Crunchy pays off the loan early, and other stories

crunchy_time

Hi everyone 
I’ve spent the last few weeks trying to decide whether or not to keep going with this diary or not. I like writing down my thoughts about money as I don’t have anyone else to talk to but I also don’t like feeling like I have to explain myself all the time. Everyone deals with debt differently and there is no one size fits all. I no longer lust after debt free status. That doesn’t mean I’m trying to get into more debt because something is wrong with my money mindset. I’m just not setting myself ridiculous deadlines and measuring my success in life according to how I match up to certain figures. 

The loans have 4 years left to run and the plan is to still pay them off early. We would like to pay them off a year or two early and that means getting rid of the just under £6k of consumer debt by overpaying whilst the car and house stuff gets paid off monthly. 

Those of you who think we are mad to get into more debt to do a pergola are not going to like what’s coming. 

The quote for the pergola was for nearly £4K and we have said yes!!! We have an idea of how we are going to fund it and a plan for how to pay it off. 

We are also still planning to pay off the loans early. If you are interested in how we do this follow along. If not, jog on.
This diary is called Crunchy pays off the loan early and other stories. This is one of the other stories.
lots of love!
Crunchy xx

remote_control

Hi Crunchy,
I am sorry if I have posted things that make you feel the need to justify your decisions. I would only have done so as I worry about your mental health and I know that you have felt the debt as a weight hanging over you. We have put all our house renovations on credit (and paying what we can out of our monthly salaries) and have never really saved up for anything. I enjoy now that the debt is coming down every month but I see it as a monthly payment rather than attaching any guilt to it. We've just managed to transfer it all to a new 0% card which I'm very excited about. I'm going to put any extra money in savings now as I will be going on holiday this year if Covid allows!
Have you ever read back through your diary? I read back through mine the other day!
All the best

t2rry

Hi Crunchy - can I tell you a secret!?  I have lied in my diary!!   Yep, I have purposely found alternative explanations for a few things rather than spell them out truthfully, for the very reason you've touched on - preventing having to explain myself.

The bottom line is that I feel comfortable in how we are managing our money (and therefore debt), and I figure that's the only thing that is important, if we choose to slow down debt repayment to have a holiday or to improve the house or to buy clothes, basically whatever it may be, nobody else (including on these boards) knows why we need/want/choose to do those things, and they don't need to.  Nobody else understands all of the ins and outs of our finances and how, actually, sometimes home improvements especially may put you in a better financial position potentially both in the short term and long term.

Think of it this way - a pergola can add £10,000 to the value of a house (for arguments sake), if you're approaching the end of a fixed mortgage period, these sorts of things could actually prove to be the most savvy financial investment, it could mean suddenly you are in a different loan to value rate, reducing monthly outgoings, improving actual disposable income or on the flip, reducing the term of the mortgage and saving thousands of pounds in interest.  You wouldn't get into that sort of detail here, or at least I don't think most would, so you only ever get a small snippet of financial circumstances.  And it is geared, naturally, to debt busting.  I still think it is the right place to do that, no matter what route you take, but the most important thing is that you know you're on the right track and making the right, carefully considered, decisions for your circumstances that only you know.

I can also vouch for the pergola adding value way above what you think - I've mentioned that we did ours last summer, a DIY job so probably not half as nice as yours will be and the valuation on our house has broken through the ceiling of our area.  Yes there are probably other factors, but it is certainly one of them.  PLUS we get to enjoy it, and when we've all spent so much time in our own homes and gardens over the last year (and probably will do for a long while yet) that has to be worth it.  No point living poorly to rid ourselves of debt to find in 10 years time that we regret wasting opportunities with our kids and our homes and our lives, opportunities that by then might be gone.  After all, you never know how short life might be.

I have loved following your journey over what is now (on and off!) years.  I would love to continue to do so  

Aspiration

Great post Crunchie and it’s your diary!! 

crunchy_time

remote_control said:

Hi Crunchy,
I am sorry if I have posted things that make you feel the need to justify your decisions. I would only have done so as I worry about your mental health and I know that you have felt the debt as a weight hanging over you. We have put all our house renovations on credit (and paying what we can out of our monthly salaries) and have never really saved up for anything. I enjoy now that the debt is coming down every month but I see it as a monthly payment rather than attaching any guilt to it. We've just managed to transfer it all to a new 0% card which I'm very excited about. I'm going to put any extra money in savings now as I will be going on holiday this year if Covid allows!
Have you ever read back through your diary? I read back through mine the other day!
All the best

I must say it’s nobody in particular that has offended me on here so please don’t apologise. I am sorry if I have come across that way. I think I am just frustrated with the somewhat one size fits all approach that seems to be in favour. I used to dream of being on the mortgage free wannabe page and simple Chuck all the money we were chucking at debt at the mortgage but not anymore.

I’ve been on this forum now for nearly seven years. People have got in debt for many reasons that I have seen. Our original £23k was from living beyond our means in our twenties and not having a plan to get out of it. We paid all of it off bar about £3k and very quickly but then our life circumstances changed again and then changed in 2017. To be honest I wish we had saved more money then than the £1k once our debt was stable and been overpaying the mortgage as well. Although it might not make sense financially, psychologically it would have been good and better for our finances in the long run. That’s my view anyway.
I guess I get tired of having to explain myself along the way.
My mental health around money is fine. Since this decision and the decision to overpay the mortgage I feel way more in control of things. I think the only guilt I feel is from not adhering to the debt pay back norms on here. 

I hope that makes sense.
Crunchy xx

crunchy_time

t2rry said:

Hi Crunchy - can I tell you a secret!?  I have lied in my diary!!   Yep, I have purposely found alternative explanations for a few things rather than spell them out truthfully, for the very reason you've touched on - preventing having to explain myself.

The bottom line is that I feel comfortable in how we are managing our money (and therefore debt), and I figure that's the only thing that is important, if we choose to slow down debt repayment to have a holiday or to improve the house or to buy clothes, basically whatever it may be, nobody else (including on these boards) knows why we need/want/choose to do those things, and they don't need to.  Nobody else understands all of the ins and outs of our finances and how, actually, sometimes home improvements especially may put you in a better financial position potentially both in the short term and long term.

Think of it this way - a pergola can add £10,000 to the value of a house (for arguments sake), if you're approaching the end of a fixed mortgage period, these sorts of things could actually prove to be the most savvy financial investment, it could mean suddenly you are in a different loan to value rate, reducing monthly outgoings, improving actual disposable income or on the flip, reducing the term of the mortgage and saving thousands of pounds in interest.  You wouldn't get into that sort of detail here, or at least I don't think most would, so you only ever get a small snippet of financial circumstances.  And it is geared, naturally, to debt busting.  I still think it is the right place to do that, no matter what route you take, but the most important thing is that you know you're on the right track and making the right, carefully considered, decisions for your circumstances that only you know.

I can also vouch for the pergola adding value way above what you think - I've mentioned that we did ours last summer, a DIY job so probably not half as nice as yours will be and the valuation on our house has broken through the ceiling of our area.  Yes there are probably other factors, but it is certainly one of them.  PLUS we get to enjoy it, and when we've all spent so much time in our own homes and gardens over the last year (and probably will do for a long while yet) that has to be worth it.  No point living poorly to rid ourselves of debt to find in 10 years time that we regret wasting opportunities with our kids and our homes and our lives, opportunities that by then might be gone.  After all, you never know how short life might be.

I have loved following your journey over what is now (on and off!) years.  I would love to continue to do so  

Ha! This made me laugh! Perhaps I should have done this! I want to be transparent though so that people can see the many ways this journey can work for them.
We would struggle to sell this house without the pergola due to a privacy issue. Basically next door can see right into our patio area in an imposing way. A flaw we overlooked when we bought it as we were desperate to find a house at that time due to life circumstances. It’s not a frivolous nicety, we are thinking of it like an extension that will add value to the house. We want to move in the next 6 years or so, what’s the point of saving up for it over three years and then only being able to enjoy it for 3!
We have a financial plan now for the first time ever. I’m happy with where we are and we still will pay loans off early by making sensible choices.
I remember when you were getting married back in 2014 ish and I was pregnant and you were the first person that followed my diary! That baby bump is going to be 7 this year!!!
crunchy xx

Sarahwithlove

To me there is a difference between a well thought out debt that's going to add value to wasting money on pointless unnecessary stuff and living beyond our means and let's be honest for most of us some if not all our debt is from that. 

t2rry

Oh my goodness is that right!? I feel all honoured to have been your first follow!!! Where does 7 years go!? We will have a 6 year old before this year is over too 😱

so much happens in 7 years, I think some people here just see the debt free part and smash that so quickly that’s it. I don’t know everyone’s circumstances obviously but I know I’m with you in having been on these boards in my 20’s, just a few years into my first ‘proper’ job in fact, the classic years when you start your adult life with a shed of student debt, then take time to figure out how money works in adulthood meaning more debt, pay it off, buy a house, take time to figure out how money works with house ownership meaning more debt, pay it off, have kids, take time to figure out how money works with kids (and maternity leave, and potentially taking a step back at work because of the new little human(s) now relying on you!!) meaning more debt, pay it off....

these have been the most up and down, expensive years of our lives. I for one think we’ve both done bloody marvellously to still be here plugging away, determined to manage it all sensibly and ensure that we’re not here later in life regretting not having got to grips with it sooner.  We’ve also made sure we have lived during that time too, what a waste it would be to have not

remote_control

These feel like the most expensive years of my life! My entire 30s will be with credit card debt. But like Sarah said it is mostly thought out debt (cars and home improvements). I suppose if we didn't have such good access to credit we would have to save up for things! 

t2rry

remote_control said:

These feel like the most expensive years of my life! My entire 30s will be with credit card debt. But like Sarah said it is mostly thought out debt (cars and home improvements). I suppose if we didn't have such good access to credit we would have to save up for things! 

Oh 30’s is absolutely in there. Trust me I did not manage ALL of that in my 20’s 🤣. I wish!! No way, it’s a long road I think!!! But definitely a different kind of debt in our 30’s than 20’s!!