Starting to budget after years of wishful thinking

LegoHead

savingholmes said:

Well done on the debt reduction. I love how fast you've turned things around in a good way

thanks, had a bit a of a slip this week and dipped into savings to buy some bits n pieces for a project. 

Mortgage is now due to complete next month and as it took so long I will probably be getting around £900 paid to me from balance of funds. I can either use this money to pay straight back into mortgage or dump into the loan. Probably going to go for the loan as it would be nice to see the back of it.

savingholmes

Will be good to see it go down. Glad the mortgage got sorted for you.

LegoHead

just quickly scanned my main bank account and could see I have £140 spare and get paid next friday so just paid this out onto the loan.

Now down to £10,590 on the loan. Hoping to get this under £9500 next friday when i get paid, possibly £9000 as I am owed back dated pay as work forgot to give me my payrise last month

savingholmes

Sounds promising

LegoHead

Just thought if I get down to debt neutral balance I will seriously assess wether I can take the gamble and use my emergency fund to clear the rest. Would be nice to have all this debt gone and never have to think about it again. Will cross that bridge when it arrives.

EssexHebridean

Leave the EF untouched - it’s there for a reason and you’re at risk of allowing impatience to overtake common sense! 

You mentioned wanting a £6k EF - that seems like a good solid figure allowing for your overall position. Once you’ve attained that, I would personally continue to save, but each time you hit £500 in savings - or another figure of your choosing, pay that off the loan. The loan will drop surprisingly fast anyway, you’ll save the interest, and should the worst happen you still have the EF to allow you some breathing space. 

You’re doing SO well - and you will get DF far sooner than you originally thought, I suspect. Keep the faith in the process, and start thinking about how fast you’ll be able to save for the work you want done on your home once the debt has gone! 

theoretica

LegoHead said:

Just thought if I get down to debt neutral balance I will seriously assess wether I can take the gamble and use my emergency fund to clear the rest. Would be nice to have all this debt gone and never have to think about it again. Will cross that bridge when it arrives.

That you choose that language says to me the answer should be no - go for a solid plan over gambling.

LegoHead

It would be a gamble so yes I think a solid plan is more sensible for my mental well being. I am being impatient and its probably not a good way of dealing with it. Just have to accept it is going to take time.

Will stick with my existing budget, will roll back on sending every spare penny into the loan for a bit. Need to calm down and think rationally... 

savingholmes

Sounds like the right call in the circumstances. I too am making myself keep an EF rather than just clear the debt - as there's a lot of peace of mind that comes with having one. 

LegoHead

mortgage has completed! Woohoo. 

Had a bit of a splurge on some gadgets this month. Trying to build an electric bike on the cheap. Originally was going to cost £700, but I am pretty handy at fixing things so bought a broken ebike motor off ebay. All in my project ebike is costing me £300. Will be using this to get to work and back and save £5 every time I do. 

I have done pretty well not buying any expensive stuff I dont really need since about November so thought I would give myself a little treat :-)