The final push to financial freedom

Cloudy456

I’ve had a couple of diaries on here before but have let them slide, although I continued to lurk for inspiration! The short version of my story is that I had my LBM in 2010 at the age of 25 - at that point I owed just over £11,400. This was from years of overspending (I got my first CC at 18!) and living beyond my means while studying and after I started working on a fairly low salary. During that time I coasted along thinking that it would all magically sort itself out one day when I earnt more, but meeting OH who was really good with money and just growing up a bit I suppose brought on my LBM.

I worked hard to clear over £8,000 within just over three years. This took quite a lot of effort as I didn’t earn that much. I did continue to have a good lifestyle with holidays etc. as I didn’t want to spend my twenties living like a hermit and I was lucky to be able to keep it all on 0% deals which reduced the sense of urgency. But, even though I took longer to reduce the debt than I could have, I completely turned over a new leaf during that time. I developed a budget tracking spreadsheet and ever since have been completely in control of every penny going in and out. My life was transformed by learning how to manage my money and live within my means.

Then last summer we bought our first house together – my parents gifted me my contribution to the deposit (it was for that purpose so I never considered using some of it to clear the last but of debt). At the time we bought the house I had about £3,000 left to pay off but it didn’t stop me being approved for the mortgage as we didn’t push to the maximum they would lend us. With hindsight I should have waited another six months and cleared the last bit of debt before buying the house as it has been very hard to do so since we moved. The house has needed a lot of work which has eaten up loads of our income and so the last bit of my debt has continued to sit on 0% credit cards. Although it has gone up and down a bit, the balance is pretty much the same as it was a year ago. But, prices are rising in our area so if we had waited another six months we might not have got such a good house for our budget, so I choose to look at it that way!

We are getting married this time next year so it seems like a good time to start a new challenge to get myself debt free for the first time in my adult life. I now earn a good salary and frankly have no excuses any more – this has to go.

Phew, that was a long introduction! I’m planning to keep updating this diary more for myself than anything else but it would be lovely if anyone else wants to say hello and keep me company!

Cloudy456

So, my situation today is that I owe £3,117.00 exactly on a 0% credit card, with the deal lasting until early 2016 – but I intend to have it clear well before then!

There isn’t any point doing a detailed SOA as all our bills come out of a joint account which we pay a set amount into each, but a rough budget is:

Income - £1,755
Joint account for bills and food - £725 (we have a big mortgage, OH pays in even more than this!)
Contact lenses - £40 (I need special ones)
Phone - £35 (this will be reduced to SIM only when my contract expires)
Amount left for spending and debt-busting - £955

So my situation looks pretty healthy but I have high outgoings as to be honest we live a pretty nice lifestyle. If I were single I would be stricter about cutting things out but I don’t want this to impact on OH as it was all accrued before we were together. Case in point – we have a holiday booked for January (booked before we got engaged) and the balance is due by the end of this week - £584.50! Luckily Friday is payday so I will be paying it then, but it will leave me with a tight month coming up.

We have also agreed that from the next payday (November) we will each save £250 per month into a joint account for our honeymoon and future. I know some people would say I shouldn’t do this until I’m DF but I won’t let our plans as a couple suffer, especially as the CC is on 0%.

My plan is to pay £200 to my CC as standard each month and top that up with anything I can spare from my spending budget.

I should add that we’re very lucky to have our wedding paid for by our parents (I feel like a spoiled brat sometimes!) so we just need to save for our honeymoon.

The only money I plan to spend before payday on Friday is £1 tomorrow night on my running club. That would leave me with just over £70 left from the month, which will go to the CC but I won't make this payment until the end of tomorrow in case anything unexpected comes up.

Cloudy456

Well, I’m 24 hours in and all is going well – I didn’t spend anything yesterday (quiet night in) and today I cycled to work even though I was very tempted to get the bus. So I’m proud of resisting and hopping on my bike! I almost always cycle as it’s not far and because I live in a city it’s quicker than battling with the traffic. Normally I love it – saves money, gets me some exercise and clears my head after a busy day but when it’s chilly or raining I’m sometimes tempted onto the bus which costs £3 a day – so I need to keep that in check as the winter weather draws in!

I’ve also done a few Onepoll surveys today and got the balance up to £8.05 which isn’t bad given that I claimed a payout and started again only ten days ago – hopefully I’ll get another £40 before Christmas.

I also brought my lunch to work – homemade soup. I’m normally pretty good with bringing packed lunches but on the days when I don’t have time to make it I’m bad for getting a £4 sandwich from Pret or somewhere, when I could easily go to the supermarket next to my office and get a cheap tin of soup and a roll for about 80p which is about the same as a packed lunch from home. That bad habit will obviously be changing now!

I’m going to my running group tonight which means spending £1 but hopefully that’s it for today. I know that’s non-essential spending which I do twice a week but to get a great workout for only £1 is amazing compared to a gym membership or exercise classes, plus it’s so sociable that it kind of counts as an evening out! Now if only the rain would stop before I go...

PinkPoppies

Hi Cloudy! :wave:

Your opening posts remind me a bit of my husband and I years (and years!) back. We were both lucky to have good jobs, we'd leapfrog each other in terms of salary every couple of years and the higher earner took a bit more of the load etc.

Cloudy456 wrote: »

So my situation looks pretty healthy but I have high outgoings as to be honest we live a pretty nice lifestyle. If I were single I would be stricter about cutting things out but I don’t want this to impact on OH as it was all accrued before we were together. Case in point – we have a holiday booked for January (booked before we got engaged) and the balance is due by the end of this week - £584.50! Luckily Friday is payday so I will be paying it then, but it will leave me with a tight month coming up.

You know what though- you are getting married and you are in this TOGETHER. You sound sooooo like me at your age in a lot of ways! Fast forward 10 years to where I'm now and I so wish my husband and I had worked more together on financial stuff, we'd be wildly better off now if we'd had our heads screwed on better.

I'm definitely not saying that he (as the higher earner) should bail you out, or that you shouldn't pay your share of the holiday and honeymoon BUT please consider scaling back the 'pretty nice lifestyle' for a bit, together, to support your debt busting. You'll both reap the benefits in the long term, you really will.

You have nearly £1k 'spare' a month. A £3k debt will take no time to bust with some very short term cutbacks, and you can both move forwards together xx

Good luck! :beer:

Cloudy456

Hi Pinkpoppies-thanks for saying hello! I completely understand what you're saying but my cc is on 0% for another year so in all honesty there is no mad rush to pay it, I just want to for my own peace of mind. OH and I have a great relationship in terms of dealing with money and communicate well about it all. He would of course help pay off my credi card if I needed but because I earn well and it's not accruing interest I don't need him to. He is busy laying good financial foundations for our future in other ways, saving each month and paying more of our mortgage. I feel like clearing my cc is my contribution to that future, then saving will come next. So we are definitely tackling our finances as a team! And I agree I need to rein in my lifestyle until its clear-that's what this diary is for! I'm just going to be a bit choosey about where I make the changes as I'm lucky enough that my situation allows for that. Saying that, the more I think about it the more I am impatient to have it all paid off so maybe I'll get stricter than I think!

PinkPoppies

I wish you all the best!

It's amazing how addictive it can be watching the numbers come down, and how many cut backs you probably won't even miss!

Cloudy456

Thanks PinkPoppies! You're doing so well with your debt-busting, nearly 17% in a couple of months is fab!

Cloudy456

So, it’s payday – the first of my new credit card-wiping mission! I’ve finalised the figures in my spreadsheet for last month and was left with a grand total of £72.37 so that has gone to the CC along with £200 from this month’s salary – so the balance is now £2,844.63. That’s 8.7% of it paid off already! I’m a big fan of recording my progress in percentages – it makes the reductions seem more to me somehow.

I’ve also paid the balance of our holiday in January - £584.50! That was pretty painful but I’m soooo looking forward to it. I’m pleased to have paid for it with cash but do feel a bit guilty – bad timing that it was due the same week that I promised myself to finally clear the CC. But the guilt will hopefully be good motivation to knuckle down with the debt-busting in other ways!

So, with my regular bills also taken into account (which will come out of my bank account over the next few days) that leaves me with exactly £170.27 to live off for the month ahead. That doesn’t include groceries which come out of our joint account so it just needs to cover my own day-to-day spending. It will be very tight as we have a busy life with lots going on, but I’ve sketched out what I think I will need and I think it’s just about do-able if I’m strict and try and avoid making any new social plans.

MSE things I have done so far today:
• Cycled to work.
• Brought lunch from home – a potato to do in the microwave and half a tin of beans. A quick and warming winter lunch for probably less than 50p!
• Did a few Onepoll surveys, bringing my balance up to £8.65.

Tonight I’m just staying in with OH then tomorrow I’m going to visit family and staying overnight. That should cost me about £30 in petrol plus I have a meal out planned on the Saturday evening with friends which I've budgeted a further £15 for. I would love to pick up a bunch of flowers to take for my Mum but that’s the kind of thing that I know I shouldn’t be doing at the moment so have said a firm ‘no’ to myself on that one!

I also need some new foundation as mine has just about finished. The one I normally buy costs £25 but I looked online and it seems Boots do several for more like £5 – they can’t be that different can they?! The £25 one lasts me six months so it isn’t as bad as it sounds but I don’t feel I can justify that until the CC is paid off.

These are the kind of small savings that I was so good about a year or two ago, which enabled me to pay off 8 grand on less pay than I get now, but now I am realising how much I have slacked off recently. Before that it was all about getting the debt down to be able to get a mortgage and I got it low enough but not gone totally, then kind of lost motivation to deal with that last bit once we had the mortgage. I guess looking forward to being married and all that brings has given me the kick I obviously needed!

Cloudy456

So the weekend went well, I had a lovely time and almost managed to stick to budget - spent £4 more than the £45 I had budgeted for, but that was always optimistic. I managed to spend a bit less on petrol but ended up out for a sandwich lunch with the family and had a dessert with dinner out on Saturday night which could have been avoided but overall I'm pleased with how I managed it all.

That leaves me with £121.06 for the rest of the month's spending - it's going to be tight!

I also did a very frugal food shop yesterday, with enough stuff for the week at a total of £33 (that included some household/toiletries items as well, so I'm pleased with that. Although our food comes out of a separate pot to my own debt-busting funds, I'm trying to cut down our spending there too.

Back at work for the week now - I'm hoping for a very cheap week! I've budgeted £2 for two sessions of my running group but other than that my aim is not to spend anything. We'll see how that goes!

Cloudy456

The low spend week has started well with a NSD yesterday. I did a few money saving activities:

Made a big pasta dish last night for our lunches for a couple of days.
Did a few more onepoll surveys.
Called our energy supplier and got onto a different, cheaper tariff saving us £13 a month.
Turned down the heating so it's on for less time each day.

I didn't have time to make lunch on Sunday so when I went out to buy it yesterday lunchtime I went to the shop and got a tin of beans and a potato at a cost of about 90p instead of getting the £3.50 sandwich that I would have a couple of weeks ago. Felt like progress to me!

Tonight I have running group (£1) and also need to get some make up at lunchtime as I've put that off and am now totally out of foundation and look dreadful! Other than that no spending planned today.

Cloudy456

All still going well although I had a relatively spendy day yesterday. I got the new make up I needed yesterday lunchtime but went for one that cost £7.99 instead of the £25 my old brand cost. And so far, so good - I think I might actually prefer it! I also needed some new moisturiser and again dropped several brands, getting one for £3.99 instead of the one I normally buy at £35. (It's not hard to see why the CC hasn't been paid off yet is it?!) So I spent a total of £11.98 on that, plus £1 in the evening on my running group.

Had a great run last night! We went over five miles and I finally got up a massive hill without walking, which has defeated me every other time I've tried it! I love running, it is so great for clearing my head and keeping me feeling good, and sooo much cheaper to run outside in the fresh air than pay for an expensive gym membership!

So, my spending budget for the remainder of the month now stands at £108.08.

Today will hopefully be a NSD - I brought my lunch to work and cycled as usual and have no plans tonight other than catching up on some housework. I've done a few more Onepoll surveys and am now at just over £11. So, feeling pretty happy with where things stand overall!

Oh, and I'm pre