Debt Free by '23

zippygeorgeandben

Do the family know about you starting to pay it off? I was thinking that if you hadn't told them, you could have a good 3 months or so and give them a lump sum, then start a regular monthly amount.  Just thinking, if anything was to happen in the three months, you might have second thoughts?  Just putting it out there!

MidsHollie

Hey Zippy, when I say I’m paying off the family loan, it’s a bit more complicated! I actually don’t have to pay it back right now, but I will some day. I already have some of it sitting in a hard to reach account. I’m basically just going to be paying in to that account, so it will be there as savings if I do need it. But I’m treating it as debt as eventually I will need to give the money back. I haven’t been clear with that because I know some people really struggle with the ‘if it’s there I will spend it’ thing, so didn’t want to really broadcast it. 

It’s amazing how little things add up. I have been putting bits from eBay sales etc in to an account, ready to move across to the ‘family debt’ account and soon I’ll have £60. It really does add up quickly. 

I set up my mortgage overpayment too yesterday. I know some would say not to, but it is only rounding the payment up to a round figure so I shouldn’t notice it month to month. And hopefully will pay off in the long run. 

MidsHollie

I’ve been paid early this month, so have just paid the first payment to the family loan debt / savings account. Once a payment leaves on the 1st, I will have now paid a total of 22% off my Total debt figure. In 6 months. When I look at my debt predictions from when I first started, it’s amazing to see how far I have come. Debt number 3 I had predicted I would pay off in August. I adjusted this to April once I got started, but paid off in March. Debt 4 was predicted October 2021, then revised to August 20, and actually paid in June 20. 

I have found the snowball method (as opposed to the avalanche method) really powerful. My focussed debt payment can now be a chunk of 500 or 600 per month off one debt. The speed with which that debt will come down will be great to see. 

In other news, I have rounded up my mortgage payment to a round figure to start overpaying. I realise that many people would say that that is silly whilst in debt, but it’s approx £20 which I won’t miss each month, and rounds the figure up. My debt is also zero percent interest, so this small amount of money will have really big impacts at the end of the mortgage term (8 months shorter term!). I hope to be able to make a larger overpayment once I’m debt free, but it’s exciting to make a barely noticeable positive change.

Sarahwithlove

I love the snowball effect too. Seeing how quickly one debt comes down and then it going makes you motivated to stay on course and make savings where ever you can. 
Good idea with the mortgage it's not much but like you said it all helps. I've been debating doing the same as would be about an extra £27 a month to round it up to an even amount as like you my debt is all 0%

MidsHollie

Only 23 days late with my June summary, which might explain why July feels like a struggle!
Extra Income Earnt: (May £21, Apr £5.25,Mar £34.19, Feb £147.75)
Debt Pay Off: (May £915 Apr £885, Mar £1274.30, Feb £1321.92)
Spends:
Groceries: £210.05 (May £194.01, Apr £192.45, Mar £382.51, Feb £209.66, Jan £144.54, Dec £140.12)
Fuel & other transport: £54.19 (May £150.12, Apr £141.46 (Mar £82.48, Feb £140.44, Jan £94.36, Dec £176.58)
Eating Out: £23.54 (May £65.50, Apr £20.40, Mar £125.88, Feb £73.65, Jan £51.12, Dec £99.51)
Entertainment: £0 (May £0, Apr £ , Mar £17.38, Feb £17, Jan £27.50, Dec £30)
Work food: £40.05 (May £33.44)
Other: £173.18 (May £485.56, Apr £71.76, Mar £13.46, Feb £23.88, Jan £68.45, Dec £119.32)

It's amazing how the 'other' category adds up. This does include some gifts and some clothes, which came out of my annual spends saving account, so not directly out of my month to month budget. Work food is problematic again, and has been in July too. I really must plan ahead more for groceries and meals, as it is clear that I can keep groceries around the £140 mark. 
I also need to look at my direct debits. I marked a few that either need cancelling or reducing. One I have actually just cancelled now. I need to look in to an energy switch too. I might try that now. 
Next month, I think I need a focus - reducing grocery and work food spends. 

MidsHollie

Hi All,
I'm a little bit quicker off the mark with my summary this month!

Extra Income Earnt: Didn't keep track in June or July (May £21, Apr £5.25,Mar £34.19, Feb £147.75)
Debt Pay Off: Jul £900 (Jun £800, May £915, Apr £885, Mar £1274.30, Feb £1321.92)
Spends:
Groceries: £201.61 (Jun £210.05, May £194.01, Apr £192.45, Mar £382.51, Feb £209.66, Jan £144.54, Dec £140.12)
Fuel & other transport: £118.01 (Jun £54.19, May £150.12, Apr £141.46 (Mar £82.48, Feb £140.44, Jan £94.36, Dec £176.58)
Eating Out: £35.10 (Jun £23.54, May £65.50, Apr £20.40, Mar £125.88, Feb £73.65, Jan £51.12, Dec £99.51)
Entertainment: £0 (Jun £0, May £0, Apr £ , Mar £17.38, Feb £17, Jan £27.50, Dec £30)
Work food: £29.45 (Jun £40.05, May £33.44)
Other: £79.29 (Jun £173.18, May £485.56, Apr £71.76, Mar £13.46, Feb £23.88, Jan £68.45, Dec £119.32)

I'm disappointed with my work food spends, and I could do better with groceries (I've been saying that since February!!). I was actually pretty pleased to be able to report that I haven't used my credit card AT ALL this month, only to realise that I used it early on in the month to pay for something online. Even though I have paid it off in full, this isn't in line with my debt free goals. 

In my last post I mentioned that I needed to look at my direct debits. I have cancelled two small subscriptions, saving me £9 per month and changed energy supplier, hopefully saving me about £15 per month. Over the next month or two I'm going to look in to my broadband supplier, and actually consider getting rid of my TV licence and just using streaming services. I'm not sure my TV licence is worth how much I watch TV (very little). I am aware this is probably considered extreme money saving though! 
I'm almost at the end of what I can sell on ebay. I'm starting to check prolific and some mystery shopping sites/apps again now, so have made a little extra with these. All extra is going to my debt payoff. I also need tocheck my tax code, as I think it changed this tax year; I may be ableto get a rebate on a couple of things. That can be tomorrwos job. 
So,goals for August:
- I will have at least 7 no spend days
- I will limit my 'work food' spends to £20
- I will not use my credit card - I do not want to spend next months money on this month's stuff

MidsHollie

Well, August was a pricey month! It also was my lowest debt pay off since I started this journey. It was also bloody stressful, so the fact that I have survived the month relatively unscathed is an achievement in my eyes. Here are my totals for the month: 

Groceries			122.14
Fuel			118.7
Gifts			38.5
Eating Out			113.26
Car			0
Entertainment			0
Other			161
Clothing			0
Work Food			47.37
Other Transport			8.7

I've realised this month that I have a posh coffe problem. It even extends to buying posh beans for use at home (they taste sooooo good!) I might address this problem in the future, but not now!

Looking back on my post from last month, I never got round to checking my tax code, HMRC kindly sent a letter saying I had underpaid, not overpaid! Ah well! I'm still thinking about the TV/broadband situation. 
My goals for August:
- I will have at least 7 no spend days - Achieved!
- I will limit my 'work food' spends to £20 - not achieved
- I will not use my credit card  - not achieved

I think I need to sit down and reconsdier my goals.It is going to be tough over the next few months. But 2020 is clearly the year of reframing goals and achievements. My debt payoff may be getting more difficult to achieve, but progress is still progress, no matter how slow. I really have achieved a lot this year. Over £9000 paid off. One month I paid off £1300! I have almost £1000 setaside for annual expenses like insurances, servicing and maintainence, gifts etc; stuff I previously would have just paid for with credit card. I wore a coat today, that I bought last year. I remember buying it. £149, put on a credit card. An impulse purchase because it was on sale, and because "it will last". Don't get me wrong, it is a lovely coat. But I couldn't afford it. I'm not sure I will be doing that again any time soon. My mindset has completely shifted. And even just that is an achievement

RelievedSheff

Keep up the hard work. You are making great inroads into that debt.

MidsHollie

Thanks @RelievedSheff, it can be really hard to see your own progress at times, and future worries can start to jeopardise past progress. I think I’ll just be the toirtoise for a while, after being the hare at the start of my journey! 

MidsHollie

I've gotten out of the habit of tracking my spending regularly, and only reconciling things at the end of each month. By this point it is too late to adjust my spending to stay within budget. I've just made a note of all my spending for this month, and I thought I had done really well so far. Well, it turns out that I have already spent almost as much on eating out as I have on groceries! Think I'll be eating out of the cupboards for a few days this week!

Going forward, I think I need to reconcile my spending at least weekly so that I can keep a better eye on my spending and adjust it to meet my budget.