Countdown from £28k...

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  • ryanm8655
    ryanm8655 Posts: 1,152 Forumite
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    edited 7 April 2020 at 11:38AM
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    Thanks for checking in and for the kind words.

    Might have to rethink my plan for this month a little bit but will still hit the debt hard.

    My emergency fund has taken a bit of a beating in the last few days due to a birthday I'd forgotten about (a family member I live with) plus I helped out with an expensive vet bill yesterday (I'm not paying rent so felt I should). As my car is due it's MOT at the beginning of May and also needs a service, that'll need to come out of my pay packet next month. I'm anticipating it'll be about £200 all in. Though on the plus side I haven't stuck any of this stuff on credit card as I would have in the past.

    I'd also forgotten about upping the payments on most cards as well, which eats into the card budget some what. All in all, paying the full £1410 on the Tesco card is likely to leave me overdrawn before my next payday but I can still meet my aim to have no interest bearing debt by the end of May.

    After that I think I'll continue powering through, taking on the debts based on when the balances become interest bearing.

    I have set up a lifetime ISA via moneybox and paying in a token £5 a week just to get the timer started. Then if I am in a good position by April next year I can hopefully pay in a lump sum to exploit the 25% bonus.

    Having other goals in sight, other than purely being debt free has really helped, though being debt free was plenty of motivation in itself. 

    Am finding it tough not to buy bits online. I could do with a mouse and keyboard for my laptop as my work laptop is a surface pro and has an annoyingly loud and not particularly ergonomic keyboard (it's one of the fabric ones for tablets). Likewise I am tempted by some exercise bands to do some home workouts and add a bit more resistance. Think I'll hold off until at least pay day though and also see if IT at work can sort the keyboard and mouse (they should do).

    Thanks!

    August 2019: £28.8k

    November 2020: £0 (0% interest)

    My debt free diary: https://forums.moneysavingexpert.com/discussion/comment/77330320#Comment_77330320

    <br>

  • EssexHebridean
    EssexHebridean Posts: 21,476 Forumite
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    Suggestion - you have now reached the point in this process where you need to start thinking about budgeting specifically for certain items. Things like presents, car maintenance etc can have money put aside monthly - indeed on the car maintenance front, for you, this should include a sum that will add up to paying tax & insurance up front when they are due also - as your monthly surplus after essential debt payments is high enough. This means that when they become due you don't have to keep raiding the emergency fund which should after all, be for just that - emergencies! (Your aim with that is that it ONLY gets touched if it has to - for example if at MOT tie the car fails spectacularly and you decide replacement is a better bet than repair. To keep dipping in for routine spending means that there is a risk that you will stop regarding the EF as a "no-go zone" and then it's a short step to convincing yourself you can dip in for all sorts of things!)  You're right about it being a positive that you're not just putting things on a credit card, but certainly i terms of the car, you're in a great position with the MOT now happening to set yourself up so that next year you don't lose a lump sum out of one pay packet to cover the costs. 

    The Lifetime ISA is definitely a good investment - that's investing in future you so ticks a financial box for sure! As you say, also a good incentive to see if you can get yourself into a position where you can make a lump sum payment to it in 11 months or so. 
    🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
    Balance as at 01/09/23 = £115,000.00
    Balance as at 31/12/23 = £112,000.00
    SOA CALCULATOR (for DFW newbies): SOA Calculator
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  • ryanm8655
    ryanm8655 Posts: 1,152 Forumite
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    edited 16 April 2020 at 9:52AM
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    Thanks for the reply. Have been meaning to reply for ages but have been really busy.

    I was paying into an emergency fund and had built up about £500 but it has been wiped out by the vets bills (not something I’d usually contribute to and won’t need to contribute to again) and a couple of birthdays. It’s down to about £90 now. As I’ve been hitting the debt harder I also neglected to pay in this month. You’re right, I need to start again and will.

    Realised I don’t need to get my car MOT’d as there is a 6 month exemption due to corona. As I can’t drive much anyway and the car has only done about 5k miles since the last MOT, I’m going to hold off on that. It does need a service though. That Expense will be a bit lower so can start rebuilding the emergency fund.

    Birthday season has also arrived. Have another £30 birthday in May. It’s easy to neglect the emergency fund when not a lot is going on but suddenly the birthdays start coming like buses and you remember why it was so important.

    Just patiently ticking off the days until pay day when I can hit the debt again. Did order some exercise bands for £20 but will use them in lieu of the gym post lockdown. Other than that my only expense is around £100/week towards groceries. Also my car is running on fumes, so I’ll have to fill that up before the next payday.




    August 2019: £28.8k

    November 2020: £0 (0% interest)

    My debt free diary: https://forums.moneysavingexpert.com/discussion/comment/77330320#Comment_77330320


  • IrishSean
    IrishSean Posts: 397 Forumite
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    Good luck fella; you are on the right track. Many people fall off the path; I've done it many times.

    If you keep it simple as, you'll be fine (essentials, expensive debts 1st, emergency fund etc.) . It's changing mindset of not spending any money without thinking about it, which you're doing. My own crystal ball gazing is focused around: imagine having that £X amount per month all going into savings as opposed to the coffers of those bloody banks / CC companies😀. That's good motivation. Remember there are ppl on these forums who need 10 years to escape the debt cycles they are in. 
    You've got this 💪💪💪
    Admin for Tilly Tidy to £1825 DFW challenge: 2021
    Rolling Total for 2021: £970
  • ryanm8655
    ryanm8655 Posts: 1,152 Forumite
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    edited 28 April 2020 at 4:31PM
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    Thanks for the advice, have done more of a budget and worked out what I can afford to pay off post pay day.

    Now down to £17.5k and only £1100 charging interest.

    That’ll be gone next payday at the end of May.

    How long does your credit report take to update balances? Debt on there is still showing as almost £23k. Shouldn’t need anymore 0% offers after next month as can just clear the balances as the offers expire but just wondering...

    August 2019: £28.8k

    November 2020: £0 (0% interest)

    My debt free diary: https://forums.moneysavingexpert.com/discussion/comment/77330320#Comment_77330320


  • brizzlegirl
    brizzlegirl Posts: 1,260 Forumite
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    Hi, can take months. Maybe 2-3? I only know that as am obsessively paying down debt and noticed that the MSE credit reports takes a while to update. Must just be a lag in the banks reporting. 
    You’re doing great, well done 
  • ryanm8655
    ryanm8655 Posts: 1,152 Forumite
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    edited 29 April 2020 at 9:42AM
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    That’s useful to know! Thanks!

    Yeah - I’ve got a little obsessed. Checking my clear score every couple of days to see if it has changed.

    Have signed up to swagbucks to earn some amazon vouchers having seen it in MSE’s money tips email. Seems like a slow burner, payoff from surveys is shocking and full of annoying spam websites you get points for giving your details to but worth a crack. 

    August 2019: £28.8k

    November 2020: £0 (0% interest)

    My debt free diary: https://forums.moneysavingexpert.com/discussion/comment/77330320#Comment_77330320


  • ryanm8655
    ryanm8655 Posts: 1,152 Forumite
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    edited 13 May 2020 at 9:26PM
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    So I’ve just had another 12 month 0% offer on an existing card.

    Have £1100 of my total balance of £17.5k that is charging interest. Planning to clear it on payday (£500dd is due to come out next week, then I’ll make another £1200 payment to the card on payday to get ahead of future expiring offers).

    Any reason why I should use the offer now rather than just leave it and clear it with my own cash? The fee is 2.99%, the APR on the £1100 is about 25%. Without calculating it, I think the fee is more than the interest I’ll be charged on the balance.

    Once the £1100 is gone all of the debt will be on 0%. So then I’m thinking about next steps...

    By the time I have to go back into the office I’ll likely have sub £10k of debt on 0% cards. I think I’d like to move back to London at that point (thinking October time and clearing £2k/month debt in the meantime). I’d like to save £2k for first months rent/deposit. Longer term I’m thinking about buying. I have already set up a LISA into which I pay a token amount (with a view to taking advantage of the bonus and paying in what I can afford in March).

    As friends have been looking at help to buy and shared ownership, I’ve also started looking into it. With about £8k deposit I could get a 2 bed new build in zone 3, with a 25% share at cost of £1400/month (mortgage+rent+service charge). While that’s a lot to pay for a 25% share, it’s less than renting a 1 bed in the same area would cost, plus I could let the other room for around £1k/month. What am I missing? Appreciate they’re tougher to sell - help to buy also looks a lot better but does require a much larger deposit (plus I could do that at a later date).

    How difficult would it be to get a mortgage when I have debt? I’m just thinking out loud here rather than making committed plans so would welcome views.

    Thanks!

    August 2019: £28.8k

    November 2020: £0 (0% interest)

    My debt free diary: https://forums.moneysavingexpert.com/discussion/comment/77330320#Comment_77330320


  • IrishSean
    IrishSean Posts: 397 Forumite
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    Awesome paydown Ryan. I agree, when you get to low thousands and look at rates to shift it sometimes is the same if not more than just clearing it. The only caveat is if income dropped you've peace of mind out its at 0% and can switch to minimum to buy breathing space.

    I was going to clear all mine with £528 payments by Sept but am now toying with the idea of shifting my last £1300 and paying by SO of £49 a month. Weirdly having a relatively small amount on credit can make you more attractive (financially, not in a love island way), or so ive read.

    In the end I need to have the fall-back of my CC (for S75 spends) and won't miss the £49 pm. Once you get to sub 5 figures things will feel great :)
    With low debt and a fairly clean credit report a mortgage shud be np. My only reckon is LTV will be tightened and bigger deposits needed with an 'expected' double digit drop in house values. (Tho I don't think house prices will be savaged as much as stocks will be, just a 'IMHO')
    Admin for Tilly Tidy to £1825 DFW challenge: 2021
    Rolling Total for 2021: £970
  • ryanm8655
    ryanm8655 Posts: 1,152 Forumite
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    edited 14 May 2020 at 10:53AM
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    IrishSean said:
    Awesome paydown Ryan. I agree, when you get to low thousands and look at rates to shift it sometimes is the same if not more than just clearing it. The only caveat is if income dropped you've peace of mind out its at 0% and can switch to minimum to buy breathing space.

    I was going to clear all mine with £528 payments by Sept but am now toying with the idea of shifting my last £1300 and paying by SO of £49 a month. Weirdly having a relatively small amount on credit can make you more attractive (financially, not in a love island way), or so ive read.

    In the end I need to have the fall-back of my CC (for S75 spends) and won't miss the £49 pm. Once you get to sub 5 figures things will feel great :)
    With low debt and a fairly clean credit report a mortgage shud be np. My only reckon is LTV will be tightened and bigger deposits needed with an 'expected' double digit drop in house values. (Tho I don't think house prices will be savaged as much as stocks will be, just a 'IMHO')

    Thanks for the reply. Good point re: security in case of a shock to income in the future. My job is about as secure as a job can be and if I was made redundant it’d be enough to clear everything and more (get 6 months full pay, tax free). Other than debt repayments I have no commitments at the moment, my only other outgoings are car related or groceries (can be pricey as I contribute in lieu of bills and it’s a household of 6 with me in the spare room). On that basis I’ll just leave it. 

    After that, my next interest free period ends in July and then there are succession of them in August/September but they’re all relatively small amounts and I’ll be well ahead of them even if I paid minimum payment for June and July (I’ll pay more). Will have a more detailed review at the end of the month.

    Good point re: having a little debt. I may tentatively aim to get debt sub £5k and have a deposit ready at the same time.

    I think what I might do is split the c.£2k I pay  off, putting £500 into savings and £1500 towards debt. That way I build up a nice fund for any moving expenses (should I move back to London around autumn) plus a chunk, which I can either put towards deposit savings or clear more debt with (in a separate account so that I can’t overspend unintentionally).

    Sorry for the streams of consciousness. I’m finding it helps me to keep on track when I’m just waiting for my next pay day. I’m quite impulsive and generally want everything in life too quickly, so this helps to stop me getting bored (a big cause for my debt in the first place). I’m going to end up having my next financial year mapped out ha. 

    I’ve applied for a few promotions in other departments for some more money in the short term (more money is an almost 50% pay rise though most of that would go to tax, pension and student loan). Longterm plan is still to change career into law but with COVID there has been a lot of disruption to recruitment so it maybe be I have to wait another year.

    Thanks!


    August 2019: £28.8k

    November 2020: £0 (0% interest)

    My debt free diary: https://forums.moneysavingexpert.com/discussion/comment/77330320#Comment_77330320


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