Finishing the race

Thelaughingcat

So, I used to bounce around these forums quite a bit around ten years ago.  

Mine was a common story on here: I had a terrible credit rating, I was ducking county court judgements by the skin of my teeth and had defaults flying out of my ears.  Total debt came in at around £23,000.

Fast forward ten years and I’m in a much better position.  My minimum wage job is a decent paying one now.  I quit smoking.  I have equity in my house for £20,000 (it still shocks me too), even if I did get laughed hard out of multiple mortgage application meetings!  And I only have one default on my credit report, due to drop off in June 2023 (it was a genuine mistake for just £45 *facepalms*).

I managed to pay off all the debt I had then but, even as my income has risen, so has my spending.  I don’t exactly live outside my means, but neither do I live within them - I pretty much carry a permanent two grand of short-term unsecured debt.

This is split between a Capital One credit card currently at £250 (and a terrible interest rate) and a Zopa loan at £1,900 (taken out last year to pay off my credit card)

I’m both an impulse shopper and an expensive plan maker.  There’s always a project, like sorting out the back garden,  that sucks money out of my disposable income.  That needs to stop.  I’m approaching 40 and I need to think about putting money away as a safety net.  

Over the last eight months, I’ve made good inroads into paying off my debt which had been floating around the £4k mark.  I really want to finish it off though, get that last two grand behind me so that my credit rating can be in tip top condition for when that blasted default comes off.  

In the year my little bro turns 30 and my other half turns 40, this is going to be hard, especially as I promised to take my OH away to America later this year for it (pandemic permitting).  

When restrictions lift, everyone’s going to want to meet up as well, which is going to be really difficult to keep cheap.  I’m probably going to have to go back into the office as well and the commute costs alone take up over two grand a year.  

So...this is not going to be a quick fix situation.  Sure, my credit card can probably go quite quickly but I’m going to have to be sensible about the loan.

I’m giving myself £25 a day spending money (on top of bills), which comes to £175 per week.  Sounds like a lot but it will be paying for food for the household as well as anything I might want.

My idea is to transfer £25 to a separate account I have for every NSD that I log, and then using that as my slush fund for things like the birthdays/projects etc.  

That will take time to build up though, so I’ll pay off the credit card as quickly as possible and then leave my loan to just run its course on the minimum payments (due to finish Jan 22).

Anything left at the end of the month goes into the slush fund account until I have £5,000 in it, at which point I’ll look into proper savings accounts.  

It feels wrong to be creating savings pots while I still have debt but I know from experience that if I throw everything at the debt, I’ll leave myself short for the things I do want to splash out on and that’s when I start dipping back into the credit again.

There’s such a small amount of debt left but it needs to go!  I want to be a proper adult with a good credit rating and a decent nest egg 😁

So, here’s to a slightly more frugal, sensible way of living that lets me enjoy the things I do want while driving me down to a debt free dolly...and maybe even a savings queen one day!

DrCarrie

LOVE IT, I too am an impulsive spender and an expensive planner. They are really hard habits to break, but with focus, I am doing it. 

Writing a diary really helps me stay focused, I hope it will for you too. I am going to see my DD in 10 days, she lives a bit of a way away from me these days. We are meeting up in a city local to her, I would normally stay overnight in a hotel, (as I can't stay with her under COVID restrictions) I really thought about it, and how much value to would add as opposed to the money...decided its not worth it!

Thelaughingcat

Yusssss!  Those are the small choices that lead to real change, @DrCarrie!  Awesome work ☺️  

When you write the diary it forces you to think before you press that ‘pay now’ button, just long enough to weigh the alternatives. 

Is your diary public?  I’d love to follow if it is. If not, congrats and good luck!  And enjoy seeing your daughter - I’m going to see my mum asap too!

DrCarrie

Hiya....here is my diary

https://forums.moneysavingexpert.com/discussion/6193643/i-am-the-obstacle-and-i-am-the-path-to-debt-free-again/p1

Be lovely to have you join me along the way. 

Thelaughingcat

First NSD of the challenge!  So very nearly dropped the ball - my other half is down South at the moment and was talking about his fish and chips.  

It’s been so long since I had fish and chips and I had an order loaded up ready to go before it occurred to me that this would come out of my £25 a day.  

I put my phone down and made an Asian-style chicken soup, all flavourful broth and mushrooms and shredded chicken with two different types of furikake and plenty of chilli.  And a huge hunk of brown sourdough to dunk in 😊 I used to be a freaking chef, I can whip up a much nicer meal from pantry ingredients and stuff wilting in the vegetable drawer quicker than Just Eat can deliver...but I still go to them way too much.

So...I get the thrill of transferring my first £25 to my separate account - I might use my Monzo for that.  If anyone has any experience with making Monzo work for them, please shout.  I’ve only ever used it to use abroad, (back when we could go abroad!).  But I know it has loads of functionality like saving pots and things like that, that I could probably make use of.

i’ve been strong and not spent!  Day One, done ✅ 

Splash21

Good luck with the diary, I'm in. 

Just chipping in on Monzo. I've used just a normal bank account and spreadsheets since 2011 to track spend and budgeting etc. 
Starting in January I started using Monzo and I love it. 

I have normals pots such as:
- Bills (every payday transfer bill money into this)
- Pocket Money (does what it says on the tin) 
- 15% Salary (transfer minimum of 15% salary into a LOCKED pot)
- Emergency Fund (Topping up emergency fund)
- Target pot (I use this for treats, for me it's usually cycling bits or tech. I create a pot per item, generally a few hundred-pound targets)
- Spend Resistance (Well done you, you decided not to spend it, so transfer it into here as if you did and look back at what you saved because you didn't 'need' it.)

Rather than seeing a lump in my account, to which my spreadsheet corresponds I can see progress every payday in the pots themselves and set savings targets. I also have a joint account with my wife and have pots such as 'Child', 'Family', 'Holiday' etc that I transfer into each month. 

You won't accrue interest but then again right now...where do you? And if you're managing your money more effectively through that beats any interest rate going anyway! 

Thelaughingcat

That’s ace, @Splash21! I’m just sat in the app, following a series of FAQ links As I try and figure out how it all works.  That sounds like exactly what I’m looking for though, so I can save towards specific goals while I pay down my debt.  

On the subject of interest, I don’t see the point either...I’d rather pay down my mortgage once I have a safety net for emergencies, rather than put it in a savings account while the rates are so low!

Thanks so much for taking the time to take me through all that - it made the app way easier to understand😊

DrCarrie

I use Monzo too! many, many pots! Really helps my budgeting: groceries, travel, putting money aside for holidays and Christmas / birthdays whatever your 'thing' is!

Well done on keeping your £25 pounds intact! 

I used to be a chef too!

Thelaughingcat

Thanks @DrCarrie!  Finding not spending money a lot more difficult than I thought I would - switching that bit of my brain off that goes ‘I’m just going past Tesco, I should pop in and see what’s on their bargain shelf’. 😁

And yay!  Another ex-chef!  We should totally start a ‘I gave up takeout and cooked...’ thread, where we basically just put photos of our dinners.  It would be an instant winner. 😆

Thelaughingcat

So, I built my shopping list last night for the next shop.  Nice and small - I’m focussing on what we already have in the freezer/pantry and creating meals from that, so it’s only fresh produce that I have to worry about.  

There was a specialist ingredient I needed to source but I used an Amazon voucher from a study I’m in to pay for that (ka-ching!). 

I’ve always been a big advocate of meal planning as a way to save money and I enjoy it.  In fact, I already have a meal plan for the year; each week with a meat, a fish and a veggie option, with a lunch.  All seasonal produce to make the most of what’s in the shops and enough leeway to allow for a couple of nights of something else if we want.  

That means, if I do see a pork tenderloin on the bargain shelf and I know in three weeks I’m due to be cooking one, I can nab it and chuck it in the freezer.  Stopping myself from nabbing the only-slightly-reduced cheesecake next to it is a different matter altogether, and that’s the impulse shopping I’m trying to stop. 😁

Halfway through the day, and struggled not to stop into the shops and market stalls on my walk.  It’s like now I’m trying for NSD’s, I want to spend more than I would have done beforehand!

Staying strong and taking a nap in the sunshine. I’ll feel better for it when I get to transfer the money again later!

DrCarrie

Thelaughingcat said:

And yay!  Another ex-chef!  We should totally start a ‘I gave up takeout and cooked...’ thread, where we basically just put photos of our dinners.  It would be an instant winner. 😆

Great idea! I dare you!