Crunchy's Final Debt Free Diary!

Willowtree222

Great that you are on it and are looking at the money and being frugal with your food.

How is the new job? Is it still as relaxed?
X

crunch_time

Nicnak wrote: »

Great that you are on it and are looking at the money and being frugal with your food.

How is the new job? Is it still as relaxed?
X

Yes, it is! So far so good but my mindset has changed so much over the last year. I feel like a different person. I don't worry about it anymore. I'm trusting my own abilities.

Crunchy x

crunch_time

Morning all!

Hair all done - bit more expensive than I thought but I won't have to have it coloured for at least 6 months.

It was also incredibly satisfying paying the payments on my own credit cards today. The Sains one was more than I anticipated - £120 and the interest estimated for next month is a whopping £68. The min payment for the HSBC one was only £87. I usually pay £100 to keep it nice and even but I paid £13 extra off the Sains one instead and plan to going forward as well.

My jeans have ripped so I am done to one pair now which is far from ideal so I have budgeted some money towards new clothes. I will go to H and M this week and use my vouchers - if I spend £50 I shall get it for £40 so it will be worth the trek.

Some money is set aside for before/after school club for the oldest child and then the rest has been popped into savings account for our holiday - £200!!

So we have managed to reduce the debt a little bit.

I stark realisation that this is going to take a while but we are ready for it and determined to achieve this goal.

Roll on husbands payday next Friday!!

Crunchy xx

Seasidegal58

All sounding good crunchy!:j

Have a good week.

crunch_time

Morning all

I have had the stark realisation that this whole debt pay off malarky might take us a while. Like more than a few years and I am feeling quite down about it today.

I've been figuring out how many days work a week I can really do that balances settling DD into school in September and paying back the debt with dealing with our other life goals. I think three is the magic number.

Although it would be wonderful to be debt free before 40 it would mean some significant sacrifice at today's calculations anyway and we have been playing the long game in debt pay off for too long now.

We will be remortgaging at the end of next year so it would be nice to get rid of one of my credit cards as well as reduce husbands Virgin one to under £5k. We want to reduce the term of our mortgage. Currently, it is £293,201 over 27 years at 1.73% meaning it won't be paid back until we are 65/64!! With £73k of interest.

Ideally, we want to shave 10 years off that. Our current monthly payment is £1135 and with a term of 17 years as of today we are looking at £1659 a month. £500 is a lot of money a month. I would need to be working full time to afford that. Maybe we just shave 5 years and then another 5 years and go at it gradually like that.

I know it sounds silly to be thinking that long term but life is getting on now and we should be playing a long game. Perhaps so we don't make any silly mistakes in the future. Like giving up my job on a whim to do something completely different.

Im really beating myself up now arent I.

Going to go and have another coffee and cheer myself up a bit!

Crunchy xx

Homegrown0

Try not to feel bad crunchy, you made the decision at the time with the best of intentions and it hasn't worked out how you thought but you picked yourself back off and came up with a solution.

In terms of your mortgage commitments, i know it's tempting to drop your mortgage term and up your payments but I'd be a bit worried about upping your monthly commitments by £500p/m unless you really had to. Would it be safer to keep the term as it is right now but commit to overpaying by £X per month (within your overpaying allowance) then when you come to remortgaging again in a few years, you can see how much you've managed to drop the term by? It means that if something comes up or your circumstances change, you won't be stuck struggling to pay a £1.6k mortgage every month?

Note: I am FAR from a mortgage expert, so just my thinking rather than advice! I'm sure someone else more experienced than me will give you more food for thought.

crunch_time

Just a quick update! Will come back properly tonight!

Husband got paid and the expenses we have been owed for since last year have finally been paid!!! Which means I have paid off the HSBC credit card finally and reducing the debt by £983.

There is an extra £200 ish as well which should go somewhere but will figure this out later. Planning to draw up our budget for February later.

Oh in other news it looks like I will be doing 4 days a week for the summer term and then full time for at least the Autumn maybe even the spring term next year. Very excited about this kick start to my career and also the money. 4 days is about £1600 a month and full time is £2000.

Hurrah!!

Crunchy xx

enthusiasticsaver

I think Homegrown makes a good point in that committing to a fairly significant increase in mortgage payments is perhaps a little premature until you have seen how to cope with the fairly ambitious targets you have already set. You are carrying a fair bit of credit card debt plus a car loan and booked an expensive holiday so you might find yourself a little stressed if you throw overpayments into the mortgage into the equation too. It is a good thing to do but I am not sure it is priority. I would make sure first that the holiday does not cause your debt to increase and that you get the unsecured debt down before your remortgage.

Just my thoughts though.

ohdearhowdidthathappen

I've probably misread, but I thought you said you were working 3 days a week to settle your child into school and then it changed to full time within a post?
It's lovely to have long term plans, but you have to enjoy the present too. As a previous poster has said, it might be worth just overpaying your mortgage rather than shortening the term officially. Our mortgage is £320k over 19 years, so similar-ish to yours. We're thinking (hoping) that at some point in the future (when the children are older) that we'll overpay then. At the moment, I'll be 60 by the time our mortgage is finished. Ouch. But we won't be overpaying it until the debt from our extension has gone

crunch_time

Morning all

We have a house full of the lurgy at the moment. Both children were off yesterday with fevers and coughs and I'm feeling pretty meh as well. So a nice quiet weekend planned.

Thanks for your comments homegrown, enthusiastic saver and oshdth! Most of the time I think I am just whittling on to myself so it's nice to have some feedback.

With the mortgage, don't worry, we are not planning to overpay anything just yet. I'm being responsible and looking up to see what is ahead. Our current mortgage deal doesn't run out until Nov 2020. I'm merely looking at the figures to see what the impact would be on our budget then so I can plan for it now. If I work full time all of the academic year 2019/2020 most if not all of our debt would have been paid off anyway.

Our credit card min payments total around £300 at the moment so if that is gone it is a long way to the £500 extra needed. If I am working full time as well by the time Nov 2020 swings around then there is no reason why we couldn't reduce our term as we will have built up a considerable savings cushion by then as well.

The £17k of the credit card debt we have built up in the last 18 months is due to a lot of unforeseen circumstances meaning it is more important than ever for husband and I to keep looking up ahead to what is in the future. Which is why I am not doing the classic Dave Ramsey thing of keeping a £1k emergency fund and chucking everything else at the debt.

With regards to the days a week I work I'm toying with ideas at the moment. I have the opportunity to do 4 days a week for a term and then one or two terms of full time and because of our financial situation and my being out of work for a year and feeling guilty for it I am toying up everything at the moment. Husband has the potential to be working away more this summer. Although we don't know if this is def going to happen its good to bear this in mind and would be a reason not to do full time. If I committed to full time for a few terms then at least there will be an end date and then I can return to part-time if it doesn't suit us. Luckily the head is very understanding and willing to be flexible. A much nice school than the last one.

So I'm just trying to be sensible about everything and get my head down and deal with it.

We have already paid £1k of the holiday off already. I haven't worked out our budget yet for February but it looks like we will have another £500 to add towards it. Once my emergency tax is lifted then I can add the extra £200 I meant to in January.

Right, I'm off to finish the ironing and make a cup of tea.

Crunchy xx