Small Steps Out Of Massive Debt!

GeorgianaCavendish

I checked my existing cards for balance transfer offers and found out I am eligible for two 0% deals.
I've requested transfers for the HSBC 22.9% balance and the Barclaycard 19.2% balance today.
It's funny how I didn't even consider checking the available offers with my existing providers, it's like I'm so scared of being rejected that I'm reluctant to look and also feel that I should save any offers to help with that MBNA debt when it expires but meanwhile I was paying so much interest on the cards I feel less emotional about.

I'm now going to focus on the PayPal balance. I will never be able to transfer that balance to 0% because it isn't a credit card account, so there is no point focusing on a potentially-transferrable debt that is currently on a lower interest rate.

I've been thinking a lot about where I have made mistakes with debt busting in the past and how I could learn from those times. I think my biggest mistakes were 1. having an unsustainable budget and 2. prioritising debt repayment over emergency funds. A contributing factor to both of these mistakes is that I have a feeling that I can't be trusted with 'spare' cash so every month feels like a rush to get money out of my bank account. When I had more money (through savings efficiencies, bonuses or rewards from cash back etc) I felt like I had to throw it at my debt as quickly as possible before it suddenly disappeared. Often I wasn't even allocating it where it could do the most good! And this came at the expense of a savings account so I was really stuck when everything happened last year and we had credit available but no cash.

I'm starting really small and not paying for things before they are due. Usually I like to pay bills as soon as I get paid, even if the bill itself isn't due for a few weeks, then any money still in my bank account is 'left over'. I'm sitting on a bill for £125 that isn't due until the end of next week just to prove to myself that I'm capable of keeping hold of money and having it available when I need to pay that bill.

I've also opened an instant access savings account with MetroBank that I will use when building up overpayment money throughout the month. When I feel the urge to make an overpayment, I will put it in the savings account first and then when I'm sure that I really can afford to use that money for a debt repayment, I'll transfer it across. I'm not sure how often I'll do this, maybe monthly to begin with? I used to keep telling myself that I was saving on interest by making payments as soon as possible but honestly the pennies saved by doing this come at the pounds of interest incurred when we had to use a credit card instead of cash from an emergency fund.

Until I get the hang of this, I'm cancelling YNAB. I'll think about subscribing again later in the year but for now I'll use a spreadsheet to keep track of our budget and will continue to watch the YouTube videos from YNAB.

GeorgianaCavendish

PS. No news on dental plan yet ... searching out my paperwork!

enthusiasticsaver

Not saving for emergencies is a common mistake. Debt busting and living in budget is a marathon, not a sprint. Learning to manage money includes being disciplined enough not to spend it and not to think of money in your account or overdraft or credit availability as money you can spend. If you can concentrate on living within a budget, saving for emergencies and unusual expenditure you won't go far wrong.

GeorgianaCavendish

enthusiasticsaver wrote: »

Not saving for emergencies is a common mistake. Debt busting and living in budget is a marathon, not a sprint. Learning to manage money includes being disciplined enough not to spend it and not to think of money in your account or overdraft or credit availability as money you can spend. If you can concentrate on living within a budget, saving for emergencies and unusual expenditure you won't go far wrong.

Thanks for stopping by! You are so right. At first I just wanted to get out of debt as soon as possible but it wasn't sustainable and the lack of emergency fund caused so much trouble down the line.

The challenge for me is not thinking of money in the account as money I can spend (no overdraft and the way I've viewed credit availability has changed but I'll be honest and say I'm not 100% there yet).

I need to accept that I'm in this for the long haul and it isn't a case of temporary pain and then going back to old spending habits, it is a change for life!

GeorgianaCavendish

Finally got round to listing a few things on eBay yesterday and I have already been reminded of how much I dislike all the cheeky questions from buyers (can I collect it? can you drop it off? can I pay with a cheque? I know it says £30 but will you take £4 because it's for my kid's birthday and I've already promised they can have it ... ) Hopefully I'll start to shift things soon and forget about the annoyance as the 'to sell' pile goes down!

Working_Mum

I think you are doing a great job Georgiana! Be kind to yourself as you travel this road.

We only get to walk this way once and it is important that you build in times for joy into your plan. I found having an "abundance" mindset helped me enormously and be truly grateful for what I currently have. I love challenging myself creatively to come up with solutions to whatever challenge I am facing whether it is how to spend Mother's Day or buying presents for someone's birthday or finding a few more pennies to round up my savings or round down my debt!

I have learned so much about myself and the world around me since I started on my debt free journey (and there have been detours along the way) but my life is the richer for having been in debt and now well on my way out of it.

There are so many strategies out there for reducing debt but I found that I had to have a plan which worked for me after all I was the one who had to peacefully sleep at night. I like the way you are keeping your plan dynamic and making compromises along the way, this is a great approach and in a few years time I hope you reflect on how much you've grown through this and not let your shoulders drop.

Wishing you a lovely weekend

Homegrown0

Hi GC, glad you're making progress and adapting things to make them work for you

I had to laugh about the ebay questions - some people have a complete cheek don't they? Hope things start to sell with minimal irritation!

GeorgianaCavendish

Working_Mum wrote: »

I think you are doing a great job Georgiana! Be kind to yourself as you travel this road.

We only get to walk this way once and it is important that you build in times for joy into your plan. I found having an "abundance" mindset helped me enormously and be truly grateful for what I currently have. I love challenging myself creatively to come up with solutions to whatever challenge I am facing whether it is how to spend Mother's Day or buying presents for someone's birthday or finding a few more pennies to round up my savings or round down my debt!

I have learned so much about myself and the world around me since I started on my debt free journey (and there have been detours along the way) but my life is the richer for having been in debt and now well on my way out of it.

There are so many strategies out there for reducing debt but I found that I had to have a plan which worked for me after all I was the one who had to peacefully sleep at night. I like the way you are keeping your plan dynamic and making compromises along the way, this is a great approach and in a few years time I hope you reflect on how much you've grown through this and not let your shoulders drop.

Wishing you a lovely weekend

Thank you so much for your lovely post Working Mum, it bought a tear to my eye! I think it is so important to have self compassion while debt busting, I've tried the "scolding myself until I do it right" approach in the past and that really didn't work. It is so freeing to think about this as journey with ups and downs and that there isn't a "perfect" way to do it, giving myself permission to sometimes make a 'bad' MSE decision because that is what works for me and knowing that I can learn from mistakes and make tweaks and changes to behaviour going forward without beating myself up about them endlessly.

Hope you have a really lovely weekend too

GeorgianaCavendish

Homegrown0 wrote: »

Hi GC, glad you're making progress and adapting things to make them work for you

I had to laugh about the ebay questions - some people have a complete cheek don't they? Hope things start to sell with minimal irritation!

Thank you I am trying to challenge myself with some things and adapt with other things to keep this moving in the right direction. Even a tiny bit of progress is still progress!

I managed to get another handful of things up on ebay at lunchtime today. No cheeky questions so far so fingers crossed! I do wonder if I am missing a trick when I buy things on ebay, perhaps there are lots of people who give in to the demands.

Have a great weekend!

PositiveBalance

Hi Georgina,


Have you tried a zero-balance budget? I got it from Dave Ramsey and it works for me, especially as my income varies every month depending on what overtime I do/don't do.


Essentially, before the month begins you budget EVERY SINGLE PENNY due in to something; rent/council tax/food/debt repayment/socialising etc. If you spend more in one category, you have to take some out of another category to balance the books, but you can't spend more than you earn i.e. go into debt to pay for things.


From what you were saying about your Metro account, I would be tempted to pay whatever you were going to save in there onto whichever debt you are currently focusing on at the beginning of the month, that way you are more likely to stick to the rest of the budget and not fritter any of the OP money away.