Small Steps Out Of Massive Debt!

astrocytic_kitten

You’re doing so well!!! Such a healthy financial position, well done you. That’s really brilliant.

On the clothes and books (and plants!) spending...I do allocate money for them in YNAB at the start of the month, I’ve just been consistently spending more than I’ve allocated for the past couple of months 🤦‍♀️ I’m still sticking to the same overall monthly spending figure as I was when paying off debt, but extra money has been going to nice stuff rather than debt or savings. That’s not really a problem though and I might stick to doing things that way and try to get rid of the spending guilt instead. 

I’m very much a person to be swayed by seeing how ultra frugal people on other diaries are being and then feeling guilty and wondering if I should rethink my own plan, even though I know from experience I need some treat money 😂

enthusiasticsaver

It looks like you are in a really good position and the savings pots are building nicely and great you managed to maximise your Lisa. Glad you are liking  Somerset 

GeorgianaCavendish

rugbymadfamily said:

Great news on MBNA!

I'm a fan of pots but also find there is a risk of temptation when the money is sat in my bank account! I've put my emergency fund and my extra pots amounts into premium bonds. Although they are not earning any interest, there is a chance that they could win something. Interest rates are so low, I'd rather take the chance to win something. PBs money can be accessed in 2-3 days if needed which is why I feel safe with it there as is easily accessible, but not so easy that I can spend it when I'm tempted 😉 

For me the temptation is even greater when the money is all mixed together - even though I have a spreadsheet with details of emergency fund and deposit savings. I've transferred the emergency fund over to Premium Bonds now, I feel better already with it safely out of sight - now I can use the savings account for the deposit savings

GeorgianaCavendish

astrocytic_kitten said:

You’re doing so well!!! Such a healthy financial position, well done you. That’s really brilliant.

On the clothes and books (and plants!) spending...I do allocate money for them in YNAB at the start of the month, I’ve just been consistently spending more than I’ve allocated for the past couple of months 🤦‍♀️ I’m still sticking to the same overall monthly spending figure as I was when paying off debt, but extra money has been going to nice stuff rather than debt or savings. That’s not really a problem though and I might stick to doing things that way and try to get rid of the spending guilt instead. 

I’m very much a person to be swayed by seeing how ultra frugal people on other diaries are being and then feeling guilty and wondering if I should rethink my own plan, even though I know from experience I need some treat money 😂

I know what you mean, and I don't think there is anything wrong with spending the 'extra' money on nice things rather than savings. I try to allocate it to something fun that I would still save up for (like haircuts) but I can see a time when I would allocate it to something more instantly gratifying. At the moment, I get my IPSOS I-SAY rewards in amazon vouchers and end up using those for books  

I get the same feeling when I read other diaries, but then if I restrict my spending too much I am more likely to end up going on a spending spree. If I'm more generous in allocating budget lines to some indulgences then I won't have those kind of blow outs. 

GeorgianaCavendish

May 2021 Goals & Debt Totals

First month of switching my focus from debt repayment to deposit saving. Looking forward to getting a big boost when the LISA bonus is applied at the end of May. 

I moved my emergency fund into Premium Bonds and already feel better with it being out of sight/separate from the deposit savings. Other than that, not much else happening on the financial front. 


Debt £2,000.00

Virgin - £2,000.00
0% until March 2022 
(8 more payments to go!)

Deposit Savings

Total Deposit Savings: 26.87% 

(I've decided to focus just on deposit savings here, I'm tweaking the figures for my one year pots so it makes more sense to me to concentrate on the fixed target of the deposit) 

FOMO_overspender

Just caught up on your diary and wow - you’ve done amazing! Huge congrats on getting rid of MBNA and super impressed with the switch to savings now debt is almost gone. I’ve really struggled walking the line between still saving and paying off debt, as the temptation was always to have no savings and pay off debt so supper impressed you’ve maxed out your Lisa whilst paying down debt! 🥳

Definitely given me some food for thought on where to keep Emergency Fund - might look in to something else as it is just sitting in Monzo at the moment. 

Good luck with your May goals. No doubt you’ll smash them!

enthusiasticsaver

Great progress on savings and the debt is coming down nicely. Well done. 

GeorgianaCavendish

FOMO_overspender said:

Just caught up on your diary and wow - you’ve done amazing! Huge congrats on getting rid of MBNA and super impressed with the switch to savings now debt is almost gone. I’ve really struggled walking the line between still saving and paying off debt, as the temptation was always to have no savings and pay off debt so supper impressed you’ve maxed out your Lisa whilst paying down debt! 🥳

Definitely given me some food for thought on where to keep Emergency Fund - might look in to something else as it is just sitting in Monzo at the moment. 

Good luck with your May goals. No doubt you’ll smash them!

Thank you!  
Re: emergency fund - I did have it sitting in Monzo for a while and in some ways I do like having the pots as it helps me with budgeting on pay day, but in the long term I get a bit antsy when I have a high balance there for too long. I also thought it would help my mindset to have the EF completely separate from deposit savings, so I didn't get tempted to add them together. 

GeorgianaCavendish

Just logged in to HMRC to do the WFH tax relief claim for 2021/2022 - looks like the same deal as last year where tax relief is given for the whole year. 

GeorgianaCavendish

Weird thing with MBNA. I closed the account back in March, but it is still showing as active on my credit report with zero balance and a £500 credit limit. I called them and they said this is because after closing an account they allow customers access to their online banking and statements for 4 months, so basically the account will be open-but-not-really-open until August. Such a weird way of doing things. At least I know what is going on though!