Start of my journey

JonW1984

Hi all and thanks for reading. Sorry it's quite a long first post!

I find it inspiring to read the debt diaries that others put up and I thought I would do one to try and stay on track.

I have struggled with debt for most of the last decade. After leaving uni I did some travelling and built up a £1,500.00 overdraft. At the time it was 0% and I was still living with my parents so I cleared that debt quickly and without too much effort. I then went to work for a credit card company and quickly fell into the trap of using free credit and paying the minimum amounts. Again, this didn't cause much trouble on a day to day basis and I think I naively thought that using credit cards was ok.

I then started a post-graduate course over a 2 year period. That is where my troubles really started because I paid the £11,000 course fees using a combination of a personal loan and 0% credit cards. I was also renting privately with my girlfriend and I quickly built up an overdraft, mainly through overspending on day to day items and with trips to the pub.

My aim all along was to enter the legal profession but I struggled to get a job in that sector. Eventually I was offered an opportunity to join a firm with a view to training as a solicitor - the only catch was that it was minimum wage!

Nevertheless I jumped at the chance and went from a £16k job to earning around £11k. I took on extra jobs as a nightclub doorman and building site security guard. For a period of 6 months I didn't have a day off and on weekends I worked two 12 hour shifts plus 5 hour stints working in the evenings. Shattered is an understatement...

Eventually I managed to pay off all of my debts and I had also secured a very small payrise to about £14k. At this time my girlfriend and I got married and had a daughter.

We were fortunate enough (thanks to a £5,000 gift) to buy our own "doer-upper" home with a 95% mortgage. The house needed lots of work and I spent without checking what I could afford and soon built up an overdraft of around £2,000 although my wages remained low. I had also stopped the part time work by this point.

Within a year or two I finally qualified as a solicitor and immediately found a new job with a payrise from £16k to £22k. I continued to spend, wrapping up my overdraft onto a credit card with repeated 0% cash transfer offers. Before long I had about £8,000 on the credit card plus a further overdraft and the minimum payments were becoming substantial.

I took a consolidation loan to pay off the credit card and overdraft and felt much better knowing that provided I made the monthly payments I would eventually clear it all.

But that wasn't the end!! I carried on spending recklessly and without keeping track of my budget nor even checking my bank balance! Often the only way I knew where I was up to was when my bank texted me to say that I had entered an unarranged overdraft!

I kept extending the overdraft until about 10 weeks ago where I realised that my overdraft was up to £3,500 just before payday. I immediately decided to look for a better paid job and was offered a role with a salary of £36,000 (plus £4k car allowance) although the role involved lots of travel. I spoke to my current employers and (to my surprise) they offered a payrise to £31,000 (about £400 per month more).

So that's where I am now. I hope that I have finally had my "lightbulb" moment. For me it was seeing that even though I was a solicitor earning good money I had nothing to show for it. I realised (and have realised it further having written this down) that over the last decade I have had a pattern of continuously running up debt before consolidating it and ignoring the problem. I am genuinely worried that if I do nothing now I will spend the rest of my 30s in debt.

My wife has a good income and has about £13,000 in savings. I have only told her that I have about £2,000 on a credit card and I want to clear my debts as soon as I can to get out of this mess. She is careful with money and we have agreed to have a lean few months to see what we can save. My number one priority is to keep on top of my spending and prevent the overdraft getting any worse.

So, to the planned budget. I have put down the bills / costs that I pay myself. My wife tends to pay for things like council tax, electric and gas.

Adults - 2
Children - 1 (4 year old)
Dog

Monthly income

Wages - £1,881.57

Monthly expenditure

Mortgage - £600.00
Water - £41.94
Overdraft interest - £33.65
Loan repayments - £234.57
Car tax - £16.62
Car insurance - £30.94
Phone - £8.71
Broadband - £21.50
Petrol - £88
Food - £140 (circa £35.00 per week)
Social / other - £60.00

Total expenditure - £1275.93

Available to repay debt - £605.64 per month

Debts

Overdraft (as of 18/06/18 - day before payday) - £3,522.51
Loan - £12,666.78 (54 months to run)


My goal is to clear the overdraft entirely by 18 December 2018. That will then free up an additional £33.00 or thereabouts which I am currently paying in interest leaving me with £638.64 to pay towards debts.

By 18 December I will have made a further 7 loan payments and the balance will be around £11,024.00.

If I can then continue saving £638.64 over the next 12 months I will have a lump sum of £7,663.68 against a loan balance of £8,209.95. Hopefully the settlement figure on the loan will come out a bit lower in any event but we'll see.

My debt free date is therefore hopefully going to be 01 December 2019 or 17 months. If I can simply pay off the overdraft and establish some healthy financial habits over the next 6 months though I will be overjoyed!!

I have established a routine over the last 2 weeks of updating my budget spreadsheet every morning with details of my spends. I am also withdrawing cash only for the week and leaving the card at home. I plan to update this diary perhaps every few days, for my own motivation if nothing else.

If anyone has any tips / comments to make please feel free to add.

onedaysomeday

Good luck on your Debt Free journey

Silver_Queen

I am so glad you got your pay rise! I was gasping when I saw how much they were paying you as a NQ. I'm currently in my second year of TC and I'm on £25k, and I still think that I'm being underpaid.

I think the easiest thing would be if you filled in a Statement of Affairs (I think the link is at the top of this forum) which will remind you of little things you might not have thought of in your budget outlined above.

Good luck!

JonW1984

Ah thanks, I looked for the soa but couldn't find it.

A few people had commented on my Nq salary as being low but I think coming from 16k it felt great! Feeling much happier after my payrise especially as my billable figures were smashing my targets but none of the partners seemed to mention it!

I think law does have a problem with using young lawyers as cheap labour. Unfortunately it's an oversubscribed profession and where I am firms have a ready supply of new graduates willing to work for buttons.

Good luck in your second year, not long to go til admission!

JonW1984

Well it’s been almost a week since I last posted. Been very busy with work. The last week has been a revelation in terms of showing me how much I was previously spending on unnecessary things!

One of the biggest areas was alcohol (sounds bad!) but we would go to the pub maybe 2/3 times a week. Considering that two drinks each would cost just under £17.00 that has been a huge saving. Also I did a proper food inventory before putting together our meal plan for the week. By using up things that were already in the house I managed to spend just £27.00 at Aldi and had 7 days’ meals planned including breakfasts and lunches. Hopefully I can repeat that this weekend. The target for grocery shopping is a lean £30.00 but we don’t tend to eat that much meat so I’m confident we can do that.

Going to make some home-made gnocchi this week which I haven’t done for years. It’s only flour, potatoes and eggs but with a simple tomato sauce it’s a delicious and cheap meal.

If I have got my figures right my petrol allowance will last for the remainder of this month. I travel for work quite frequently too and am reimbursed 45p per mile but I haven’t had any trips this month but next month I might have some which essentially brings a profit of about 30p per mile.

Entertainment has been cheap too. My wife was working last weekend so DD and I went for a bike ride and just played outside and managed to spend nothing whilst having plenty of exercise. We baked some cookies as well using store cupboard supplies and she’s been very excited to take one to school in her lunchbox every day. Thinking of baking scones or a fruit loaf next weekend to use up some dried apricots and sultanas that have been in the cupboard for a while.

Including this month’s loan repayment I am still on track to pay £850.63 off the debt this month which will bring the total down from £16,189.29 to £15,338.66. I have been doing every survey offered by PA and Panelbase and since 23 June have a total of £21.00 owing (only £11 currently cleared). I’m optimistic that the total could maybe go to around £40 by 18 July and the surveys offered seem to be pretty decent.

I just need to get through this month and achieve my target. I think that will give me the confidence to know that I can do this. Thinking ahead I want to clear the overdraft my December and then start thinking about setting aside money to pay off things like car insurance in full going forward as this will save even more.

So, in summary a good start but I just need to reach payday and achieve my budget.

JonW1984

Well I survived the weekend without overspending. The "big" shop was just £23.00 this week although we're still using up a few store cupboard essentials. With the hot weather no one has been eating much which helps.

Made a couple of fruit loaves using up some dried fruit that had been languishing for a while. Makes a cheap breakfast and lunchtime treat for DD's lunchbox.

My wife's on nights for the next few days so I'm very unlikely to have to spend a penny. I was recently diagnosed with gout following a flare up that lasted about a month so I'm planning to be off alcohol for at least a few months although I might have the odd one here and there.

Surveys seem to have slowed down a little. Prolific Academic were sending me loads but then tailed off. Panelbase on the other hand have sent me quite a few and I'm now up to £22.30 between both sites, not bad since 23 June and it's basically paid for my broadband bill this month.

Looking forward to tomorrow as that is the mid-way point between paydays. Still feeling confident that I can hit my target this month in which case I will have paid a massive £859.69 off my debt, woo!

JonW1984

Up to £25 on the surveys and very pleased with it.

I was thinking of selling some items bit in all honesty I don't think there is much to sell! I have an old Animal watch which has some sentimental value but is probably only worth about £25. I think I'll keep it for now and see how I end up at month end.

I need to spend some time this evening reviewing the other survey sites as I'm convinced that each site must have macros to limit the amount of surveys you get invited to. PA started as 3/4 per day but that has tailed off.

I closed by old barclaycard account yesterday although it was a struggle to get them to do it. Had to ask three times and they kept trying to convince me to stay. I asked them to close it last year and they said they did but the account stayed open. The cynic in me suspects this is part of their retention strategy....

I still have a nationwide credit card open (zero balance) but I want to close it. I know it probably is sensible to leave one for emergencies but I would feel happier knowing that it isn't there. We're also in the fortunate position to have £13k saved so can hopefully cope with any unforseen costs.

Making homemade pizza tonight which will be a total cost of about 30p each

FiscalPickle

Just had a read of your diary, well done on your LBM and your progress so far. With your profession, do you find it hard to 'keep up appearances', as it were? In my line of work it's not a problem, but as I work with a lot of well-paid professionals with nice cars and their own homes I do feel like I've short-changed myself sometimes. I try not to compare though, as I don't know their real situations. Good luck on the rest of your DF journey :T

JonW1984

Hi FiscalPickle, I think there's definitely a lot of pressure to keep up appearances and people sometimes comment that I must be doing really well because of my job.

I go to a networking group comprising of professional types and they all have swanky cars and the latest iphone. Personally I'm not too bothered by that and drive an older car (paid for in full) and buy my suits from Matalan etc.

Over the years I've done various cases for some of them them and I was amazed to see how despite appearances, they were seriously struggling!! The house on interest-only / range rover on lease seems far less impressive when you realise that!

Starmummy

Hi Jon,
Good luck with it all. I feel for you on the expectations of your job, A lot of 'well paid jobs' pay peanuts until you have a certain amount of experience and qualification. I'm the same. it took me ten years in my field to get a decent salary.
The keeping up appearances thing always amuses me.

I work in a field where I have to look the part but it can be done craftily. We only own one car that's 12 years old, I can use the excuse of walking for heath and environment reasons...My partner tends to park it hidden away in a corner as he works in an industry and with a salary where everyone expects him to drive a new Mercedes or BMW. He is quite open though that he would rather a very comfortable pension than pay such a chunk of his salary on something that is completely worthless pretty quickly. It makes no financial sense to pay £50k for something that you keep for just 3-5 years. it's throwing away £1k a month.
We work on a £1500 budget for car purchases, on the premise that if it lasts just over a year owning a car is cheaper than a bus fair. Yes it may mean that you spend 1500 on a dud, but you are far less likely to have 4 1500 duds than one 6000 dud. Our last two cars have lasted 3 years and have run beautifully. I'd much rather spend the extra money on experiences and travel. The novelty of a new car soon wears off.

JonW1984

Hi Starmummy, I think it's crazy how much people are willing to throw away on depreciation. I appreciate some older cars can be unreliable but most modern cars will easily go for several years with minimal maintenance, even better if you can do some basic servicing yourself. I used to have a little Citroen that I bought for £600. I used it for work for about 2 years and in that time I received far more back in expenses than I actually paid for it.

Happy it's Friday, OH is off this weekend so looking forward to some good family time. DD has a friend's birthday party on Sunday but nothing else really planned so hopefully will be a cheap one. This weekend's baking is likely to be a banana bread to use some ripe bananas. The fruit loaf went down a treat with everyone (including the dog...)

I do need to rebuild part of our front wall though part of the capping stones have come loose and 3 or 4 of the bricks underneath are also looking a bit loose. Hopefully I can rebed them in some mortar before the whole lot comes down. The only trouble with having an older house is the constant maintenance! Luckily I still have several bags of sand and cement in the garage so will try and give that a go on Sunday morning.

2 weeks since I started on here - 12 days til payday. Still on track but I only have around £10 of my self imposed "social" budget. On the plus side I have £60.00 allocated for food and £27 due from PA and Panelbase.

Hope all enjoying the sun still!