Getting out of the vicious circle

savingholmes

Great progress

I think breaking the 3 year car buying cycle is essential to making good value decisions.

outoftheviciouscircle

I'm feeling it today, cabin fever has well and truly set in and I feel like I can't even be bothered to move. I've washed and styled my hair for the first time in 9 days to see if that makes me feel any better but it hasn't. I haven't put a scrap of make up on for over a week and must admit my skin is looking a lot better for it. One more day to get through and I can actually go back to work on Monday. Never thought I would look forward to that moment so much.
I'm used to be being active, I normally do over 20,000 steps a day. I have an active job and I walk the dog up to 5 miles a day, looking at my Fitbit and seeing I have only done 5000 steps is so depressing.

Not much to report financially, DH debit card arrived yesterday so I applied for the switch to Nationwide so that should start to happen by the end of the week. Hopefully I'll see the financial benefit of all these switches in October as working in retail means work does get pretty busy from here on, so not much time for surveys etc. 

Cooking a stirfry for dinner, the freezer is actually looking well stocked so I may go through it and make a meal plan for next week. May only need to stock up on some bits and pieces for the fridge.

enthusiasticsaver

Well done on coming back and having  a second go at getting rid of the debt.  40 is quite a milestone and as you say if you do not want to be working and still paying a mortgage at 70 then setting a plan as early as possible is priority particularly as retail employer pensions are not usually great and you have a long term mortgage. 

Whilst paying extras to the debt is good I also think it is a good idea to set overpayments from regular income and having a good balance of holidays/cars etc and overpaying debt is important but you do need to be honest with yourself as to why you always prioritise spending on something over repaying historical debt or it will be forever round your neck. Ideally you should be overpaying your mortgage and pension to reach your goal of early retirement.  Getting rid of expensive car finance is a good start as new cars depreciate so quickly. 

outoftheviciouscircle

enthusiasticsaver said:

Well done on coming back and having  a second go at getting rid of the debt.  40 is quite a milestone and as you say if you do not want to be working and still paying a mortgage at 70 then setting a plan as early as possible is priority particularly as retail employer pensions are not usually great and you have a long term mortgage. 

Whilst paying extras to the debt is good I also think it is a good idea to set overpayments from regular income and having a good balance of holidays/cars etc and overpaying debt is important but you do need to be honest with yourself as to why you always prioritise spending on something over repaying historical debt or it will be forever round your neck. Ideally you should be overpaying your mortgage and pension to reach your goal of early retirement.  Getting rid of expensive car finance is a good start as new cars depreciate so quickly. 

Theres some good advice there and really some food for thought. I have been thinking of maybe throwing an extra £50 a month at the mortgage now as I know from playing around with mortgage calculator that a little can make a big difference.
Having only ever worked in retail I'm not sure how my pension compares to others. At the moment I pay in 6% and my employer pays in 12%. When the debt is paid off I would like to up it to 10% which will mean my employer will pay in 20%. I believe 20% is the maximum contribution from my employer.

We've only had the new car for 2 months so unfortunately we are now stuck with that for the next 4 years but being able to pay off the balloon payment at the end of the 4 years will be something that we will need to prioritise. If we don't get that money together it will be a case of taking on a new finance agreement or a loan to buy the car and borrowing is something I really don't want to have to.

savingholmes

That sounds decent on pensions. Lots of online calculators that can give you pension projections

joedenise

Definitely worth prioritising the balloon payment.  It's so easy to get into that cycle of leasing for 3 or 4 years and then not being able to afford the balloon payment so starting another 3 or 4 year lease.  I'm just glad that we managed to do that with our last car and that our current car we paid cash for.  It was less than a year old when we bought it and we've now had it for 5 years and hoping it's going to last until we decide we should give up driving due to our ages!  ie we're planning on running it into the ground rather than buying another car if we can.

enthusiasticsaver

The pension does not sound that bad with a decent percentage going in but upping that to 10% and maximising your employers contribution is definitely worth it as soon as it is affordable.  I would concentrate on the card debt first and get rid of that then divide spare money between the pension, mortgage overpayments and saving for the car balloon. 

outoftheviciouscircle

Yeah that sounds like a good idea. Definitely something to think about.

outoftheviciouscircle

It's been a few days since I checked in and there's not really anything to report. I went back to work on Monday and I'm doing very well at making sure I take some lunch to work everyday rather than spending up to £4 a day.
It feels so good to be out and about again and do be honest 10 days of isolation probably saved me some money.

I have had to purchase a new dress, my husbands best friend gets married in 2 weeks and I just didn't fit into any of the decent clothes I had and with the pandemic, I haven't had any need to buy nice going out clothes in a long time so its not like thats a regular occurrence.

Was great news to hear about the US borders opening. It does mean that I am in full on planning mode for my trip to Florida next April. I will be working hard to pay down the debt and also ensuring that I don't get into any further debt for a holiday. There are some pounds I want to lose but in the form of weight. I'm not going to get sucked into joining any weight loss groups this time, just going to do it simple. Cut down on food and exercise more.

It is pay day today so I'm going to play around moving money between accounts and then work out the plan of attack for October.

outoftheviciouscircle

I'm getting really bad at updating my diary but I suppose even once a week is still giving me to motivation to carry on busting the debt.

Work has been crazy which is why I suppose I haven't been keeping on top of my diary. September turned out to be a very good month for me financially. I completed a nationwide current account switch and was surprised to see the £125 in my account the next day and I also sold a few bits and pieces to the value of £146. I worked out that to be able to clear the debt in 20 months then I need to pay £700 off it a month. Once Ive reached that amount I am putting any other extras in savings ready for Florida and Ive actually managed to put £400 away this month. 

I have a couple of expensive weeks coming up. We have DH friends wedding next week. DH has tried on all his suits and not one of them fit him, so we are off to buy him a new suit tomorrow. Then there's some money for a wedding present. I also have 3 birthdays in October but looking at my spreadsheet we should be absolutely fine and still able to debt bust and save.

I have a day off today, I really need to do the food shop but think I'll opt for a delivery and I definitely don't spend as much but I have been getting a lot of substitutes lately so maybe I'll bite the bullet and just get dressed and go. I need to make a meal plan first though. As I type I've remembered I have enough in a survey site to cash out £20 of Tesco vouchers so maybe I'll do that now. I haven't had any time for surveys the last couple of weeks so I'll spend a little time on those today.

Have a good week everyone!!