Debt free before August 2023

Poppy1984

Hey 👋 
Mini update from me, I have made an overpayment bringing my debt total down to £8,000 which means since February 2018 I have paid off £22,322 that's utterly crazy!!! I've still a way to go but I'm getting there. 

I'll update again in the middle of the month once my fixed monthly payment and any other money I manage to over pay has came off the total. 

Hope everyone's staying safe 

Poppy

FootyFanDan

Morning Poppy - Wow that is a fantastic amount to have cleared off the debt, that debt figure is tumbling now. Well done

savingholmes

£22K gone is a massive achievement. Over two thirds of the way to debt freedom... Woohoo

Poppy1984

Thank you both I cannot believe I have paid that amount of debt I would never have believed it if someone has told me a few years ago this would have been possible I just wouldn't have believed them! 

Getting there people..... getting there......

Poppy

Poppy1984

Hello 👋 
I'm doing a lot of after debt thinking at the moment. I'm anxious about getting debt free then entering back into debt so I want to plan ahead as much as possible before I become debt free to prevent that from happening. 

I'm not going to be looking to make any big purchases or even start saving for anything big straight away. The temptation being ooh spare cash I could save for a new car a holiday etc etc. I just want to have a bit of breathing space at first. Wiggle the budget about loosen it off a little and let myself settle into it for the first few months I think.

by the time I'm debt free I will have £1,500 in my help to save account, so that will be my "emergency fund" however it's going to have to be a real stinker of an emergency for me to break into it because if I withdraw any money I will receive less interest ( bonus payment) from the government so that's an incentive not to use it unless it really is an emergency. 

I also really like the idea of living off last months wages rather than pay check to pay check. I remember hearing about that idea a while ago having the months wages as your zero balance in your current account. Then when you get paid you always have a months wages in there. I get £1,600 a month so in my head once that's the balance of my current account that would be 0. It's would take me a while to get to that point maybe 4-5 months but would feel nice to not be spending my wages to 0 every month. I might even get it to £1,000 rather than a full months wage. 

So my plan is to have a months wage or £1,000 in my current account. My help to save will be £1,500 but I will continue to put £50 a month ( the maximum) in that and once the second bonus payment has been paid in in July 2022 (I think) I'll put that into another savings account as that closes after that. Then I'll just keep that as my emergency fund and keep a small monthly payment going into it keeping it topped up. 

Once both of them are sorted I think that's when I'll start some savings goals for things like home improvements a new car and holidays. 

The whole time I'll still have all my usual pots set up with regular savings for things like xmas, mot, insurances etc. 

Poppy

Naomim

That sounds like a good idea to have a months salary. I've just started using ynab and watching their videos, this is something they advocate, not living paycheck to paycheck.  It will take me a long time to get there but I'm sure I will eventually.

It's also understandable worrying about not going into debt again. This is a fear I have although not really something I have to worry about for a few more years! 😄  It's a good thing you are thinking of the future without acting like you've won the lottery and putting yourself in a bad place financially again.

Keep going, I'm sure you'll play around with a few ideas.

Naomim 

Poppy1984

Thank you @Naomim 😁 I think it was maybe Dave Ramsey I heard talking about not living Paycheck to Paycheck but I can't remember now. I just remember loving the idea of having a full months wages in my current account and feeling like it was something I'd never be able to achieve with my level of debt I had at the time. 

Ah yes it could be so easy to go a bit crazy and buy a load of treats (clothes are my Achilles heel lol) BUT that's what got me into this mess in the first place. Living beyond my means, trying to keep up with the Jones and robbing Peter to pay Paul several times over. I look back now and cannot believe how stupid and irresponsible I was. I think it was a combination of trying to give my son everything he needed, despite being a single parent and I also had a huge loss which I think sent me a bit off the rails. Anyway it is what it is really, I do feel shame about it but I'm sorting it now so what's done is done and I've learnt some massive life lessons along the way which I won't ever forget now. 

Keep going looks like you're doing amazing in your journey too! 

Poppy

Sarahwithlove

I'm with you I to love the idea of being a month ahead. It's one of my aims after my credit card is cleared 

Poppy1984

Looks like you're not far off now @Sarahwithlove well done!!! 😁😁 

Poppy

Sarahwithlove

Poppy1984 said:

Looks like you're not far off now @Sarahwithlove well done!!! 😁😁 

Poppy

Thanks I'm hoping only a couple more months