Crunchy's Final Debt Free Diary!

crunch_time

Evening all

I was listening to a podcast today by an American female budgeting guru who said something that really resonated with me - Don't pay off your debt until you have built some wealth first. I've decided that once we know where we are with me with work for September and have paid off the last £2k of the holiday we are going to put some proportions on our budget and try this tack. I worked out the proportions today and felt miles better about the future and the direction we are heading in. We shall keep plodding on as we are until say September and then make some significant changes to the way we do things.

Crunchy x

Homegrown0

Ooh, I love a good podcast. Would you mind sharing which one?

I love to get a new perspective on things. What do you mean by proportions?

September is not too far away

crunch_time

Sure it was the goal digger podcast and the latest one with the budgetnista.

I guess I’m just getting mega tired of the slog and feeling like I’m putting my life on hold until this debt is paid off. It’s like I’m punishing myself for my past.

This lady was a teacher but lost her job and then her house in the 2008 recession in America. She had $200k of student loans to pay off but only made the last $50k payment as a lump sum once she had savings. She now has a 7 figure business she built from nothing which is inspirational as it is. But I massively enjoyed hearing another story other than the save an emergency fund and then pay down until it’s gone and then you can start saving for your future. I’m nearly 40 I want to be saving for my future now!!!

Yes homegrown September isn’t far away and we also have the dream of paying off the holiday before we go.

The proportions thing is cataegorising your budget and giving each category a percentage that you are comfortable with e.g 1% of our joint income is £51 so our holiday category is 10% of our salary monthly or £510. After our holiday we would pay off anything on our credit cards at this amount per month and then start saving for the next one. I saw it on Pinterest somewhere and started it before we planned to move two years ago now.

Most of our debt is now at 9% and the min payments are low enough to not effect our lifestyle. Husbands virgin one although massive is only £100 a month. We have to live our lives too.

Perhaps I can be a trailblazer for a new way of debt pay off - save your way out of debt - ha ha!!

Crunchy x

Willowtree222

There's always the argument of paying off debt before having savings, but I have always done it the other way round as well. I kept thinking it was wrong to do it that way, but it does make me feel better seeing money in savings. x

Homegrown0

All, that makes sense. That's an interesting way of looking at things actually - I think i'm going to have more of a look into this to see if it helps to put things into perspective.

Our debt payments are at 13% of our monthly income which i think is fine - definitely manageable for us but then we do try to chuck more at it where we can (while saving).

I'm another one that likes to save alongside debt being paid off. I need to have a buffer, but we're also trying to live a good life while paying off the debt so it's important to me that we can still do things and aren't too restricted.

Trailblaze away!!

crunch_time

Glad that there are some savers out there too! I feel I need to have a buffer now for peace of mind. We have £2k in savings but I don't want to touch that - ha ha! Last night, husband was saying that things are a little slow at work. Although Im not worried as such it did make me think that we don't have enough to cover our bills in savings. If he lost his job and I went full time my salary would only cover the mortgage and bills. Time to sort that out!!

Ive had a think and decided to pop the two payments of £1k for the holiday into a savings account for the time being - perhaps until I get paid in August or September. Then that money can be saved and I can pay it off. Sure, that might cost a few pounds in interest but that is nothing compared with peace of mind for having some money in the bank albeit temporary money.

I think for many years Ive been living in fear with money and instead I should be making it my friend.

Husband got paid today - about £200 more than I thought. His payslips are now online so I cant see why but I think he now has £100 extra a month thanks to the change in personal allowance amount and then the other £100 was expenses (for fuel). I saved the extra £100 into an account despite really wanting to pay off the overdraft a bit. I figured its better to have a bit of a buffer. This is me now - trailblazing! Ha ha!

So - no change on the scores on the doors but I feel wealthier already for holding onto some money for a change.

Plans for today include food shopping, returning library books and giving the house a bit of a tidy up ready for the weekend and the inevitable return to school on Monday for a 7.5 week term!!!!!

Crunch!!x

Willowtree222

Oh no, I forgot it was 1 7.5 week term. Ahhh!

I'm also aiming to put money in savings to act as a buffer as well. I need at least one months pay as a 'just in case'.
x

crunch_time

Evening all!

Busy busy day back at school. Not helped by the older car breaking down this morning and husband having to abandon it an walk home. garage collected it and its going to cost about £300 to fix it. We are asking them to investigate the state of the car to see if its worth it as its 11 years old, done nearly 140k miles and also has an oil leak. We couldn't survice long term without two cars so need to replace it really with a 5-7 year old one as a little run around and spending £3-5k. So if there is another £1000k worth of repairs its just not worth it.

sigh.

But the childcare bill was £50 less than I thought so I have slushed that money into the account with the other £100.

day by day, step by step eh!

(runs off sobbing...)

Crunchy x

crunch_time

Morning all

Car situation was better than expected. We paid £327 for a new part but there's nothing on the horizon so hopefully it will do us until the end of the year. I had to dip into the emergency fund to pay the bill but did some figuring out and have decided to start saving £200 a month into my ISA from now on. Im also going to secretly stash a similar amount of husbands money into an account for him. He earns nearly £70k a year and yet has no savings. Thats got to change.

I know what I am doing from September now - covering maternity leave 3 days a week until probably February next year but I shall look for jobs to start from January and see what comes up. Although I haven't had a contract yet.

I get paid next Wednesday and have decided to pay £1000 towards the holiday after all as I am happy with our medium-term savings plan mentioned above. It would be great to pay that off before we go - that was our original dream.

I'm working towards aligning our budget with the new proportions way of doing things but this will start after the holiday.

Other than that things are still ticking along - battling the food budgeting is a constant thing.

Crunchy x

Homegrown0

Glad the car situ wasn't too painful - there's always something unexpected that crops up, so i'm glad it wasn't as bad as you thought and that you had savings to cover it. It's a nice feeling.

I'll join you on the monthly struggle with food budgeting. Although for me, it's not just the food. It's popping into B&Ms and stocking up on toiletries, cleaning things and that all adds up. My food shop doesn't normally come to more than £60-70 per week. It's the random £60 in B&M on top of that (which i always forget/ can't forecast the cost) that scuppers me.

Anyway, if you find some miraculous solution, do share!