Pay off debts before Baby number 2!!

crunch_time

Hi everyone!


I've been lurking for a while reading other people's inspiring stories and am amazed at what people have achieved in debt pay off! Well done everyone!! I decided last night to start my own diary in order to inspire ourselves into debt free living which we have dreamed of for a long time!!


Our situation (mine and Hubby's) is this. We currently have £3568 of what we call 'immediate debt' which is credit cards and an overdraft. We have a baby on the way (baby number 2!) due in October and we would like to have paid off all this debt by the time the baby is born so we only have to pay our loan monthly payments during my maternity leave and can afford to have the full year off. This is entirely possible so long as we are sensible.


We have done well over the last few years after a period of time until 2011 where we couldn't seem to get a grip on things at all by constantly living beyond our means. Between us we have been made redundant 3 times and have had to take pay cuts and I have been back to uni for a year to further my career to get where we are. The result is that our careers our now great but our finances are not and it feel like we have to pay back the past! Does anyone else feel like this???


Successes so far include:


- starting to pay off our mortgage at £200 a month after it being interest only for nearly 7 years!! So far we have paid off nearly £1000!!!
- I have paid off £2000 of overdraft from being at uni for a year in 2009 - 2010!!
- We have paid off our sofa loan with the remaining balance of £800 2 years early!!!


I'm very good at planning our money monthly. I know exactly how much is in each of our bank accounts, have a food budget I try really hard to stick to and never miss any payments or anything. We are lucky that once every essential is paid we have hundreds of pounds left every month to 'play' with. The problem is......we do play with it!! We seem to feel that we work hard and therefore we deserve to treat ourselves with the attitude of 'we'll sort it out next time we get paid.'


This cannot continue with another baby on the way. We also want to move but there is no way we can without some more equity in the house and less debt.


Phew! I feel like I have given myself a good talking to!!!


Here are the dreaded debts we are contending with:


* £2200 - Husbands overdraft. This has been lurking around the £2k mark ever since we met 10 years ago and we never seem to have gotten round to starting a min payment and getting rid of it! This one is the annoying rock and will be the first one to chip away at!! (it costs more a month)


* £575 - My credit card. I only got this in November and already have this amount racked up on it! This is mainly maternity clothes and then topping us up because we haven't stuck to budgets during the month.


* £793 - Husbands credit card. Again this is debt racked up from not sticking to budgets and treating ourselves regularly. Some of this may be expenses from husbands job. I'm waiting for him to work out his mileage so I know exactly how much is our own debt.


Plan of action:


- start having a mini finances meeting every Sunday night to talk about expenses coming up in the week.
- stick to food and personal spending budgets.
- have some NSD's - particularly at weekends.
- Start thinking 'what can we afford' rather than 'what do we deserve.'


I'm hoping we can do it! It is achievable so long as we don't get distracted!!


Anyone got any tips for cheap/free things to do with a 2 year old?? And how to stick to budgets - food and spending. I need all the help I can get. Also for keeping husband on track. He works very hard and loves his booze and chocolate at the weekends. And is also rubbish at taking lunch to work.


Thanks and good luck everyone with your goals!!


Crunchy xx

crunch_time

Hi all!


Here we go then....


Had first mini finance chat with husband last night and agreed the following for the week


Today - He will take leftovers from yesterdays dinner for lunch.
Tues - Lunch will be leftovers mixed with pasta
Wed - same. We will also need £2 for parking at the hospital for baby scan.
Thurs - He is away for work so will claim lunch on expenses.
Fri - new food will have arrived from the online delivery on Thurs night so he can have wrap or something else....


All week - I will eat leftovers and what's in the cupboards as will toddler.


I get paid on Thursday so am planning to make the first big chip into the overdraft - woohoo!!I am also planning to take out my £100 spending money and make it last the whole of the next month. And make husband do this when he gets paid next week.


I will do the online shopping and really try to stay in our £80 budget for the week.


We have no plans for this weekend at the moment so thinking about a cheap picnic and a walk somewhere with our friends who like to do the same. So hopefully a no spend weekend apart from petrol.


Husband has wine left over from his treat this weekend for the weekend so wont have to spend money on his little fix. When we get new food on Thursday I shall (try) and make some healthy treats for us for the weekend. You have to indulge yourself sometimes right??


Other than that the meal plan is done for the week and.........being stuck to!! This is a shock to both of us but I guess the first step towards achieving our goal.


I have decided to tackle my credit card £575 but chucking left over money at it say from our food and spending budgets until we have paid the other 2 debts off just to try and add a little variety to the challenge. The overdraft has to be paid off in multiples of £50 and my credit card can take the odd £5 or so here and there. I'm going to call this 'slush' money.


I'm also going to put £150 from hubby's money when he gets paid into his online savings account as a sort of overdraft if any unexpected costs come up during the month that cant be budgeted for the next time we get paid. I will add the 'slush' money to this and then pay off my credit card with anything that is left over £150 if nothing else crops up as an emergency. Does anyone else do this? Does it help in sticking to budgets?


Wooohoo! This feels so good and I finally feel in control of things!!


Crunchy
xx

t2rry

Subscribed

Sounds like you have a plan...wish I could get my OH to sit down and discuss our budget even once a month! He doesn't like to think about it so wants me to just sort it for him so he doesn't have to stress about it all!

I too have a 'slush' fund but mine is of the random amounts of money left at the end of each month. This is for unforseen and unavoidable spends. The intention is (not got there yet!) when it reaches £100 I put it to debts & start it again. I put our underspends (so where I have saved money on supermarket shop or petrol with use of vouchers etc) in a sealed pot to save. I'm using it for wedding night hotel, I suspect I may do the same next year for christmas spending or something else useful. That's quite a popular one on here.

I find incredibly that having money sitting in different accounts really helps the budget as for some reason I don't consider it available to spend! So I budget each month an amount to savings for future one off spends like car tax etc.

You seem excited about being in control again and I know that feeling! It gives you the energy to carry it on and you have the best aim I've seen to get in good financial shape for arrival of No2! Congratulations and Good Luck!!

crunch_time

Thanks T2rry for subscribing!!


My husband is the same. I control everything to do with money now and have access to all his accounts and check our spreadsheet daily. It used to be 'head in the sand' but now its more 'too busy' and I work part time so can deal with it all. Yesterday was a real LBM for him though....moving forward from a debt hangover!!!


I have always been good at planning but not so good at sticking to it so I'm hoping (like you) this diary will help me to stick to it. Its nice to have somewhere to state the facts as it seems crude to talk about money so frankly with friends and family.


I love having lots of little accounts too especially ISAs. I cant get at them online and have to go to the bank for mine which makes it harder to get access to the cash!


Thanks for the congrats too! We were in dire straits during maternity leave for number 1 so that's the incentive for change this time round!! Good luck to you too!!
Crunchyxx

crunch_time

Hi All


A little update for you! Here is my progress so far....


- getting very excited about payday on Thursday. I will be paying £350 on the overdraft.
- I re looked at our bank accounts yesterday and I had over estimated how much Husbands credit card was. I said £793 when its actually £703! Debt reduced by £90 before we have even started!!
- Husband has promised he will submit his expenses tonight and work out his mileage. The mileage will be coming off the £703 credit card so fingers crossed it is a good amount!!
- I scraped all the money together from the rest of our accounts into the slush fund. It stands at £50.50. This will go on my credit card and pay off the clothes I bought our toddler son for the summer (usually go secondhand but splurged on new as hubby had had a pay rise and felt 'we deserved it.' Regret it now.)
- I also sorted out a few direct debits moving them from the joint account to my account. It was too late for one to be moved for the beginning of the month so its been cancelled for this month so this will go on my credit card again paying off the new sets of house keys we had to have cut because I lost mine!! = £22.
- I also tried to get a definite outgoing date for one direct debt - breakdown insurance - but the company systems cant commit to this (?????). So I looked at other options and there is another company that I haven't heard of before that do the same service and including onward travel costs £35 a year! I currently pay £11.94 a month! Definitely switching next week once hubby gets paid in case we have to pay for the year. Very please with this - every little helps!!!
- I'm going to do the online food shopping today sticking to our budget for the week and using the double points voucher we got given last week.
- we have £40 in points we are going to use to buy bits for the house. Next purchase will be a food processor so when I go online I will see how many more points we need for it.
- I checked my [EMAIL="p@ypal"]p@ypal[/EMAIL] balance yesterday and it is £9.42. I have a maternity top and jeans to sell on [EMAIL="eb@y"]eb@y[/EMAIL] that I don't like so I will wait till they sell and fees are paid and then transfer this money back into my account to pay off the rest of my maternity clothes I bought. Current balance - £80
- We have also started a 30 day list of things we need. Most of them are things for the house/baby or clothes for husband. We decided to tackle this list out of our spending money.


Some bad news though...
- chimney has a hole in it letting rain through into our loft so have to get a quote for that - hopefully not too expensive.
- Husband got a parking ticket even though he paid for a pay and display ticket. He hasn't got the ticket anymore but sent an appeal email. cost £60 if we have to pay it.
Both these will have to come out of his money to go on debt as we know about them before we get paid. GRRRRRRR!!!!!


Otherwise I'm so pleased with this start. Told husband I was on here and he said he was proud of me. Feel like its a team effort now. He has always been supportive but never been involved so this will get him involved and hopefully we will make lots of progress!!


I shall update on Thursday once I get paid.


Keep up the hard work everyone!!


Crunchy xx

crunch_time

Food shopping update - so proud of myself!!!


Just did the online shop and only spent £59 as there is only £62 in the food shopping account! Before I started I thought to myself that if I go over then I can always use the money from the slush fund account!


NOOOOOOOOOOOOOOOOOOO!!!! This is why we are in this mess!


In order to stay in budget I moved some things into next weeks shopping list and kept to the basics range where possible. I also thought of quick cheap meals we can have.


The £59 includes £13 of nappies and wipes too! I changed the delivery date so I could get the rate at the lowest £2.99. I used the double points voucher too.


THIS IS PROGRESS IN A BIG WAY!!!


I also looked at food processors for our nector points and decided against buying one and instead using the £40 to buy a better hand blender to make soups etc (our old one broke a few months ago) and a smaller saucepan and digital scales. These are all items on the 30 day list which have been on there for more than 30 days - probably even a year!!!


We might even get change from £40 to plan our next spend!


This may seem really silly stuff but being this organised is new to me and I can already see that it will change things for us!


Crunchy xx

t2rry

Go Crunchy!!!

Your payday tomorrow...woohoo!

Some people think it's a waste of money paying for food shop to be delivered rather than going to the shop, I disagree, I think you save more than the delivery charge but not being surrounded by offers et al. AND there are ALWAYS vouchers worth using for something, provided you don't buy something just because there's a voucher, it's fab!

Looking forward to your debt busting update after payday

crunch_time

I agree T2rry! So much cheaper! No panic buying, can delete stuff from trolley, no whiny children or husband, meal planning and grocery listing as you go, don't have to drive anywhere so save petrol, no treats, avoid buying clothes and toys, don't have to lug it from the street to my house - the list is endless! Well worth the £12 a month I pay!


Been a mixed day today - emotionally and financially.


Had 20 week scan (always magical and awesome) but forgot to put scan photos (£4 each) in my budget so needed to get cash out on way to hospital. Cash machine only had £20 notes I only needed a tenner so then had to top up the food budget account which I had to take the money out of with money from the slush fund account - that will teach me for already allocating it!!


Then spent all he £20 on lunch for us all as they were running a hour late and both boys were getting grumpy. So cant put the money I didn't need back in the slush fund.


On the bright side at least we have the slush fund and I could do that and did not have to use credit cards!!!


Spoke to roofer today and his ball park estimate to fix the hole is about £400. He is supposed to give me a more detailed quote tomorrow. Half of this is for chimney caps to keep the rain out of the chimneys at £50 each. That is officially the most boring thing I have bought for my house. I wont be able to admire them as they will be on top of the chimneys. But again, on the brightside, at least the walls will dry out and not fall down (fingers crossed!!)


Husband also had bad news about our ongoing energy supplier switch. To cut a long story short, we thought we were owed £400 but old company have now told us we owe them £460 and have been sending demand letters without a final bill. We are going to contest it and contact ombudsmen etc etc but its made me worried that we will be forced to pay it and not have any means to do so husband and I discussed saving the money at least until we know what is going on and then if we don't have to pay it is a bonus.


So, at the end of the day we will wont be able to pay off as much debt as we were hoping this payday because of roof and energy company. All I am going to do is save what money we would have done into our slush account and wait till next payday and if the roof costs less then great and if we don't have to pay the energy bill excellent but it just means I cant get stuck straight in tomorrow. BOOOO!!


Seeing baby number 2 on the screen has really cemented my desire to get this debt paid off. We promised ourselves we would be in a better situation this time but we are not. With more things being our fault than just life!! Result was a 'reality' chat with husband about sticking to budgets and not dreaming too big about things. We agreed with me which was a turning point. A few days ago he wanted to add a couple of hundred pounds to our holiday fund 'in case we wanted to buy something. ' (we are going to Wales to stay in a cottage and go walking.......not shopping in New York!!)


We discussed our summer keeping it cheap with lots of picnics and walks and bbqs and doing cheap things rather than zoo trips and meals out etc so we can stick to our spending budgets. Toddler wont notice - he is more than content with our lifestyle its us that want all the other things and I have had too many good times over the last 15 years, a few months of restraining ourselves will do us good!!


Phew rant over... sorry. Feel better. Looking on old Mr Brightside again, it will be fun to save the money and top it up with extra savings we make over the month - I will update tomorrow on that instead!!


Hope everyone is good and staying positive.
Crunchyxx

crunch_time

Morning diary!


Woohoo got paid today!! Decided to be more positive after last night.


Cant get any green on the signature yet but there is £407.50 in the slush fund ready for reckoning at the end of July!!


Other things I will do today for my cause:


- get cash out for hair cut next month and save it in an envelope so I don't spend it like last month.
- get cash out for spending money for the month and save in envelope.
- set up budgee app for tracking of spending money this month.
- chase HR for the extra day I did back in Feb which STILL hasn't been paid to me!!
- chase roofer for roofing costs.
- chase husband for expenses and mileage (he can do whilst watching football tonight, right?

Going to have a MSE weekend and await Husbands payday next week for more slush fund excitement!!


Have a good day!!
Crunchy xx

t2rry

YES Crunchy! Loving the positivity! X

OrangeFairy

Hi Crunchy,

Just subscribed! Your diary is sounding so positive I feel like it has spurred me on.

Congrats on baby number 2 how exciting and a perfect motivator!

I can completely identify with the feeling of 'we work hard so we deserve it'. Our disposable income should be around £1200 but we must fritter it away as there is never very much left!

Need to really buckle down. I need to make some targets like yours I think!

OF x