Nobody's business

Nob0dy

Afterthought.

I mentioned doing some maths to obtain the result of 31 months for being debt free, that goes from the next month, so from the 1st of April 2017 we go to the 1st of November 2019.

I thought it was right to put it on record to give myself a definitive goal, it always works better if instead of saying "one day" you say "on this day", makes the result tangible, real.

In the short term I can look forward to have a positive Net Worth in 5 months, that would be on the 1st of August 2017, it will probably be earlier though, I should get updated figures for my pension in the new financial year.

Worth remembering that theoretically I am already in positive, Net Worth wise, however, I have decided not to include my bikes in the calculation.

Cherryfudge

I really wish my maths was as good as yours - I struggle to understand longer term projections though the calculation tools on the Net have helped there.

You seem to be doing a very thorough job and having worked it out in such detail complete with down-to-the-day target dates is a good way of helping yourself stay on track.

Thanks for the pensions explanation btw! That's something I need to go into. I've been focussing on paying off my mortgage early which is a useful thing to do but once the mortgage payments are freed up I can work on the pension - maybe I need to start earlier with that though.

You are probably wise not to take the bikes into account if you don't have to. They are your source of long-term well being really, and you have the summer and the open road ahead, who'd trade that in?!

Nob0dy

I have always loved maths and been a bit nerdy, so when stuff like this comes up I delve into it out of pure and simple curiosity.

If it can help you, I can post a tutorial on how to do basic calculations in Excel, you would be surprised how easy it is.

As for the pension, whereas I stand by MSE suggestions that you should first pay off debts and then deal with savings, that thought is based on the assumption that usually you pay a lot of interests on your loans and earn minimal percentages on savings, whereas my pension, due to pension scheme offered at work, offers an immediate 150% return, plus the standard annual interest, highly recommended to anyone that has the ability to do so.

I wouldn't say anything more on the topic of pensions as I know nothing about it, so I couldn't recommend one or another, it does sound like a good idea though to deal with a personal pension, state pension is just rubbish, unless you have different plans for early retirement

Cherryfudge

Thank you for the Excel offer. I must admit I avoid Excel . I started a course in it once for a long-ago job so maybe I ought to go back and relearn the stuff I've forgotten or misunderstood... I wonder though, what are the advantages over pen & paper? I live in fear of clicking on the wrong place and losing or mixing up everything! (I know that sounds like a complete computer-phobe, sorry. I'm actually pretty good with Word, used to earn my living by it, but that doesn't help me get over the whole Maths thing).

Oh dear - is this a can of worms to open up?

I do have a work pension and I need to find out more and see if I can make better use of it. I've got an ISA sitting partly filled but the interest rates are now so low that overpaying on the mortgage seems a much better option than saving, with pension coming after that. So I'm with you on the not saving more than an emergency fund right now. Your pension's sounding good, I fully understand you liking it!

Nob0dy

Do definitely check, if you are employed and they offer to match your deposits it's a nice boost, worth squeezing some money in.

I should probably put more in my pension, as it is won't return much once I actually retire, but it's a start. I could probably up the value sooner rather than later, as even without the matched deposit from my employer I should still benefit from the tax relief, which is still a nice instant 20% bonus, but that is definitely something that I don't want to deal with now, I will wait for the annual account to come through to start investigating.


Excel is useful for me mostly because this way I save it all in an electronic sheet and I don't have any paper hanging about, but if you're comfortable with pen and paper I would say whatever works for you

Cherryfudge

I've been thinking about Excel... I really ought to take the plunge, if only to reduce the paper mountain and be fairly sure that everything's added up as it should! However, life is due to be hectic for a while so I will put that one on the back burner. Thanks for the offer though!

I remember a colleague talking about overpaying into her pension so I'm sure it should be possible. I need to dig out the documents and have a read but again - not tonight. It's 10 past 11 and if I start reading now I may end up losing sleep. I've just been reading Historybuff's diary - she's closer to her pension than I am - and it's an inspiration, partly because she tackled her finances so well and partly because she warns the rest of us to do so sooner rather than later!

Nob0dy

I have not been around a bit, shortly after my last post I kind of lost faith in the project, a few unexpected expenses made it VERY difficult to stay on budget and I got to the point where I couldn't be arsed and I've let it go for bit.

Eventually I just realised that to get ahead of it I needed a new job, so I've got licensed for a secondary employment, which cost me quite a bit, but since October I'm working a second job which is giving me a nice little extra, then in November I re-started budgeting and now I've been going strong since.

The solution worked so well that after having to go court for speeding and spending a fortune (1100 in solicitor + 600 in fine) just a week ago, I actually have the solicitor all paid and the fine is covered by paying in instalments and I don't have any extra on credit cards or loans.

I'm just a bit annoyed that in between all the extra expenses my debts were 14,969.96 in March when I wrote the original post and grew to 15,570.06 in November, I had actually made it worse, at least I have done through investing in the future and a few months down the line my debits are down to 13,992.30, is paying off, but I'm working like a mule...

I think the problem with budgeting was that I was having too many expenses and I was failing to get on top of it, budgeting was just making me miserable, so I left it aside for a bit while I was securing extra income and now I'm on top of it I'm dealing with it a lot better. Funny enough, now that I'm earning more money I'm feeling more relaxed about the budgeting and I have started using the tools better to reduce my expenditures. Psychology is a funny beast, I was probably buying lots of unnecessary stuff just to make me feel better, with the result that it was making myself more miserable afterwards.

Anyway, enough of this, I'll come back one of these days to discuss the topic further.

Nob0dy

So, I mentioned that 2017 went a bit funny, after starting this post and budgeting things were not going really well, so I paused it all, it was really getting on my nerves and ignoring it for a bit while I was looking around at possible solutions made it somehow better; bit of a shame losing on all that budgeting, but now that I am in a better position I am finally able to deal with it without getting stressed.

2017 March/April
Around this point I was tempted to run my own pub, a local one became available and I applied for it, unfortunately I did not have a Personal Licence and it all end up in nothing, still, I decided to apply for a Licence and after passing the relevant examinations I am now a Personal Licence holder. Might never use it, but if the opportunity presents itself I am now ready for it.


2017 May/September
After the pub chance passed I realised that, due to my poor economy, maybe was sensible to focus on something with less hazards and more stable remuneration in order to give me a boost to clear my debts, knowing some people in the Security industry I went for an SIA Door Supervisor badge, the whole process was pricey and I had to add more money on the credit cards, but it proved to be worth afterwards.

Being summer I ended up also doing a fair amount of miles on the bike and again some petrol went on the card, I really need to budget some petrol money in winter to make up for the spikes in summer.

The last spike on the card was going on vacation, I was able to pay the travel cash, but I had no spending money and ended up cashing off the card.


October 2017 to January 2018
With the end of the year things finally started to look better, I got a second job using my newly acquired SIA badge and, while the pay isn't great, it makes a huge difference. Since October I've been earning a good 6/700 extra per month which I've been able to use for extra payments to my loan or to set aside for yearly bills like vehicle taxes, MOT, insurances and the lot. I'll get more into details at a later point.

I really don't have much free time and I'm not too happy about working a 70 hours week, but it's all for a purpose and it actually brought up some good ideas, so I might finally be debt free soon(-ish, predicted for Autumn 2019) and I might have a new career opening.

Had some huge extra expenses as I got summoned to court for a speeding fine and in between that and retaining a solicitor I ended up forking out £1700, I wasn't a happy bunny, but thanks to the extra work the solicitor is paid in full and I only have 2 fine instalments left at £200 each. Once this is out of the way I should have a bit of breather.


Current Position
The current position doesn't look dissimilar to what it looked like a year ago, but I'm proud of all the work done and the future looks bright.

Barclays Card: -197.34 @ 18.9%
Halifax: -1,005.00 @ 0.0%
Santander: -2,806.00 @ 0.0% (£3.00 fees monthly)
Barclays Loan: -5,161.30 @ 13.9%
Friend Loan: -5,000.00 @ 0.0%
Pension Fund: 16,408.16
Payment for sold bike: 950

Total Assets: 18,481.14
Total Debts: -14,169.64
Net Worth: 4,311.50

Barclays card: they have raised my limit to 9,500 and I haven't really used it since I cleared the balance in October. I am currently using it for minimal monthly payments just to keep the usage up, mostly I use it to pay fuel and it gets paid in full when the statement arrives.

Halifax card: 0% until the end of March, then I will have to look into a transfer offer.

Santander card: 0% until some time in 2020, I think it's July/August. They charge me £3.00 monthly for the card which isn't ideal, but unless I get a very good offer for a balance transfer with charges at less than 2% is not worth moving it around. I plan on clearing it by summer next year and I'm looking at around £50.00 in charges, moving the money with a 2% is 56.12.

Ideally, I will look next month at a balance transfer offer to move my Halifax balance and, if I get a nice offer, I could move the Santander balance as well to consolidate them into one account, if the limit offer by the new card isn't high enough I don't really care, things can stay as they are.

Barclays loan: no way to make this better, I've had a look around and I could get a loan to repay this and save a 2/3% in yearly interest, but it wouldn't really save me much so I won't be doing it, requesting a new loan and putting more records on my credit report isn't worth the £100 I could save. Repaying this rather than shopping around will look better.

Friend loan: mate of mine was impressed with the amount of effort I am putting in clearing my debts and last year in October gave me a £5,000 cheque to help me out, one of the problems with having a big loan was the monthly interest fees charged, last year I was being charged around 150£ a month, whereas after a few repayments and throwing in this money I am now being charged only 65 a month. The idea is to clear out the loan first and then pay back my mate.

Pension: self explanatory

Bike: I mention getting a fine for speeding, so I have decided to get rid of my faired bike as it's just too fast, the guy is paying me in instalments and is driving me insane, is the son of a mate, so I thought he'd be straight with me, instead is driving me nuts and not keeping up with the payments, when you budget every penny it's not the best thing...


Will do another post with future ideas, as this has become already too long.

Nob0dy

I've read all sorts on credit scores and their validity, some people take them too seriously, from what I've seen the numbers are completely irrelevant, so, out of curiosity I have decided to register for all free services and see how they compare me.

I am referring to Noddle, which use CallCredit scores, ClearScore which uses Equifax and the tool on offer here at MSE which uses Experian.

In February, which is the first month I had all 3 active, I could see the following
Callcredit, 595, Fair (3/5)
Equifax, 499, Excellent (5/5)
Experian, 926, Good (4/5)

I did mention that I switched my Credit Cards, when I received the update above I still had my main card with Barclays and the 2 zero interest for repayment with Halifax and Santander. The Halifax 0% offer was expiring at the end of March, so I shopped for another offer and got a fantastic deal from MBNA, 40 months at 0% on all balance transfers, the transfer fee was low so I moved both Halifax and Santander sto stop paying the £3 a month I was paying on Santander.

I guess in March they didn't get the update in time as I received the very same score as February:
Callcredit, 595, Fair (3/5)
Equifax, 499, Excellent (5/5)
Experian, 926, Good (4/5)

It's with April that all went funny, they received the update about my new card but they still haven't seen the closed account, with these results:
Callcredit, 596, Fair (3/5)
Equifax, 499, Excellent (5/5)
Experian, 878, Fair (3/5)

Callcredit actually went up a point, making no difference whatsoever.
Equifax didn't move an inch and Experian dropped like a brick.


Now, I'm not saying one is better than the other, because I don't think they are, the only important reason to register on one of these services is only to check your report and ensure all the information are correct, just a word to the wise, ignore those numbers, they can offer a rough idea about where you stand, but are far from definitive