TravelGirl84's DFD

Fudgefund

Hi Travelgirl84. :wave: I am a similar age to you and feel exactly the same way. My debt is holding me back, no matter how much I earn it's effectively making me feel as though I earn much less and it's so depressing not being able to buy things like new clothes for work. I do think sorting this out now is the key to a brighter future, I have no idea if you have a partner or not but when you're in a relationship debt also holds your other half back because you can't contribute to what they want to do.

It sounds like you know what you're doing, just stick with it and don't make any unnecessary purchases! I have subscribed.

TravelGirl84

Fudgefund wrote: »

Hi Travelgirl84. :wave: I am a similar age to you and feel exactly the same way. My debt is holding me back, no matter how much I earn it's effectively making me feel as though I earn much less and it's so depressing not being able to buy things like new clothes for work. I do think sorting this out now is the key to a brighter future, I have no idea if you have a partner or not but when you're in a relationship debt also holds your other half back because you can't contribute to what they want to do.

It sounds like you know what you're doing, just stick with it and don't make any unnecessary purchases! I have subscribed.

Hi Fudgefund!

Thanks for your comment. I agree that sorting it out now is best, I can either grin and bear it now or do it in another two years and another £5k of debt later....

I'm currently single but totally get what you are saying about holding a partner back. When the time comes that I meet someone it would be another reason to be debt free, so I don't have to hold back on doing things or think I need to put things on cards to do things together. I actually haven't thought about it this way really, because I'm very intent on being on my own for the foreseeable future, but you make a very good point so thank you!

If I was debt free I would be a minimum of £432 better off each month, imagine what I could do with that?! I just need to stay on track, which is my downfall. I need to remind myself of why I'm doing this!

Thanks
TG

TravelGirl84

Not a bad spending day at all today. Until recently when I have been trying to cut down on what I spend on food etc at work, my breakfast/lunch/snack/coffee spending per day could look something like this if I went all out:

Breakfast - Omelette - £2.05 and a Cappucino - £1
Lunch - Meal - £3.25
Snack - Chocolate bar or a piece of cake up to - £1.20
Total - £7.50! :eek:

A more of an average day would be something like:
Breakfast - Toast or scrambelled/poach eggs - 60p and a Cappucino - £1
Lunch - Meal - £3.25
Total - £4.85

To get this down I am cutting out posh coffee at work (maybe one as a Friday treat with the cheap Friday fry up but I feel like even that is too much at the moment!) and bringing in lunch and snacks.

Today I spent:
Breakfast - Toast and a poached egg - 65p
Lunch - Salad from home and free caesar dressing from work
Snack - Yoghurt from home
I also bought some bananas from Sa1nsburys for snacking, which seemed overly expensive at 50p for two, I'm sure they are usually much cheaper.
So total spend for today is £1.15, and this includes a banana for tomorrow (so really we can knock 25p off and call it 90p) :T

I also made sweet and sour for dinner and once it's cooled down will freeze two portions.

Been looking at ways today that I can exercise for free once my gym membership is up (in about two weeks). They do bootcamp at work twice a week but the last time I did it about a year ago I think I got heatstroke The Monday session is worse because the guy is much stricter, so if I go I may try the Weds again with my friend. I was going to try starting the couch to 5k but I'm not keen on running, and apparently it's not very good for your joints if your hypermobile? I have found an app for workouts at home though that I gave a go today which was ok so might give that a try again. Might also try some pilates at home too. Any ideas for free workouts welcome!

TravelGirl84

NSD today. Ended up not going to work so all food from home, and of course haven't used petrol, so I'm going to transfer what would have been my petrol usage today in to my HTB fees savings (£12). Some refunds have also come back on my card so that's my card down a little more. Will update my signature to reflect this.

enthusiasticsaver

I think you may find a spending diary useful. There is nothing like writing down what you spend your money on and adding it up at the end of the month to really focus your mind on where your money is going. It also often makes people think twice before making impulse buys (which your furniture would have been). There are always going to be temptations, people mention a place they have been and you think that sounds nice and book a holiday and think about the finance afterwards. You pass a shop window and see some clothes or furniture you like and buy immediately without thinking where the money will come from or if you already have something which does the same job.

I always found it useful to have a target in mind each time for savings. So if we were saving we were saving for a new bed or sofa or holiday, car. Your target is clearing debt at the moment and the end result is an extra £432 in your pocket every month to go towards holidays, furniture or just be saved for the future. Every unnecessary penny you spend delays that day.

enthusiasticsaver

I am also not sure why you have two debt figures, one with interest and one without?

Do you have a front loaded loan? A loan where the interest is added at the beginning?

Normally you would calculate your current debt figure to include outstanding amounts on credit cards and loans including any interest to date. If the interest has not yet been charged (most loans have interest calculated daily and charged monthly) then you would not normally include that in your current debt figure. If the interest is already added (front loaded) then that should be included in the debt figure as that is the amount you will need to repay unless you get a rebate for early repayment.

TravelGirl84

enthusiasticsaver wrote: »

I am also not sure why you have two debt figures, one with interest and one without?

Do you have a front loaded loan? A loan where the interest is added at the beginning?

Normally you would calculate your current debt figure to include outstanding amounts on credit cards and loans including any interest to date. If the interest has not yet been charged (most loans have interest calculated daily and charged monthly) then you would not normally include that in your current debt figure. If the interest is already added (front loaded) then that should be included in the debt figure as that is the amount you will need to repay unless you get a rebate for early repayment.

Hi Enthusiasticsaver! :wave:

Thanks for your comments.

I do keep a note of everything I spend within my bank. I mark them as hashtags so I can look at them and see where the money has gone. I tried to search using the hashtag the other day though and it came up with an 'all time' amount and not that month so I need to look in to that more. Physically writing it in a notepad though might make me look at it more as it's there in black and white to see. It's only been a few days since payday so I could back track and get it all down.

Regarding the two debt balances, the reason I have done that is because annoyingly the bank I have the loan with only shows the total amount with interest for the whole term of the loan. I haven't seen it done like this with other banks, only what I have got left to pay with the added interest at the end of each month (I think). So I used one of those loan calculators which works out what you have left to pay without the interest, so I could see where I was at should I be able to pay it off early. I don't know if that makes sense, and I don't know how else to track it? At the moment my loan term is just under 7 years, and I really want it paid off a lot quicker. I think I just want to track what I have paid overall. I guess if I make overpayments though I really won't know where I am at all, I don't know lol. I'm not very good with numbers suprisingly! What do you think?

enthusiasticsaver

Have you actually checked there are no penalties for overpayment of the loan?

I think I would be tempted to use just the one figure so you can judge the impact of the monthly repayments you are making? As the interest is already charged on this particular loan that really should be the one with the interest (so the higher figure). Do Tesco (if that is the lender) not give you the facility to actually check the monthly balance? That is the figure I would use rather than a loan calculator.


If you did not have this HTB issue I would be advising you to overpay on your most expensive debt which presumably is the loan if the credit cards are at 0%. Presumably if you are increasing your mortgage this will also mean an increased monthly repayment so this will also affect your ability to repay the debt. I think an soa is a definite must before you take on a bigger mortgage. What are the implications if you leave the HTB as it is for 2 years and just focus on getting rid of the debt and the loan? Do you have to start repaying the 20% loan and what interest rate will you be charged?

It sounds like you are trying to do a lot all at once.

TravelGirl84

enthusiasticsaver wrote: »

Have you actually checked there are no penalties for overpayment of the loan?

I think I would be tempted to use just the one figure so you can judge the impact of the monthly repayments you are making? As the interest is already charged on this particular loan that really should be the one with the interest (so the higher figure). Do Tesco (if that is the lender) not give you the facility to actually check the monthly balance? That is the figure I would use rather than a loan calculator.


If you did not have this HTB issue I would be advising you to overpay on your most expensive debt which presumably is the loan if the credit cards are at 0%. Presumably if you are increasing your mortgage this will also mean an increased monthly repayment so this will also affect your ability to repay the debt. I think an soa is a definite must before you take on a bigger mortgage. What are the implications if you leave the HTB as it is for 2 years and just focus on getting rid of the debt and the loan? Do you have to start repaying the 20% loan and what interest rate will you be charged?

It sounds like you are trying to do a lot all at once.

I just had a quick check about penalties on the loan (yes Tesco), and it says I can overpay without fees, or if I want to pay it off in full I would be charged a period of interest, which is what I thought. I have looked online and the app and they don't give the balance without the full interest amount.

I can put up an SOA, in terms of my income and bills? I have a spreadsheet but maybe I need to do some more comparisons with how much I could reduce other debt by if I kept the HTB for another two years. I think for me with keeping the HTB it's the feeling of being trapped in for two more years, and also no one knows how Brexit will affect everything, though I know we can't think about that until it happens.

The situation with the HTB is:
1. I take on the whole mortgage and my mortgage increases by about £160 a month. I will have to pay the government 20% of the house price back which because the value has gone up I have to give them an extra £2.5k on top of what I borrowed (even though I physically haven't made this money because I am not selling, so in the long run if prices go down they win but I lose).
2. I keep the HTB for another 2 years and everything stays as it is bar an increase in the interest rates so my mortgage will be about another £30 a month (unless it suddenly changes). I'm 2 years in to the 5 years of the HTB being interest free, but if I don't do it this time then I must in 2 years when the next mortgage term ends, otherwise I'll be locked in to another two years, and after 5 years of having the HTB they will charge £40-£50 a month interest, but you're not paying back the actual loan.
The risk with holding on this time is that if the prices go up again in the next 2 years, meaning I have to pay the government back even more, and if I'm not selling then I'm basically giving them money back that doesn't actually exist yet and I could lose out in the long run if prices then go down. Maybe the way to make sure you hold on to your cash and make sure you're not losing out is to pay it back when you sell, so maybe I keep hold of it and sell in 2 years, if there is anywhere I want to go.

I am definitely trying to do it all at once

Smythson

If I'm understanding correctly, you have the option for another three years of interest free HTB loan before you will then begin paying interest (at a very low rate in comparison to credit card interest rates - if I recall?)

Even when you get to the stage of paying interest on the HTB, if you're paying interest of credit cards it's likely better for you to pay the cards off first.

I don't follow how you will lose out if the value of your house drops? HTB is a fixed percentage of your property value, so if anything - you want it to drop at the point you're able to pay it off..!

Get your SOA posted and the folks on here will be super helpful as always!