F.I.R.E. Starter, the journey begins 4 August 2019 at 8:32AM in Debt free diaries 58 replies 5.7K views

FIRE_starter

enthusiasticsaver said:

Sounds like you have a plan to get rid of the debt. CC2 is relatively small so I would target that first.

Before going into being a landlord I would urge you to do lots of research. We went the other way when planning for FIRE and overpaid into pensions and stocks and shares ISAs. We did this on the grounds that investments are more liquid, no maintenance needed or chance of dodgy, unreliable or non paying tenants and our investments were still growing without any effort whereas rental properties earn you nothing if sat empty between tenants. More tax efficient too in that you get tax benefits on paying into pensions and stocks and shares ISAs are free of tax but rental income isn’t. 

You’re the second person to say this. I think I need to rethink my plan on this as may be a bit outdated! 

As the cc1 and cc2 are 0% for this year I was going to pay them off over the course of the year and focus all overpayments on the loan which should run until February 2024 but I’m upping payments. Does this sound right? 

Thank you again. 

FS

vampirotoothus

Hi there, the general approach is to clear o/d and cards first. The logic being that both can readily be withdrawn. Also you have no guarantee that you will get another CC to balance transfer to and could therefore end up with that debt at a higher interest rate than the loan. My approach would be regular payment to the loan, split the balance of card 1 by the number of months left on 0% and get that gone. Then set the DD for card 2 as high as you can (don't leave yourself short) and then overpay that as much as possible, so that you have less to transfer at the end of the 0% period. 
Good luck

FIRE_starter

Yesterday marked day one of no spending. We had a belated Christmas celebration with my family as my parents had covid over Christmas. We all bought a bit of food and had a wonderful time. 

Today we have two kids birthday parties, one for DS and one for DD. Luckily we have cards and presents ready to go. I keep an eye out for bargains and keep a box of children's pressies for parties. Mainly when someone is selling 8 brand new boxed barbies on Fb marketplace or Sainsburys has a sale. 

I’ve bought oven pizzas, a bag of salad and Aldo’s version of dominis garlic and herb dip as a treat lunch for today in our food shop to stop us considering going out for lunch or dinner this weekend.

Feeling positive- if I can make it through a weekend without spending, the week days are far easier. 

I keep what I call annual outgoings fund which is for things that come out yearly rather than monthly like home insurance, MOT, service, car insurance, holidays and as DH is self employed money for annual leave for him. This way each week when DH gets paid we put away about £130 and then when the car needs servicing we just take the money from there. I’ve updated it to allow for the holiday to Wales in April. I am always tweaking this on the spread sheet to reflect how much things cost each year. 

Enjoy the last of the weekend 

FS

enthusiasticsaver

FIRE_starter said:

enthusiasticsaver said:

Sounds like you have a plan to get rid of the debt. CC2 is relatively small so I would target that first.

Before going into being a landlord I would urge you to do lots of research. We went the other way when planning for FIRE and overpaid into pensions and stocks and shares ISAs. We did this on the grounds that investments are more liquid, no maintenance needed or chance of dodgy, unreliable or non paying tenants and our investments were still growing without any effort whereas rental properties earn you nothing if sat empty between tenants. More tax efficient too in that you get tax benefits on paying into pensions and stocks and shares ISAs are free of tax but rental income isn’t. 

You’re the second person to say this. I think I need to rethink my plan on this as may be a bit outdated! 

As the cc1 and cc2 are 0% for this year I was going to pay them off over the course of the year and focus all overpayments on the loan which should run until February 2024 but I’m upping payments. Does this sound right? 

Thank you again. 

FS

I would agree with that approach as long as you can repay the cards before the deal expires as otherwise you will have BT fees and the CC rate after the deal finishes will be higher than the loan. 

FIRE_starter

Morning all, 

One of my favourite days of the month is the first. I love seeing all the big payments going out to the loan and CCs. We pay £1032 in total a month for the last year. At the time that meant we would be debt free by the end of 2022 but we kept spending without thought so we are now having to pay that and find overpayments to achieve the same goal - you live and learn! 

I’ve updated my signature and have a lovely spring in my step! I’ve also tallied up how much we overpaid in January - £804.50. All thanks to DH gritting. This puts us ahead of the £553 we are required to over pay a month to be debt free by the end of the year so I’m doubly excited. I’m hoping this will help out in April and May when there will be no gritting and we’ll still be paying off the holiday. 

Loan payment went out less £100, not sure why so I’ve immediately paid £100 off it. 

We managed a no spend weekend but needed bread yesterday so a quick trip to the shop was needed. We’ll try again and see what we can achieve the rest of the week. 

Happy February 

FS

FIRE_starter

Really busy week, my hospital has had lots of covid outbreaks across several wards so staffing has been challenging. As a result I have eaten terribly and spent more than planned. 

I have managed to pay off some more off the holiday. I’ve had a think after the last comments on the diary and this week overpaid the CC1 by £156. I’m not tempted to overpay CC2 as it’s the smallest and has lots of time before it’s 0% ends compared to its balance. So new plan - CC1 1st then overpaying loan, all while making our regular £487 a month to loan, £470 to cc1 and £75 to cc2 and then all complete by the end of the year!

Nice weekend plans for us with the usual kids classes and a play date with friends at our house then lunch with friends ok Sunday. Meal out is the only big expense and it’s not an expensive place so fingers crossed will be well within budget. 

FS

FIRE_starter

Work or my exhaustion because of it continues to slightly delay my plans, between DH and I we spent £65 on eating outside the house this week. We tallied it up and we’re surprised but there’s been lots of shop bought lunches because we’ve not taken the time to pack a lunch the night before. Goes without saying that £65 would be better off being overpaid somewhere! 

We sat down yesterday and went through in detail what we’ve spent and talking it through. We decided on a no guilt or investigation approach and rather just categorise each transaction as ‘needed’ or ‘something we need to think about’. All the ‘something we need to think about’ ones we then looked at and realised we buy a lot of shop bought
stuff this week and also we seem to run out of kids lunch hits half way through the week and then need to keep topping it up. We’ve made a plan to increase our snacks/lunch bits in the food shop so we have extra to take in our lunches so we’re less tempted to buy something on a whim and then make plans for my day off so I’m less likely to want to go to the bakery at the end of the road. 

We managed another big overpayment this week of £184 bringing us to a total of £340 this month. Just £195 left to pay for this month which I think we’ll get done in the last two pay days of the month. 

Luckily tomorrows lunch is sorted. Good luck with planning this week.

FS

FIRE_starter

…also DH is due a tax rebate which will go to completely pay off CC2 (the small one). Hoping this will arrive this week and then will put us ahead of our overpaying. 

I must admit this is addictive! 

FS

Bluegreen143

Love your “no guilt or investigation” approach to your overspend. Always important to remember the relationship is more important than the money (I sometimes lose sight of this 😆). Sounds like you did a good job identifying the problem areas and coming up with an approach together to deal with it.

Aimingforthegoodlife

Hi FS! Sounds like you have a great plan, amazing work with the gritter OP! How exciting that you will be wiping one credit card debt completely, thats such a good feeling. Just remember to go easy on yourself, spending on lunches/food out when you work so hard and we are in a pandemic isn't the worst, these things happen! Take care!