Small Steps Out Of Massive Debt!

GeorgianaCavendish

EssexHebridean said:

If it helps, I absolutely get where you are regarding feeling terrified that the old habits will resurface - I think a lot of us have been in a similar place. It took literally years for me to trust myself with a credit card again after having got into a muddle with one when I was 18 - I was SO convinced that I'd end up running up debt again. I didn't though - and I still think that was because I'd been through the process of paying it off, having to deal with the provider etc, and that taught me deep down that I NEVER wanted to get back into that situation again. I've been in debt since - loans, OD's and obviously the mortgage - but it's always been manageable, and never left me with that panicky feeling that the card debt did back then. 

We're now in a position where we have NO debt at all - and initially that felt really strange indeed. (I'm not counting the 0% card as the money is sitting there in the savings to clear that off tomorrow if we needed to do so) It takes far more time than I thought it would to get out of that feeling of guilt when I spend something on myself, or go over our (still quite tight) food budget - and even now that is a process I'm still going through, three years on. I worry when the surplus in the joint account at month end isn't as high as I'd like - in spite of the fact that the whole point of the surplus is that it does allow us to get a takeaway here and there, have an unscheduled meal out, or to decide to go out somewhere for the day - and we really do still budget for pretty much everything, too.  I suspect it will take you a similar sort of time to get your head around being DF when your time comes as well - but perhaps it actually needs to - the lessons we learn (teach ourselves, really!) have such a lot of value maybe those feelings of slight fear that things will all go to pot again are actually the very thing that ensures that they won't? 

Thank you EH, it is reassuring to hear that someone else has been in the same situation and come out the other side! I know that it is going to take me at least another 18 months to become debt free - maybe 12 months to have the debt down to a 'reasonable working level' (where a small amount of 0% debt feels like a sensible financial decision and not a millstone round my neck). I'm striving for balance in my financial goals and working on calming my anxiety about not throwing absolutely every single 'spare' pound at debt repayments because I know that a. that money isn't really 'spare'  and b. even if I did cut other expenditure to the bone, I would only shave about 2 months off the DFD. I don't think a slightly earlier DFD is worth the risk of prompting a massive financial blow out (which would definitely come sooner than the revised DFD and push it back even further) 

I'm starting to notice how much stress and anxiety is 'normal' in my day-to-day life, and how many of my previous financial decisions were based on panicky FOMO. At times debt-busting has been a way to mask my anxiety-driven obsessive behaviour because it is easy to tell myself that I am working towards a worthy goal. Sorting out the unhelpful behaviour from the moderate/balanced behaviour is difficult and I find I'm having lots of Grown Up Chats with myself where I say "yes, I am choosing to spend £X on (eg.) a weekly yoga class and doing that means I have £Y available for debt repayments but these things are all important and I'm not wrong for having other priorities alongside debt busting". I'm still very much a work in progress! 

GeorgianaCavendish

astrocytic_kitten said:

This is really thought-provoking, thank you for the book recs - I’m definitely going to check them out, they sound useful.

I’m trying to focus on living in the moment and not getting wound up about possible futures at the moment for other reasons. It’s made me realise that I find myself fiddling with spreadsheets and YNAB and projections most days and there’s no real reason for it. Definitely something for me to do some thinking on too!

I hope the books are helpful! There were so many parts of the Geneen Roth book that made me think a-ha!  

I think there is a lot to be said on focusing on living in the moment. A lot of my debt stems from finding "the moment" intolerable and trying to spend my way out of it, and ironically a lot of my unrealistic earlier attempts at debt-busting come from the same place. I'm trying to find a middle path where I have a clear-eyed view of my finances so that I can make informed decisions about the best course of action, but not obsessively focusing on it to such an extent that it makes me feel panicky and trapped. Making sure that my "right now" is tolerable - or even, dare I say, enjoyable! - is much more helpful to my debt busting than forever punishing myself, interspersed with chaotic spending sprees when the punishment gets too much! 

GeorgianaCavendish

I'm nearly at the end of my first month with Monzo and I'm really pleased with it so far. I've managed to save £20 to my Christmas pot with the 'save the change' thing, and I've got £8 left in the spend account which I'll sweep over to the Christmas pot before I top it up again tomorrow for the new month.  I haven't sealed the pot, but having its growing slowly is so far enough motivation on it's own. 

I'm making an overpayment to Tesco tonight with the cash back and survey money I received during the last month, and tomorrow I will be making a big overpayment with the money snowballed from my loan repayment. I won't have any new lyrics for my favourite song this month, but maybe in March or April if all goes to plan! 

Naomim

Monzo is great,  one of my new favourite pastimes is looking at the pots actually having money in them! 

I'm waiting right to the end of the month before drawing down my survey money. Only got £12 so far this month. 

GeorgianaCavendish

Naomim said:

Monzo is great,  one of my new favourite pastimes is looking at the pots actually having money in them! 

I'm waiting right to the end of the month before drawing down my survey money. Only got £12 so far this month. 

I really like that too, although now I'm struggling with my main bank account balance being so low so early in the month (because I'm transferring money to different accounts & Monzo, instead of having most things in one place!) 

I'm trying to do the survey draw downs once a month too, unless I get a really lucrative survey in which case I'll take it out asap (I don't think it will happen but once I did a tedious multi-week survey on PA and got paid £80!    ) 

Naomim

GeorgianaCavendish said:

Naomim said:

Monzo is great,  one of my new favourite pastimes is looking at the pots actually having money in them! 

I'm waiting right to the end of the month before drawing down my survey money. Only got £12 so far this month. 

I really like that too, although now I'm struggling with my main bank account balance being so low so early in the month (because I'm transferring money to different accounts & Monzo, instead of having most things in one place!) 

I'm trying to do the survey draw downs once a month too, unless I get a really lucrative survey in which case I'll take it out asap (I don't think it will happen but once I did a tedious multi-week survey on PA and got paid £80!    ) 

Yes there is that problem, but I prefer to look at Monzo and ignore everything else.  I just refused a PA survey today, it was initially £2 for 15 mins,  but then it was £16 for an added four weeks of registering bits on your phone. Just don't feel like I have four weeks of dedication in me   

GeorgianaCavendish

Naomim said:

Yes there is that problem, but I prefer to look at Monzo and ignore everything else.  I just refused a PA survey today, it was initially £2 for 15 mins,  but then it was £16 for an added four weeks of registering bits on your phone. Just don't feel like I have four weeks of dedication in me   

After the survey I did, I don't think I do either! Even though it was well paid it was pretty stressful getting reminders to log in and do a 30 min task every other day! 

GeorgianaCavendish

Thank God It's PayDay! 

Bit late with my TGIP post this month!  I made an over payment to Tesco with my extras from surveys & cashback on the day before payday. Then I made my snowball payment on payday itself with my regular direct debit to go out tomorrow. I am on track to pay off the entire Tesco balance next pay day. 
My credit rating has improved since my last report (MSE Credit Club for the win!) as the banks reporting cycle & Experian reporting cycle have finally updated with the cleared HSBC loan and Lloyds balance. I'm looking forward to making more tiny improvements in the coming months but trying to let it happen in the background and not focusing too much on it. I have no plans to make new credit applications for a few months anyway, so I don't really need to check it. 

Financial Stress Management
The DebtBuster account for direct debits and the Monzo account for day-to-day spends worked pretty well last month and I'm sticking with them this month. I am doing a bit better with 'forgetting' about the DebtBuster account and just transferring the money there and letting the direct debits do their thing ... except for my snowball. My snowball figures have been in flux as the loans came to an end and I've been switching targets from Lloyds to Tesco, but from April things will be more settled. I'll have a fixed figure that is going towards one debt for at least 4 months, so I will amend the direct debit accordingly and hopefully feel a lot less stressed! 
I have some cashback and survey money building up again, I'm going to ignore it for the next 3 weeks and then do the cashouts (unless, as I mentioned before, I get a very well paid survey - in which case I cash out in case it disappears). 

Small Print Fail
I made an annoying discovery at the beginning of the year. My HSBC card allocates payments to the highest interest rate first (understandable) and if there are multiple promo interest rates, it allocates to the oldest balance first - not the rate that is expiring first. My oldest balance also had the longest promo rate (into 2021) but I've got balances expiring mid-August 2020 which will be the last to clear. That means I've had to rerun my calculations and move HSBC up my priority list. I think there might be a 10 day overlap between the promo rate ending and my final payment, so I'll incur some interest but not enough to make it worth doing a balance transfer. It just goes to show - never assume anything and check the statements even if I think "oh its all on 0%, it will be fine!"   It is annoying but at least I have realised my mistake now rather than when I incurred whopping interest charges that I wasn't expecting. 

Pension 
I realised that I made a really basic mistake when I was calculating my pension contributions. I didn't take into account the tax relief that I would receive, so it is cheaper than I thought to contribute the 5% 
I've just submitted the paperwork to payroll to have the 5% deducted (5% being the maximum amount that my employer will match for my age bracket). I will sit down and make a proper plan for increasing my pension contributions beyond the matched amount in the next few months, and I will do some more research into pension funds. Aviva were helpful for general advice but I'm still feeling a bit nervous about taking the plunge into a higher risk rating. 
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 
Now You're Just Some Money That I Used To Owe 
- Student Loan 
- Lloyds Credit Card 
- HSBC Loan 

Verbatim

Hi Georgiana,
I hadn't realised how stressful you found the process and I'm glad to hear you've found a way to get around those awful gut wrenching/ heart seizing feelings. 
Could you save some of the extras you might have by August to pay off the HSBC in full?  Sorry! I'm sure you've thought of that!
You're doing brilliantly by the way!

Isitdoable

Wow, really agree with you over the stress and anxiety surrounding all of this.  I'm always very interested in the reasons behind spending, as I feel a lot of my financial problems have been emotional/anxiety driven.  I don't think I'm quite there in figuring it all out but I hope to one day!