Learning to live within my means

SandyShores

Just popping in to say well done.  Your debt free date is just over the horizon.

We got rid of the same amount of debt in around the same time as you last year, and this year I was able to cash in a pension early so it gave us a 5% deposit and we bought a house.  We're a bit late to the party - should have done this all years ago - but I just wanted to say really well done.  Its a lovely feeling on that homeward stretch

astrocytic_kitten

Thanks @rugbymadfamily and @SandyShores! It still doesn’t feel quite real, it’s like 5 minutes ago I was deep in the slog of having paid off loads but still with loads to go and all of a sudden the end is in sight.

First priority once debt free is to reach a 6 month emergency fund. Then planning to overpay mortgage / build to 12 month emergency fund / increase pension in parallel. I opened a regular saver the other week and was shocked at how little information they asked for, realised that I’m so used to applying for credit cards / loans to shuffle debt around pre-LBM that I was expecting those sorts of questions 🤦‍♀️

enthusiasticsaver

I saw you  post on another diary and thought I would have a quick peruse of yours so have just whizzed through it and thought I would congratulate you on getting the debt so low whilst also saving for emergencies etc.  Also to say that overpaying on  your pension is best done asap and can be done very gradually like just increase by 1% or 2% a year depending on what you are paying now.  Looking forward to seeing that loan finally gone next year. 

astrocytic_kitten

Thanks @enthusiasticsaver, to be honest pensions scare me as getting to where I need to be seems so overwhelming. I’m currently contributing 15% between me and my employer, maxing out employer contribution. I know I’m lucky to have a good employer contribution. Have only been in this job for a couple years, last one had a much lower employer contribution and I was only making minimal contributions, so my overall pension pot isn’t huge. The future just seems so uncertain, my health is so uncertain, the amounts needed to retire before state pension seem so vast....

If I was to retire at 60 with no lump sum I’d need to contribute 25% starting now, to retire at 55 I’d need to contribute 33%. I plan to make a start towards that once the debt is paid, but then I start to think about mortgage affordability with the lower take home pay, and then I realise I’d need to stay in my current stressful job for the next 20 years, and then I get very confused and give up. 

redofromstart

I now burn with the need to look at the Pratchett hardbacks.  I am on a perma ban from looking at jumpers though.

enthusiasticsaver

astrocytic_kitten said:

Thanks @enthusiasticsaver, to be honest pensions scare me as getting to where I need to be seems so overwhelming. I’m currently contributing 15% between me and my employer, maxing out employer contribution. I know I’m lucky to have a good employer contribution. Have only been in this job for a couple years, last one had a much lower employer contribution and I was only making minimal contributions, so my overall pension pot isn’t huge. The future just seems so uncertain, my health is so uncertain, the amounts needed to retire before state pension seem so vast....

If I was to retire at 60 with no lump sum I’d need to contribute 25% starting now, to retire at 55 I’d need to contribute 33%. I plan to make a start towards that once the debt is paid, but then I start to think about mortgage affordability with the lower take home pay, and then I realise I’d need to stay in my current stressful job for the next 20 years, and then I get very confused and give up. 

I think most people are scared of pensions because it seems to be so far off in the future and they are not easy to understand. 15% is a reasonable level of contribution and whilst your lower salary makes contributing more difficult and the numbers seem overwhelming starting ASAP gives the pot that much longer to grow. Your health is important and undoubtedly stressing out will not help so just focus on what you can control. At least you are aware of the amounts you need to invest to achieve financial independence at 55 and 60. 

astrocytic_kitten

redofromstart said:

I now burn with the need to look at the Pratchett hardbacks.  I am on a perma ban from looking at jumpers though.

I haven’t seen them in person but a friend sent me a pic, they’re so lovely....I’m thinking of buying one a month once I’m debt free. Popped over to your diary, lol at the jumpers - that shop would be very dangerous for me too! 

astrocytic_kitten

enthusiasticsaver said:

I think most people are scared of pensions because it seems to be so far off in the future and they are not easy to understand. 15% is a reasonable level of contribution and whilst your lower salary makes contributing more difficult and the numbers seem overwhelming starting ASAP gives the pot that much longer to grow. Your health is important and undoubtedly stressing out will not help so just focus on what you can control. At least you are aware of the amounts you need to invest to achieve financial independence at 55 and 60. 

Thanks @enthusiasticsaver, that’s very helpful advice. I thought I’d made peace with past financial mistakes but thinking about pensions just makes me regret the debt all the more and wish I’d been sensible and made the most of my salary when I was working full time. Need to face that, move on, and do what I can for a better future though. I’d be in a much worse position if I hadn’t had the LBM, even if it did come a bit late in the day.

astrocytic_kitten

Well, I have hit 75% paid off! Still on track to be debt free by the end of April, haven’t made much progress on moving that forward to the start of April. Have had some communal flat repairs to pay for this month but all out of the home repairs pot 👍

Latest thing I really want to buy is £28 face moisturiser, my usual winter face moisturiser pre-LBM. I used to pick up samples whenever I could for travel and I’ve been using those up, but the time has come to buy a replacement. I’ve got ridiculously sensitive skin that flares up at the slightest thing so I don’t want to waste money buying something that I won’t be able to use, but I’ve found one at £10 from a brand I’m ok with that should work. Going to do a bit more research over the weekend to see if there’s anything cheaper too. As much as I love the current one I’d much rather find something that works well at a lower price point, it’s just a pain not being able to go to a shop and try lots.

Other than that, I plan to spend the day with Netflix and a blanket - feeling pretty wiped out after a long week. Will try to get going with a Christmas present I’m knitting too.

GeorgianaCavendish

Congratulations on hitting the 75%! You've done amazingly well