Becoming obsessed....

EssexOstrich

foxgloves said:

Yes, EssexOstrich, those particular money leakages were an eye-opener to us too. We calculated that we were spending £2000 a year just on buying lunches on work days. Making packed lunches on an evening (one of us washed up after dinner, the other made lunches) was an absolute no-brainer. Yes, it's a common misconception that putting 'extras' on credit cards is 'living to your salary'. Of course these days  I know it isnt. Holidays, car services, festival tickets, etc, etc, are not emergencies. Or new boots or a fantastic deal at a favourite cosmetics counter. All those things need to be included in our budgets. If the money for them isn't there (i. e saved for), then they don't happen. It took me from the age of 19 to my 40s to realise this, but once I'd grasped it, I was up & away.
Wish I'd discovered the empowerment of budgeting earlier, but better late than never!
F

I could’ve written that myself!!

EssexOstrich

So I've had a thought about what my intentions are as a result of this new determination. I want to pay all debt off within 5 years, which is doable. I don't want any more debt than I already have, and I want to make regular overpayments every month no matter how small.  I'm possibly going to look maverick by saying I will include saving for a holiday in my plans (key word being 'save', rather than credit card it) but I'm not aiming to completely halt life whilst I tackle this, more to make long-term changes in my financial habits and use this diary to remind myself of the unhappiness I felt as a result of my stupidity. Our utility bills aren't too shabby, I've recently switched in electric, gas is negligible (around £40 a quarter) and I've recently haggled Sky right down to basics. I've had a look through my bank statements and found some instant saving areas and started to do a few bits.

Done:
*Cancelled my gym membership and youngest daughter's gym membership. Neither of us use it and although it's been frozen for the last month due to lockdown it will be a saving going forward. Saving of £455.76 per year.
*Cancelled Equifax subscription for myself and husband (paid by credit card). Took it out on a free trial. Lazy !!!!!! didn't bother looking at it again. Saving of £190.80 per year.
*Cancelled Genes Reunited subscription (also paid by credit card). Stupidity levels as above. Saving £215.40 per year.
*Cancelled Weight Watchers. For the last 3 months, there was a payment to McDonalds or Starbucks the same day as the WW direct debit came out. Say no more. Saving of £191.40 per year.
* Tallied up the cost of takeaways and eating out - £213.80 for a 6 week period (excluding lunch/meal deals/work canteen etc and only includes card payments!). I don't drink and don't have any costly hobbies, my social life and friendship group is very much geared around food and without much family support they are my lifeline, so it's unfeasible to cut this to zero. I will set a budget of £50 per month for the time-being and revise this down if I manage it. Average yearly saving of around £1200 ish.
*Paid off the BNPL aspect of Very that is due by 8th May (£75.13). The old me would have paid this off by credit card, probably on the 8th May if not later, but the new me has paid it with my debit card with the leftover of this months pay. Small steps! 
*Upcycled a mirror and photo frame to match a newly decorated room. The old me would most definitely have ordered something new and slung the old stuff in the garage whilst promising myself I'd sell it at a bootsale. Cost £3.50 for spray paint. Saved lots.
*Lost weight and saved money by getting off my backside and hanging the washing out rather than using my best friend, the tumble dryer. I have cardboard towels, but who cares!
*Considering an emergency fund. How much is recommended? (if anyone has read this far down..!)

To do:
*See if anyone will give me 0% to transfer 2 of the CC balances.
*Ebay clothes (complete with tags) and sort boot sale stuff out for when normal life resumes.
*Set up a diary of insurance expiry, offer/promotional expiry dates, etc so I don't keep paying over the odds!
*Work out a monthly 'cash' budget. Withdraw a weekly allowance. Ignore the rest of my salary.
*Set up saving fund for holiday. I know some will see this as totally extravagant given the debt. We spend very little family time together throughout the year and get an enormous amount of happiness from a holiday. My intention going forward is to save for it and pay for it in advance instead of slinging it on the credit card.
*Teach my children how to turn lights/televisions/chargers off.

For future reference, my minimum financial commitment to the debt is £609.14 per month.

Suffolksue

delurking  to wish you luck .
I dry towels on the line but then when v nearly dry ( or dry) tumble for 15 min to soften ,maybe a compromise .
to my mind a holiday of sorts ( maybe U.K. self catering?) is not a luxury more like necessary .

joedenise

You've made a great start there and well done of paying off the BNPL to Very before it's due and on your debit card.

It's usually recommended to have an emergency fund of £1000 but I think in the circumstances I'd aim for £500 to start with.  You can always up it to £1000 when you're a bit more financially secure.

EssexOstrich

Hi Suffolksue, thanks for delurking. Fab idea re the towels, I'll do that!

Joedenise, thanks for the advice, £500 feels doable right now so that's a relief. 

Thanks for the support, much appreciated

Mumoffourkids

Even when I was debt busting at my hardest, I always had a holiday. We go to Cornwall each year in May half term because it is cheaper than the summer holidays. The main year I paid off my debt we had a cheap caravan totalling £350 plus spending money of £700 so just over £1000 and that was for 7 of us. Now I only have my car loan to pay, we still go to the same place but have a larger caravan near the sea and slightly more spending money. We also try to have a few days away in the summer holidays camping somewhere closer by.

EchoB

One benefit of lockdown is that holidays currently aren’t an option, this is a great opportunity to start saving for when we can have one.
I’m impressed by you’re “done” list-excellent progress 👍

savingholmes

Good luck on your journey. I always allow some money for holidays. When money was really tight - we did surveys and competitions and by going to two or three time share presentations got 2 or 3 family holidays in this country for free.

EssexOstrich

Thank so much for all your replies, it's lovely to have some support, especially on the holiday front! I think after being stuck indoors with my grown up but oh so childish children I'm going to need it!

Seasidegal58

I've just typed a long post and lost it!😡. But your plans are very sensible EssexOstrich and you've had some lovely, helpful posts. 

I think having a proper budget with categories for everything is the key to debt busting. I use You Need A Budget (YNAB).  You do have to pay for it but I find it invaluable and wouldn't be without it. Some people don't get on with it, although you can have a months free trial first to see how you like it. Or if you're comfortable with spreadsheets you could set up your own. 

The other helpful tool when in debt was the Snowball calculator whereby you enter all your credit cards and loans etc and how much you can afford to pay off each month.  It helps you in working out what to pay off first and how long it will all take. I couldn't find the one I used but this might help

https://www.lemonfool.co.uk/financecalculators/snowball-calculator.php

I used to love entering my payments each month and seeing the balance go down!😀