Destination, debt free.

NewbieJD

28....05.....2020

The date has been stamped. Today is the day that I embark on this long and winding journey of becoming debt-free (with the exception of the mortgage).

Rollback 4 years ago and I wouldn't have imagined being in such a position, roll back 8 years ago and I said that I would never get a credit card. 8 years later, 7 credit cards, 1 loan, and two floundering overdrafts say otherwise. If I can change my mentality, all will not be lost.

Four years ago, everything was going great, released my first paperback. (it didn't do as well as I hoped), got engaged, and had little to no debt. I was once great at saving money, hardly spent it, then something snapped. Gambling has been the biggest killer, but spending money on stuff that wasn't needed also added insult to injury. But, what is done is done. I can't change the past, but I can shape the future. With the help of this wonderful forum, the awesome folk on here, and the likes of Dave Ramsey, Les Brown, and Tony Robbins, I can make the first steps towards changing my life.

So enough rambling. These are the starting stats.

Overdrafts: £1515

Credit Cards: £13230 (arrears £881)

Credit Cards

Tesco - £245

Barclays - £96

Capital one - £461

Marbles - £1706 in arrears

Santander - £3790 in arrears

Nationwide - £1500

MBNA - £5432 in arrears

Loan: £7150

Finance: £1750

Paypal: £1586

Total: £25,231 ouch.

Dave Ramsey's Baby Steps

Step 1 -  £1,000 emergency found saved - Pending

Step 2  - Pay of all debt using the debt snowball - Pending

Step 3  - 3 - 6 Months of expenses in savings -  Pending

Step 4  - Invest 15% of household income into Roth IRAs and pre-tax retirement - Pending

Step 5 - College funding for children - Pending (no children yet)

Step 6 - Pay off home early -  Pending

Step 7 - Build wealth and give - Pending

Steps 5,6 and 7 could take a very long time, but the focus is on the first four.

So, I've been in contact with the companies where there are arrears and have plans to get them cleared within the next three months. One card has automatically been closed, that's probably a good thing so I can just focus on paying it off and avoid going into default. Once I have cleared the arrears, I will be on to a debt company to arrange a DMP, I've looked into it, but would like to ensure I have no arrears.

To help change how my mind works, I'm putting together a playlist on youtube of motivational speakers, the ones I've listed above I have so much respect for. Les Brown was once in a very similar situation and climbed his way out. As he says, "if you fall down, fall on your back because if you can look up, you can get up." I've got a book by Tony Robbins about money and will soon add one by Dave Ramsey to the list. Changing my mentality is the toughest obstacle here.

I will be embarking on Dave Ramsey's baby steps as well to help me on my way. I will keep track of that as well. My aim is to get out of debt within four years, it will be tough, but I will face it head-on and give it a good go.

So deep breath, step back, and here I go. This is my diary, wish me luck...

PS. Next update due 28.6.20

monkey62

Hey good luck, looking forward to your next update.

NewbieJD

First update.

I don't think I'll be doing a rundown of my day to day life like some Diaries, I'm not that interesting!

So, I think this first month will be a big struggle but have made a few payments, this will be reflected at the end of the month update when all the interest, etc is taken into account.

So I've opened up a new bank account through Starling, this is used only to protect my money. Anything I have leftover will be taken out of my main bank accounts and moved into Starling, this is my step one of Dave Ramsey's baby steps. I aim to save £1000 in there whilst tackling my debts. I won't be getting an overdraft which is great.

I've written out a complete list of food shopping items that I get monthly, I'm putting the information into a spreadsheet with the cost value, and the value that I actually paid. I aim to get most of my food shopping early on in the month to reduce my outgoings towards the end of the month. I've budgeted £50 per week, but aim to cut that down by 1/5, thus saving £40. I mainly shop at Lidl and Asda and try to avoid Tesco as I find them far too expensive on like-for-like items.

Wescot have tried contacting me again about Paypal via a text message, I've blocked text messages from them.

Finally, I have taken a free month subscription at Scribd so I can listen to audiobooks from Dave Ramsey and Tony Robbins.

Here's to the next update.

NewbieJD

Ok, quick update:

Octopus Energy has put my account into arrears. £300 to be exact. No idea why as my energy has never been in arrears before. I'm on an Engie fixed tariff which was taken over by Octopus in January. Fast forward five months and my account is magically in arrears. Sigh, something to fight I guess.

I've finished the shopping budget, it's incredibly in-depth. I will religiously follow it and attempt to keep the shopping down as much as possible. I've finished listening to Dave Ramsey's Total Money Makeover. It was incredibly insightful. I watch a lot of his show on Youtube so didn't expect much less. I'm now listening to, How To Manage Your Money When You Don't Have Any by Erik Wecks. It's quite eyeopening.

Lu2025

Hey Newbie, thanks for your comment on my thread, im following you aswell. Good luck with the journey.