Finally taking back control after a decade of debt

londoner2019

Not a whole amount to report recently. I’m not going out as much or travelling anywhere, so those sorts of expenses are fairly low.

We do have some house stuff that I’m preparing myself for, and I’m more determined than ever to have that whole month of expenses banked by the end of this month.

I’ve managed to ring fence the next week or so to near zero spending on myself - a combination of friends being away means I’m deliberately not going out of my way to make (expensive) plans. I’ve got a stack of books to read and some painting / decorating to do at home, as well as a focus on my exercise routine.

always bumps along the way, and I am consistently reminding myself that by setting high standards, a little hiccup isn’t the end of the world.

londoner2019

A successful weekend in - and minimal spending - this is going nicely this month!

had a panic when I realised there’s some spending to be done on house things (internal
works) but then I realised that I’m busy saving an emergency fund - THIS IS WHAT IT’S FOR!

Whenever it feels daunting, I look back and realise that I’ve saved/reduced debt/been sensible with money more than £10,000 in just over a year. Even though lockdown helped a bit, I need to mentally pat myself on the back every now and then?

londoner2019

How is everyone managing their budgets with the upcoming changes to national insurance?

I use a salary take-home calculator to help me figure it out, but until the new tax year kicks in, it’s hard to precisely budget further than April.

Lucky enough to have a little extra coming in this week, which will go entirely on house work that needs fixing. 

Whenever I have a few days away from my spending spreadsheet I feel really anxious - the best solution is to sort it as soon as I can. Previously I would leave it for a couple of weeks, but that feeling of being scared to look at your bank balance I never want again. Even if I spent a bit more than I planned this weekend, I have full visibility of it and I’m aware of the road ahead.

londoner2019

So the advantage of weekly payments is that I can budget based on getting 4 payslips a month… I get paid on Thursdays, so next month there’s a bonus 5th payslip. 

I’ve decided that this will be my buffer zone. Keeping to my monthly spending habit is challenging, and I’ve been probably too strict on myself in order to try and pay back more each month. But having an “extra” payslip every three months will help.

I have also received an annual bonus this week, which is going straight on some house work. I realised that it’s only based on how long I worked pro rata in 2021… meaning that if I’m still here this time next year, that bonus will increase tenfold. Wow. Could go a long way to wiping off debt!

londoner2019

The end of another month. It doesn’t feel like I’ve made a lot of progress, but these last six months have been a one step back two steps forward sort of time.

I have managed to save up a month’s worth of bills and spending, meaning I can begin to manage my pay on a monthly basis, rather than weekly. Every week when a payslip comes in, it will go straight to a different account. I will withdraw what I need at the end of every month. 

Now, time to kick on!

londoner2019

It's been a little while since I've been on here...

I've managed to BT my remaining debt (got it down to 3000) but I've had to borrow a little bit to cover expenses for essential house work. I've got 15 months at 0% which I'm really happy about. 

New CC: 6700 (3k from old card and 3.7k new debt)
Upcoming bills to cover: 900 various insurance
EF: 1000
Owe partner: 8000
Extra buffer money (to cover for any gaps in employment): 3000
Holiday: 3000
= 22600

This sounds like a lot but only 7600 of it is CC / insurance. 8000 is to my partner, where I have flexibility in terms of when to pay it back, and the other 7000 the aspired position to be in. I hope to be paying this off 1000 a month, with the promise of a significant bonus early next year to get me there faster. Still, it's going to be the end of 2023 before I see the back of all this. I feel in control right now, which is the best position to be in. And I can look back at how I've got to where I am by counting up what I've paid off:

Paid off:
Tax bill 2021: 1900
Partner: 1800
Old CC debt: 8700
EF: 1200 (want another 1000)
Saved up for month's expenditure: 3000
= 16400

londoner2019

Well... it's a year and a day since I last posted. A lot has happened in those 366 days...

My contract shifted from a 12-month temp to a rolling freelance contract (same job, same pay. Even got them to tack on the employer pension contributions I'm missing out on)
Had a couple of bonuses come in from the temp contract this month (one was expected, one was a surprise)

With those bonuses, I have today wiped off the last of the CC debt (it was sat at 0% for another year, so I could have shoved 4k in savings to earn a little, but honestly the mental anvil has been lifted by just getting rid of it)

I have even looked into personal pensions, and the tax relief I can get from that means I have a little extra from my self employed tax savings pot to put to good use elsewhere. I feel so on top of every aspect of my finances at the moment - even looking at student loan repayments.

I know I still owe my partner 8k - that was for some legal fees for our property a few years ago which I couldn't afford, and for their kindness in helping me out for a few months while I was between jobs (covid redundancies, grrr) - but honestly now that I'm purely putting money into savings accounts rather than paying off CCs (for the first time in literally a decade) I don't know how to feel... it's weird.

My biggest setbacks were when I tried to do too much at once. I would plan for an extremely tight budget, and inevitably fail (because I can be quite impulsive) and then beat myself up about it. A mix of being more realistic with what I could afford to pay back and being more strict with my spending helped, but it needed to be a balance.

I am now looking to put away a smaller amount each month and gradually build things up. 

londoner2019

I have spent some time this week planning ahead for my taxes next year. I’m on a regular freelance contract so I know exactly what my income will be over the next 12 months and can save accordingly.

I have also found myself a SIPP to invest in, meaning I can cut my tax bill down a little bit as well. Meaning more funds available for my various pots.

I have also discovered that come my next tax bill, I will have my student loan effectively down to the last £2,500. Should I have that in my safety net pot, I will pay that off entirely. The interest is at 5% (thanks a bunch, inflation) so the idea of chipping away at it isn’t as appealing.

It means that next April I will be able to set aside much more for savings - and even look into the possibility of overpaying on the mortgage. Absolutely wild that this is even something I can think about doing. 

Finally, it would be remiss of me not to mention how much inspiration I get out of reading other diaries. Living a more frugal existence is tough for me at times, but being able to have those quiet weeks is fulfilling knowing that they are doing nothing to harm your bank balance!

doingitanyway

I have read your diary without commenting. Just wanted to delurk to say a massive well done. You have done really well and now you can grow your pots and invest in your future self. 

londoner2019

doingitanyway said:

I have read your diary without commenting. Just wanted to delurk to say a massive well done. You have done really well and now you can grow your pots and invest in your future self. 

Thank you for your kind words @doingitanyway - I am normally quite a composed and rational person but it’s dawning on me that this is quite a big deal and I’ve come a long way since I was maxing out on 4 credit cards and using payday loans. 

I still kick myself for taking out that very first one because I was annoyed at being at the limit of my £2k overdraft that wasn’t costing me anything. It’s SO easy to spiral, and I think it’s dangerous just how easy it can be to obtain credit at 0% for 12 months. Just a few taps on an app.