Debt Free before 40 - 356 days to go

chocchocshot

Long time lurker; first time diary entry! I am feeling the need to hold myself (and family!) accountable to achieve the goal of debt free before 40 (only 356 days to go!).

Debt at highest was £30k and as of 1st January 2020, this is now £5560.13. This has taken several years of hard graft, lots of budgeting and trying to be sensible with money but also live!

Both myself and OH have taken risks with our jobs (i.e. extra studies/qualifications, lots of travel/time spent away) and this has paid off for us until now...

OH is under threat of redundancy - all a very complex situation which I am not going to go into but is causing OH a lot of stress/anxiety currently. We do have a healthy emergency fund which we can access but my preference is to leave that untouched for this year.

The debt of £5560.13 is made up of 1 CC (£914.11 on 0%) and a loan of £4646.02 (2.9%). If we follow what we have been doing for the last few years, my DFD is April 2021. However, I have 356 days to go till the big 40 and would like to have this cleared by then so I can start my next decade, debt free and become a MFW! :rotfl:

I know this is perfectly doable - I am a long time lurker and have seen lots of people clearing bigger debts than this. We have a good, solid budget in place which we review regularly so no need for a SOA and I have a very comprehensive spreadsheet which keeps track of everything!

OH is on-board with the plan - he does take some persuading sometimes! We do make a good team: he spends with his heart; I spend with my head and therefore between us, we do end up with a good balance.:T

In addition, I would also like to clear some "stuff". We do seem to have accumulated "stuff" over the past 12/18 months so will be looking to de-clutter and hopefully make some cash to create an over-payment pot for the loan. The garage will be the first port of call - I seem to de-clutter the house and place it in the garage with the good intentions of doing something with it but never getting around to doing anything with it!

Anyway, enough for a first entry.

chocchocshot

A little historical context to the debt of £30k...

As mentioned, at it's highest the debt was around £30k - not including my University student loan (which is now thankfully paid off!). The £30k was made up of CC's for home improvements and extra study/qualifications. Our first couple of houses were "doer-uppers" - and these were "proper" doer-uppers. Houses that needed new glazing, new central heating, bathrooms and kitchens. We are not afraid of hard work and learnt a lot of skills by buying these properties and living in them at the same time as we were doing the work. I am quite a dab hand at tiling After the sale of our first house we were debt-free for a period of about 4 days before the sale of our next house went through and this house was the one that needed the most work. We managed to live in this house, renovate it, raise our family and recently sold it. All the equity from the sale (about £100k) we put into a new house (one that needs no work!). Our focus is now twofold:

1. Spending quality time with the little ones -they were always quite happy to "help" with a paintbrush, or a saw or hammer and nails...:rotfl:
2. Clearing off the remaining debt before the end of the year. The credit card is the last remaining "house renovations" and the loan was relating to a purchase of a much needed second car.

Sea_Shell

How much is in your emergency fund, and what interest rate is it earning?

chocchocshot

We have 6 months salary saved in our EF fund. This would cover all expenses if we were both out of work for 6 months. This is locked away in a 2 year fixed term ISA - we are entering the second year, hence why I do not want to touch it!

Based on what we have in the EF, we are considered "debt neutral" but as we have known that the OH job has always been precarious, we have chosen to save hard to build the EF, paying down the highest % debts first, hence why we are left with a 0% and 2.9% interest debts. I have another smaller EF which is more accessible than this earning 1.41%.

Over the weekend, we have decided on our plan - we will focus on the CC first. It is the smallest debt, even though it is on 0%, we need to motivate ourselves. We have paid off £25k already and need something to motivate us - saying we have 1 debt will be motivating. We looked at transferring the loan to a 0% card, but the transfer fee is more than the interest left to pay. So the plan - pay off the CC; once paid off, continue to "pay" the CC monthly payment into a savings account to pay off the loan early. This could possibly take around 5/6 months after the CC is paid off when combined with the loan repayments.

With this plan now in place, I have made an over-payment to the CC this weekend - £450. This is money that I have been squirreling away. I have a SO set up for £25 to a bank account from which our TV licence is paid from (the only DD from this account). So this means once the £12.83 comes out for the TV licence, the rest just sits there slowly building and bingo...it has accumulated to £450 over time (a very long time!). The CC now is £464.11 (I wish I paid the additional 11 pence - I like round numbers! Next time ); the regular DD payment does not come out until the end of the month, so hopefully by the start of February this will be considerably lower.

Also started to de-clutter this weekend - I have a pile of toys sitting in a box staring at me. I need to move it before the DC start to re-claim it....these are all things that they have not played with in a very long time!

chocchocshot

So a quick update...

OH position is now NOT at risk - we have had months of worry, stress and anxiety which has made OH physically sick. He is taking a little time off (doctor's orders) to "re-group". It is time for OH to get out of that place and to get a better work/life balance so this will be our focus...

As none of the regular DD's are due yet, I have been playing around with my spreadsheet. Our possible earliest DFD could be the 10th July 2020 - which is in in 184 days! This would be of course in the perfect world with no upsets and no major expenses....

Ultimate goal is to be debt free by my 40th birthday....353 days away!

chocchocshot

First scheduled DD went out today - takes us under the £5k mark!! :T

• 182 days till 10th July (potential DFD date if nothing goes wrong!)
  
• 351 days till my 40th (absolute goal to pay of debt before the big 4-0!)

MartinisTHEWAY

My first time posting on here and hopefully don't offend or sound stupid. You mention university? Do you still have the text books? If so try ebay/gumtree as some of these books can go for £50+ and as students can have 10+ books you could be sitting on a hidden profit. Clothes and utilities is another way and accumulating money quick and i know from experience you can get quite a few £100s from ebay-just list items to finish around 9pm ish as ive found this a better selling time. I know from a debt of £30000 my ideas may be simple but its the homestraight you are on and £100s here make a far bigger difference to your total. Good luck

chocchocshot

Not offended in the slightest MartinisAllway (great user name BTW!); all textbooks have been removed via different sources a long and distant time ago. When we moved house recently we cleared DVDs, CDs and even more books via WeBuyBooks, Music Magpie etc - it was so therapeutic!

I have been a bit quiet lately on the forum as OH has been very poorly, both physically and mentally, so having to really focus on DC and OH, and of course working full-time and keeping house/meals/washing/ironing and all the other things (plus trying to keep my MSE hat on). I am exhausted and so very pleased to see Friday.

Today OH seems a little happier and in less pain, so hoping we have seen through the worst of the physical pain. Times like this really make you realise that health is the most important asset that we all have.

Have a good weekend all. x

175 days till 10th July (potential DFD date if nothing goes wrong!)
343 days till my 40th (absolute goal date to pay off debt before the big 4-0!)

chocchocshot

A very productive weekend - lots of cooking, cleaning and even a NSD!

This week sees payday - hurrah! We were both paid early in December which has made January even longer but fairly happy to report we have just about made it intact with lots of planning.

I am due a pay increase this month; my plan is to siphon off the extra and put this in my "loan overpayment account". It will be interesting to see how much this actual is after the tax. NI, pension etc,.

I have used the Salary calculator website so I have a rough idea of what it maybe, but sometimes it is so hard to tell (plus according to HMRC last year apparently I underpaid tax - just like the year before but I have had no changes in my employment, no maternity, no sick, no changes in pay...so it remains a mystery to me how I keep underpaying tax every year?!). Plus I don't want to be disappointed so I just need to wait a few more days to see what the "extra" is - fingers crossed!

Last of the scheduled DD goes out on the 27th January, so will be nice to review the spreadsheet and add in the revised debt total as we move into February.

Have a good week everyone x

173 days till 10th July (potential DFD date if nothing goes wrong!)
341 days till my 40th (absolute goal date to pay off debt before the big 4-0!)

chocchocshot

So, it has been a few days since my last entry.

Payday has happened and I was fortunate to see an extra £133 in my pay this month; I have siphoned this off to a separate account.

Keeping MSE ways have been at the fore front of my mind. Meals have been planned (almost with military precision!); shopping bought (if its not on the list, it is not going in the trolley) and batch cooked where possible to make the working week a little easier. Really seeing a reduction in the food bills (and less panic visits to the supermarkets!) so need to keep this up! However the box of clutter that i cleared earlier this month still has not made it any further than the kitchen

Last scheduled DD has gone out today; the credit card is under £300. :T I promised myself the extra money in my Jan pay would go towards loan over-payments; I may just send it to the CC and get rid of the balance with next month's scheduled DD. I just need to see that we are achieving something... The CC was 0% for 32 months (finishes next Feb), so it feels like we have not had a debt "victory" for some time.

OH is continuing on the road to recovery. It will take a bit of time, but hopefully moving in the right direction. In other news, I have been given a promotion at work.:j I have known about this since October - it has been a long time coming and I have not breathed a word to anyone not even my OH, as it has been mentioned many, many times before and never materialized. There is a uplift in salary but will really need to see what this means in terms of take home pay when February's payday comes round, after tax, NI, pension etc. I feel like I am wishing my life away, but hopefully we can then think about booking a summer holiday with the kids.:)

Onwards and upwards.
All for now
Choc x

165 days till 10th July (potential DFD date if nothing goes wrong!)
333 days till my 40th (absolute goal date to pay off debt before the big 4-0!)

savingholmes

Well done on the promotion and the DFD goal. Great that your OH's job is more secure than he thought. Hope he recovers soon.