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

ellipticalorbit

elbree said:

Great news on the sales and potential for making some big inroads into your high interest debts. So motivational when you make progress like that, well done! I also have a small regular indulge at M&S food court. In lockdown 1 it was the only place with any food in my town! My daughter and I used to go and buy fancy pasta etc and now we still do once in a while for a treat. What's life without a few treats? 

Thanks Elbree, it'd make great inroads and mean we have a little more breathing room the next 3 years while I clear everything if we can progress with the sale(s) so plan to proceed in November and will wait and see how it turns out.

Absolutely agree, I think a few treats are needed now and again - we've been enjoying the luxury the last day or so and have no regrets with this food shop whatsoever!

ellipticalorbit

Scott_Weiland79 said:

Hi re below and energy bills you can but try, i would try price comparison sites and switch. Go through top cashback and see what you can do on the sites, you may even get 50-100 in cashback.

Bar that all else you can do is be frugal ie energy saving bulbs in every room, switch off lights when not in rooms,  leave nothing on standby when not in use. Re dishwasher or washing machine dont washing machine or dryer dont stuff in half loads unless you to ie kids school clothes. And maybe turn you thermostat a couple of degrees. 

We are trying to do this but with two kids its hard, as they have a habit of getting up during the night to the bathroom and leaving the house like Blackpool illuminations lol.

We have recently switched oil supplier but sadly cashback sites i dont think offer cashback on switching heating oil.


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 summer and early autumn.

Thanks Scott, absolutely agree. It must be a challenge with teaching the kids, but hopefully they take some interest in it and start to switch things off themselves - for the good of their future planet

I'm pretty environmentally conscious day to day so everything is fully switched off after use, whether it's a light when leaving the room or switching off at the wall. I only ever do full loads of washing so I don't think there is much more left we can do to reduce our usage now I've amended the heating schedule. We have a Nest which we need to get hooked up to the boiler once it's safe to get someone out to do this and having had one in our first house I know that will help us manage the ambient temperature of the house and manage our bills. It was quite eye opening logging into the Bulb account the other day, the estimated usage has just crept up over winter quite substantially so now we've given them actual readings I'm hoping we'll get an accurate monthly bill and I expect it will drop by at least a third now we've changed our heating schedule. Will keep you posted in the next month or two once we see the impact.

Will explore switching once we have an accurate bill but suspect we may already be on as good as it gets and I like that our usage is offset!

Scott_Weiland79

Well i know our electric usage is dropping thats mainly down to me, i dont use the heating when i am at work through the night and i literally flick everything off bar essentials when the kids leave for school in the morning lol Hopefully the weather will continue warming up we had a couple of canny days earlier in the week. I would definetly look at switching supplier.

ellipticalorbit

It's been a crazy few weeks since I last posted. We had our beautiful baby so have been settling into life as new parents, which has been an absolute whirlwind of bliss full of love and baby cuddles.

It's strange, everything has now changed perspective wise, a lot more than I thought it would. I thought I was already gearing up mentally to be a parent but nothing prepares you for the sheer overwhelming love and sacrifice you feel you'd make for your child. Who knew?! With that in mind, it's changed my perspective on finances a lot...

Firstly, it's made it more important than ever that we put ourselves in a really strong financial position to be able to look after the little one and set them up for their future.

Secondly, I'd do anything to be able to give them the world - not everything and anything as I do want to be environmentally conscious and less consumeristic. But I would like to make sure they have the best of the things they do need, and importantly grow up getting to experience the world through lots of travel with us when they're a little older.

Which takes me on to my third thought - clearly I hadn't had a baby yet when I was still planning for tropical and skiing holidays in the budget over the next couple years. Now baby is here and I see how fragile and perfect they are, there is no way I want to take them to extreme climates when they're quite so little and anything could happen. So I suspect we might save a bit in the budget on the holidays which I'd planned from the bag sale funds. Or at least we'll be staying much closer to home in or near the UK when the time comes!

In terms of this month's updates, we're generally on track and have made some good progress. After taking the £5k loan, doing a money transfer on 0% with hubby's credit card of almost £5k and paying the £2k holiday fund in to the biggest credit card with the highest APR, I've reduced the balance on this now to £1,194 (from an original starting balance of just under £13,000 in January). This means from next month I'll be saving about £100 a month on interest.


I have also made a few unplanned purchases:

I've had to buy some additional newborn onesies as baby bear was a little smaller than we had been expecting. I also chose to invest in a piece of kit which baby bear can wear to track their heart rate and oxygen levels for peace of mind after a little scare in hospital - it was £280 but has been worth ever penny so far and I've been able to sleep really well at night since we got this!


Latest Position:

This month I've paid off £1,710 of the debt (net, after interest).

Debt free by Aug 2024 ~ 3y5m to freedom

**Current debt: £69,769/ £82,500 total credit. 16% down, 84% to go**

Credit card debt: £44,809 / £52,500. Loan debt £24,960 / £30,000

EF: £1,000 / £1,000

Savings: £0 / £10,000 (5 year goal)

Mortgage Neutral Progress: £311,447 / £315,000, paid off 1%

Pension Pot: £17,280

Overall I definitely feel I'm now in the habit of generally not spending on the credit cards and just reducing the debt monthly.

It feels really good having hit a milestone of getting the debt under £70k!

£69k is a lot less scary sounding than £70k+ and I feel like every time I drop into a lower band of 10k it will help make achieving debt freedom feel even more realistic and tangible.

I feel like a completely different person from who I was when I started this journey 3 months ago in January in a good way. I'm definitely making more conscious choices and better decisions now

astrocytic_kitten

Congratulations, and welcome to baby bear! 

Good progress on the financial front too 😃

elbree

Congratulations @ellipticalorbit! Welcome to the world baby elliptical! It sounds like you're a thousand times more competent than me already - my baby whirlwind was more full of sleep deprived fog and cold cups of tea than bliss! I did think you were being a bit ambitious on the skiing front for a year or two plus you've made some amazing progress on the cards. Keep up the great work. 

dawnybabes

Welcome to the world !  Congratulations x

ellipticalorbit

Where to start? It's been several months since I updated my DFD and I definitely took my eye off the goal and have taken a huge backwards step and undone all the progress I had started to make, which is really disappointing!

I think I've really !!!!!! up the plan and now can't even begin to forecast making avalanche payments to clear each card as I've no idea whether I'm going to be in a bit of a black hole in the next 3 months or not.

I mismanaged part of my plan to clear the last of the business and tax bills and now have a bit of a deficit in my plan. I have a sale planned which should cover it, all going well, but I won't know for certain until the end of the year. If not it looks like I'm going to have to borrow from family to cover it. All this means, besides making the minimum payments on the personal debt, I can't even start to plan the pay off on them without knowing the sale will go ahead.

Lessons Learned:
Don't stop focusing on the plan every week
Stop being frivolous when you really can't afford to be
Discipline is going to be key to getting through the next few months spending as little as possible
Is shopping a real addiction? I think it might be
I'm !!!!!! with credit cards, I just spend what is available on them
I'm really good with loans, as they have fixed payments to reduce the balance

28/08/21 - Take 2 at becoming debt free, Day 1

Step 1 - Cut up the credit cards - should have done this earlier this year rather than trusted myself
Step 2 - clear the business bills and personal tax
Step 3 - new avalanche plan for the personal debt

Not proud of these numbers:

Debt free by no idea when / who knows how many months to freedom

**Current debt = £73,267 / £82,500 total credit. 12% down, 88% to go**

Credit card debt £51,283 / £52,500. Loan debt £21,984 / £30,000

EF £1,000 / £1,000. Savings £0 / £10,000 (5 year goal)

Mortgage Neutral £308,773 / £315,000 2% down, 98% to go

Pension £21,345

elbree

Welcome back @ellipticalorbit. Sounds like you are being pretty tough on yourself but you did just have a baby! Try not to beat yourself up too much and just move on. Otherwise you might end up feeling like it's not even worth the bother. Well done for starting posting again! Post or do something small every day to keep inspiring you. Other people's diaries are pretty incredible and definitely keep me on track! 

ellipticalorbit

Morning everyone,

I've been meaning to get back into the habit of posting regularly and now is as good a time as any.

There have been a lot of developments over the last few weeks and months that I should probably share. Since my last post, I've cut up all the credit cards with scissors and am fully committing to enabling the balances to reduce monthly, so that's a positive. I feel like the debt pay off plan is in motion.

A couple circumstances have changed and I'd like to explain them then ask for your advice - what would you recommend I do?

1. With my current debt payments (c.£2k a month, and household bills and living costs of around the same now I pay for childcare too), my monthly outgoings are around £4.2k a month currently. This means I need an income of at least about 80k to keep my head above water.

2. I found out this last week my team, including me, are being made redundant. I've got 4 months to find another job at my income and level internally or I'll get 1 month's salary paid off as I've only accrued a year and a bit's severance. Normally I'd be pretty confident of finding another job with my income, as my income hasn't been less than this since 2014, however due to point 3 it's not going to be easy or likely

3. I'm pregnant. I've been told by my two mentors (who are pretty senior in the organisation) in the company to not tell anyone - as although it's illegal to discriminate, they think it'll significantly hamper my likelihood of getting another role if people know. The problem I have is:

1) I can't afford an income drop
2) I will now not get Occupational Mat Pay from my job if they exit me as it'll be when I'm 7 months pregnant in the new year and they'll only have to pay me Statutory Mat Pay as one lump pay out - this will be enough for me to live on until the baby is about 4 weeks old with my current outgoings
3) It's too late for me to get another job externally as I now won't qualify for OMP or SMP elsewhere, which means if I leave now and walk away from the one month severance and the SMP, I'll be financially worse off than not having earnings in months 8 and 9 of pregnancy
4) My outgoings will go up to £4.4k a month once child 2 needs childcare, i.e. when I can get another job

My outgoings are now at a level where the salary needed to cover them is astronomical and I think this is the final nail in the coffin for being able to carry on as things are with the gradual debt reduction plan. I think it's time to take some radical action.

I may have some sales going through at the end of this year, which I'll know for definite in 8 weeks time, which might provide a couple months living costs so I could take 3 months off after baby is here but it won't solve the problem of the costs ever-growing with no income or job security.

I've one last resort option: sell the house. My husband is understandably disappointed this is on the table but I think it has to be done. My family have a flat we used to live in which we could rent for a couple years - it would be a secure, safe, happy place for the babies and us to live in while we have a financial fresh start. It would mean if I took all my half of the equity out the house I could survive maternity and find a new job while also clearing about £43k of the debt out of £70k. Between wiping out over half the debt and reducing living costs significantly it would take my costs down to about £2.3k a month (maybe 2.5-2.7k with additional childcare). It would take me about 2 years to clear the last of the debt and save up my half to buy another property. One step back but two steps forward in a couple years time.

I should add, if we stay where we live now, then long term we'll need to incur costs to extend this house and the only good schooling option locally is private school. It feels like I'll never escape these outgoings. If we move, then we would move to an area with access to top free schooling and when we do buy another house it'd be one that's big enough for our family but not excessive.

The alternative to moving is try get another job with a huge income and hope nothing else goes wrong, which feels very risky. It's also kicking the can down the road on the schooling issue.

If you've read all of this I guess the question I'm asking is:
What should we do?
Have you had to anything so drastic?
Will it be okay?

Thanks for supporting me.