Refresh: My 6 year journey from -5 figures to +5 figures (it was 4 years, but I messed up)

ellipticalorbit

Thanks Scott and Elbree - I've looked at the pet insurance policies. We do want to keep them in place as we lost a pet last year and are keen not to go through similar level of vets bills (it cost us thousands in emergency hospital bills as we didn't have them insured) with our other pets who are now older. We do have all their annual boosters etc done and to be honest if we had more saved I would just cancel and put money aside monthly but if we were hit with an unexpected 4 figure vet bill I don't know what we'd do if we didn't have insurance at this point. It would massively set back my debt free journey and the pets are so important to us. Having said that, I have just realised I'm paying the insurance policies in full myself, which neither I nor my husband realised so thank you for making me do a deeper dive into this. We've agreed to split and he'll reimburse my payments - another £34 a month saved by halving the costs.

I'm waiting for the painting valuation but hope to hear back next week - I do think this would make a huge difference and the valuation will likely be a 5 figure sum, if not then definitely high 4 figures. I'm going to shoot some photos of the handbags today to get them up on Vestiaire Collective for sale - fingers crossed I can make some extra money from them!

On the 0% plan, we were a little surprised yesterday to see the 0% Santander balance transfer card my husband applied for was rejected. We've no idea why - he has nil balances on his two credit cards, a great credit score and has never missed a payment. His only credit agreement is a Hire Purchase agreement for my car, which again we've never missed a payment for. A bit disappointing as we were hoping I could clear my largest and most expensive APR card completely between moving the majority of the balance to 0% and clear the remainder using the £5k loan I got. Back to the drawing board. There is a money transfer deal card on 0% which MSE Credit Club says he has a 90% approval chance of getting with MBNA so I think we'll try apply for that today and if that is approved great (MBNA have approved a card in the past) and if not then I guess we'll need to scrap that plan for now, as we don't want too many hard searches hitting his credit report. I'll update once we've done this.

ellipticalorbit

I didn't expect to post again this morning but some good developments have been made in last 40 mins while I've been having my morning cup of tea and thinking about the debt and reduction plan!

I realised, given we weren't waiting for a balance transfer to go through to a card in my husband's name I can now pay the £5k loan payment straight into the card with the highest APR. I've just done that and it's reduced my card balances to £46,907 / £52,500 so my cards will now be at under 90% utilisation for the first time in a very long time (89% to be exact) - hoorah! I know it's just shifting the debt to a lower APR loan rather than it being cleared but something about the picture of having made a decent dent into the cards makes me feel like it's a step further forward than the loan would have me.

I also realised it's pay day so have moved my pay into my main account and had a pleasant surprise. Since adjusting the pension contributions I must have misunderstood what my after tax take home pay would be. I'm amazed to see my pay is £218 more than I thought it would be - so accounting for the additional £69 I thought my pension contribution change would make to my salary, I'm actually now up £287 in my take home pay vs last month - bloody marvellous. I've no idea what to do now though - is it a one off, is this my new take home salary after tax? I've no idea, going to have to look into my pay slip to understand it. I'm also on mat leave for next few months so wondering how, if at all, this will impact my take home pay throughout maternity period as I'd made some calculations based on my work's pay terms based on how long I intend to be off for, but perhaps it might look more favourable than I'd planned. Fingers crossed - I would definitely benefit from an extra couple hundred pounds a month and it really would help the debt situation. We'll need to wait and see I guess... I'll do a forward forecast based on the new pay slip just as a hypothetical best case budget, but keep my current forecast as the main plan until I see what next month looks like...

Scott_Weiland79

34 saved result spend it wisely lol If it were me i would set up what me and my partner have its basically a treat fund and stick 20pm month in it. Use it for a nice family takeaway or a day out fund (covid wont be here forever). The rest get it off debt or in the EF 

Stay positive your doing great 

ellipticalorbit

Scott_Weiland79 said:

34 saved result spend it wisely lol If it were me i would set up what me and my partner have its basically a treat fund and stick 20pm month in it. Use it for a nice family takeaway or a day out fund (covid wont be here forever). The rest get it off debt or in the EF 

Stay positive your doing great 

Thanks Scott - great suggestion, I'm definitely going to set up a small amount per month for dinner / baby clothes / days out - that way I won't just throw that spending on a card and incur interest rather than continue to clear the balance: great suggestion.

I've modelled out what the £218 a month additional pay means and it plays a great help in clearing more debt quicker and after checking my payslip it looks like this is my new pay amount after all since amending my pension contributions - there aren't any weird anomalies. This is a brilliant help as it's an extra £2.6k a year to help shift the debt - win!

We've had some more success - husband has now been approved for an 18 month 0% money transfer card and we can move another £4,929 off my highest APR card to 0% as a result by doing this! That means in total today I've managed to move £9,943 to lower interest, of which 50% of that is now 0% interest. All good progress and will help with the plan of enabling me to get some offers for lower interest (hopefully 0%) myself in time and means I can clear more balance each month! For anyone else in a similar position I strongly suggest asking your other half for their help to shift some of the debt to lower interest products, assuming they're happy to, trust you and know about your circumstances. It's a massive weight lifted.

Happy Friday folks!

katsu

You mentioned putting spare money into an investment ISA.  I wouldn't do that with your debts. Pay it off the debts instead as the investments have to beat all the interest you are paying out on the debts to be a better move and I doubt they can. Let the odd £ motivate you against the debts

Selling is great,  I even sold a couple of hub caps on eBay once 😂  Very funny. 

I would manage the gifts etc by getting rid of the credit cards - cut up/ in ice/deleted from your apple/google/ whatever online. Spend only what you earn and have budgeted. Want leggings and don't have cash?  Sell a bag!   That is really the change, I think.  I don't spend money on stuff I don't need now, unless I have cash in the bank to pay for it. 

Hope this is some help!

ellipticalorbit

katsu said:

You mentioned putting spare money into an investment ISA.  I wouldn't do that with your debts. Pay it off the debts instead as the investments have to beat all the interest you are paying out on the debts to be a better move and I doubt they can. Let the odd £ motivate you against the debts

Selling is great,  I even sold a couple of hub caps on eBay once 😂  Very funny. 

I would manage the gifts etc by getting rid of the credit cards - cut up/ in ice/deleted from your apple/google/ whatever online. Spend only what you earn and have budgeted. Want leggings and don't have cash?  Sell a bag!   That is really the change, I think.  I don't spend money on stuff I don't need now, unless I have cash in the bank to pay for it. 

Hope this is some help!

Thanks Katsu. Great advice - hopefully the sales will help and agree not to put anything new on a card. It's either in my account in cash (the fritter fund Elbree mentioned) or not at all, so that shouldn't happen again.

Around the money in investment ISA, the only money in there is my ringfenced tax due later this year - I can't pay this towards any credit cards to cut the interest even short term as I can't down the line pay personal tax when it's due from a credit card, therefore it has to sit in an account and may as well earn some interest while it does. If there was another way to do this I'd be all for it but as the money will be needed I can't use it to help the rest of the debt. You make a good point though in general, the interest on any money I did have would have to beat the combined interest on all the debt so I definitely won't be saving anything beyond this, any other spare cash will go into reducing the debts first and foremost as I don't imagine any small savings can save more than £700 a month on interest

elbree

Brilliant news on pet insurance, increased wages AND moving debt to lower interest rates. What a successful day, well done! Where there's a will there's a way (as my Nana used to say!). You could use some of the 'new' £200+ to loosen the budget slightly - a little more for food, present fund, EF etc and then the rest on debt. It will take the pressure off and you can still move it to debt if you underspend. Discovered a L*dl is opening up across the road from my school. Beyond excited 😂

ellipticalorbit

elbree said:

Brilliant news on pet insurance, increased wages AND moving debt to lower interest rates. What a successful day, well done! Where there's a will there's a way (as my Nana used to say!). You could use some of the 'new' £200+ to loosen the budget slightly - a little more for food, present fund, EF etc and then the rest on debt. It will take the pressure off and you can still move it to debt if you underspend. Discovered a L*dl is opening up across the road from my school. Beyond excited 😂

Thanks Elbree - I've made the pot for essentials every month now which will definitely stop me using the cards and anything leftover at the end of the month will get put towards the highest APR card. That seems a sensible approach. Very exciting about the L*dl opening, how handy and a cheap way to shop the essentials!

I've been trying to find more ways to cut cost out my plan and I realised the some spare cash (over and above the £200 a month) I have in my plan in the next 9 months was £2k to put aside into the holiday pot for early 2022. However looking at the debt pay off plan, if I pay that £2k towards a credit card balance now, then it saves £400 in interest between now and January and I wouldn't need it until then anyway. So I figure I'm as well doing that, and if we do decide to try go skiing then I can put the cost on the card at the start of the new year which means I can claim if any travel dispute were to arise and I'm still £400 up as a result of not paying that interest for 9 months in the meantime. If we decide to skip skiing for another year to prioritise clearing the debt or just because of the pandemic, life, having a young child (I'll be a pedestrian while we're away, but I do love doing that anyway - it's just lovely being up in a snowy village in the mountains) then it's £2k more paid off on the debts. Seems like a win win situation either way.

I've been looking at my monthly costs again and I'm wondering if we can reduce our electricity and gas spend - something I'm going to look into. I need to give some meter readings as our bill had been bumped up over winter, but we've just amended the schedule now it's so warm so I think we should be able to reduce our bill again between now and September over spring, summer and early autumn.

The other thing we're going to do is start tracking our food costs more closely as we both think we've been spending way too much on groceries. We've got into quite a bad habit over the past few years of buying easy stick in the oven food from M&S or nice things from Waitrose, then supplementing with the local supermarket, but I think soon as this baby is out we need to get back on a healthier meal planning track for good. It'll be beneficial from a cost and health perspective, as I'm going to have a lot of baby weight to lose so figure fresh cooking, healthy meals and long daily walks will help the weight drop off and keep me busy - and the sooner I can fit in my wardrobe again the better as it'll be a novelty having clothes I've been unable to wear for near enough a year again, almost like new but without spending a penny. Anyway, I'm thinking we cut out the expensive supermarkets, use our local big supermarket and get used to making lots of cheap healthy meals using essentials ingredients. We've been trialling frozen berries and veg for the last couple months and it's worked so well for us to reduce food waste and cut some costs so rather than me buying strawberries, raspberries and blueberries for £5 a week to go in my breakfast I now get a big bag of frozen ones for £4 and it lasts for about a month. Instead of buying fresh tenderstem broccoli or cans of sweetcorn each week, we now just buy frozen bags and it lasts us a month. We can't do it with everything - some things will be better fresh like sweet potatoes, spinach and my soft spot is vine tomatoes but I'm thinking we can try cut out a lot of the luxuries and get more creative while I have the time to cook.

The other thing I've realised this morning is there are always ways to be kind on a budget. My sibling and his fiance's horse just died (they live in the countryside and she's always had two horses and they're completely devastated). We found out last night, so I've bought a card and was browsing flowers to send condolences this morning but it occurred to me that a handwritten card is probably going to mean more than sending flowers so why send flowers - it's another £40 which could be saved. I don't know if this is a step too far, as I know they would be well received, but they'll just wither after a week and the card is surely the important bit. If we send flowers I'd like them to be special, so don't want to find a cheaper bouquet. Are they really needed? I don't think they'd miss them but would appreciate a second opinion on this.

The other thing is that I've a close friend who has just moved house - she's sent me a lot of flowers and baby gifts this year, she's incredibly thoughtful - and I do want to get her a housewarming something as it's a one off big event for her. Any ideas for where to look for a cheap but nice gift for someone on a budget? She loves candles and normally I'd just pop to Jo Malone or somewhere but I can't really justify £50 on a candle currently, given it's that type of lifestyle that's got me into this mess...

lashie

Hi, delurking to comment regarding the gifts mentioned in your last post. 

Have you looked at Katie Loxton? They sell her candles and defusers in JL however her website has much more choice and free delivery when you spend £35. I just bought a gift from there for a friends 40th and the gift bag and tag (which is free) made the gift really special. I have been given a few of her candles in the past and they smell gorgeous.
Regarding the flowers, I think you could just send the card on this occasion. In future if you do consider sending flowers, have a look at Bloom & Wild. They are letterbox flowers and last so well. They are good value for money and a bonus that they fit through the letterbox. 

https://www.bloomandwild.com/

https://katieloxton.com/
Your doing great, keep at it. 😀

lashie

Ps - just had a quick look on KL and they do a ‘home sweet home’ candle and matching diffuser which totals at £36.98 with free delivery, personalised gift bag and tag.