Finally taking back control after a decade of debt

londoner2019

Marching on.

Continued my low spending life this year. Haven't booked any trips away yet (while saving up for when that does happen), few impulse purchases on "stuff", and plenty of nights in, meal planning to reduce additional trips to the shop where I tend to spend more.

All that meant I was able to have about 230 in my left over pot at the end of the month. I'm just setting that aside in case I need it for train tickets to see my family, or other expenses. 

I'm gathering all the various price rises coming into effect next month to adjust my budget and see what my monthly spends are. 

I'm trying to work out the annual spends budget (haircuts and the like) but I'm finding that too granular to get my head around. We'll see. I've done a rough estimate for things like Christmas, birthdays, holidays, house maintenance, clothes, tickets to stuff, and other bits like insurance. I'd love to have all of that for 2026 saved up by NYD. Feel like I'll be about 3 grand short based on current projections. I could try and pick up some extra consultancy work to put all of that towards it.

But if I can, it means that 8 months of putting money aside in 2026 will go to 2027, and then 4 months I have to do what I like with. It's weird to not allocate it to something. But at this point, I don't necessarily have anything specific. Maybe I should start writing a list.

londoner2019

Pre-covid, I was in a cycle of payday loans. It started off with me being in my overdraft after university, then discovering money transfer credit cards, then ending up with four of those, all pretty much maxed out. Payday loans helped me to pay just over the minimums on those, and topped up my monthly spending. 

Those closed accounts are steadily dropping off my credit file now, six years on. The fact that I had about 40 closed accounts was mad. I was taking out 100, 200 loans, sometimes multiple times a month, to tide me over.

Covid dropped my outgoings, and a redundancy in Covid led me to a higher paying job, so I was very fortunate to be able to stop using those lenders, shuffle all my credit over to a 0% card, and gradually pay that down. 

This time next year, all those closed payday loan accounts will be totally wiped from my credit file. It's not made any material difference to my life right now, but it will be nice to see them gone.

mrosie

You've done brilliantly. Well done! I only hope I can do the same and get myself out of this mess.

londoner2019

mrosie said:

You've done brilliantly. Well done! I only hope I can do the same and get myself out of this mess.

Thank you. I'm not very good at receiving compliments, but it is genuinely appreciated. My go-to is to attribute the reasons to good fortune / a global pandemic. It's something that I think a lot of people in similar situations do - become a little bit more self deprecating, feel like an imposter. When I have to give myself a bit of credit for getting myself a higher-paying job. Sure, acknowledge that I got myself into my predicament, but I also was the one to get myself out.

Some of the best advice I've received on this forum is to refrain from using negative terminology, putting oneself down, and to try not to compare your situation to that of others. Everyone's debt free challenge poses their own particular problems, go at their own pace, and are faced with their own setbacks. And life happens! Stuff gets in the way of black and white spreadsheet numbers. That's ok. So good luck on your journey

londoner2019

Organised my various pots and spreadsheet post-pay day, after a bit of a spontaneous weekend away. A little pricier than I'd like, but that's ok.

I had to replace my old phone, as I'd had it for about six years and they just become obsolete these days with software updates and batteries dying. Spent a bit on a brand new one, but I'm assuming I will make that last six years too, and sticking on my sim only contract. BUT being self employed and working from home, I can claim some tax back on that as a business expense, so that's brought the investment down a bit.

I've also been fortunate to receive a small bonus this month - totally unexpected, and I think it was because I've been visibly frustrated and stressed at work. Convinced it's a small incentive in the hopes I don't quit! Very transparent what they're doing, but I'll take it, as it covers the phone and some of the trip spends. It's even covered a small weekend trip this month, which involves a night in a hotel and train tickets.

As it's the end of the tax year, I can now calculate exactly what that bill will be. And given I've been putting that money into an ISA, I can also see what interest that's earned, so I can redistribute that extra cash elsewhere. Honestly, my spreadsheet these days is a complicated web of tabs, formulas, and numbers. If I don't look at it for a few weeks I need to remind myself where everything is. Heaven forbid anyone else would need to make sense of it.

But the main point of this post is that I've managed to level out my pots and reset for the month. Now for a quietish few weeks on the spend front.

londoner2019

June update. The last two months were a little more spendy than planned. It also included paying the remortgage arrangement fee upfront. But I managed to get a bit of a claim back on my tax bill, and the mortgage will be lower from next month. So I've reordered things, levelled my pots, and from next month my daily spends budget increases by 85. I'm hopeful that I can still come in under this each month.

I'm also working on saving an annual sinking fund - for Christmas, birthdays, haircuts, dental, insurance, house maintenance, holidays etc. I want to make that as generous as possible, but then also leave room to save more across the year. I think by the end of March next year, if I don't put the money anywhere else, I will effectively have my entire 2026 sinking fund saved. 

At the moment, I think I can save 4k a year more aside from these pots.

So I'm putting aside a significant sum each month, but it's entirely going on the sinking fund stuff - ensuring I have an emergency fund in place, and being able to pay for holidays and building insurance etc up front.

Maybe I need to be stricter on my daily budget to try and increase the extra I'm saving. I've deliberately been quite generous with what I allow myself to spend on groceries, incidental house items, pubs and restaurants, as well as travel (trains, tubes). Usually things like gigs, tickets, or extended train travel will come out of this (I have around 300 that floats each month, which I roughly delegate to what I need). 

Lots to think about. Because I'm not being a good budgeter in the grand scheme of things. I just force myself to have a quiet week if I've had a blowout sort of week before. And I've lucked out on being able to pay down my debts.

londoner2019

Been a little while. I've not really been as on top of outgoings as I should have been. 

One big change we've made recently is shopping at Aldi a bit more. A new one opened up round the corner, and it's amazing just how much of a difference it makes. We typically do a big online shop with Sainsbury's, and then we have Morrisons and Waitrose stores to alternate between. But recently, we found we were just going to Waitrose a lot more. Go in for a few bits, and before you know it, spent 50 quid. 

The next few weeks are relatively quiet, so I'll see if this month's spends even out a bit.