Small Steps Out Of Massive Debt!

GeorgianaCavendish

We're finally close to the end of this never-ending month!
I'm really looking forward to pay day next week and making an overpayment to MBNA. Although I'm happy with the decision I made over the last couple of months to prioritise the LISA, I do miss the buzz  that comes with paying off a chunk of credit card debt.  
It feels very surreal to be at this point in January and not to be stressing out because I haven't got enough money to last until pay day. All my expenses are covered until the end of the month and I've even got a little bit extra in a couple of my savings pots. It has been a long old slog to get to this point, with lots of ups and downs, but it feels like that is starting to pay off and I'm able to enjoy the results of all that slogging. There's still a lot of hard work ahead, especially with deposit saving, but I feel so relaxed about money in comparison to the early days of this diary and even a few months ago. It feels good to have a bit of breathing space! 

Kakiste

Well done. I think you're completely correct, it's the difference between the anxiety of when you're still up to your eyeballs in debt to when you establish a proper budget and everything is on rails. 
I've noticed that other than updating my signature- when payday is doesn't really affect me anymore as it's no longer a case of "I've spent all my money in the first few days and now i'm back over the end of my overdraft with no money for the next 3 weeks" Every week I have £30 for groceries no matter whether it's payday or the last week of the month. 

astrocytic_kitten

Great news 😀

enthusiasticsaver

Well done on getting to the goal of a stress free financial status.  Feeling in control of your money means you can focus on other areas of your life and yes it does not come with same excitement maybe as when you had the challenge of repaying debt but you can set yourself new challenges like savings goals etc.  

Adjusting_the_balance

I’ve sat and read your entire diary other the course of the last few days and WOW!!! What an incredible journey you’ve been on - you really are truly inspirational. Can’t wait to follow the rest of your diary 

GeorgianaCavendish

Kakiste said:

Well done. I think you're completely correct, it's the difference between the anxiety of when you're still up to your eyeballs in debt to when you establish a proper budget and everything is on rails. 
I've noticed that other than updating my signature- when payday is doesn't really affect me anymore as it's no longer a case of "I've spent all my money in the first few days and now i'm back over the end of my overdraft with no money for the next 3 weeks" Every week I have £30 for groceries no matter whether it's payday or the last week of the month. 

@Kakiste ! You've really hit the nail on the head about the value of having a budget. I used to think I had to spend all my money as soon as I got paid because I couldn't trust myself to hold on to it (this is to blame for all the stockpiled toiletries!). I found budgeting really hard for a long time, and triggering in some ways, but I'm glad that I stuck with it because it's such an amazing feeling of freedom knowing that I've always got the money to cover my bills and planned spends no matter when they fall in the month.

enthusiasticsaver said:

Well done on getting to the goal of a stress free financial status.  Feeling in control of your money means you can focus on other areas of your life and yes it does not come with same excitement maybe as when you had the challenge of repaying debt but you can set yourself new challenges like savings goals etc.  

@enthusiasticsaver ! I do miss the excitement sometimes, but the other side of the coin was a lot of anxiety so on the whole I'm happier with this middle ground calmer approach Deposit saving will take over from debt repayment as my main goal once the MBNA is gone and I'm saving towards annual expenses like insurance, holidays and Christmas - the pots are very small at the moment but I've just transferred the Feb savings into them and I like seeing them grow  

astrocytic_kitten said:

Great news 😀

Thank you!  

Adjusting_the_balance said:

I’ve sat and read your entire diary other the course of the last few days and WOW!!! What an incredible journey you’ve been on - you really are truly inspirational. Can’t wait to follow the rest of your diary 

@Adjusting_the_balance - I can't believe you read the whole thing! I'm glad you enjoyed it and I hope that there are some useful things ahead  

GeorgianaCavendish

February 2021 Goals & Debt Totals

My sense of amazement from the beginning of this year continues - for the first time EVER I made it through January without a shedload of stress about overspending on Christmas and feeling screwed over by the early December pay day. I'm starting to trust my budgeting abilities a lot more (setting up different Monzo pots has really helped with this) and knowing that the money is already there for certain expenses is very liberating! 

I'm waiting (impatiently) for the LISA bonus to be applied to my account - that will be a massive motivational boost when it does arrive! - but for the next couple of months my focus is on the MBNA debt. I had some really good news at work - we will be getting a bonus in April. Although it is smaller compared to previous years, it means that my LISA / deposit saving plans won't be set back too much by focusing on MBNA from now until beginning of April. This has taken a weight off my mind because I kept thinking whether I should make a balance transfer or not, but now I can focus on MBNA 'guilt free' as it were. I have such odd feelings towards MBNA, it is definitely the debt I'm the most resentful about (I don't know if that even makes sense!) maybe because it is the card I've had the longest and I've cleared & reloaded the debt quite a few times. When it is finally gone, I will have a glass of champagne while I ceremonially cut up the card! :-:smiley:

I'm continuing with gradual increases to the emergency fund and saving into pots for insurance, Christmas 2021 and holidays (August 2022 but hopefully a couple of days away before then). I started these pots during my last pay cycle so I've just transferred the 2nd month's money - it feels great plotting it on my spreadsheet and knowing I'm going in the right direction. And actually having budgeted for these savings properly, so I didn't have to raid them to get through January. 

Debt £6,200.00

MBNA - £3,500.00
0% until April 2021 

Virgin - £2,700.00
0% until March 2022 
(I'm not sure what went wrong with my calculations last month, but I'm actually £50 ahead of where I thought I was ) 

Savings :
Holiday: 14% 
Total Deposit Savings: 12.85% 

another_casualty

You are doing amazingly well 😼👍
Your Mbna situation is very similar to what mine was . Mbna was my first and longest  credit card I ever had . I was so delighted to get rid in the end . It won't be that far away when you can put that all behind you .
keep going ...

enthusiasticsaver

It will be great to be finally rid of the MBNA card.  You have plenty of time then to repay the Virgin.  Good news on the bonus. 

 Hopefully the deposit pot will soon start to increase rapidly once the MBNA is paid off.  Is it maximum £4k a year you can put in? I think I would just stick with paying £200 a month to Virgin as that will clear it by March 22 and direct any spare to the LISA. 

astrocytic_kitten

You sound so much more relaxed and in control - glad you’re seeing the joy in having pots too!