few smaller ones to see progress but now Im struggling as the bigger ones left and not as easy to see progress..

good luck, look forward to reading you're diary

mizmir

Hi - I'm going to snowball them using the "whatsthecost" calculator. Basically means that I will be working on them highest interest first. At the moment I am doing a card shuffle to try to get better rates so I am focusing on the overall number coming down rather than specific cards.

Thanks for stopping by - much appreciated.

mizmir

Not a bad day today. Had some client work so money coming in - have sorted out spreadsheets and can reduce some more outgoings.

Still need to increase income so I will work on that and do something "money making" extra each day. My self employed income is not fixed and I haven't been doing it long enough to really have an "average" income - but I know what I need to bring in so I am working towards that.

Ali-OK

Hi Mizmir :wave:

Thanks for your post on my diary yesterday and I'd be delighted to keep you company on your journey - have subscribed

You sound very organised and all those baby steps will certainly add up. Great you are making savings already too.

Your SE work is sounding good. Keep plugging away, hopefully it'll increase and become stable. I'm in Year 4 of SE, so I have a fair idea of the up and down months for me financially, though it's never a given of course!

The one thing it has made me do, is have an emergency fund, though it's just me and no OH (to earn or think about - a double-edged sword ). Might be harder if you have very little leaway from income to outgoing, but if you can put a little aside each month (even £25) it helps with the worry of the uknown income each month.

I'm in danger of rambling now :rotfl:, will keep popping in though and following.

StressedSteph

Hi Mizmir,

Looks like you are having a great start to your debt busting.

On the TV/Broadband package. Be careful....
Last year we left BT for Tesco Broadband. We live in a very rural area, and I wish wish wish that I had stayed with BT. When I rang to cancel my contract with BT they price matched my new offer and I wish I had accepted that. We had LONG periods of no internet connection and all in all it was a nightmare.
If BT offer you a good deal I would stick where you are. Especially if you new business relys on internet connection. Just my thoughts. xx

You're doing great though and will subscribe to follow your journey xx

mizmir

Hi Ali and Steph - thanks for dropping by and for your suggestions. Ali - we have an offset account which we currently put money into - it is intended to cover annual costs of things like tax and insurance but we try to avoid using it so that we have something to fall back on for emergencies. I know Martin would say use it to pay off debts but there is something comforting about knowing it is there - and as it is offset - it is equivalent to a decent interest rate. It might be cleaned out by our tax bill at the end of the month but at least we won't be in more debt.

Steph - thanks for that feedback - I have been wondering about that. BT's offer is not quite a match to Virgin but some of the reviews of V are terrible and at least BT are fairly reliable and we wouldn't have any interruption to service. And it is a good saving on what we are currently paying but with a better connection. I was tempted to stay with BT and you have helped me decide. Thanks.

mizmir

Good morning all. Feeling quite optimistic today with my new spreadsheet and snowballs. The picture is still grim but I feel more in control and that everything I do is making it better than if I hadn't done anything. It may be a long haul but it will be worth it.

Today I am expecting a call back from BT and I will try to get them to throw in some of the "new customer" benefits to the deal they have offered to make it more comparable to V. But I think I will stay with them - I need reliable Broadband for my business and from what I read V start you low then up prices - and traffic manage so that the service you get is much less than advertised.

Other things to do today - client work this afternoon - plus some reports to write up. Meal planning for the week ready for a trip to A**i tomorrow.

I am also going to apply for a low interest loan. I know it is often not a good idea but having looked at all the options I think this is a sensible move. OH has been offered a loan at 4.7% - if we take that over 4 years we can use it to pay off our remaining higher interest cards and still be debt free by our snowball date but with less interest. We will then get rid of the cards so we can't rack it up again. I think it makes sense and it is a good interest rate.

I also want to do is get up in the attic and see what there is there to eBay. I know we put a lot of clothes and things up there - plus some collectables so they might be useful to put on. Is there a way of finding out if there is a free listing day coming up?

And I need to refresh my memory about matched betting. I made a couple of thousand on this first time round and now I have a new address and bank account I can do this from scratch again (hoping all those easy offers are still available!).

So things to do today:

• Meal plan
• [STRIKE]Sort out BT[/STRIKE] Done - shaved a few more £ a month off - still a bit more than Virgin but I think more reliable and I need that. But has saved me £15 a month from where I am now.
• Apply for loan
• Client work
• Write at least one report
• Sort out ebay stuff from the attic
• Remind myself about matched betting