Slow and steady wins the race... to financial stability

cybertortoise

Hi to anyone reading! Previously I have tried to rush this journey, setting up unmanageable payment plans which led to being very short of money for essentials like food and the payment plans being cancelled. This time I am going to be a bit more sensible and go a bit slower in the hope that I will actually reach the finish line this time.

I am starting this diary to keep myself on track during my journey to becoming debt free. I have around 25k of unsecured debt at the moment and very little disposable income to clear it. This is LBM number 2, hopefully this time around I will stick at it.

To help me I am using a combination of envelope budgeting and YNAB. I have allocated a specific amount of money for each category and will physically put it into separate envelopes on payday, each envelope is also a separate cash account on YNAB. I am paid weekly so at the end of each week I will move any money left in the envelopes to a separate one and if this isn't used by the end of the month it will be paid to a debt. Phew hopefully that makes some vague sense! I am giving myself some leeway with the 'leftover' money as I have 5 children and no money budgeted for clothing etc this means I will have a spare few quid for trips, new shoes etc.

I have a couple of doorstep collected loans and items on HP so I will be focusing on paying extra to these debts first due to the interest I can save especially as none of the other debts are accruing interest at this time. I know it seems a long convoluted process but it works for me having the money separate rather than in one purse.

My first task is to send off for my credit reports so I know how much I owe and to whom.

cybertortoise

Well nearly three months on and I am in somewhat better position than when I first started this diary - can you call it that if there's only two posts that are nearly three months apart?


I have recently sent off for all three of my credit reports and worked out what is owed, to whom and compiled an Excel spreadsheet ( I love Excel way too much for it to be healthy).


There have been various changes on my credit reports resulting in a smaller amount of debt than I had expected. Some have dropped off and others have vanished. I also returned several HP items totalling a couple of thousand pounds.


My current debt total stands at:
£12,852.29

cybertortoise

That's over £10k less than I estimated.


I know some may come out of the woodwork after a while and I am mentally prepared for that.


I am YNAB-ing every day, I just need to stick to it. I'm determined to make the software work for me. I also have my trusty Excel spreadsheet detailing each debt and my weekly budget so I know how much to transfer to my bills account each payday.


I changed bank accounts saving £14.50 per month and have been surprised how well this is working out. Previously I have tried just using 2 separate accounts but ended up using the money from my bills account which I then had to pay back leaving myself short and needing to borrow from the bills account again. Vicious circle!


I have used a maximum of £5 and immediately budgeted it back. This is a small but definite victory and a sign that my LBM is sticking.


In October I will be getting a lump sum of money so after I buy a desperately needed new (used) car and pay the years insurance I plan on offering F & F's to several creditors with debts of smaller amounts. Specifically a few of the ones I am currently paying Lowell £1 per month towards. Hopefully they'll accept F & F's and any money saved can go towards any others being reclaimed by them.


I actually find myself enjoying making my budget work each week and making the payments to creditors. What a strange feeling!

Bobarella

Good luck with your mission Cyber Tortoise.

cybertortoise

Thanks Bobarella