Cutting up the cards and saving for a house - one debt at a time!

stokegal

Hi Everyone!

I have been pondering with the idea of setting up a diary for a while now. Partly because I didn’t necessarily think I was in “unmanageable” debt so didn’t need to do one and partly because I didn’t think my journey would be interesting enough for anyone to read.

I sat down and looked seriously at my debts in October when it looked like I had missed my sales target for the month and therefore was only going to get paid basic salary with no commission which would not cover all my debt repayments.

As it stands I was able to cash in some shares, use my savings and I actually managed to pay about £5k of debt off that month and the next month I had a true up of my commission so was able to pay a further £2k off.

I then found out that I was pregnant so my goal was then immediately to pay as much debt of as I could before going on maternity leave mid 2021.

So as it stands my current debt is

Barclaycard - £9200 - 24.4%

Amex - £1050 - 22.2%

Overdraft - £1600 - 39.9%

PayPal - £175 - 0%

Very - £750 - 0%

Taken from savings - £800 - 0%

Caravan Finance - £16274 - £181 / month (5.9%)

Sofa - £1098 - £26 / month (0%)

Family Loan to buy car - £1450 (0%) - £300 or £550 a month dependant on bonus (I use to get a quarterly bonus so would pay more at the end of the quarter)

Total - £32 397

It didn’t help I had also never counted the caravan or sofa finance as they were just monthly payments that came out so to collectively put everything in 1 place was a bit of an eye opener. That teamed with I thought the debt was manageable didn’t give me a LBM until recently.

I have included a SOA below.

To explain a few of the entries

Other income

My OH moved in at the start of lockdown and he pays £530 towards bills and half towards shopping and then we keep our finances seperate (I earn double what he does and I would never expect him to pay off debts I accrued before him)

My DS is also from a previous relationship and I receive £300 a month child maintainance from his father.

The water bill is very high due to a recent reading - it was exceptionally low before but the combination of OH moving in (and his love of long showers!) a leak and problem with the heating has lead to an underpayment so the DD was increased acccordingly - I will ask them to review this in 6 months time and expect it will come down as this years water usage should not be as high

Mobile phones - both are new contracts and are not eligible to be reduced for 18 months (DS contract was his main Christmas present)

Utilities - I need to review as I’m now out of contract and is on my to do list!

Gym - currently in contract but have asked to cancel due to me contacting them for prenatal advice and not recieving any response. Not expecting them to fulfil request but will see!

Bank account fee - covers mobile phone insurance for me and DS phone and RAC cover and was cheaper than buying these separately. 

Overdraft - I tend to use for the last 2 weeks of the month but I would like to be in a position where I don’t need this at all.

Caravan... yep a huge luxury when in debt but pre covid was used ALL the time. I bought it brand new 2 years ago and got it a bargain price at a show and will certainly be using it again when we are allowed to again.

Business Insurance - I set up a little business making personalised gifts in the middle of COVID - this was suppose to be so I could establish a business and then in a couple of years, falling pregnant and look at doing this full time instead of going back to work (I have a fairly stressful sales job which won’t be easy with a newborn) - however we fell pregnant much sooner than expected. Either way - it’s been fairly lucrative and has already paid for the initial machines.

My salary varies massively from month to month but averages out over the quarter. I have tended to work on the lower amounts and then anything else I get is extra to pay off my debts.

Wages - £2 200 - £4 000 / month

Other income - £800 / month

Total income £3000 - £5100 / month

Adults in household - 2

Children in household - 1

Bills

Rent - £600

Council tax - £131

Water - £86

Utilities - £118

TV license - £14

Broadband - £22

Home Insurance - £12

Netflix - £10

Amazon prime - £8

Gym - £20

Prescriptions - £11

Specsavers - £13

Savings - £100

Car Insurance - £46

Caravan Insurance - £28

Caravan storage - £30

Pet Insurance - £21

Business Insurance - £5

Petrol - £40

Bank account fee - £13

Mobile - £48

DS Mobile - £38

Food - £150

Total £1566

Fixed repayments - £207

Total - £1773

Available for repayment £1227 - £3327

The last thing to mention is that we also want to save for a deposit for a house.

The house I live in at the moment was bought for me by my dad 8 years ago. He paid £125k cash for it and has agreed that when it gets sold he just wants his initial £125k investment and will let me keep anything over this. From looking at similar houses it’s worth about £160k but I would not be looking to move for another 18 months when all debts (apart from caravan) have been paid off and my partner and I have saved up more deposit (we want to get to about £60k between us - so need to save another £25k on top of the estimated £35k in the house now)

Wow that’s a long post and if anyone is still awake thank you for reading!!

FootyFanDan

Hey.

I just wanted to wish you the best of luck on your journey to debt freedom and congratulations on finding out you are going to become a mummy . I think the shock of seeing all the debt separated and not in just a direct debit payment coming out every month can sometimes shock you into seeing just how much the debt is. The very fact you have realised this is a positive step.

Good luck! 

stokegal

Thanks! My DS is 11 so it’s been a while since I’ve had to do the whole baby thing. I was on zoom with a friend last night where she was telling me about all the new things that babies had (white noise machines, sleepyheads, amber braclets for teething... etc) the DFW in me was thinking I didn’t need them 11 years ago, have babies really changed that much lol

I have a spreadsheet for all my outgoings and my DD were on one page and debts on another - adding them together was a huge shock - at least it’s onwards and upwards now!

stokegal

Small win today - I checked my gym membership and I can just cancel the DD. I have cancelled the DD with the bank and also sent the gym an email confirming that I don’t need to do anything else.

We have woken up to snow and OH and DS have been up since 7am playing in it. I thought DS had broken his sledge so had been looking at trying to replace that but everywhere is sold out. Looked in the shed and found that I had already replaced it so that saved me £10.. then realised his Wellies no longer fit him... no problem.. he can just use mine as we are the same size (mine are just plain black ones from sports direct).. I can’t find them anywhere so now I need to buy 2 new pairs of wellies 🤦‍♀️

I also need to go shopping at some point but told OH that I want to meal plan first (I use to do this religiously but he likes flexibility with his meals at night!) ive looked at what ive already spent on food (£50) and it’s 4 weeks exactly till payday so have set myself the challenge of spending £200 only (including any takeaways) - OH will pay half so that wil mean I’m on track for £150 budget.

stokegal

Morning everyone!

Yesterday did not end up being NSD! After the snow fun we decided to go shopping to get DS some wellies and I needed a new coat.

I’ve been very frugal over the past few months which has allowed me to pay off just over £6k of debt. This has involved me making no unecessary purchases and having the most liberating conversations with friends where we agreed to not exchange Christmas gifts! (This was amazing this year - I had a budget, I stuck to it only buying my DS, OH and parents and I didn’t have to worry about buying the perfect present for anyone else!)

My DS had felt the frugal living as I’ve said to no 99% of things hes asked for / wanted to do (this was due to trying to be frugal / but more so because of COVID restrictions) his mental health has been awful recently with him being an only child and not being able to see his friends so I had agreed with myself to not be as strict today.

The only thing he asked for was a Five Guys for lunch. This is his favourite fast food place so I agreed, 1 burger, 1 toastie, 1 chips, 2 milkshakes - bamn £27.70 later
I managed to pick him some wellies up, they were labelled £15 reduced to £11.99 but scanned at £9.99 so there was a further saving there! (Unfortunately they were the last pair that size so he had them and I’m still on the hunt for some - he did offer to share them with me - bless!)
We then spent a further £3.85 on a donut and a drink so total spend for the day was £41.54.

This morning, a £100 credit has been applied to my very account so that has taken my total down by £100 and I am still on course to pay £1050 to clear my AMEX off by the statement date (this will take me into my overdraft so I’m putting it off until the latest I can to minimise the overdraft interest)

My dad is also giving me £2500 as my grandad passed away recently - he has specified that it is to go towards the house deposit but I’m going to pay off some of my barclaycard which will save me approx £45 a month interest. I’m still going to count it as a debt as it will need paying back into my savings but it will be at 0% interest rather than 24.4%

savingholmes

Can you move any of your debt to 0%? Have you looked at the mse credit club to check?

stokegal

NSD today! Whoop!

I do need to go food shopping however after looking at the freezer it appears we have a lot more in than I thought and I should be able to get away with just picking up bits like bread and fresh fruit.

Also sat down OH today and showed him my full spreadsheet of our monthly outgoings and my debt repayments for the next 12 months. He’s incredibly supportive but sometimes doesn’t see the long term goal of why we need to cut back now so we can move house in 16 / 17 months. I also explained my concern over dropping my salary when on maternity pay and why I was working so hard now on trying to clear most of my debts before my salary dramatically decreased.

I had a play around with my debt repayments and have figured I can pay back all debt apart from my sofa / caravan by nov 2021 - I can then concentrate on repaying back the £3300 I have taken from savings and house deposit to put me in a position to apply for a mortgage at the start of 2022 - this is exciting as I had originally calculated this date to be much later.

These figures however don’t include saving any money for Christmas 2021 (I spent just over £1500 this year on Christmas) nor anything for the baby (I have some bits left from DS1 11 years ago and some of my friends seem to have had their last babies so are happy to give me a lot of stuff)

My figures are also based on worst case commission payments and don’t include anything that I will get from my side business - I am hoping to buy Christmas and baby stuff with this.

I suppose my biggest worry is spending whilst I’m on maternity leave. At the moment I’m able to have a lot of NSDs by staying in all the time (thanks COVID) but with DS1 I barely left the house when I had him and I suffered with PND. I’m worried that I will do the same with this baby - I won’t leave the house as I’m trying to save money and then will end up not in a good place mentally. I know I shouldn’t worry about something that hasn’t happened yet but it doesn’t stop the nagging feeling!

Anyway to end on a more positive note - I sold some stickers ready for the big January clean up (side business) - only £5 - 2 stickers to 1 customer but am thinking of promoting this over the next few days whilst everyone is sorting out their houses post Christmas! 

stokegal

savingholmes said:

Can you move any of your debt to 0%? Have you looked at the mse credit club to check?

Thanks for the suggestion - I have looked and I’m not eligible to move anything to a decent 0% offer yet. (I have 3 sub prime offers where it is 3/4% to move and then only 0% for 6/9 months - then the APR is 34.9%)
I have joined Credit Karma and Experian which are both showing high utilisation (it was around 85% prior to me paying off 2 cards) it’s now around 55% so I’ll hoping the more I pay off it might open some better offers.

I was wondering what the best thing to do was when I pay off my cards - do I reduce the limits / close cards to show less credit available or do I keep cards open to show lower utilisation??

stokegal

Hoping today will be a low spend day!

I’m taking the Christmas decorations down (all 4 - yes 4 🤦‍♀️) Christmas trees will be coming down and I still need to do a freezer inventory before we go food shopping.

My dad transferred me £2.5k this morning so £2k that has gone straight off my Barclaycard (ive kept £500 back to pay just before payday so I don’t go into my overdraft until the last minute) he also said that he had forgotten to put money in my Christmas card so will be transferring another £100 over so that will go straight off the credit card too!

Just before Christmas I sorted out some of DS toys to sell on Facebook (most unopened 🤦‍♀️) - most sold but I have a couple that didn’t - I might stick them on eBay to see if they sell there if not then it will be off to the charity shop.
There was also a high speed lego train in there - I’m hoping to get around £50 for that. I didn’t list it before Christmas as it was missing 1 piece (a magnet piece to connect the carriages) but the replacement piece has been delivered so I can list it now. If it doesn’t sell I’ll put it back up in the attic until next Christmas time as lego is timeless and usually sells well at Christmas

Hope everyone has a good day!

stokegal

Another NSD whoop! It snowed here so I haven’t left the house today. OH did go to the butchers though and bought steak for dinner and a joint for Sunday but insisted on paying (I think he’s sick of freezer food 🤦‍♀️) 
We managed to take down all the trees and box up the decorations (outside are still up), clean the conservatory, living room and kitchen and put the decorations in the office. I have to find some motivation to go up into the loft to put everything back tomorrow.
I’m constantly feeling sick at the moment and not eating much at all so my energy levels are really low. I’m hoping this passes in the next couple of weeks when im out of my first trimester!

stokegal

More snow here today! It’s not looking too bad but I still don’t want to try and drive (we live on a busy new build estate which isn’t gritted and my car is rubbish in the snow) so I will get OH to drive for today’s chores - we has a works transit van that is fine in the snow!

£50 DD for AMEX and £181 for caravan came out today so will update signature - whoop!

Today’s plan is to do the following
Aldi food shopping - £30 budget
Take rubbish to tip
Buy 2 x plastic boxes from home bargains to put Christmas decorations in - £12 budget
List 5 things on Facebook marketplace / EBay

Have a good day everyone!