Debt Free by '23

MidsHollie

I have decided to commit to a diary. I didn't want to start a diary and lose the wind in my sails and not keep up with it. But since my LBM in October I have kept up with this debt free journey. And what better day than the start of a new decade to commence my diary. My debt started with student loans and small credit cards, then bigger cards and a car payment. I just thought life would sort itself out, but turns out that budgeting, saving and planning are really useful tools to manage finances! I'll post my SOA on a later post.

My goals for the year are as follows:
- Pay off my hobby loan 267.19 - achieved today!
- Pay off the Halifax CC
- Pay off the Virgin CC
- Continue with £300 PM payments for Car Loan
- Save up £1000 Emergency Fund
- Actually budget, and put aside for annual expenses

I have a total of 32,567.34 of debt, not including my mortgage and HtB loan. I hope to be debt free by 2023, although to have paid off the credit cards and car loan by Spring 2021. Wish me luck!

GlitteringGold

Good Luck Hollie. I’ve got a similar figure, £29.4k. Feels like an absolute mountain but I’m feeling determined.

MidsHollie

So here is my best attempt at an SOA. As someone who has not learnt to budget, and does not plan ahead and save for things, it has been pretty hard to work out what actual costs are. Therefore this is somewhat aspirational in terms of budgeting items such as groceries, holidays etc.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 2158
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 500
Total monthly income.................... 2658

Monthly Expense Details
Mortgage................................ 628
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 1
Council tax............................. 133
Electricity............................. 0
Gas..................................... 42.85
Oil..................................... 0
Water rates............................. 27.12
Telephone (land line)................... 0
Mobile phone............................ 10.01
TV Licence.............................. 13.24
Satellite/Cable TV...................... 33
Internet Services....................... 7
Groceries etc. ......................... 250
Clothing................................ 20
Petrol/diesel........................... 150
Road tax................................ 2.5
Car Insurance........................... 70
Car maintenance (including MOT)......... 40
Car parking............................. 15
Other travel............................ 50
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 15
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 22.5
Haircuts................................ 15
Entertainment........................... 130
Holiday................................. 25
Emergency fund.......................... 50
Education............................... 150
Volunteer Expenses...................... 12
Professional Fees....................... 30
Total monthly expenses.................. 1952.22


Assets
Cash.................................... 400
House value (Gross)..................... 265000
Shares and bonds........................ 0
Car(s).................................. 12500
Other assets............................ 0
Total Assets............................ 277900


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 160000...(628)......2.2
Total secured & HP debts...... 160000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Halifax CC.....................1893.04...20........0
Virgin CC......................2374.3....25........0
Car Loan.......................8800......300.......0
Help to Buy....................50000.....1.........0
Family.........................19500.....0.........0
Total unsecured debts..........82567.34..346.......-


Monthly Budget Summary
Total monthly income.................... 2,658
Expenses (including HP & secured debts). 1,952.22
Available for debt repayments........... 705.78
Monthly UNsecured debt repayments....... 346
Amount left after debt repayments....... 359.78

Personal Balance Sheet Summary
Total assets (things you own)........... 277,900
Total HP & Secured debt................. -160,000
Total Unsecured debt.................... -82,567.34
Net Assets.............................. 35,332.66

Created using the SOA calculator at https://www.LemonFool.co.uk.
Reproduced on Moneysavingexpert with permission, using other browser.

There are a few things I could cut down on eg TV, phone & internet package at £33 PM, Netflix, and entertainment (includes eating out), however, I have a lodger so feel I need to provide TV and good internet. I could probably cut groceries too.

MidsHollie

I took a bold move yesterday. I added up how much I have still to come out of my account in direct debits, and worked out that I have about £150 over that amount still in my current account. My groceries and fuel money is in a Monzo account (I didn't budget for eating out in January, which has also been going to Monzo). And then I paid £100 off one of my credit cards. It leaves me with very little leeway in my budget for things I may have forgotten, but it's money that hasn't been allocated else where so there is no reason it can't go towards the card debt.
It actually scares me. I've been listening to Dave Ramsey ALOT! And it really resonates with me when he talks about being scared, and how this makes you work harder towards your goals. I have always earned above average salary, in very safe jobs. Credit or some savings have always been available as a safety net. I realise what a privilege this is. So this self imposed situation of not using available credit (I haven't had the guts to cut up my cards..... maybe I should....), not use my emergency fund, and not use the money I'm putting aside for annual expenses - It's making me worry - am I able to get through the month with what I have budgeted?
Budgeting is a really steep learning curve for me, as is having to think before I spend, and plan ahead.

I have only had one NSD in January so far. One day I spent a few quid at the pub after along walk with a friend, and yesterday a few of us went on along cycle, and as I didn't have to drive or clean my bike after, I paid for some hot drinks and the car parking. I also bought a gift for a house party I went to, and had to get some kit for my bike, so spent an unbudgeted £30. These are the kinds of little spends that I want to get my head round, figure out what money I'm loosing where, and plan ahead for the future.

Purplebonnie

I had a similar amount when I started and it is coming down, so good luck with your debt free journey.

MidsHollie

Thanks PurpleBonnie and GlitteringGold. It's very encouraging to see how other people are doing.

So we are over two thirds of the way through the month. I've paid £692 towards debt this month so far. I'm expecting about £100 from a side hustle at the end of the month, and over £8 from Prolific. I also submitted a claim for some cost occurred a while back. I may be out of the payment window, but lets see - it might be another £100 or so towards the debt. All of this will go towards the Halifax card. I've had 5 NSDs so far. Today probably won't be one - I'd like to prep a few meals for the week this evening so will need a few groceries.
I've signed up to a few different challenges here to help me stay focussed and motivated; the £1000 emergency fund (£220.03/£1000), NSDs (5/15 for Jan) and Lunches to Work (7/22 so far for Jan). I've also signed up for the 1% challenge. My 1% is £330. I'm hoping to pay off 25% this year, but this is a stretch goal which will rely on much frugality and good fortune thrown in. There's actually some chance with some good fortune that I'm working hard for, I'll be able to pay off more than this.... lets see! I'm also going to sign up for the 1 debt vs 100 days. This will work well with my Halifax card (approx. £1700 balance). Again, a stretch, but still will be good to get as much paid off as possible!
Here's to the ret of the month being within budget and frugal!

Vegasgirl1973

Hi Hollie, good luck with it all I owe a similar amount and have only just become honest with myself. I have signed up for the 1 debt v 100 days challenge too. I know it will be a long road ahead, but it will be easier to walk it now, than ignore it for a while longer. Well done on getting started :T

pencakes26

Just stopping by to say hi as I'm in a similar place with my debts. Good luck with your DF journey!

ceb1995

would you consider switching to a cheaper supermarket option? you could save £50-£100 on food without too much effort by doing so.

MidsHollie

ceb1995 wrote: »

would you consider switching to a cheaper supermarket option? you could save £50-£100 on food without too much effort by doing so.

Hi Ceb,
Thanks for the advice. I actually already do most of my grocery shopping at a value supermarket with occasional shops at others for more specific things. This SOA is really just my best guess! I tracked all my spending in December and although I was away for a week I did have guests / partner staying for more than a week and my grocery shop was £160. So far this month its been about £45. I think I have over budgeted on groceries! One issue I do have a little is wasting food. Not a lot, but the odd fruit / veg or dairy product does go to waste. And I also buy too much fancy snack food (bad for the purse, bad for the body!) I'm working on these! And I'm trying to have frugal meals - loving a batch prepped soup for work lunches and 3 bean chilli. And found a recipe for a Moroccan mince dish that I'll cook later in the week.
It will be interesting in March when I have three months of spending to see how much I'm actually spending in each category.

ratrace

Hi dont want to come across as harsh but your car is killing you you are spending £500+ every month on it thats more double what you spend to feed your self can you trade itin for a cheaper one and wipe £8k straight from your debt

Also family loan on your soa it says 0 payments going towards that when is due to be paid and what will be the payments

same with the help to buy when is that due to be paid back and whats the plans to raise the amount is it to remortgage if so then its very important to reduce your overall debt as fast as possible that way you will get a better interest rate etc...

sorry if i have come across as a bit harsh but it coming from a good place