Virgo In Pursuit


This is my first DFW diary on my journey to become debt-free. For those who don’t really follow the zodiac, Virgos are known for being perfectionists and control-freaks, I tend to tick the boxes except when it comes to my finances.
A little bit about myself, I am over 30. I think I enjoyed the freedom of my twenties too much that I somewhat didn’t really consider paying all the debt I owed. My mindset was as long as I have work, I can pay it off with ease. How wrong I was, the work and money were always there but the repayments were a nightmare. At 25, I was having a credit card with a limit that I cannot afford to payback, focused on too many experiences that I can handle that I ended up with payday loans. Being in University on basic pay also meant that I was over utilising my credit card, hence, the hefty result. Looking back, I do not fully regret having those life experiences as it was something I still remember fondly and learnings were made. However, I wish I knew more about being financially responsible and knew life hacks such as overpaying my credit card (and not just the minimum) and living below my means.
I am where I am now and I’m taking control of those decisions.
Fortunately, I have gotten over the payday loan spiral and closed my accounts years ago, finished University and resumed working with a more appropriate pay (unsocial hours increments and extra shifts can be a lifesaver). The University aspect was vital to my promotion. Two years later, I got another offer to a senior role. So I am using this opportunity to save bigger and even end my credit card debt quicker. Obviously without sacrificing my usual self-care (within reason).
Brief SOA:
Annual Income: £30,000 (Was £26,000 annual income until March 2021) + overtime
Credit Card: £9201.57 / 22.04% interest (Was £13,200) - looking into 0% balance transfers or overpayment at present
Savings: £4,600 of 5,000 goal / £5000 goal achieve as of May 2021 (Trying to aim for £10,000 the rest of the year)
I do have a few reasons why I decided to become “money smart” recently. But I will bore you with my sob story some other time. I just want to be stable enough and boost my finances so I can actually start thinking about a future in London.
I will tackle posting my statement of affairs next (if I can find the template again) and talk about my woes and progress as much as I can. Fair to say, I have seen an improvement in my mindset to money since I started joining in January. The advice and support I see on here is are motivating and heartwarming. I hope this little diary of mine can shed the same because I know I am not alone and I am bigger than my money problems. This is me, Virgo in Pursuit of becoming debt-free. Wish me luck!
Debt-Busting Progress: 2020: £13,200 | 2020: £9,200 | 2021: £4,900
2022: ongoing
Replies
One thing I would try and look at is your savings / credit priorities. If, for example, you get a 0% balance transfer for 8000, I would consider paying off the remaining 1201.57 using your savings. Have a look at the amount of interest you're paying each month - you'll be able to reach your savings goals and wiping out the credit card debt goal much faster without the interest payments.
I do understand the reluctance to do this, as it's nice to have that pot for emergencies and other goals, but if you're able to, I would focus everything on clearing any debt with interest.
Congrats on the promotions though! Sounds like it was thoroughly deserved.
LBM - 01/02/2021: CC (1) £8400
22/03/2022 (by priority): EF: £700/£2200; CC £5500 (at 0% 07/2022); partner: £1800/£9800; Dream holiday: 0/£3000; Extra 3K in current account: 0/£3000; tax 1900/1900; Month exp; 3000/3000
Paid off:
Self assessment tax: £1900
Partner: £1800
CC debt: £6200
Month expenditure: £3000
EF: £700
Total paid off: £13600
To go (excluding holiday and extra 3K): £15,000
Targeting £1,000 p/m From 01/2022. All goals reached (£25,200): 12/2023. (38%)
N.b. Debt up due to house purchase and redundancy... back on track after those setbacks!
DFD: Finally taking back control after a decade of debt
🌊 A smooth sea never made a skilled sailor 🌊
Tilly Tidy to mortgage for 2022 = £446.54
my diary..everyone is welcome 😁 https://forums.moneysavingexpert.com/discussion/6259606/must-try-harder/p1
Thank you for the kind words @londoner2019 and @WinterWarrior!
Debt-Busting Progress: 2020: £13,200 | 2020: £9,200 | 2021: £4,900
2022: ongoing
Debt-Busting Progress: 2020: £13,200 | 2020: £9,200 | 2021: £4,900
2022: ongoing
Don't worry at all - you've done the hard bit! Facing up to it and figuring out a plan is hard.
LBM - 01/02/2021: CC (1) £8400
22/03/2022 (by priority): EF: £700/£2200; CC £5500 (at 0% 07/2022); partner: £1800/£9800; Dream holiday: 0/£3000; Extra 3K in current account: 0/£3000; tax 1900/1900; Month exp; 3000/3000
Paid off:
Self assessment tax: £1900
Partner: £1800
CC debt: £6200
Month expenditure: £3000
EF: £700
Total paid off: £13600
To go (excluding holiday and extra 3K): £15,000
Targeting £1,000 p/m From 01/2022. All goals reached (£25,200): 12/2023. (38%)
N.b. Debt up due to house purchase and redundancy... back on track after those setbacks!
DFD: Finally taking back control after a decade of debt
0% Balance Transfer Versus Overpaying With Savings Each Month? Save Or Control Spending?
My main focus recently was my credit card debt. It seems like no matter how much I overpay, use the card for little spends, I still don't seem a dramatic decrease with my balance. I really have two options: 0% balance transfers versus overpaying with savings each month.
I didn’t really want to touch my the savings pot that I built, but the advice was sound, I am actually still paying more interest than paying off the actual debt. I decided to take the plunge and go for a 0% balance transfer instead. I was eligible for Virgin Money from the MSE calculator and was approved for the full amount. I managed to get a 0% for 26 months for a range transfer fee with a limit that I was happy with. I can project to pay off my credit card debt in 15-16 months with the monthly that I put in compared to the 22-23 months I estimated with my first card.
I was quite pleased since if you think of the state of my affairs from last year, I don’t think I even qualified for a balance transfer and was almost classified as someone with persistent debt. To me, that is a win.
I am taking the advice: As soon as I hit my £5,000 savings goal this month, the rest of my extras will go into overpaying the credit card.
Thank you all for the sound advice!
Debt-Busting Progress: 2020: £13,200 | 2020: £9,200 | 2021: £4,900
2022: ongoing
Good news: £5,000 savings goal achieve! I was aiming for an ambitious £10,000 for the rest of the year but I will try to slowly balance that with overpaying my credit card instead.
My 0% balance transfer has been approved for £8,800. If the balance transfer is correct, it saved me at least £1,400 in interest alone and estimated my debt free date to 16 months after (or even sooner).
Needs Improvement: Since I was poring through my accounts this week - I realised I am spending too much still. I had a quick look at my Monzo spending estimates and it was more than my allocated £500 on top of my rent and debit outgoings. I will post an updated SOA so you know what my main culprits are.
I’m really glad I took this step, it was well time for it.
Today will be a "spend day." Having our first date night in months now that lockdown is being slowly lifted. I will not go overboard and forget my goals, I promise.
Debt-Busting Progress: 2020: £13,200 | 2020: £9,200 | 2021: £4,900
2022: ongoing