Staying Motivated & Small Steps, I'd love some advice please!

Kawaii_Corgi

Hello! I'm new to posting in forums, but I've been reading the Debt Free Wannabe forums for weeks now, it's definitely got me feeling more positive and inspired.

I had my 'lightbulb' moment the week after our wedding, October 8th. For the past year before that I'd been having anxiety, stress and generally embarrassing panics about the state of my money, but it really hit home after the wedding how much debt I had, and I'm now dedicating myself to paying it all back!

I've been in debt pretty much since I started Uni back in 2010.. a combination at the time of my parents also having trouble with debt (ironically) and me paying on cards and overdraft to live alongside my part time job, in order to keep up with friends etc. which is ridiculous now I think about it! I'm the first to admit that from then on, and continuing when I finished Uni I was terrible with money, and from that point I was basically living off of debt on CCs and accounts, from moving out and buying things for my flat to just buying the weekly food shop.

Thankfully, my husband's lovely Dad basically paid for our wedding so that wasn't a major worry but it upset me more than anything that he had to, as I'd love to have been able to pay for it all ourselves and thanks to me we couldn't. Now we're married I'd love to be able to move from our tiny studio flat into a flat with actual bedrooms plus be able to afford to live more and again because of me we can't so that needs to change!

So I've gotten myself a subscription to YNAB, after advice I saw here, and it's proving incredibly helpful. So far I'm keeping track of every penny, am scheduled to pay off all I can and looking at a debt free date of January 2020 for the £20k+ I owe (according to their goals system, if my calculations are correct!)

So after that not so short life story (I don't blame you if you didn't read it all!) my questions are...

How do you keep motivated? The thing I find most difficult is the guilt of not being able to do things for other people, which I know I shouldn't have been doing anyway because of the debt; but now I've set myself solid rules on spending I DEFINITELY can't and it makes me feel awful!

What small goals do you set to help you see the light? I'd love to know how I can break it down and look at each bit of a positive rather than 'oh my god it's STILL another 3 years..'

Thank you in advance MSE, and apologies for the long first post

EDIT:

Okay so here is my SOA! I'm not sure on percentages but unfortunately I think most are in their 30s.. I need to confirm though. I don't pay minimum payments on anything so I put what I'm actually paying, though it does occur to me that maybe I should be paying one over another? Maybe paying off a small card or account would give me a boost?

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1460
Partners monthly income after tax....... 900 (his contribution)
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2360

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 178
Rent.................................... 390
Management charge (leasehold property).. 0
Council tax............................. 101
Electricity............................. 80 (prepay meter we can't change)
Gas..................................... 0
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 17
Mobile phone............................ 55 (:( awful i know, needs to be reduced)
TV Licence.............................. 0 (we use our tv exclusively for gaming)
Satellite/Cable TV...................... 0
Internet Services....................... 18
Groceries etc. ......................... 140
Clothing................................ 20
Petrol/diesel........................... 60 (my smart car does 50-60 mpg to work and back which is 10 miles)
Road tax................................ 0 (no road tax on smart cars!)
Car Insurance........................... 62 (went up £30 after car accident - they crashed into me! )
Car maintenance (including MOT)......... 20 (£20 for service payments, new car so MOT free)
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 30 (counselling; she's already put me on her lower rate used to be £45!)
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 9
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 15 (for xmas and birthdays over the year)
Haircuts................................ 0 (I get this free by helping lovely hairdresser friend with her social media)
Entertainment........................... 40
Holiday................................. 0
Emergency fund.......................... 10 (emergency fund for flat e.g. if we go over on electric)
Gym..................................... 50 (to be cancelled)
Savings (for emergency)................. 50 (£1000 challenge!)
Software................................ 12 (YNAB and adobe CC)
Total monthly expenses.................. 1367


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 7000
Other assets............................ 0
Total Assets............................ 7000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 10000....(178)......0
Total secured & HP debts...... 10000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Argos Card.....................583.......22........0
HSBC CC........................5346......140.......0
Barclaycard....................4863......140.......0
HSBC Overdraft.................1700......25........0
Next...........................654.......40........0
PayPal Credit..................584.......32........0
Simply Be......................2758......145.......0
Very...........................4188......150.......0
Cap1...........................714.......40........0
AQUA...........................3764......200.......0
Total unsecured debts..........25154.....934.......-


Monthly Budget Summary
Total monthly income.................... 2,360
Expenses (including HP & secured debts). 1,387
Available for debt repayments........... 973
Monthly UNsecured debt repayments....... 934
Amount left after debt repayments....... 39

Personal Balance Sheet Summary
Total assets (things you own)........... 7,000
Total HP & Secured debt................. -10,000
Total Unsecured debt.................... -25,154
Net Assets.............................. -28,154

LionessInWinter

Welcome to the forum and good luck on your journey to being debt free.

I find that joining the challenges keeps people motivated and perhaps starting a diary to keep yourself accountable for your actions. It's important you leave some money in your budget for fun activities or treats as well so that you also enjoy your life whilst paying down the debt. Remember to budget for yearly, quarterly expenses as well so that when its time to pay them you have money in your budget as opposed to relying on your credit card.

Kawaii_Corgi

Thank you for your reply Lioness! I was thinking about a diary, though I guess in a way YNAB is a 'money diary'?

sourcrates

Hi,

Can I ask, are you just over paying your accounts, as a pose to some kind of debt management ?

Kawaii_Corgi

Hi Sourcrates, just sorting it myself; no debt management or reduced payments. I've heard good things about StepChange, my parents are actually in a DMP with them as they got in a lot of trouble, but if at all possible I'd like to continue to sort it myself.

steveoz

For me it was more of a case that I had to, so my situation wouldn't have worked for everyone.

12 years ago, I had loans, credit cards, both I and the other half did. We owed 10's of thousands, everything was on credit card, cars were on loans / finance, and we lived in our overdrafts. We even took money out on the house to get items...we thought it was normal, 'everyone was in debt right?', it's the way everyone lives? All of these cars are on finance, these clothes are on credit cards? It was normal to buy a car with finance, a computer, a TV, a stereo, then lose money on the cars over three years, then sell it, top up the finance and owe more and more? We 'looked' like we had some money, but we had nothing.

I eventually discovered that I was 'trying' to live a lifestyle beyond my means, it wasn't really normal or at least the banks and media sell it to you as being normal, it fuels the system, it's in their interest to make the rich richer, it's basically a trap...

I couldn't ever see a way of progressing as debt was holding us back. I also at the time suffered from panic attacks and anxiety, and I won't lie, eventually our escalating debt started to contribute as I became aware, it might not be so normal after all.

We also had our daughter arrive too, which was a big deciding factor and motivator. I was spending more on cars and technology etc than anyone in my position at the time had any right to (don't get me wrong, not crazy amounts, but when you earn 17k a year and you spend 10k on a car, that is disproportionate), yet we lived in a street where drug dealers and prostitutes collected? The house wasn't bad though, a bit rough around the edges but nice decor and plenty of space, an old school terraced town house, in fact it was fairly desirable as a location close to the town centre for young party-goer types, but it wasn't the place to bring up a child. And I didn't want my daughter growing up there.

I got rid of the financed car, it pained me as I loved it, it was the one thing above everything that made me feel good as I'd always wanted one (a BMW M3), paid off the debt and bought a cheap runaround with the cash the leftover a £900 saxo, put any disposable income onto my other credit card, that was only £150 a month and it seemed to take forever, but time soon passes. I stopped the partying and instead bought a cheap bottle of wine in at weekends. My treat was a bottle of wine on a Friday and a takeaway once every now and then, nothing lavish. Once that card was done, I used the money to start paying off one of the others, then we worked on the wifes credit cards, we used the whole snowball thing. Cut down on what we had that we didn't need, reduced our expenditure and with every debt paid off, added the money spent paying that debt to the next one until one by one they were all gone. The wife sold her larger car and we bought a dirt cheap peugeot 106 with zero extras. I cancelled the Gym membership and bought a punch bag and dumbells with one months fee, and used them every night in our lean-to instead. Etc Etc.

It took some time, but we made good progress.

It wasn't easy moving though, not everyone has a well paid job. The wife was working part time in a junior position, and I was working in a call centre in a junior job, we had between the two of us maybe 25k a year, and no one on earth was going to lend us 140k to get out of where we were to get a home out of that area, we still had some debts. So, we had to take a step back, we ended up with a 140k mortgage over 45 years at 7.9% interest.

On one half we were clearing our debts and moving forward, but simply put, our earnings made it impossible to move to a place that was better to bring up our daughter, so we found ourselves slaves to the system once more, and the 140k debt for what seemed forever (and doubling our existing mortgage outgoing) made me really anxious again, but I did this this time for our family and my daughter.

I continued to run around in an old £900 citreon saxo, and the wife in her old 1 litre 106. We shopped in cheaper places, made clothes etc last, and we focused on finishing clearing up our debts. Once that was done we managed to start putting some money into the house and savings, but quite a while later. I even went for about 7 years without getting any new glasses! Although I wouldn't recommend that! Health and eyes are important.

I'll admit, in the past 6 years we have also been fortunate, things seem to have paid off. I was lucky in that I ended up getting what I consider to be a good job, now earning probably what will be the most I ever will in my working life, and the wife went back full time and got an ok job too, but it wasn't always great, and the reality is, I can't sustain these earnings anyway this job I have is the exception, so at some point, things will have to change again, and I am thankful for what I have and what I have done.

However, as well as there being luck involved (jobs, right place at the right time or not) which can be either good or bad, at somepoint you have to make the call to prioritise something over something else, that is what it boils down to. Back when we were where we were, I made the call to give up something to further us.

It's true you do have to take some gambles in life (example our house, which could have easily gone the opposite way if our jobs hadn't improved), but you also need to come to a point where you take a stand, and decide one way or another you are going to make decisions to tackle debt. And EVEN if it's simply not going to Costa at the weekend, and putting £12 more off of a card each week or month, it's something, and it all adds up.

In terms of paying off debts the bigger sacrifices make the biggest difference of course, but it all depends on what you are willing to do. And just think, that whatever you give up, it won't be forever, it's a temporary thing that should help you get a better hold on the issue.

Even now knowing what I know from where we have been I find it hard to deal with finance. We recently bought new sofas, and I figured I would take advantage of DFS interest free and keep the money in my bank earning (a small amount) of interest, but as soon as they mentioned 'credit agreement' I shuddered and just paid up. I don't even own a credit card now, the wife does, we use that to pay for holidays and such for the extra protection and then pay it off right away but I struggle to deal with or think about credit.

If I had of stayed in the frame of mind where I was, I would have gone out by now and bought a 60k car on finance, a 400+k house and be keeping up with the jones, but although we are debt free now other than mortgage, I still drive around my 11 year old Mercedes, and ride my 20 year old bike - I don't want things to get silly again.

For me I know my biggest worry and anxiety will come when circumstances change financially, and from having been there before, I want to try and do what I can to safeguard our future and minimise the risk of that.

Anyway, that's my little story so far in a nutshell. You never know when things will get turned on their head though. So, motivation was health - less anxiety and stress, more freedom, and my daughter / families future.

I wish you all the best on your journey, and whatever you decided to do, I hope it all works out for the best.

Kawaii_Corgi

Wow steveoz, what a post! I wish I could click the thank you button a few more times.

I agree with the anxiety; I've had nights when the worry of my debt has kept me up. I can't wait to put that behind me even if it is a bit at the time! And also on cutting back massively. I need to cancel the Gym as soon as I can, though I'm going to be on a free holiday due to illness soon, and I'm working on selling a pile of impulse bought clothes I don't need on eBay. I'm sure there's other things though, I just need to sit down and have a think.

Thank you again, and I hope its all working out for you too! For the sake of yourself and your family

steveoz

You are welcome, and thank you, I wasn't sure if it would help but just thought I would give my little story.

I think looking back that as I mentioned for sure, debt and money has been a large contributing factor to stress and anxiety in my life. I nearly went through redundancy earlier this year, and yup, still started stressing about money and what we would do.

Of course, there are many, many more people in the same position and unfortunately even worse off. Debt is almost accepted by society and even fuels it (as an example how payday loan companies get away with it I'll never know, it just keeps people in debt even more by charging ridiculous amounts, and this rubbish is rammed down peoples throats in the high street and on TV preying on those in need), but the truth is, if at all possible it is far better to at least try and keep it under control.

Not everyone's circumstances allow them to clear of a debt quickly, and I do know that 10 / 20k can seem to take an eternity when paying off small amounts, but time does soon pass, and if you stick to it, it will go.

I wasn't advising either that you had to sacrifice everything, of course there has to be a balance, after all, life is about living and enjoying it, but anything perhaps you feel you could substitute for something a little more economical or go without will help to reduce your balances.

I'm not sure if you both budget on a monthly basis either, but a spreadsheet for the month ahead is always a good idea, as it's easy to spend out on things you don't even remember, especially now with contactless!

A little treat every now and then is great, just try not to maybe binge buy random things on the internet if you have a bad day

Also yes a clear out helps, I sold for example a ton of items out of my garage and from draws in my office at home I totally forgot I had, even if you can make a couple of hundred, that's money that will go towards clearing a debt.

Kindest.

Steve

Oh and a quick edit, some years ago I started to put £50 a month in my daughters bank account, that remained in the same account for perhaps 9-10 years now, it seems like yesterday, but time soon flies and it builds up. There is over 10k in the account now, just by following the simple rule of £50 a month minimum then adding every now and then say 10-20 more.

Even if you decide you can't or don't want to pay 100's off, you could likely still easily live your life and maybe even set a minimum like 50 a month as long as the debt doesn't increase will have a positive effect over time. You can always pay a little more off every now and then. And years very quickly do pass by!

I guess what I am saying is set realistic expectations, don't put 100% of your disposable income toward the debt and then sacrifice lots IF you will just end up feeling down and then take money back out of it to get something. I guess just start with a realistic goal and plan and build on it from there. You might find it gets easier over time and you enjoy seeing that debt drop!

EssexHebridean

Superb posts from Steve, above! :T That;s a really good warts and all "you can do it but it's like this" approach.

You'll already know from the diary threads on here no doubt that there is a wealth of advice, help and support available - so one of the first things I would say to you is to keep posting! You'll find that not only will you get help to celebrate the small wins, you'll also be among people who understand how something small can feel really significant!

Set yourself "milestones" - and decide on a reward for your next one so you have something to work towards. Not anything madly extravagant - but something that you will appreciate and want to work for. So it might be something simple as a sit in Starbucks with a coffee and your favourite magazine - it's just a matter of finding the things that work for you as an incentive.

Don't lose sight of the bigger picture - that bigger place you want to live in.

Above all, try not to beat yourself up too much - yes you acknowledge that you made some daft decisions, but we've pretty much all been there at some stage! The fact that your parents made some of the same mistakes before you is interesting - and that's a pattern that often does repeat. Now though you have the opportunity to break that cycle.

Kawaii_Corgi

Thank you EH! Yes I have been following a few of the threads, and there's so many lovely helpful people on here. I'd love to stick around and post some more!

I think milestones are a great idea; I'll have a think about what would be a good 'reward'!

I'm awful for beating myself up, I feel a lot of guilt about the debt and I'm *trying* not to let it get me down; and yes I feel it is a cycle that does repeat unfortunately as my nan is also in a similar situation.. and I'd love to break free of it!

Thank you for your advice

steveoz

Thanks Essex, it is so true, rewards don't have to cost a significant amount of money. I've in recent years taken the family to New York, as we always wanted to go and I was able to afford it, but although it was good, it's safe to say that some of my best memories are still say of that pushbike ride out with my wife and daughter in the country and a picnic one summers day. It's not all about spend, spend spend. Oh and congratulations on being mortgage free!

Everyone has different tolerances for sure, the bigger the sacrifice the harder it is, but success can be measured and achieved in many different ways and varying degrees.

What also scares me is my parents got into a bad financial situation, and it only got worse with them being sold an equity release which essentially stewed and took nearly all of their property.

They haven't found it easy and of course they don't want hound-outs from their children either (it's difficult enough to buy my mum something small and not have her fighting to give me the money). But I am quite worried about us getting into such a position.

There's a fine balancing act between living life and having fun, and wasting money. In more recent years I have also found that no manner of material possessions will fill a void in one's self if it exists, it needs fixing from the inside out not trying to be patched up the other way around.


Kindest.