Snowscreamer's debt reduction efforts

snowscreamer

So priority changes:

Holidays:
I have a cousin getting married in Texas next May. It would be a real shame to go all the way to Texas (which will be affordable) and not make a real trip of it, and holidays for us are what makes life worth living. So we have worked out what we would like to spend on this holiday, what is realistic and where we can make savings. We have set a total budget of £3500 for which we plan to fly to Texas, spend a few days there and attend the wedding, followed by a 1200 mile road trip over 5-6 days to Florida, where we will then spend a week with OH's uncle and his family who live near Orlando. This means we will have to up the holiday budget in a big way. We have been saving £300/month but that wasn't enough to cover what we ended up booking... In the next twelve months we will be going on three holidays of which two were already booked (might have thought twice if we had known about the wedding earlier!).

Holiday / Planned total budget / Already spent / Remaining budgeted / Remaining to budget
Caribbean November 2015 / 1000 / 663.22 / 43.50 / 293.28
Skiing January 2016 / 2500 / 2081.12 / 49.09 / 369.79
USA May 2016 / 3500 / 0 / 0 / 3500

Total remaining on holidays - which all needs to be budgeted between now and May ie. over seven months... £4163.07... eek!! :eek:

Split over seven months that's the best part of £600 a month ie. a doubling in our holiday budget. My justification... we will budget for it therefore won't do what we did on our last big holiday and abuse the credit card. We are earning more now. The credit card debt is nearly gone. We will make sure we do not go over budget but that we do have a jolly good time. Something to get very excited about, and you have to do these big trips before you have kids. Other categories we will continue to rein in. Holidays really is the only one we have gone crazy on.

OK. Second priority change. Car savings. We were doing £400/month so we had ~£10k in two years. I have altered this to £250/month as I think the car we currently have is fine and not imminently about to clap out on us plus it's relatively efficient. New car will be needed when we have kids but with no diamond ring that is not in the immediate future. £250/month will give us ~£10k in three years and we can make do until then. I'd rather spend money on other things, the car is fine.

House.
We have a lodger this month (£500 extra income - yes please) after responding to an SOS from an old school friend of mine who had a friend relocating to our area imminently without time to sort out accommodation. Quite enjoying having her and the extra income is very welcome, so we are starting to think about doing this more long term for extra income. The drawback to our house is it's semi-rural and quite difficult to get about without a car. Our road is fast, and we currently only have room for my and OH car in the driveway. So we are prioritising (as part of our list of home renovations - hoping these are investments to add value to our house when we sell) removal of our front garden and renovation of the driveway. Will be able to fit 3 cars when we do this. Already had a couple of quotes - around £4500. So we are trotting off to see our mortgage advisor on Friday. We ought to be able to afford under the current affordability regulations (checked a couple of calculators) to extend our mortgage by around £25k without lengthening the term. This means we can crack on with renovations. The driveway should pay for itself before we sell if it makes our house more attractive to lodgers. All long term view Very exciting! And so much happier now all income is budgeted and we are nearly out of the debt hole - the future is bright :T

snowscreamer

This month has been amazing!
OH company tax rebate landed and half straight to him - more than we were expecting - £2815.32!! That's basically more than a whole month's "everyday" expenses!! So I could have used that to help repay our remaining "next month" debt of £2000 (ie. living on credit cards from half way through the month) but seeing as we have so many reserves built up for annual expenses and rainy day expenses in reality we don't need the credit cards at this stage. So that one's for when the credit card debt has gone.

I also could have used it to pay off our remaining credit card debt at that point of £2600 but it's on 0% until Feb so also decided against that! Instead I used it to:

Top up "Buffer" (ie. diamond fund) to £1500 - which is the max I would want spent on any diamonds OH might wish to purchase...:cool: - £1000
Top up "Holidays" to enable us to only have to put aside £400/month rather than £600/month over the next 7 months - phew - £1400
Top up "Credit card repayment" - £400

So all looking rather healthy!! Plus it's been a pretty low-spending month on everyday expenses so we have definitely got over incoming money going to our head and have a more long term plan now

snowscreamer

So... long time no post but I think I'm done with this diary! It's been a very eventful couple of months. Our unsecured debt was down to £1200 at the end of November; then the mortgage advance we applied for in order to renovate and add value to our house arrived; with that we cleared the last of the unsecured debt. It's all budgeted in YNAB so at least £35k (which is the amount of the advance) will be going on our renovation rather than reverting to old habits.

What else has happened?
We enjoyed a long-awaited holiday in the Caribbean
Whilst away my boyfriend proposed, and we are getting married in September this year (luckily there should be minimal costs from our side as our parents are going to pay)
Currently away on our annual ski holiday until Saturday; looks like we are going to come in under budget for that which is great - more for house renovation!
We started on the house renovations by having our bathroom refurbished - this we actually had budgeted for without needing the mortgage advance - makes it even sweeter!
We both opened ISAs as we now have hundreds of pounds left over each month with no unsecured debt to pay off - love this feeling!!

Never going back to spending money without budgeting again, and I hope now forever more we have hundreds of pounds left over each month - means we can be excited about the future

MoneyMission2015

Oh my goodness SS, how exciting for you.

Congratulations first on the engagement, very exciting!!

And congrats on the debt slashing too, that's great that you've managed to clear it & can start married life clear of any debt.

House renovations sound good. We are also getting our bathrooms done this year, ensuite first I think then the family bathroom. That'll be it for house stuff this year. I want to replace our conservatory with a proper extension but as it will probably cost around £30k we're going to wait. We've never liked conservatories but it was here when we bought the house, we don't use it much but it seems pointless just knocking it down.