Reducing Debt - being accountable and taking responsibility

DrSpendLittle

enthusiasticsaver wrote: »

It is always good to have a plan and yes there is satisfaction in budgeting well and sticking to it. We have loosely followed Dave Ramsey's 7 baby steps although I had never heard of him when we started our road to financial independence so think his advice is spot on. Overpaying into pensions, saving emergency funds and for large items, avoiding debt, saving for uni fees for our DDs and overpaying our mortgage are the reason we are able to retire early along with some generous gifts from my mum. We are paying these on to our DDs and have a great deal of satisfaction from that far more than buying things would give us. Holidays of course and experiences, nights out with friends etc we enjoy within our budget.

Exactly 2 months now left of my working life so am very excited. This year has been harder than I thought it would be as my DH retired last year so it has been tough working (albeit part time) when he has been able to choose what he wants to do. I thought it best to give him a year to wind down though before I go as he worked long hours and travelled lots for his job so easing into retirement gradually seemed the best way. We are very lucky to have knocked 8 years off our retirement dates by following Dave Ramsey's advice.

All sounds great and I will certainly follow your lead, especially letting DF have a good year of retirement before I retire. I like that idea and I think it will be really applicable to him. And me! I may do some private tutoring when I retire to pass the time. Mind you, I've 20 years left at the game yet, so I may well be ready to leave it for good by that time!

I'm so glad I came across Dave Ramsey - everything he says chimes a chord with me. It seems to have worked for you and that is inspiring to read. I hope you're going to stick around on theses boards when you retire as your advice & experience is really helpful.

Enjoy those final few months of work!

DrSpendLittle

Had a busy morning in the office - its been one of those mornings of catching up rather than making any real progress on a defined task. Still, it clears my desk ready for cracking on with defined tasks this afternoon and for the rest of the week.

I need to collect my recent Xmas pressie purchases on the way home from work. Got them delivered to a nearby Waitr0se for pick up - one of the many things I like about buying through JL. I also need to pick up some eggs as we forgot them yesterday, so not exactly a NSD but pretty close!

I've been wondering whether to just clear CC1 off in full and then make a start on chipping away at CC2. That would leave me with just one debt. I know I need to reduce my credit utilisation on CC2 (credit limit is £10,450) but I'm so tempted just to clear CC1 and be done with it. Its only £380 to get to zero. Undecided. What would you do? Dave Ramsey would clear it.

DSL:j

enthusiasticsaver

Both CCs are at 0% aren't they? Dave Ramsey would clear the smallest and snowball to CC2 so yes that would mean tackling CC1 first. I think the only reason you thought tackle the larger one first is to decrease the credit utilisation percentage to help with your AIP. Personally I feel that you are in control of your borrowing and bringing the overall debt down reasonably quickly so if clearing the smaller one first would help you feel better then I would do that. I do not think that will go against you when it comes to mortgage scoring as the broker will look at overall indebtedness. That will give you just one CC to repay apart from car finance.

The only thing I would say is moving house is expensive so alongside clearing the debt ideally you would be saving for fees, moving expenses. Is it a priority to move in the early part of next year or can it be left until the middle to end when hopefully CC2 and the car loan will both almost be repaid?

DrSpendLittle

enthusiasticsaver wrote: »

Both CCs are at 0% aren't they? Dave Ramsey would clear the smallest and snowball to CC2 so yes that would mean tackling CC1 first. I think the only reason you thought tackle the larger one first is to decrease the credit utilisation percentage to help with your AIP. Personally I feel that you are in control of your borrowing and bringing the overall debt down reasonably quickly so if clearing the smaller one first would help you feel better then I would do that. I do not think that will go against you when it comes to mortgage scoring as the broker will look at overall indebtedness. That will give you just one CC to repay apart from car finance.

The only thing I would say is moving house is expensive so alongside clearing the debt ideally you would be saving for fees, moving expenses. Is it a priority to move in the early part of next year or can it be left until the middle to end when hopefully CC2 and the car loan will both almost be repaid?

Thanks for your advice - yes both CCs are 0% and my broker was quite positive re: indebtedness overall - didn't seem bothered by utilisation. So, I've decided to do just that and clear CC1 so I'm just left with CC2!! Yay! It makes me feel like I'm making progress and helps overcome the frustration of a £450 dentist bill getting in the way this month. Happy with that!

Re: moving costs, we fortunately have a very good chunk of money set aside (DF family money) to cover stamp duty, fees, moving expenses and new furniture. This means we can use the entirety of our equity as a deposit for the new place, thus reducing LTV and hopefully getting a better rate. This is why I am able to really focus on paying down my debt and using half my income to do so. If we didn't have DFs family money, things would be completely different and I wouldn't be able to make the debt paying gains I am. Hence my determination to clear it so quick!

DrSpendLittle

I'm having a quiet one today. I'm working at home and I don't envisage any spends. We've leftover roast ham to use for dinner and a couple of dishes in mind. That'll be three meals the ham has done us - it was a half price free range bargain in Waitr0se, so I'm even more MSE chuffed.

My budget is going to be tight for the remaining 6 days of October. I've £25 left in my fuel budget (but I put £15 of fuel in the car yesterday) which should be more than plenty and I'll let it roll over to next month where I've budgeted slightly less.

I've £25 left in my food budget but to be honest, we have plenty of food in the cupboards and freezer and if I had my way, we wouldn't need to do another shop. But DF may want to mix up the menu and do a wee shop himself. Fair enough.

I've £10 in my purse, which has no specific job or purpose. I'm hoping it'll stay there for the rest of the week, but we've friends visiting this weekend so it may get spent in the pub. We also owe the window cleaner £15 and I always forget to include him in my budget!

Other than that, the only thing to report is that I temporarily reassigned the £610 I'd put aside for next month's new boiler to spend this month. I've spent:
£225 in the dentist (half the treatment costs of my onlay)
£156.79 on Xmas pressies (only 2 people left to buy for, took advantage of 20% off and double points weekend at JL)
£261.22 reducing CC1 (will be CLEARED COMPLETELY on 1st November )

I wanted the money to have a use rather than just sitting in my bank account until mid November. Given I had to borrow £225 from it anyway for my dental bill, I thought I'd make use of the remaining funds too. I'm so impatient its terrible! However, all the spends had been budgeted for (I've already done my YNAB budgets up to February 1st 2018) and so I was just spending it this month rather than next. The £610 will be replaced on 1st November from my salary.

Right, best get back to reading this book!

Have a wonderful Debt Slaying Tuesday!

DSL :j

DrSpendLittle

Morning World,

Yesterday was a NSD and I'm hoping today will be one too. I've a meal plan for tonights and tomorrows dinners - we have everything in for both - and I plan to work at home both days. Hoping DF makes some more bread soon as we're running low!

I have the 6 days before payday jitters! I want the end of the month to come so I can restart my budget and make my credit card overpayments. It looks like I'm not going to be overpaying by much in November - I think my credit card repayment total is only £358. Sigh. Stupid new tooth. And car insurance renewal. And new boiler. And car service. And xmas. This time of year is cash flow terror.

Still, I will be completely clearing CC1 on November 1st, so that is something to celebrate! :T

Right, back to work - I need to finish reading this book today!

DSL

glass_half_full

Hi DrSpendLittle,
According to your signature you are averaging £1200 ish per month paying off the debt so far, that's impressive progress. Its great that you are clearing CC1. What will you do with it? Keep it or cut it up?

DrSpendLittle

glass_half_full wrote: »

Hi DrSpendLittle,
According to your signature you are averaging £1200 ish per month paying off the debt so far, that's impressive progress. Its great that you are clearing CC1. What will you do with it? Keep it or cut it up?

Thanks! I think I'll keep CC1 until I get a new mortgage and complete. I don't want to suddenly reduce credit as it will increase my overall effective credit utilisation. I will most definitely have a card cutting up ceremony when the time comes!

Funnily enough, I don't feel I'm skimping and saving - I think thats because I decided not to cut back on groceries. The £250 I spend per month is just my half. Some may say :eek: but DF and I love our food and cooking so I think keeping that little luxury is helping me in not feeling too hard done by.

glass_half_full

Oh I see, that makes sense to keep it open then. I cut mine up as I had a problematic relationship with them at the time
£250 on groceries seems fine to me and it is better to be enjoying cooking at home and saving in other areas. As you say it is important not to feel too straightened or it's not sustainable, or fun.

DrSpendLittle

I completely forgot to share this news! :rotfl:

About two weeks ago, DF and I got onto talking over dinner about bills and moving and finances and stuff. I think it was the day we had received the decision in principle from our mortgage broker and were both reassured that we could borrow what we wanted (and more!) and that my debts didn't (in theory) affect this too much. We were both in a relaxed frame of mind (I blame the prosecco!). Well, basically, one thing led to another and he asked and I answered with 'around 8K'. He was incredibly sweet about it. I told him I was in control of it and that I was repaying £1000 per month, which was why I was budgeting etc. He was curious as to what I had spent it on and I remember saying 'death by a thousand cuts' and 'frittering', as well as the usual student debt, living beyond means etc.

Anyway, I feel some relief obviously but, funnily enough, I've quite miss my secretive debt slaying operation. I feel like some of the pressure to repay asap has reduced, which I'm not 100% comfortable with. I was using the 'lets try and pay off as much as possible before telling DF about my precise debt levels' as motivation to get it sorted asap.

On the other hand, DF now knows why I am being frugal and is way more accepting of my 'I can't afford it this month' mentality. I know he'll be proud of me when I'm debt free and reveal that, actually, on July 28th 2017, I was precisely £11,862.34 in CC and OD debt. That is my new motivation! He's going to go spare next July when I tell him!! :rotfl: