Tidying up the mess

enthusiasticsaver

I actually think taking a 2 week break is essential and you are so focused even if you don't take your full wage for July and August the debt will still come down albeit not by as much and I think focusing on Santander is the way to go. Just think in 6 months time your situation will be so different. Hope you manage to get the work keep coming in.

in_need_of_direction

I’m in awe. I truly wish I was brave enough to take even a full week off

BabyStepper

Thank you everyone for the encouragement. :A It really helps.

The cashback for our car insurance has just become available - that's a nice bonus I had forgotten all about. It's also the first time I've used cashback so I'll definitely be using it again for big purchases.

I'm looking forward to finding out about this potential new work next week - getting quite excited just thinking about it. Very different from my usual type of work, exactly what I need and have aspired to for some time. Fingers crossed.

My £250 got paid so the emergency fund has been topped up to £450 and car fund got £50. It may be small but at least it's a start.

Did some projections and my wage will definitely be back to normal by the end of September. In the meantime, I'll do the best I can and you guys are right, I'll enjoy the quieter time to relax and recharge my batteries.

Debt free is in sight, start of next year, but I find it very hard to imagine how life will be once we're there. I've never been in that position all of my adult life. I've had lots of ideas how to manage our income once that day comes but no decisions made yet. It might depend on how the car is running, if we need a new one soon, if our emergency fund is still in existence (!) and what life is throwing at us. (There may be a big family wedding next year that will cost a fortune - or it's being hinted at anyway.) Who knows. I guess one step at a time is the way forward.

So for now, I'm trying very hard to stick to the budget, that's all I can do for today. Things are looking good though.

Moneywhizz

HI Babystepper. You sound very relaxed and happy with the way things are going. Such a difference from a few months ago and all down to your hard work and determination to get this debt paid off. You have managed all the different things that have cropped up along the way and still are on target for paying off your debt. Life will be so much better when you have all that extra money each month and the freedom to decide what you will do with it. Sounds like your work is going well, fingers crossed that the new work comes off. Enjoy your holiday and time off to recharge your batteries.

BabyStepper

It does feel very different Moneywhizz, the anxiety I was suffering from has pretty much gone, thank goodness. I'm still listening to Dave Ramsey all the time for inspiration and obviously reading on here, and I believe we're going to do it, however long it takes. I'm less impatient now I realise money management is for life and not just for debt repayment times. There's peace of mind in knowing cash is not being wasted aimlessly and that even if I stray from the plan a little, at least there is a plan and I can get back on it.

Good times!

enthusiasticsaver

Good that the anxiety has gone and hopefully in less than a month more than 50% of the debt will be gone.

You are right in that these budgeting and financial planning skills will help you in your money management for life not just while clearing the debt.

BabyStepper

I just got my 1 year anniversary badge from the mse badger...woo hoo! :T Happy mse birthday to me! :bdaycake:

I thought I'd try to list the lessons I've learned in the last year. So much has happened, I want to keep track and make sure I don't go back to my old ways. So here it is, the 10 most important things I've learned so far.

Lesson 1 Learn to add up your debt
So I know this sounds daft, but when I first arrived here, without a clue and with only having watched a couple of Dave R youtube videos, I didn't really understand what I should be paying off quickly and what could wait. Overwhelmed much? Oh yes. At one point I had my mortgage counted in as debt to be paid off asap and my debt total was £203k. :eek::eek::eek:
I have since learned that overdrafts are the first priority, unsecured debt on credit cards and loans come next, mortgages are debt but can wait until everything else is sorted and student loans barely count at all. By working this out, the amount of debt I was trying to pay off went from £55,943.06 to £203k and settled at £21,228.07. Score straight away. I had a realistic idea of what I was dealing with.

Lesson 2 Take the advice I have benefited hugely from the very wise, very experienced mse-ers on here. (That's all of you, btw.) I needed help with this, I'm not very good at asking for it, but the help came anyway. Now this is the first place I come and ask a money-related question. And I take the advice.

Lesson 3 Stop the expensive bad habits Me and OH both stopped smoking back at the beginning. It was not without difficulties but we got through it and we're glad we did. This will not only help us in the long-term but It helped massively with the next lesson...

Lesson 4 Make a budget and stick to it We all know how hard this is, right? It's not just those monthly expenses but yearly ones too and all those things you forget about need to be added in as you remember, even if it's months down the road. I changed to the cheapest suppliers, the best deals I could find, the cheapest supermarket, and just kept going until the budget worked. And yes, I feel a little smug about that sometimes. (:o)

Lesson 5 Keep an emergency fund I hated this when I first heard of it. Why have cash in the bank as savings when it could have made a dent in the first debt? How frustrating. However, it is such a basic principle that to pay off credit cards I needed to STOP USING THEM. So where else could we get the cash to replace the oven when it broke or visit OH's aunt when she became unwell or anything else that came up? Having an emergency fund of some sort was one of the most important things in changing my mindset about money - I didn't need to spend everything I had straight away and my emergency fund proved it to me every single day. Cash amount: £800 Actual value? Priceless. :beer:

Lesson 6 Be patient and consistent It took 3 whole months to save up my £800 emergency fund back at the start - torture in the worst way. We had so little income that I actually thought we would never achieve it. But we did. And how great was that? Learning some patience makes me feel a bit more grown up. Not a bad thing at my age, really. Also helpful later on in the debtfree journey.

Lesson 7 Cashflow everything We had to do up our bathroom at one point and sold stuff to raise the cash. This would never have crossed my mind before. But once we were committed to not taking on any more debt, then this needed to be applied in every single situation. I wouldn't say I have fully learned this (I almost just spent a small fortune on a car, even if it was being done frugally) but I'm hoping there is no need for any other big expenses before we have saved the cash to buy outright. Work in progress, this one.

Lesson 8 Martin vs. Dave After all the ground work was laid, we had our emergency fund, our budget was in place and I was earning a reasonable income again, we needed a plan to pay off the debt. Martin says highest interest first, Dave says smallest to largest, what to do? I have changed my plan so many times it makes my head spin. At the moment I go with how I feel on the day the overpayments are due. If I need a quick win for motivation I pay off a small debt in full. If I'm worrying about a massive debt then I pay something towards it. Tweaking and changing has not really mattered much to me as long as the debt goes down. I now quite enjoy re-doing my plan, it's practically become a hobby.

Lesson 9 Use a visual aid I LOVE our thermometer!! It's a very poorly drawn thing stuck inside the wardrobe door but I LOVE colouring it in and I LOVE looking at it and I LOVE dreaming about the day it is fully coloured in!! I would totally recommend this.

Lesson 10 Try not to stress so much I wouldn't say this is a lesson I've learned, more that I wish I could go back and reassure myself that it would all be ok. Because it now actually is ok. We have debt but we know what we're doing to get rid of it. The plan works. We got our new mortgage deal. The sky did not fall in. Just because I am more aware of the problem does not mean I should worry more. Really wish I had had more faith in myself. However, I know for the future that I can manage this.

Well done if you read all that. I'm off for a piece of birthday cake and a cuppa. :coffee:

enthusiasticsaver

All excellent advice. Enjoy your MSE birthday cake

DancingInTheRain

What a wonderful post, happy anniversary x

[Deleted User]

:T :T :T Fab post Babystepper - you're doing so well, and it's really inspiring