Beckie89's Debt-Free journey

beckie89

Hello,

I hope it's ok to start a diary here, I've just joined the debt-free by Christmas 2015 thread and know I'll be better at it if I have somewhere to write down my actions and therefore have accountability!

I am 25 and live on the South Coast of England. I have some credit card debt and also an old student overdraft that I haven't paid off and is now accruing interest.

I have no safety net or savings which leaves me with a huge amount of worry.

I rent privately with two housemates. The rent is reasonable but I am not very good at budgeting after this has been paid (and direct debits that come out at the beginning of the month!). I also have no way of saving towards a new deposit if I need to move (which might need to happen soon due to housemates moving on). Ultimately I would really like to buy my own flat but there is no way I can save towards a deposit at the moment and I feel I need to pay my debt off first.

So, my short-term (this year) goals are:

• Pay off £4452.28 in debt (two credit cards and an overdraft)
• Have £2000 emergency fund
• Start a flat deposit savings account
• Learn how to budget so I have money available to me at all times of the month!

I am leaving my job next Wednesday (14th January) and am still trying to find a new role. I have some freelance work to do in the meantime and also am being paid until the end of January.


So here goes....!! :T

beckie89

To achieve my goals, I know I need a plan. So these are some of the things I will be implementing so that I can get rid of my debt.

Budgeting:
- Compose a budget that is accurate and realistic
- Keep a spend diary (using MoneyWhiz on iPhone and Mac - already installed so no extra cost)
- Reconcile this with bank statements
- Know where cash is spent
- Keep food budget in an envelope so I can't overspend as easily

Earnings:
- Boost my income using freelance design work, UserTesting (hopefully!) and other ideas that I can get from MSE (find out how to use Quidco?).
- Sell unwanted items on Ebay - try to have a monthly clear out to do this.
- Take on extra days with my second job to increase earnings
- See if I can get any babysitting work (or go back to being a holiday Nanny)
- Sell stationary and cards on Etsy

Paying off debt:
- Have a plan for the amount I can pay off from my monthly earnings (see budget)
- Use extra earnings (from second job and from boosting my income) to make extra payments on the debt

Money Saving ideas:
- Make sure to be organised with food shopping so as to avoid buying lunch out.
- Plan cheap treats for date nights and cook at home.
- See how I can reduce my mobile phone bill
- Do I need my gym membership?
- If I can't make Netball training, stop paying the monthly fee
- Use cashback sites when buying online

If you happen to read this and have other ideas - please do let me know, I'm going to try and read through lots of other diaries to get ideas to add to my plan!

betsycat

Hi Beckie, all looks good! Another designer! we're so lucky to be in a profession where we can do little bits of freelance on the side... even if it does mean working lots in the evenings!

Looks like you've got some good plans – definitely do a SOA if you get a chance as it does help to figure out where all your money is going (even if you think you already know!)

Have you been on the snowball calculator to see how quickly you can pay everything off?

Good luck, you'll do great!

beckie89

Thanks Betsycat!
I'm doing the snowball calculator at the moment and will do a SOA this evening too.

Then hopefully I will be super clear on my targets and how much extra I would need to make in order to pay it off this year

Wish I could say that I had a low spend day today but because my car is broken at the moment, it cost me £18 to get to and from work!

I'm going to work from home tomorrow and Wednesday though in order to keep costs down.

beckie89

So, SOA done - this is done based on my primary income which is usually supplemented by £300 per month by my second job.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 3 (but two housemates so only my finances included)
Number of children in household.........
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1153.69 (n.b second job brings in variable income on top of this - this is baseline!)
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1153.69

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 455 (inc bills so disregarded bill options below)
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 38
TV Licence..............................included in bills
Satellite/Cable TV...................... 0
Internet Services.......................
included in bills
Groceries etc. ......................... 80
Clothing................................ 20
Petrol/diesel........................... 100
Road tax................................ 10
Car Insurance........................... 43.03
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 5
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 10
Entertainment........................... 100
Holiday................................. 0 (nothing planned this year )
Emergency fund.......................... 0 (this makes me nervous!)
Gym ...................... 39 (I should look into cancelling this)
Total monthly expenses.................. 920.03


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 5500
Other assets............................ 0
Total Assets............................ 5500

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly.. .APR
Natwest Credit Card......................478.33........18.95%
Natwest Graduate Overdraft...............1792.61.......17.8%
Nationwide Select Credit Card..........2181.34.........19.9%
Total unsecured debts..........4452.38..........


Monthly Budget Summary
Total monthly income.................... 1,153.59 (minimum - usually up by £300)
Expenses (including HP & secured debts). 920.03
Available for debt repayments........... 233.56
Monthly Unsecured debt repayments....... 200
Amount left after debt repayments....... 33.56

beckie89

My snowball calculation (paying £200 per month against debts) has a payoff date of April 2017 ( 27 months).

My goal is to pay this off by Christmas 2015 (12 months). This would mean averaging £450 per month against the debts.

I am going to try my very hardest to achieve this, I am going to have to boost my income in order to achieve this. I am leaving my job next Wednesday and looking for a higher salaried role so this will help.

I am keenly aware there is no contingency in this plan so need to try to save £10 a week even if it's just to take care of unexpected bills.

Phew! I'm terrified but feel much more in control

takingcontrolatlast

Hi, Ive just joined as well and I so impressed by the preparation and determination you have - i have picked up some tips from you and Betsycat which I will use

beckie89

Thanks takingcontrolatlast! Good luck with your own progress too. I don't feel very prepared but I am certainly determined.

Had a bill for £183 today which needs paying this month. Slightly panicked about that as I will need to find that money from somewhere.

My snowball calculates from next month's payments so I will try my hardest to pay the £183 from this month's earnings. Must find some more freelance work somewhere.

I'm thinking of starting an Etsy shop to sell my own-design of stationary particularly wedding stationary as I have done a lot of that in the past. Does anyone have any experience of selling via Etsy?

Thanks!

betsycat

You can do it! Do you have anything you can sell on eBay? Old copies of magazines apparently sell well – I'm going to put up some copies of a patchworking magazine I subscribed to a couple of years ago as it looks like they sell for around £5 each.

I've not ever sold on Etsy but have always wanted to... I want to sell greetings cards but I'm worried that the initial outlay of printing might not be made back that quickly so I might wait for a couple of years until my debt is paid off and I have a little bit of disposable income. But if you were selling artwork, especially personalised artwork, you might be able to do really well with very few costs involved!

helpme_115

Hey, looking at your SOA looks like you have it all under control!

If you are really keen to pay off debts by xmas I would suggest lowering your Entertainment down to £50 (I did it this year, not sure if im going to be able to cope though but so far so good!), maybe move the £50 to emergency fund?

Will subscribe to see how you are doing (im new to diaries too!)

beckie89

Thanks for the advice helpme_115 - that's a good point. I'm going to try and use the £100 for this month and see if I break into it or not, if I can, I'll keep it under £50 and put the extra across to my debt busting. I've got a hen do to go to in Derby in July which is costing £120 so perhaps I can budget for that by using some of my excess entertainment budget.

I am pulling the purse strings in - but my boyfriend is on a vastly different income from me and it is nice to be able to not be saying No everytime he suggests something. Although, we are doing lots of country walks and working through our movie collections instead of the cinema.

We don't live together so we take it in turns to cook for each other - this comes out of my grocery budget.

I have cleared the £183 bill that came in this month but that means I have less to put against my debt - I need to make some extra money in order to be able to put £450 onto my debt this month otherwise it'll just be minimum payments plus a little bit extra.

Have had a fairly low-spend week so far. My car is broken so I've had to get the bus a couple of times and need to get the train home from work this evening but have been walking as much as possible.

Here's hoping for a cheap weekend!