Snowscreamer's debt reduction efforts

snowscreamer

Thanks for popping by MM!

Same as you - using the credit cards for spending to get cashback reward but paying them off in full every month with the exception of our 0% card which contains the debt-still-to-be-tackled. That's down to £4000 now (keeping it in round numbers!). Given myself a slap on the wrist for budgeting ahead of schedule with money I don't have on YNAB as that's not how it's supposed to work and now doing forecasting separately. I forecast we will pay off the 0% card by the end of the year. That ain't bad.

Have got ~£2500 in cash which isn't going on the debts because it's all allocated in savings pots. That amount was going up and up as we started budgeting and working out how much a month to put aside for each category but now seems to have stabilised as we actually realise the expenses (eg. £500 car insurance this month)!

Anyhow all seems to be going amazingly swimmingly, touch wood. OH is amazed at the amount we now have left over every month given that we don't really feel that our lifestyle has taken much of a hit.

Happy Monday!

SS

MoneyMission2015

snowscreamer wrote: »

Given myself a slap on the wrist for budgeting ahead of schedule with money I don't have on YNAB as that's not how it's supposed to work and now doing forecasting separately. I forecast we will pay off the 0% card by the end of the year. That ain't bad.

Anyhow all seems to be going amazingly swimmingly, touch wood. OH is amazed at the amount we now have left over every month given that we don't really feel that our lifestyle has taken much of a hit.

SS

I've done the same with YNAB sometimes. I know that my OH is paying money in to the joint, but sometimes I don't know when he is paying it in. But a few times I have put his amount in to YNAB anyway to be able to budget, but then I know I shouldn't do that because if it doesn't go in for some reason then my budgets wouldn't be right and my bank accounts wouldn't make much sense. So now I am back to only putting the money into YNAB when I can see the money is in the bank account. I actually get paid tomorrow. I know it's going in because I have to authorise the payment on the bank for the company I work for, and I am itching to load it in to YNAB so I can budget for next month, but I know I have to wait until it is in my account.


My car insurance renewal is due in 2 weeks. I've had a quote off my current provider which isn't too bad but I am going to shop around anyway to see if I can shave just a few pounds off it and also to see if I can earn cashback anywhere. I also need to make sure my OH does this when his is due. It isn't until October, but I know he would just let it roll over if I didn't gently remind (nag) him.

snowscreamer

MoneyMission2015 wrote: »

I've done the same with YNAB sometimes. I know that my OH is paying money in to the joint, but sometimes I don't know when he is paying it in. But a few times I have put his amount in to YNAB anyway to be able to budget, but then I know I shouldn't do that because if it doesn't go in for some reason then my budgets wouldn't be right and my bank accounts wouldn't make much sense. So now I am back to only putting the money into YNAB when I can see the money is in the bank account. I actually get paid tomorrow. I know it's going in because I have to authorise the payment on the bank for the company I work for, and I am itching to load it in to YNAB so I can budget for next month, but I know I have to wait until it is in my account.


My car insurance renewal is due in 2 weeks. I've had a quote off my current provider which isn't too bad but I am going to shop around anyway to see if I can shave just a few pounds off it and also to see if I can earn cashback anywhere. I also need to make sure my OH does this when his is due. It isn't until October, but I know he would just let it roll over if I didn't gently remind (nag) him.

I have the same thing with income!! Have always been itching to get it into YNAB before I actually get paid. I've been good this month though. I tweaked things around on YNAB as I was budgeting this month's income for each month before receiving it and therefore getting a red "£3500 overbudgeted" warning at the top. We do currently spend (on credit cards) around £2000 that we haven't got hold of yet (paid at the end of the month). Credit cards make this possible but it is still bad.

So I added a new category under "Debt" entitled "Next month's income" and from there released £2000. Starting marking our end-of-month salary payments as income for next month and so from now on will only budget received money but are still around £2000 behind each month. Once our "debt" credit card is paid off (£4000 now - when I started we had credit card and overdraft debt to the tune of £7000) then I'll work on catching back up to the point where we are no longer borrowing from next month. Should be able to do that in three months I hope.

snowscreamer

So July has gone a leeeetle bit awry on the budgeting front. For the first time since this journey began we spent more than we earned...

Income: £4101.10
Expenses: £4198.20
Net income: -£97.10

End-of-month net position: -£68.64 - back in the red!!

Having said that we did still manage to pay £200 off the credit card so not all doom and gloom but obviously this is a lot less than I hoped as I'd originally budgeted £700. The problem was we put a £525 deposit down on a new kitchen... d'oh!

So, we have been giving some thought as to how to add value to our house before selling it and trading up in a few years. The downstairs floorplan is currently pretty uninspiring so we plan to knock down a wall, replace a false ceiling with a pitched ceiling and Velux windows, and get a whole new kitchen with a much better layout. We think all of this will cost in the region of £25000 but ought to add more than that to the value of the house as we suspect prospective buyers previously may have been put off by the current arrangement (long thin kitchen adjoining unnecessarily long lounge). So yes it is spending but we ultimately we hope we will gain financially. We hadn't planned to jump so soon, not least due to current debt situation and were waiting to extend our mortgage next March when the current deal expires. However we had been doing a lot of research and met a few kitchen designers. Had a good idea of prices and what was reasonable and couldn't say no to a deal we were offered. The salesman assured us we can continue to delay delivery until we are ready but we had to put a deposit down to secure the price. So that was that and there went £525...

Onwards and upwards, plans... well we should have around £700/month (based on basic salary) to put towards debt based on previous spending and current income however as OH's car is really on its last legs (184k miles on the clock and £900 spent on repairs in the last 12 months) we have decided from this month onwards to split any surplus income 50/50 between debt repayment and saving for a replacement car. The next time there is an expensive repair bill we will sell (if anyone will buy it!!) or scrap his car and spend whatever is in the car fund on a replacement car with a lower mileage, higher fuel efficiency, lower tax band and higher reliability. That's the plan anyway.

Think that's enough for now... let's see how August pans out. Really hoping it is less spendy than June and July!! Budgets are all set in YNAB and should have £650 surplus as it stands.

MoneyMission2015

The refurb sounds exciting. I do love a good floorplan


We did something very similar. When we bought the house it had a living room, dining room, kitchen & conservatory. We knocked down the wall between the kitchen & living room because we spent most of our time out the kitchen anyway. Then we blocked up the wall between what was originally the living room & dining room so that we still have a separate reception room. We also replaced the kitchen. We too spent quite a bit of money on it but luckily we had saved for it & we think it was worth it.


Problem is, once you do one room & it looks all shiny & new, it highlights the work that needs doing around the rest of the house. My ensuite desperately needs changing & the main bathroom could also do with updating. But I also don't like the conservatory and ideally I would like to either knock it down & build a proper extension in it's place, which can then be opened up properly to the new family room, or just have the extra garden space with some lovely full width conscertina doors along the back wall of the house.


Oh we could dream forever couldn't we! My main goal in the next few months in regards to the house is to get the front room sorted out & turned back in to a reception room. It is currently the separate reception room, but is just a playroom. But the kids never play in it anyway, they just grab the boxes of toys they want & bring them in to the family room. So I've decided to sort through all the boxes to get rid of a lot of the toys, then turn that room in to a cosy lounge and find other places for the toys.


Good luck with August. I'm sure you can achieve your surplus if you stick to your plan.

snowscreamer

Hi MM. We are trying hard to be very sensible and only do renovations to our house that we think will add significant value. As much as I would like various changes for us to enjoy we have to be realistic - we wouldn't be happy with this house as our forever home. Once we get to our forever home I think I will need restraining on all the plans I will have!!

MoneyMission2015

snowscreamer wrote: »

Hi MM. We are trying hard to be very sensible and only do renovations to our house that we think will add significant value. As much as I would like various changes for us to enjoy we have to be realistic - we wouldn't be happy with this house as our forever home. Once we get to our forever home I think I will need restraining on all the plans I will have!!

Sounds just like me. When we first moved in to this house (our second home) we thought we'd be moving after around 5 years but after 3 years we realised how much we liked it so decided it will be our almost forever home. We will only move again now to either downsize when we are older or if we win the lottery :rotfl:


So as soon as we decided that we were staying, the ideas just kept flowing. The problem is there is only so much work we can afford to do at once and also we do need to live in the house too, so I have to be sensible in how much work we can actually do without it disrupting us too much. When we got our kitchen done we were cooking on a camping stove in our living room for about a week. The kids loved it obviously, not so much fun for me though & we soon got fed up of pasta!

snowscreamer

MoneyMission2015 wrote: »

Sounds just like me. When we first moved in to this house (our second home) we thought we'd be moving after around 5 years but after 3 years we realised how much we liked it so decided it will be our almost forever home. We will only move again now to either downsize when we are older or if we win the lottery :rotfl:


So as soon as we decided that we were staying, the ideas just kept flowing. The problem is there is only so much work we can afford to do at once and also we do need to live in the house too, so I have to be sensible in how much work we can actually do without it disrupting us too much. When we got our kitchen done we were cooking on a camping stove in our living room for about a week. The kids loved it obviously, not so much fun for me though & we soon got fed up of pasta!

We are planning to oversee our kitchen/lounge renovation ourselves rather than have it installed by the company we are buying the cabinets from to save money. Consequently I suspect we will probably be without a kitchen for a few weeks whilst dealing with different workmen (electrician, plumber, joiner, worktop fitter etc)... Plan is probably to camp out at my parents' house during that time so we don't have to come up with any interim solutions to be able to cook!

MoneyMission2015

It's hard work but it will all be worth it in the end when you have a lovely new kitchen.


My plan next is to get our ensuite done as it really needs updating. That shouldn't be too disruptive because we can use the main bathroom, but my husband doesn't like the shower in the main bathroom because it's a single shower which he says feels claustrophobic. But he'll just have to put up with it for a few days. I just need to carry on saving for it

snowscreamer

*Pokes head in for monthly update*

August has turned out to be an excellent month for saving and debt-busting after much drama mid-month which I thought might de-rail our efforts!

The drama was car-related... OH's car had been making a funny noise and with us having already spent £1000+ on it over the past year we were dreading another bill especially with the service and MOT coming up in October. Our "car repairs" pot on YNAB is constantly being emptied and the monthly amount I have to put aside going up... it was at £120/month but I was thinking it would have to go up to £150 as we had the services and MOTs coming up for both cars and the pot was only at £120 as it had been emptied in July. Argh! Anyway we decided that the latest was the final straw and over the next few years with the number of miles OH does (15k a year) it would work out cheaper and certainly safer to replace his car. But where to find the capital to replace the car?! We were thinking of using our 0% credit card and then increasing our monthly payments into that with the saving on car servicing and fuel (buying a more efficient car).

Luckily OH's parents came to the rescue and have given us their "spare" car which is a Peugeot 207 diesel. Slightly more economical than the old car, slightly lower tax and at only 65,000 miles (old car had just hit 185,000) certainly should save us in servicing costs. Plus the MOT / service is due in January which gives an extra three months' breathing space to top up the pot. New plan is to keep this car for a couple of years during which time to put aside £400/month so in two years' time we will have £9600 put aside so can buy a newish low mileage car that we can keep long time. Phew! SO much drama and glad it's over.

Extra income: somehow we managed to get £600 for the old car which is amazing as we were so fed up with it we would probably have paid someone to take it away. We also got £100 each for OH switching his current account to Nationwide (where I bank) plus £200 from OH's old business client who never paid up and we forced into a CCJ. Assuming his business stays afloat that shoudl be £200/month for the next 9 months so that's better than a poke in the eye with a sharp stick! That will fund half of our car savings per month so that's great. We also got £170 from some abandoned stock sold at OH's business and £60 from my mother who borrowed my car for a week when hers was at the garage (I cycled to work). So in all, an extra £1230 income last month!

It was quite a spendy month again like last month but doesn't feel so bad with all the extra income we got. Plus we had a new radiator fitted in the living room which will be amazing as previously there was only one radiator right down the end of the room near the patio doors whilst we sit at the front of the room a good 14-16ft away from the radiator! So now we have another radiator on the front wall which is much better. Analysis of our electricity bill indicates we spent around ~£200 in electricity for a puny convector heater in the living room which wasn't even particularly warm but just took the chill off in the living room, and it won't cost anyway near that with one extra radiator added to our central heating system (gone from 8 radiators to 9 and used about 950L of oil in the the last twelve months for heating and hot water - under £300 in today's prices - and we like to keep our house toasty). Speaking of which we did spend £230 in August to fill up our oil tank but it's so cheap right now we couldn't miss out. Our full tank will last us for at least the next 12 months based on last year's usage so that's fantastic. I had £300 in the budget for oil (saving £50/month over the last 6 months) so was able to redistribute £70 into other categories

Debt repayment / savings for August:

Debt repayment: £600
Car replacement: £400
Buffer: £419.91

I added the non-specific "buffer" category as I'm hoping now the finances have started to really look up OH might be minded to buy me some diamonds in the near future. Or maybe this is just wishful thinking. I have told him that I am setting money aside for this purpose (as he has previously complained he'd never be able to surprise me as I am like a hawk with YNAB these days). So we shall see. But if it happens then at least it shouldn't throw out our debt busting plans if I budget for it plus if it all went towards the credit card or the car I could be waiting for years...

Happy Tuesday everyone

snowscreamer