Wow wee oh my - trying to hack away at my £54k debt (was even about to book a holiday)

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  • That is great advice, thank you. And congratulations on paying off so much of your debt. I am a bit of an introvert too, have housemates before and really did not enjoy it. Can i ask, how do you feel now you are so close to your target?
    Thank you! I have to admit, impatience is kicking in now (with any luck there's just a year to go). The payday money shuffle (and knowing that I'm getting closer to it going to savings, investments and deferred house maintenance instead of debt) is something that I look forward to, and I'm even more motivated to scrabble around for extra work and try to sell more things as the finish line is not some nebulous date several years into the future any more. My peace of mind has been greatly improved by having separate accounts for bill payments and emergency funds (I no longer begrudge parting with the money!). I guess I feel like I'm the captain of my own ship now, rather than floating in the sea clinging on to a life preserver. 
    Yes i can imagine. Your starting debt amount is similar to mine and i imagine it will take me a similar amount of time to clear it (gulp). I have always lacked clear goals but looking back with that amount of debt and living month to month it is hardly surprising. It would be great to be at 0 with savings and a clear budget so i can make some plans for the future. Will review your own posts now to try to understand where your debt comes from. Hopefully livin la vida loca like me!
  • caeler
    caeler Posts: 2,605 Forumite
    Mortgage-free Glee! Photogenic Name Dropper First Post
    You’ve made a great start! Well done! What works for me is tracking my spend each month (yes I log receipts) and keeping a track on debt payments and outstanding balances. I find closely tracking stops money being lost and motivational when I see things reduce. It reminds me why I’m frugal. The food budget should be something you can massively control and some of the old style boards here are great. 
  • caeler said:
    You’ve made a great start! Well done! What works for me is tracking my spend each month (yes I log receipts) and keeping a track on debt payments and outstanding balances. I find closely tracking stops money being lost and motivational when I see things reduce. It reminds me why I’m frugal. The food budget should be something you can massively control and some of the old style boards here are great. 
    Thanks. So you have a budget and then at the end of the month look at your receipts to see if you were within budget? I think a weekly Tesco shop will work a treat for me and save time. 
  • caeler
    caeler Posts: 2,605 Forumite
    Mortgage-free Glee! Photogenic Name Dropper First Post
    @Rainbowtrousers I log all my receipts to make sure I stay within my monthly allowed spending money which covers food, fuel and any incidentals or things I want. I’m very strict with myself.  I meal plan so I avoid overbuying and wastage. I always take a packed lunch to work.  I only do one weekly shop and recently I’ve realised I don’t need to do a full weekly shop, now every other week is just for a few fresh bits like milk and veg.  I hate wasting money. I do this as I’m very focused on paying off the mortgage so every spare penny is accounted for. 
  • Another great and helpful response, thanks. And agree on the housemate point! I had a plan of action to tackle it but then thought i'd just remortgage next year to clear it all and then eat into some of my equity. As i type this i realise this is not really tackling the debt and is just another way of overspending?
    As @enthusiasticsaver has said, remortgaging really isn’t recommended. The finances don’t make sense, but it’s also so tempting to think you can clear it all and then you’ll definitely be back on the straight and narrow... but so many of us have found to our cost that doesn’t work. We’ve consolidated or similar then ended up in exactly the same hole further down the line but with even more debt. I very definitely needed the long hard slog of budgeting and paying the debt off while not running up more to change my habits and attitude to spending.
    Debt at LBM (Dec 2018): £23,167
    Debt free Feb 2021
  • You have made a good start but I would caution you against transferring the debt to your mortgage. Firstly because turning unsecured debt to secured is unwise as it risks your home. If you were made unemployed or got sick you would have to find the money to pay your now larger mortgage and having taken a mortgage payment holiday this will be a mark against you anyway. The second reason is because shifting debt on to your mortgage deludes yourself you have sorted the debt. You haven't and it means you have no motivation to change your spending habits which are the reason for the debt in the first place. Transferring your debt to the mortgage sounds like a quick and easy fix. In reality it means you will be paying off this £50k plus the rest of your mortgage over the next 25 or 30 years along with the interest. A much more expensive way of clearing it. 
    Wise words as always and thanks. I genuinely forgot that I did this just over two years ago with my rental property as a 'fresh start' then quickly booked a holiday to the US for christmas! And i take it you are not a fan/it is not advised to do the 50/50 approach - so get my debt down to circa £25k then pay the rest off with a remortgage? Please don't laugh but i remembered that i (used to)  have a £50 pedicure and manicure each month. Was looking over old statements and could not figure out the £50 cash withdrawal each month 
  • Another great and helpful response, thanks. And agree on the housemate point! I had a plan of action to tackle it but then thought i'd just remortgage next year to clear it all and then eat into some of my equity. As i type this i realise this is not really tackling the debt and is just another way of overspending?
    As @enthusiasticsaver has said, remortgaging really isn’t recommended. The finances don’t make sense, but it’s also so tempting to think you can clear it all and then you’ll definitely be back on the straight and narrow... but so many of us have found to our cost that doesn’t work. We’ve consolidated or similar then ended up in exactly the same hole further down the line but with even more debt. I very definitely needed the long hard slog of budgeting and paying the debt off while not running up more to change my habits and attitude to spending.
    Understood and thanks. So your debt free journey has been coming up to 2 years. How has it been? Have you taken a very strict approach and not had holidays etc? Can i ask was your debt as a result of overspending and a lack of a decent budget too?
  • Understood and thanks. So your debt free journey has been coming up to 2 years. How has it been? Have you taken a very strict approach and not had holidays etc? Can i ask was your debt as a result of overspending and a lack of a decent budget too?
    Yes, my debt was entirely the result of overspending and lack of a budget (well I had lots of budgets, I just didn’t stick to them). Holidays, clothes, nice food....I grew up poor and the second I started earning a ‘good’ salary I decided I could afford all the things because that’s what people on good salaries do, despite all evidence to the contrary. There was also a bad break up and a hefty dose of anxiety behind it. A lot of my colleagues are incredibly high earners, often from family wealth too, and a lot of the clothes, holiday spending was driven by feeling not good enough and wanting to fit in.

    I also have some chronic illnesses which I ignored - basically at the same time I ran up debt I worked ridiculous hours and didn’t look after myself. Realising I was trapping myself in the high stress job and making my health worse basically to service debt contributed to my light bulb moment, as did getting a hefty pay rise and seeing it be swallowed up in minimum payments. It was tough at first, the urge to spend was still there and probably 50% of my diary is me telling MSE I want to buy something. Over time I’ve got better at stepping away and realising when something is a want rather than a need. My clothes budget went from hundreds per month to maybe 70-ish and now it’s about 25. I sold a lot of clothes to fund some home repairs that were needed at the same time. I’ve spent probably days of my life planning in detail luxury holidays or city breaks that I haven’t taken (I always did like the research stage though!). I haven’t had a holiday in the past couple of years other than one trip to see family, but mostly because my health sort of collapsed so I’ve been working from home part time for quite a while. I still spend on yoga because the health benefits for me are absolutely worth it, and I have a cleaner because I have such limited energy its worth it to have someone do that (consultant advised it even!). 

    It still doesn’t quite feel real that I’ve paid off so much, but the feeling that I get from living within my budget and knowing I have money saved for if the washing machine breaks or to pay for annual insurance is so good. I think the proudest I’ve been in the debt journey was my first year where I lived within my means for the entire year.

    A couple of things that have really helped me have been zero-based budgeting and tracking every single penny I spend (i used YNAB which people tend to either love or hate), and also for me realising that other people don’t notice or care what I have. It’s actually brought me closer to some friends when I told them I was paying off debt and they admitted they were too. Though I’ve always been too embarrassed to share the figures!
    Debt at LBM (Dec 2018): £23,167
    Debt free Feb 2021
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