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Aspiration

Just wanted to say how motivating I found your post! Reading it you can sense the weight being lifted and it can only help your journey continue at pace 

meerkatpie

joedenise said:

Well done.  It can't have been easy.

Thank you! 

It really wasn't, but I am so glad that I have!

meerkatpie

Aspiration said:

Just wanted to say how motivating I found your post! Reading it you can sense the weight being lifted and it can only help your journey continue at pace 

That's very kind, thank you!

It really has taken a burden away. I expected them to be angry, but actually they have asked me to update them every month so they can support me if I am struggling.

The fog seems to have cleared for the first time in a long time!

meerkatpie

Hi Everyone, 

So that is another month done and time for another update. 

The weather has certainly changed, but I think for the better. I much prefer these autumn nights and being able to wrap up warm!

Before I go into the breakdown for this month, I want to apologise for my indecisiveness as to the plan I have with my money. After discussing everything with my family, we have worked out the best path to get me to where I need to be. 

We/I have decided to sort out my LISA before doing anything else. As if I don’t get this maxed out first, I might miss this full year's worth of allowances. Plus, when I have put my money away and I can’t contribute anymore, I can forget about that until the next tax year. 

I know this is supposed to be my debt free journey, and it will be! But I will resume paying off larger amounts as soon as possible. 

In terms of my LISA, I have added £1,200 this month. I currently have £7,962.17 (this includes any bonuses and interest). My plan for November is to pay a further £1,200 into it, and then in December, £200. This will have maxed out the full amount I can deposit for 2021. 

As this is my focus, it does mean that my debt has had to take a temporary back foot. I have paid £292.15 towards my car and £129.79 off my Barclaycard. They currently stand at:

Car Finance - £11,332.65

Barclaycard - £4,196.69

Which leaves my current debt at £15,529.34 and a reduction of £421.94. It isn’t much, but at least it is something. 

Once my LISA is topped up at the end of November, my December plan will be to start paying £1,000 a month off of my Barclaycard to get it paid, ideally before April. 

At the moment, I have amended the card to a fixed direct debit of £150. I want to prepare for other expenses that I know I have at the beginning of the year; my car tax, service and insurance will come to around £900 alone so this needs to be saved before those expenses come. My plan is to amend my budget with each payslip for all of my essentials and expenses that I am aware will need to be paid and then use any remainder towards the credit card. 

Of course, it is not too far until Christmas either, which is something I have put money to one side for, but I may need a little more, so I will review my savings/repayments over the next two months and try and spread things out as best as I can. I hope that everyone else’s shopping is going well! I will unfortunately be working all of Christmas and New Year so I will be treating myself to some new pyjamas to make up for it! 

Still, I think that this will be the best way to go moving forward. It isn’t as much towards the debt as I would like, but it is a similar plan to what I was advised when I first started my diary last year and that seemed to work out okay, so fingers crossed we will get there!

Anyhow, I hope that everyone is keeping well and I shall be back next month with the rundown. 

Take care all!

enthusiasticsaver

Good that the debt is coming down.  Why don't you just divide the amounts rather than swapping priorities from saving in your Lisa to overpaying debt? 

As I read it you need to save £1400 to maximise the bonus by the end of the current tax year?  That means £280 a month into your LISA from November to March.  From April onwards it means approx £330 a month to get to £4k by April 2023. 

You also need to save for your car expenses which are £900 so you could save £300 a month in November to January to cover those then start with £100 a month from February so you are prepared for January 2023 and the next batch of car expenses.  Same goes for Christmas. 

Leave your car loan payment as it is for now and pay the remaining spare money off the credit card.  

That way you are keeping things on an even keel which is much less stressful than constantly changing priorities. 

meerkatpie

enthusiasticsaver said:

Good that the debt is coming down.  Why don't you just divide the amounts rather than swapping priorities from saving in your Lisa to overpaying debt? 

As I read it you need to save £1400 to maximise the bonus by the end of the current tax year?  That means £280 a month into your LISA from November to March.  From April onwards it means approx £330 a month to get to £4k by April 2023. 

You also need to save for your car expenses which are £900 so you could save £300 a month in November to January to cover those then start with £100 a month from February so you are prepared for January 2023 and the next batch of car expenses.  Same goes for Christmas. 

Leave your car loan payment as it is for now and pay the remaining spare money off the credit card.  

That way you are keeping things on an even keel which is much less stressful than constantly changing priorities. 

Thank you! I really am trying my hardest.

You know, I have been torn about that very thing. I completely agree with the car, it is on 0% at the moment anyway, so I am happy for that to go down at is own pace. 

But with my saving/debt, on the one hand paying them both together will get me to my goal at the same time, on the other hand it feels like a longer chore because I don't get that quick win on the way, I feel like the joy of completing one task spurs you on to the next. 

Would you advise the former? Are there any other benefits, money wise? 

I am definitely going to put money away from January for my expenses though, Christmas and car payments happen every year so I might as well get prepared! 

Thank you

enthusiasticsaver

I think with the level of debt you have there will be no quick win. Clearing debt is a slog and quite honestly it should be for no other reason than you don’t want to go down this route again. Having a plan you can live with for the next few years is the only way forward if you have this double objective of saving for a house at the same time as paying off debt for things you bought in the past. You seem to be trying to focus on both but not in an organised way. From a money point of view as the debt is at 0% (although presumably the card deal has an end date) it makes no difference. From a psychological view clearing the debt first is better as you correct the mistakes of the past before looking to the future and saving for your house. Splitting the surplus income between the two gives you a sustainable plan where your focus doesn’t keep moving from one to the other. 

meerkatpie

enthusiasticsaver said:

I think with the level of debt you have there will be no quick win. Clearing debt is a slog and quite honestly it should be for no other reason than you don’t want to go down this route again. Having a plan you can live with for the next few years is the only way forward if you have this double objective of saving for a house at the same time as paying off debt for things you bought in the past. You seem to be trying to focus on both but not in an organised way. From a money point of view as the debt is at 0% (although presumably the card deal has an end date) it makes no difference. From a psychological view clearing the debt first is better as you correct the mistakes of the past before looking to the future and saving for your house. Splitting the surplus income between the two gives you a sustainable plan where your focus doesn’t keep moving from one to the other. 

Thank you!

I am trying to weigh up what's best as for one reason or another, I will be needing to move out sooner rather than later.

Given the changes I have already made, I will crunch the numbers and speak with my family to see what would be best.

I like the idea of splitting between the two and at least then I can set up an automatic payment and just let my finances take their course over the goal time that I set!

I really appreciate the advice, thank you.

meerkatpie

Hello Everyone!

Firstly, I hope that you have all had a wonderful Christmas and I wish you all the best for 2022. Things have been tough for many of us this year and I am hopeful that the New Year will bring happiness and prosperity to all of us, in whatever form that may be.  

Secondly, I apologise for the inactivity. I have been working my socks off with overtime, including throughout all of Christmas. I have also been working really hard with my finances, laying out plans practically month by month for 2022 and ironing out what I can for the end of 2021. 

So, following my previous posts, I was at a crossroads with what to do, especially considering I have some expenses in the coming months. 

I have been able to work quite a lot to try and earn some extra pennies. As great as it has been financially, it takes such a toll on your physical and mental health that I don’t think I’ll be able to work extra for a while as I need to recover. Although, the positive is that Christmas has been paid for with no credit card debt... I think for the first time ever!

A great boost for me was when my LISA hit the £10k mark! I decided just to fill it up and forget about it, so that I leave a clear path of debt reduction until at least April. It really just gave me the little boost I needed to keep going. 

That still hasn’t stopped me working on my debt! I understand I am a payday behind with regards to an update, so here is how everything stands as of January 2022…

Car Finance - £10,748.35

Barclaycard - £3,000.00

Which, since my last update in November is a total reduction of £1,780.99 and brings my total debt to £13,748.35. 

As my LISA is full, I was able to pay £1,048 onto my Barclaycard in December alone. Working from my basic salary, not including my overtime payments, I have been able to set up a £1,000 direct debit for my Barclaycard, meaning by the end of March, this should be clear. 

I have also put £400 into a savings account with a standing order of £200 set up. Based on when everything is due for my car (early March for my service and early April for my insurance and tax), I should have more than enough to cover these expenses. Taking my car to my local dealer will be £300 (ish) for my service, assuming nothing is wrong with it, but it hasn’t travelled very far so I am hoping for nothing major. My insurance quotes as of today are about £350 and £140 in tax, so based on those savings, I think I should be fine and have a little spare if anything goes awry. 

Following the advice from Enthusiasicsaver, I am planning to amend the standing order to £100 from April so that I am well prepared for 2023. It is something that happens every year, so it will be much less of a sting if I start early!

I have also realised that my emergency fund became non-existent a long time ago and that is something I want to change. So I have also set up a standing order for an old building society account that I had. £50 a month now goes into there too with a current balance of £150, so that will slowly creep up. I used this account as it is still a passbook, meaning I have the horror of having to make the trip to the branch haha! At least it means, I will genuinely onlt use it for emergencies!

With my overtime payments, I am treating my budget as though I haven’t had them. Once all my regular payments have been allocated I will see where it needs to go most, either my debt or savings and then make a monthly decision on that. Ideally my Barclaycard will be paid, but again it will be best to prep in case the car needs any unexpected work. 

Otherwise, aside from that the status quo continues. 

Most of my family regrettably have Covid, so it has been quite a lonely and isolated Christmas, which hasn’t made work too bad; but I am very much looking forward to seeing everyone. 

My New Year's resolution this year is small, but it is to read at least one book every month. I love reading but I find it so hard to pick up a book and get going! The thing is, when I start, I don’t stop until it is finished haha! 

Aside from all that, I really hope everyone is okay and that 2022 is as great as it can be! I will check in again soon!

meerkatpie

Hi All! 

January seemed like it was 60 days rather than 31 so I am glad we are in February. I’m trying my best to look forward to things that I have planned for the year and I am starting to take a step back from work after being a little non-stop the last few months.

I don’t have too much to report, but that hard work certainly paid off over the festive period.

My debt now stands at:

Car Finance - £10,456.20

Barclaycard - £1,500.00

So I have managed to pay off £1,792.15 last month which brings my debt to £11,956.20. The lowest it has been in a very, very long time!

I’m happy with how things are going, but we are not there yet. 

If all goes to plan, I should have a few hundred pounds left on the Barclaycard next month with it being paid in March. 

I’ve also still be squirrelling away money for my car so I should have enough to cover all of my expenses at the end of that month. 

I’ll be happy when I can put the credit card chapter behind me and finally tackle the car. 

Although, with family circumstances I may need to look at moving out this year so I am not sure how that will go. But I shall take each month as it comes.  

Hope everyone is well.