Debt Free by '23

MidsHollie

Thank you @Sarahwithlove and @FOMO_overspender. Yes, @enthusiasticsaver, I definitely feel on top of my finances. I always feel like I would like to be doing more or should be doing more, but that is life isn't it. Once you achieve one thing you are looking for the next achievement, the next bit of progress. 
I've been looking at my annual spends today, and re-jigging what I will need to put away for next year based on this years spends and next years predictions. I have kept it pretty frugal and lowered a couple of categories to allow a higher budget in others. 

Here are my spends for this year (and budget for next year in brackets)
Car Ins/Tax: £431 (£540)
Car Maintenance: £850 (£1020)
House Ins: £162 (£240)
Med/Dental: £65 (£120)
Clothing: £107 (£180)
Gifts: £321 (£420)
Holiday: £0 (£300)
Haircuts: £60 (£120)
Travel: £0 (£360)

I also put away a few fixed, irregular expenses such as estate management fees (housing estate, not financial / death estate!!) and professional fees in to this sinking fund too, but I won't include them here as they are a fixed amount. I hope I have overbudgeted a little - rather overbudget and underspend than the alternative! I probably won't have a holiday in 2021. COVID is unpredictable, and I'd rather prioritize debt this year. I am putting some money away for holiday and travel, which might get spent on a couple of weekends away.

I've used the left over from this year to pay my final debt payments for 2020. £1700 will be heading out of my account today. I have been getting myself confused with my debt pay off dates lately. I used to get paid on the last working day of the month, and then send all my payments out that day or the day after and count them as being paid in the next month (eg Get paid on 31st Jan and then call all the payments I made with this money as Feb payments). My paydate then changed, and towards end of the month I'd be having this internal argument with myself over which month the debt should be considered to be paid (when it actually doesn't even matter!!!).Going forward, if the debt was paid 31st Jan it is a Jan payment, 1st Feb would be a  Feb payment. Much simpler! It does mean though that my debt pay off totals for December basically include 2 months money, and my totals for the year include 13 months. 

I'll do a summary of Decembers spending (too much!) and a 2020 review, 2021 goals post over the next couple of days. 

mark55man

its important to be consistent, so I agree with your change that makes that easier.  particularly as it doesn't put you on the back foot for 2021, just moves the goalposts a little

MidsHollie

Doesn’t time fly! 

2020 Summary:
- paid off £14657.53 of debt
- saved £800 in an emergency fund
- Overpaid my mortgage by £134.64
- tracked almost all of my spending
- completed a zero based budget most months, using monzo to create pots for spending
- used the debt snowball method to pay off 4 debts, putting any extra i found in my budget towards the debt. One month I made 13 payments to the debt because every time I got money from a survey site I added it to the debt

2021 Goals:
- pay off £12000 of debt
- only use the credit card if paying off in full, immediately and from an already budgeted for category
- start a stocks and shares ISA
- overpay mortgage by £400

Im hoping to pay quite a chunk to debt this month as I have been pretty frugal, and there isn’t much to spend on in lockdown! Hopefully this will take me to the point where I will have paid off more than I have left to go. I never thought when I started this diary at the end of 2019 that I would have made this much progress. The biggest change has been my mindset, and how in control I feel of my finances. I certainly can’t see myself ever getting in to debt again, and I’m looking forward to piling up the cash when it is all mine and not owed to anyone else! 

Aspiration

Fantastic progress MidsHollie!! You’re doing really well and the point about consistency certainly resonated with me!! 

mark55man

great job - here's to another successful year. sadly, there will be plenty more lockdown to be frugal in

MidsHollie

February is for celebrations:
51% paid off 
£1000 emergency fund 

I’ve just been plodding along in January. Could have been more frugal, but didn’t over spend too much. I sold a few things on Facebook marketplace and eBay, so made some extra pennies, which all went to debt. I also started the stocks and shares isa. I’m putting the minimum monthly amount in (£25) for now, and I’ll aim to increase that when I am debt free and don’t have help to buy hanging over my head. I think once I am debt free I will aim to save up as much money as I can so that when it comes time to start paying back on help to buy and also remortgaging, I’ll be able to pay off a chunk of the loan and remortgage for the rest (my pay will have increased by at least £6000 per year by that point). 

I’m going to continue to pay £100 per month in to my emergency funds it is a Nationwide start to save account, which has a prize draw attached to it. 3 x per year they do a prize draw, and if you have paid in between £50 and £100 per month for the previous 3 months, you can win up to £100. I may as well carry on paying £100 in to here. It’s a 24 month deal. At the end I’ll have £2400. At that point I can either pay off my debt, if I have any left, or just carry on adding to it for a 3-6 month EF / help to buy fund

Sarahwithlove

Sounds like your in a good place with money and know exactly what you plan to do for future. Good luck 

pencakes26

Just dropping by to catch up with your diary and say hi - I think we both commented on each other's diaries at the beginning of our journeys and it looks like a year-ish later we're still on a similar path. Good luck! 

MidsHollie

Thank you @Sarahwithlove and @pencakes26
February hasn’t been a great month for budgeting and organisation, however, I have managed to not overspend anyway, so it all worked out. I didn’t really keep track of my spending using my spreadsheet and tended to use Apple pay rather than my monzo pots, but because I was still conscious of my budget and my spending (-and there is nothing to spend on now anyway!) it all worked out well in the end. 

I did my zero based budget for the month and paid a chunk to my debt yesterday. Total debt paid = 17797, with 15137 remaining. 53% paid. I should get paid some more in the middle of the month, and so a little more can go to the debt. 

I’m hoping March will be a cheap month for groceries. I have a well stocked freezer, so that should keep me in food for a couple of weeks. And I might go extreme and try and use up the contents of the cupboard. I get in a bad habit of eating only the stuff I’ve just bought, and not the stuff I’ve had hanging around for ages. 

I’m still ticking along selling the odd thing on eBay or Facebook market place. All the sales add up over time, and also help my life be a little less cluttered. 

Sarahwithlove

Try looking through your cupboards for your next shop and only buy what you need to make a meal from what's in the cupboard. I found it a good way to use up food and keep spending down.