Crunchy pays off the loan early, and other stories

EssexHebridean

There is a very good reason why - pretty much regardless of the level of debt someone comes to the boards with - we almost always say an emergency fund is priority number 1. Build to your £500 first as fast as you can by throwing everything at it, then switch to using 50% of any spare money you can extract from your budget for paying down debts, and the other 50% to continue building that EF. Once you hit £1k in there you’ve bought yourself a bit of breathing space if things go wrong,  but continue to keep sending a budgeted amount to the EF each month as well to counter inflation and mean you’re getting closer to building a proper safety net. 

As for having to use the CC for fuel, can I suggest just putting the bare minimum you need until payday on the card, then filling up the tank once the money is back in the budget for it. At least February is a short month eh! 

crunchy_time

EssexHebridean said:

There is a very good reason why - pretty much regardless of the level of debt someone comes to the boards with - we almost always say an emergency fund is priority number 1. Build to your £500 first as fast as you can by throwing everything at it, then switch to using 50% of any spare money you can extract from your budget for paying down debts, and the other 50% to continue building that EF. Once you hit £1k in there you’ve bought yourself a bit of breathing space if things go wrong,  but continue to keep sending a budgeted amount to the EF each month as well to counter inflation and mean you’re getting closer to building a proper safety net. 

As for having to use the CC for fuel, can I suggest just putting the bare minimum you need until payday on the card, then filling up the tank once the money is back in the budget for it. At least February is a short month eh! 

We’ve had a long term savings account for many years now for emergencies and car services. But we have not been crystal clear about what constitutes an emergency. Emergency fuel has for example been credit carded and then paid back out of the budgeted amount the following month. We have always  been lucky and had several hundred pounds left every month but haven’t budgeted for sinking funds and just paid for things as we needed without looking forward too far. 

The problem with our current emergency fund is that its in accounts that aren’t easy access.

I think this is the first time in our lives that we have been stable enough with jobs and kids to actually look forward properly rather than just react. Hence all this thinking is coming out now.

Before I have felt guilty that we have had more than £1k in savings and feel we should be using some of it to pay down debt as per Dave Ramsey I do like your suggestion of continuing to save though to completely avoid debt rather than break it up as per Ramsey so steps - thanks!

Hastingslass

I have read your diary over a few days and have to say you’re such an inspiration l. Like you I used to be a teacher but used my transferable skills and became a Housing Officer for a housing association. I work from home but have to come into the office once a month for a team meeting and from next month in person visits. Is this something you could do? I earn just over £34000 for full time and get a car allowance. My full time work hours are 35 a week although I work a 9 day fortnight 

crunchy_time

Hastingslass said:

I have read your diary over a few days and have to say you’re such an inspiration l. Like you I used to be a teacher but used my transferable skills and became a Housing Officer for a housing association. I work from home but have to come into the office once a month for a team meeting and from next month in person visits. Is this something you could do? I earn just over £34000 for full time and get a car allowance. My full time work hours are 35 a week although I work a 9 day fortnight 

Bless you @Hastingslass - curious to know though what is that's so inspirational about me!  I have been on this forum for 8 years and still in debt!  Ha ha!

I'm really scared of giving all my education experience, if I am honest.I really like working with young people and helping them make the most of themselves.  I really enjoy this part of the role and building relationships with the teams around them.

My manager announced a mini restructure of our team today and am not happy about what my new role will look like.  I will be mainly classroom based which is not what I signed up for and not helping me move on with my career - even if I am unsure what that looks like right now.  It's not making use of my skills and I'll have to give up all the relationships that I have built and pass my whole case load of students onto others and then basically be a bum on a seat.  I really love my team and I love the potential of what it could be and of course I love the students, but my manager is not receptive to feedback and is not very good at managing us.  I was criticised by her in a patronising way today and that and the restructure have sealed my decision to leave as soon as possible.  My heart is telling me to look for a job in one of the two colleges I have mentioned before, even though they are 45 mins from home and will entail longer slightly more time away from my children.  Or getting a similar job in a secondary school and then doing the specialist course at some point.  My previous thoughts were doing the course first but now I think, new job and then course.  

Anyway, husbands pay day is here!  Money shuffle complete including £350 in an emergency fund!!  First priority is this.

ohdearhowdidthathappen

Sorry to hear your manager is treating you like that, I'd use it as an incentive to move on... when will managers learn?!

crunchy_time

ohdearhowdidthathappen said:

Sorry to hear your manager is treating you like that, I'd use it as an incentive to move on... when will managers learn?!

Thanks it’s mad isn’t it.

we’ve actually had a good chat this week And I’ve got a lot off my chest. We have a new person on board who has taken half my workload off me meaning I can move forward with other things. 

I’m going to park my worrying about next steps for work for a week. I have an appointment with my life coach/counsellor next Saturday and I’m going to ask her help to figure out what to do as my thoughts are everywhere.

crunchy_time

Morning!

Glad I have an emergency fund as the toaster has broken and son needs new rugby boots. Rugby boots should ideally come out of a kids kit fund but we don’t have one of those. This highlights the need to have one especially as they will need new summer clothes soon. I already know what they need so need to set a budget. Im going to look at finances tonight to see if there is wiggle room to not use the emergency fund for this.

Weekend plans are to have a big sort out of the shed tomorrow so a low spend weekend for us.

Crunchy xx

crunchy_time

Morning!

No wiggle room for rugby boots so used the emergency fund.  It wasn’t a planned spend so I guess it can be an emergency. Payment for credit card has come out so I’ve reduced that balance on signature by £64.

I’m enjoying building up savings and following the snowball method. Such a switch in me mentality has been crucial.
Toaster and boots would be on credit card right now and I would be fretting about how to pay them off next month.

Crunchy xx

foxgloves

Hello Crunchy, 
When we were first starting to save into an emergency fund, we too found we were having to use it for exactly the sort of expenditure you describe. Once we'd got the debt paid off (£35k at its worst), I set up savings pots.....just 6 cash envelopes at first & it took me a couple of attempts as the Budgeter in the Relationship to get a system which worked. When I got more confident with it, I changed to virtual savings pots & increased the number to ten. So under our system, new football boots would be paid for from the clothing pot & new toaster from the appliances replacement pot. Implementing this system meant that we have (so far) been able to ring-fence our emergency fund for unforeseen emergencies in case of job loss, damage to home, etc. Previously, everything we needed to buy that we couldn't pay for from our normal budget came from our emergency fund, making us question, like you mentioned, what constitutes an emergency. Before that...... well, we had no emergency fund, only debts, as despite two full time professional public sector salaries at the time, we were spenders.
F

EssexHebridean

foxgloves said:

Hello Crunchy, 
When we were first starting to save into an emergency fund, we too found we were having to use it for exactly the sort of expenditure you describe. Once we'd got the debt paid off (£35k at its worst), I set up savings pots.....just 6 cash envelopes at first & it took me a couple of attempts as the Budgeter in the Relationship to get a system which worked. When I got more confident with it, I changed to virtual savings pots & increased the number to ten. So under our system, new football boots would be paid for from the clothing pot & new toaster from the appliances replacement pot. Implementing this system meant that we have (so far) been able to ring-fence our emergency fund for unforeseen emergencies in case of job loss, damage to home, etc. Previously, everything we needed to buy that we couldn't pay for from our normal budget came from our emergency fund, making us question, like you mentioned, what constitutes an emergency. Before that...... well, we had no emergency fund, only debts, as despite two full time professional public sector salaries at the time, we were spenders.
F

This sums it up. 👍🏼 I think we’ve all had the “is it really an emergency?” debates at some stage - but ultimately, if it could be foreseen (ie the washing machine starting to make unhealthy noises, a car needing a mileage or age related replacement part, or a child growing out of an item of clothing, it’s not an emergency - it’s something we failed to plan for. The key to budgeting is learning to plan in the predictable stuff - WM’s usually give a few months of life once they reach the “unhealthy noises” stage, your garage will tell you if you ask when the “expensive” services for your car will be, and kids, well, they do tend to grow! If you know something is likely to cost you money and can predict roughly when - budget for that spend. The WM suddenly stopping working with no warning, the car breaking down and needing a repair as a part has failed with no warning, or (as has happened to MrEH) a rugby boot literally snapping in half across the stud-line - those are unforeseen.