Finally becoming debt free after nearly 20 years

LottyWatty
LottyWatty Posts: 15 Forumite
First Anniversary First Post Name Dropper
edited 22 April 2022 at 12:59PM in Debt free diaries
I’m starting a diary to try to keep myself accountable as I near the end of paying off debt and I’m terrified about slipping back into debt again. I’ve found reading other people’s journeys motivational and hope that writing my own will help me too. 

I’ve had various levels of debt since my first credit card with a £200 limit when I was 18. At one point I consolidated around 7k with a loan but didn’t close my credit card and then just went from balance transfer to balance transfer, but always adding onto the balance of new cards. I’ve always had enough money to pay more than minimum payments and went through phases of trying to get the balances down for a few months, but then just reverting to using credit cards to supplement income, or paying off say £500 lump sum only to then put £700+ back on the card in a month. 

I don’t live a particularly extravagant lifestyle - I think a lot of the debt came from just buying lots of unnecessary “stuff” - either out of boredom or wanting to feel better. and always wanting to treat friends and family without budgeting for any of it. 

I’ve no idea what my highest debt amount was as it has yo-yoed so much over the years and I’ve never been good at keeping track.  At the beginning of this year, I had around £10k on credit cards and an outstanding car finance (approx 2.7k including interest)  as well as a sofa on finance (approx £400 left earlier in the year). The car came to the end of a pcp and rather than get a new car I have kept the car, but I never quite managed to save up for the balloon payment so I ended up refinancing for that.  



I have spent the last 6 months paying large chunks off my credit card and have around £600 left to go. Next I will tackle the car and the sofa and aim to start next year debt free (as of February and other than our mortgage). 



[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1[b]

Monthly Income Details[/b]
Monthly income after tax................ 2125
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 580[b]
Total monthly income.................... 2705[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 551
Secured/HP loan repayments.............. 134.03999999999996
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 97
Electricity............................. 39.5
Gas..................................... 39.5
Oil..................................... 0
Water rates............................. 40.4
Telephone (land line)................... 47.97
Mobile phone............................ 8
TV Licence.............................. 0
Satellite/Cable TV...................... 12
Internet Services....................... 0
Groceries etc. ......................... 250
Clothing................................ 10
Petrol/diesel........................... 15
Road tax................................ 1.7
Car Insurance........................... 36.62
Car maintenance (including MOT)......... 16.6
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 8.33
Pet insurance/vet bills................. 0
Buildings insurance..................... 38.27
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 85
Haircuts................................ 10
Entertainment........................... 60
Holiday................................. 0
Emergency fund.......................... 0[b]
Total monthly expenses.................. 1500.93[/b]
[b]

Assets[/b]
Cash.................................... 3150
House value (Gross)..................... 85000
Shares and bonds........................ 0
Car(s).................................. 3000
Other assets............................ 0[b]
Total Assets............................ 91150[/b]
[b]

Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 37460....(551)......2.19
Hire Purchase (HP) debt ...... 269.76...(20.64)....0<
Car payment ...................2154.98..(113.4)....8.9[b]
Total secured & HP debts...... 39884.74..-.........-   [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Credit card....................606.24....26.88.....4.48[b]
Total unsecured debts..........606.24....26.88.....-  [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 2,705
Expenses (including HP & secured debts). 1,500.93
Available for debt repayments........... 1,204.07
Monthly UNsecured debt repayments....... 26.88[b]
Amount left after debt repayments....... 1,177.19[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 91,150
Total HP & Secured debt................. -39,884.74
Total Unsecured debt.................... -606.24[b]
Net Assets.............................. 50,659.02[/b]

[i]Created using the SOA calculator at www.stoozing.com. 
Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
Highest Debt £???
Debt Feb 2020 - approx £13.2k
Debt October 2020 £3030.98

Comments

  • Day 1 
    ✔️ Checked bank account to make sure all pending payments accounted for until next pay day.

    ✔️ Wrote Christmas present list to start planning budget for this. 

    ✔️ No money spent on coffee 

    ✔️ Nothing used from £60 entertainment budget
    Highest Debt £???
    Debt Feb 2020 - approx £13.2k
    Debt October 2020 £3030.98
  • tacpot12
    tacpot12 Posts: 7,929 Forumite
    First Anniversary Name Dropper First Post
    Firstly, congratulations on the progress you have made. Really impressive, and it will encourage others who might be thinking that it is impossible. 

    Starting to plan around your goals is a great idea. It will keep you motivated to clear the last bit of debt. Then your money can start working for you rather than being something you have pay away as soon as you get it. 

    Everything you suggest sounds fine, but I would suggest that you keep the money you are saving for insurances that you know you will have to pay, separate form the savings you have in case something social comes up. Your emergency fund is for things that you haven't planned for, you need a pot for costs that you know will need paying, and you should have a separate savings pot for anything social that "comes up". If you haven't managed to save anything into that pot, or emptied it too recently you might have to decline the social event, but you've probably had to do this for a while so missing the odd event to keep you on track shouldn't hurt. I do understand that we have to get a little bit of enjoyment from our money, to make all the other sacrifices worthwhile, but you have climbed a mountain already and although you need to take in the view from the top for a while when you get there, you also need to keep focused on no slipping back down again. 

    The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always try to check official information sources before relying on my posts.
  • tacpot12 said:
    Firstly, congratulations on the progress you have made. Really impressive, and it will encourage others who might be thinking that it is impossible. 

    Starting to plan around your goals is a great idea. It will keep you motivated to clear the last bit of debt. Then your money can start working for you rather than being something you have pay away as soon as you get it. 

    Everything you suggest sounds fine, but I would suggest that you keep the money you are saving for insurances that you know you will have to pay, separate form the savings you have in case something social comes up. Your emergency fund is for things that you haven't planned for, you need a pot for costs that you know will need paying, and you should have a separate savings pot for anything social that "comes up". If you haven't managed to save anything into that pot, or emptied it too recently you might have to decline the social event, but you've probably had to do this for a while so missing the odd event to keep you on track shouldn't hurt. I do understand that we have to get a little bit of enjoyment from our money, to make all the other sacrifices worthwhile, but you have climbed a mountain already and although you need to take in the view from the top for a while when you get there, you also need to keep focused on no slipping back down again. 

    Thank you very much for your advice  - that makes sense and I think I would definitely be at risk of using the money earmarked for say car insurance, on something social that comes up. At the moment it’s not too bad as everything is on hold due to the virus so the costs are very small, but once restrictions are lifted more I’m sure I’ll revert to type - never being able to say no. 

    I definitely need to fine tune my budget once the debt has gone and maybe open more instant savers. I currently just have a ‘groceries’ and an ‘entertainment’
    Highest Debt £???
    Debt Feb 2020 - approx £13.2k
    Debt October 2020 £3030.98
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