Give me some motivation! Feeling embarrassed and down about debt!

Andyjflet

1 - Save £1000 for your Starter Emergency Fund or £500 if you earn below £20k pa

2 - Pay off all debt (except the house) using the debt snowball

3 - Save 3-6 months of expenses in a fully-funded emergency fund

4 - Invest 15% of your household income in retirement

5 - Save for your children’s Uni fund

6 - Pay off your home early

7 - Build wealth and give

ZaSa1418

You definitely need an emergency fund, even if it just £500 to start. 

I totally understand the need to see the debt go down but if something happens e.g. washing machine / freezer breaks and you have to use credit that debt number will go up and i think that is worse from personal experience. 

enthusiasticsaver

leannes_3 said:

enthusiasticsaver said:

Great going on paying almost 50% of the BNPL  debt off and it will be good to see that gone next month. Andy is right in that saving for emergencies is a priority to start moving away from using credit altogether.  However if you are paying interest as you are then I think getting together a smaller emergency fund is ok.  

It’s tough as I know what I’m like, and I feel as though I will lose motivation if I don’t see it clearing.

one of our big debt setbacks used to be Christmas, so three months ago I set up a savings account for Christmas. We put £15 a month in, which doesn’t seem much, but it will give us £180 to spend on Christmas when it comes around. That’s £180 less on credit I suppose. 

I hear your advice on the emergency fund, but for my own motivation, I feel I need to see the debt start to be cleared before I start saving. I think once a good chunk has been saved, I’ll look into setting an emergency fund up. 

I can understand that to a certain extent and you have to do what works for you.  Anticipating Christmas is a good start as you do not want to undo all your good work on clearing debt only to run it all back up again by not planning for events like that.  The usual areas for emergencies are essential house or car repairs or vet bills and redundancy (loss of income). How much and when you save for emergencies depends on your own situation and the likelihood of any of those events occurring.  The logic behind the emergency savings is that you are not tempted to add to the debt because you have no other option if faced with an unavoidable bill.  Whether saving or clearing debt they are both great steps in sorting out your finances. 

leannes_3

I hear you all and you’ve convinced me to start an emergency fund. 

So we had planned to pay £400 a month off our debt, so I’ll reduce that to £350 a month on debt, and £50 to the emergency fund. 

That will take us to £600 a year in the emergency fund  

leannes_3

Andyjflet said:

1 - Save £1000 for your Starter Emergency Fund or £500 if you earn below £20k pa

2 - Pay off all debt (except the house) using the debt snowball

3 - Save 3-6 months of expenses in a fully-funded emergency fund

4 - Invest 15% of your household income in retirement

5 - Save for your children’s Uni fund

6 - Pay off your home early

7 - Build wealth and give

Love this! We’re well on our way  

1) £50 going into an emergency fund as of September.

2) on our journey!

3) need to clear debt first!

4) I’m a teacher so pay 8.6% of my salary into my pension anyway.

5) we put £25 a month into a savings account for our baby girl. Not for university though, it’s to gift her a deposit for a house when the time comes. 

6) we’re probably going to now stay where we are, keep a smaller house, but have much more money each month, and not get ourselves into more debt! 

7) that’s the dream!

mark55man

6 and 7 are concurrent not necessarily consecutive.  although that is an individual choice clearly.  generally investments (wealth growth) have returned better results than early mortgage repayment.   

leannes_3

Latest update! You’ll be pleased to hear I started an emergency fund.

New debt standings:

MBNA Cc: £6904 5% cleared since July 2021
Capital One Cc: £1958 2% cleared since July 2021
Buy Now Pay Later: £188 57% cleared since July 2021

As you can see, I’m targeting the smaller debt first to give myself a little boost.

we started the emergency fund this month putting £25 into a savings account. It’s not a lot, but we also do £15 a month into a Christmas savings account, and £25 into a fund for our daughter for things like her first car, university, house deposit etc.

So our pram broke this month. I was tempted to go back into old habits and buy the new one on a buy now pay later, I was also tempted to sign up to klarna and do it over 3 payments. I fall into this trap a lot and I think a lot of that is why we’re in the debt we’re in. Anyway, I bit the bullet and just paid for the pram outright, meaning we’re a bit skint this month, but at least I’ve not added to my debt eh? Oh and it’s a good feeling knowing we’ve just bought it, and we don’t still have to pay for it.

moral of the story, stuff like this happens. Prams break, tyres pop etc. We’re lucky this month as my partner worked overtime meaning we had a little spare cash to buy our pram. If we hadn’t had it, we’d have got into more debt. If I’d had an emergency fund though, none of this would be a problem…

So moral of this story, have a damn emergency fund. Even if it’s £5 a month you save, it’s something, and the feeling of having to go right back into debt after making a good start was sickening.

So I’m now adding a new update!

Emergency Fund: £25

TripleH

Congratulations,

All I can say is do not panic

There will be unforseen bumps on your journey, don't let them put you off course

There is plenty you can do as a family that doesn't cost the earth, walks in the park, woods, seaside etc.

Small children have no concept of monetary value, my nephew got more enjoyment lining up our old cars and racing them down the ramp of the second hand garage my mother picked up on freecycle than all the expensive toys he had.

Also never under estimate cardboard boxes, one of the most versatile toys ever invented.

To add: if people ask for ideas for presents, staircases are great (I bought my brother a couple) they may seem dull but you'll get more use out of them than a lot of the baby clothes  especially piece of mind

rigare11a

Do not feel embarrassed at all you are in the right place there is so much helpful advice here.

Good luck I am confident you will do well  

Andyjflet

leannes_3 said:

Andyjflet said:

1 - Save £1000 for your Starter Emergency Fund or £500 if you earn below £20k pa

2 - Pay off all debt (except the house) using the debt snowball

3 - Save 3-6 months of expenses in a fully-funded emergency fund

4 - Invest 15% of your household income in retirement

5 - Save for your children’s Uni fund

6 - Pay off your home early

7 - Build wealth and give

Love this! We’re well on our way  

1) £50 going into an emergency fund as of September.

2) on our journey!

3) need to clear debt first!

4) I’m a teacher so pay 8.6% of my salary into my pension anyway.

5) we put £25 a month into a savings account for our baby girl. Not for university though, it’s to gift her a deposit for a house when the time comes. 

6) we’re probably going to now stay where we are, keep a smaller house, but have much more money each month, and not get ourselves into more debt! 

7) that’s the dream!

Just a quick point, you do these in STEPS. 

So you start with step one, then you are on step 2. So stop step 5 etc for now until all 2 is complete. Not to be done all at the same time! When you get to step 4 you need to invest more into Step 4 until you reach 15%