My debt free diary

DF2020

Hi everyone! I've always been a spender and never paid attention to where my money has gone and as result I've been in debt pretty much the last ten years. As I've always earned enough money to not end up in hardship I've consistently thrown money at the debt accounts but then continued to go out, spend money etc and the balance has never really come down. I'm now at the point where I've realised how much money I've wasted and if I had actually been saving the money instead of paying off credit cards and loans I would have quite a hefty house deposit! So this is my way of holding myself to account of what I spend and actually getting to a debt free position!

My main problem is that although I make payments each month, I do usually end up spending a fair bit on CC's and therefore the balance on those only ever really goes up. I don't really have any self control with regards to not buying whatever I want. I don't spend an awful lot on clothes or make up etc - it all ends up usually going on food, groceries, wine and activities.

I'm going to use this diary to hold myself to account and track my spending with the aim to get rid of this debt within two years and actually start building up some savings. I appreciate all tips and constructive advice on how to tackle my spending and become debt free!



So the breakdown:

Debt is as follows:
CC1: £8,935.82
CC2: £2,047
CC3: 2,487
CC4: £384
Overdraft: £1,150
Total: £15,003

Overseas debt (I'm not from the UK)
Loan 1: $1,587
Loan 2: $7,978
Tax/Student Loan: $5,470
Total: $15,035

This is the first time I've added all this up .... YIKES! What I normally pay toward this debt is as follows. I appreciate any feedback regarding if this is a good process or there may be a better way?

CC1: £300 p/m ( I never use this account for spending)
CC2: £150 p/m (I often end up spending on this card!)
CC3: £150 p/m (I don't spend on this card)
CC4: £100 p/m (I occasionally end up using this card for small sums)
Overdraft: I never pay anything towards it as I'm usually in credit most the month then when I pay rent and other bills at the end of the month it tips me into it (maxed out) but then my pay comes in not too long after. However I would like to completely clear so I never end up going into it even when my rent comes out so I count this as debt.
Overseas debt: I throw a flat £400 into my Australian account and then have direct debits come from there proportioned to the debts. Depending on the exchange rate, this usually ends up exchanging to around $800.

In my ideal world this £1,100 I'm losing to debt each month will go into savings!

Statement of account (p/m). Rent and bills etc is my share, I split 50/50 with my OH.

Income: £2,545 after season ticket loan reduction
Rent: £675
Phone & Internet: £75
Electricity: £30
Water: £20
TV Licence: £25
Council Tax: £75
Car insurance: £83
Bread delivery: £15
Amazon prime: £7.99
Tails dog food: £50

The leftover £380 is for groceries and general spending money. As I've mentioned before, I tend to go over this amount and put more onto my credit card. I really need to stick to this limit. How do you stick to a budget?

Lemon_Tree

Hi and welcome to the boards, have you filled your details in on the snowball to work out what will be the best order in which to hit your debts? Well done for facing the music though and turning the tide

DF2020

Thanks, what's the snowball?

DF2020

So I haven’t gotten off to the best start, and the following is a pretty good representation of how I got in this mess.

Went for a drink with a colleague I haven’t seen in months after work, and also needed to kill some time before meeting my partner for dinner before a comedy gig. He bought the first round, and I bought the second. £10.75 on my Monzo.

I then met my boyfriend for dinner, and I had previously said it would be my shout. I earn a fair but more than him so like to treat him occasionally ... even though he’s better off than me financially as he’s not in debt! He also doesn’t know who my debt as we manage finances separately. We were just going to go for dumplings to be cheap and cheerful but the line was too long so ended up in a restaurant in Chinatown. I had another beer and he had two with dinner which came to £58.60. A lot more than what I was planning to spend and this when on CC4 as I’m fairly poor until payday. I’m waiting for my expenses (£142) from last month to be paid into my account to get me by to next pay, and the last £50 I have on my Monzo.
He then bought a round of drinks at the gig and then I did too, coming to another £12.50 on the Monzo. So all up I spent £81.85 on a night I had planned to spend no more than £50.

Today will be a NSD, have taken the dog for a long walk and we have plenty of food in the house. Dinner will be something easy, I picked up two M&S gastropub meals for one (beef with bone marrow and potatoes, kind of like a hot pot) on yellow sticker for £2.20 each so they are currently defrosting. I’m also planning on doing a big clear out of all my clothes that I don’t wear anymore from storage and hopefully there will be some stuff on there that is good enough to sell. I’ve never sold any old clothes online before. What do you find is best? Ebay or Facebook marketplace or some other way?

Happy Saturday everyone! :beer:

enthusiasticsaver

I think that to solve this issue you need to start giving the debt priority and stop spending on credit cards altogether. Next time you feel compelled to offer to buy dinner for your boyfriend, friend or whoever just pause and suggest splitting it. Regardless of whether you earn more than your boyfriend he has no debt and you have around £22k of it.

The soa is incomplete as you have not put how much you spend on food or entertainment or travel or personal items just a blanket £380 which you say you overspend on anyway. Why are you paying for bread delivery? Your car insurance is very high and you have not allowed for car maintenance, insurance or fuel. You also have a season ticket so do you need a car? You also need some emergency savings so budgeting better is a good start.

My suggestion is first of all cut the cards up. Find out the interest rates on them all and if they are 0% when do the deals expire.

Second - start a spending diary and record every spend. Put a certain amount in your Monzo account weekly for food and entertainment, personal spends and keep to that.

Thirdly start putting some money aside for emergencies every month.

Fourthly look at your expenditure and cut back or eliminate where possible. It should be possible to reduce on phone/internet, dog food, bread delivery. Cut back on wine both to save money and help your health. Look for special deals for eating out and use coupons\money off discounts.

MoneysavingmadGem

Definitely start a spending diary, I find that by having to write it down and be accountable for ever penny spent you soon start to think harder about what your spending on.

Don't carry cc cards, just your monzo card or cash. This means you have a spending limit.

Does your OH know about trying to crack these debts? As then they may be supportive when out and about ie not choosing expensive places to eat...

Good luck!!

DF2020

Thanks for the advice so far! My season ticket is a ridiculous amount per month which comes out of my pay via a season ticket loan from work. I commute into London for work but live in Cambridgeshire so I definitely do need my car as I play netball a 15 minute drive away 3x a week. Plus we need it for food shops, dog walks in the country side, taking dog to vet etc. My car insurance is annoyingly high and I am hoping my premium will come down when it's due for renewal in February. I've been living in the UK for 5 years but only transferred my Australian licence to a UK one for a year ago, so in terms of insurance they look at me like I'm a new driver. They don't take into account my impeccable 15 year driving history abroad

I've re-budgeted my numbers as I don't think I've been allowing myself enough money after putting so much on debt, and this is what has led to me then spending on the cards. The key is to have enough so I don't end up needed to use my credit card toward the end of the month for basics, and then end up spending everything I've just paid off.

CC1 is a 0% balance transfer from CC's 2, 3 and 4 which I stupidly didn't close after the transfer. Although, it is kind of lucky because my dog needed emergency life saving surgery in September and if I hadn't had the balance available on those cards well I hate to think where we would be.

I've looked into transferring the balance of those cards onto another 0% interest card so I have 2x CC payments to make instead of 4 and have been approved for a Virgin Money card. So once all those balance transfers have gone through I will close the Amex and the MBNA but I think I'll keep the Capital One open (smallest credit limit) and use it only for work expenses then pay back the balance when I am reimbursed each month. I don't want to be using what little there is of my budget to cover work travel etc as it is usually around £100-£200 per month.

So my new budget looks a little like this - it's a bit different as obviously Christmas is happening next month. Thankfully I have already bought most of my Christmas gifts (which I had actually budgeted for!!) so only have a few bits and pieces to pick up in the next few weeks.

I've created lots of little pots in my Monzo account and will allocate funds to each of these every month. I am hoping I won't use a lot of this pots and just watch them grow over the months.

Income; 2,545
Rent: 675
Council Tax: 75
Electricity: 60
Water: 20
Mobile & Internet: 75
Tv Licence: 25
Amazon Prime: 7.99
Car insurance: 83
Fuel: 20
Road tax: 18
Car maintenance: 20
Dog food: 50
Vet fund: 20
Sports subscription: 10
Clothes: 10
Toiletries & makeup: 10
Groceries: 165
Fun & Entertainment: 100
Emergency fund: 30
Holiday fund: 30
Christmas fund: 80

Debt repayments:
CC1: 300
CC2 (balance transfer): 300
Overseas: 400

I think this is doable. I'm going back home for my sister's wedding after Christmas (paid for on the CC of course) which is going to burn a small hole in December's pay. Thankfully I have about $500 in my overseas account I will use for spending money and I should get a Christmas bonus from work which I will either throw towards debt or put in my emergency fund.

DF2020

Hi everyone! So today was my second real day on the debt free journey and I was prepared for it.

I did have a spend day yesterday as I needed a few things to prep lunches for work and I also bought a thermos. I have been really bad at buying a £2.55 coffee every day for the train ride into London which equates to £51 per month! That and in addition to circa £5 for lunch most days thats about another £100. I went to TK Maxx and got a really good one for £6 which I can justify as it's the equivalent of 2.5 coffees which I would have bought by Wednesday.

I had meetings outside of London so I did have to spend £37 for the train ticket, but I put that on the Capital One credit card and will pay it right back when I get my expenses. Usually I would buy lunch from M&S at Paddington on my way to meetings for these days out of the office as they are expensable, however I was putting a lot of things on credit card and then using my expense payments to get through the remainder of the month and not ever really putting the fully amounts back on my card. So I packed a chicken wrap made at home today to try and start some good habits.

I also resisted buying a diet coke at lunch time from the cafe which previously I would definitely have done and not even thought about the cost! So quite proud of myself for recognising that bad habit and consciously not giving into it.

I did get back to KGX about 30 mins before my train is about to leave so caved about bought some crisps from M&S using £1.40 I had in my purse. Other than that ... I think I've done ok! It's an improvement on the usual day.

My OH is preparing dinner tonight so I don't have to worry about any spends there, and I will be packing up my lunch again for work tomorrow. Here's to developing good habits!

Flossymuldoo

Well done so far. Food and drink is where a lot of my money was going so well done for making your own wrap and not buying the coke!

MoneysavingmadGem

My downfall if grabbing food and drink too! Iv been keeping cereal bars in my bags just incase!

DF2020

Coming toward the end of the week and I have a wfh day tomorrow which is good. I have done a meal plan for the next week and will go to Aldi armed with my list and a strict budget! I have plugged all the items into the Asda app and it's showing £35 there so hopefully I can get everything I need (2 persons) for £30.

Our downfall has been lots of little 'pop to the shops' which can be £10-£15 each time which really adds up!

Can't wait to get paid next Friday so I can put all my money in their little pots and start managing them! :j