Debt and Budget (Reset) plan

sunshine_raincloud

Hi Shell. That is very kind of you to be able to help your family member out! I am sure they are very appreciative as it sounds like they are in a very tough position. As you have said it is great that you have been able to get yourself into the position where you can offer help without having too much of a disastrous impact on your finances so you should feel proud of that!  

shell16

Thanks @sunshine_raincloud, I obviously feel bad for them as they are now in a worse state than I am, even when paying off our own debts and trying to get straight.  I am happy (ish) that its not derailed us too much and could have been so much worse. 

Hope all ok with you, your balance is fantastic, it will be gone in no time at all!

Shell x 

shell16

Morning All

A quick update from me.  I have closed off the first week of my budget and pleased to confirm I had £16.81 left from my cash budget envelopes (Grocery and Fuel only).  

In view that my EF has been depleted once again, I transferred £50 when I got paid last week and also transferred £15 in notes so now have £65 .  The £1.81 has gone towards my Penny challenge.

I have decided just for the next month to pay only the minimum payments (£104) on my Credit Cards rather than my usual of £286.  The remainder of £182 will be put into my EF so will then have a balance of £247.  When I next get paid I will be transferring another £100 so working my way to mini target of £500.  I will of course also transfer any notes I have left from my cash budget envelopes like last week.

Updated PAD thread with totals and we are on for a whopper of a month and look like we will be smashing the yearly month totals declared each month to date.  Updated with my own PAD of £1.81 to Penny challenge. 

Prolific being very slow with agreeing surveys, have £3.14 cleared and £12.05 pending.  

Thats about all for now.
Shell x

shell16

Back again!

Received  a letter from Lloyds about my ISA account and that they have failed to pay the correct amount of interest upto Feb 2021.  Its not a huge amount but they are crediting me with £2.39 and as a way of compensation will also be paying me £1.72  via cheque, so a total of £4.11.  Its not a huge amount but at least I can pay towards debt once it all clears!

Thanks
Shellx 

shell16

Evening All,

I have an update on some important changes I'm going to be making on my debt free journey.  Its been a really difficult decision to make in all honesty, but the rising costs of food etc and the impending ridiculous Price cap rises coming up have forced me to this decision.

Sinking Funds/Savings

Currently I transfer around £550 a month to various funds.  In all honesty this is annoying me as it is literally drip feeding and taking ages to achieve the targets I need on all funds.  I have decided to change tact on this and do the following from my September Budget (due in 2 weeks time):

• £275 a month to my 'Accelerated' Sinking Funds which are EF, School, Vehicle Maintenance, Hols Part 1, DD1 Birthday, DD2 Birthday, Hols Part 2, Christmas 2023
• £175 a month to my 'Variable' Funds which are Family Fun, Eating Out, Misc, Birthdays
• £50 a month to Saving Challenges - the savings from this will be like a 2nd EF fund, so will go to whatever is urgent or to Half term school hols. Anything really that i haven't saved for.

The above totals £500 a month so Im saving £50 a month on what Im currently putting away into these funds.  The 'spare' £50 will be going towards increasing my Gas and Electric payments.

I have condensed the various funds and put all what I had drip fed into the EF which has been depleted recently.  I have £0 out of a mini target of £500.

The 'Accelerated' Sinking Funds will work as follows.  The £275 will be paid each month to at least 1 fund, see below:

September Pay - £213 to EF and £62 to School (Update 20.09.22 - £275 to EF only)
October Pay - £238 to school and £37 to vehicle Maintenance Update - School fully funded
November Pay - £275 to vehicle maintenance
December Pay - £193 to vehicle Maintenance and £82 to Hols Part 1 (Update 16.12.22 - Veh Maint fully funded - £100 to Hols Part 1)
Jan 2023 Pay - £75 to Hols Part 1 and £200 to DD2 Birthday
Feb 2023 Pay - £275 to Hols Part 1
Mar 2023 Pay - £75 to Hols Part 1, £200 to DD1 Birthday
Apr 2023 Pay - £275 to Hols Part 2
May 2023 Pay - £225 to Hols Part 2, £50 to EF
June 2023 to Aug 2023 Pay - £275 per month to Christmas 23
Sept 2023 Pay - £175 to Christmas 23 and £100 to EF

Its quite in depth and I will no doubt need to tweak along the way as this is assuming I will not be using any funds at all!  However by the end of 2022 I will have fully funded my EF (mini Target), School, and Vehicle Maintenance.

Now my debt

 I have decided to just pay the minimum payments on my credit cards, this will mean my DFD will be extended and also I will miss paying these off before the various 0% deals finish.  I will still be paying debt down but at a much slower pace than I have been during the last 12 months.  I will still transfer any prolific cashouts and any other cash which I wouldnt usually have to debt as I do now.  If I reduce to minimum payments I will save myself around £180 a month and again will use this towards my gas and electric to hopefully tide me over the winter period.  I do not want to be in a position where Im choosing if to put the heating on or not!

On a more positive note, I have mentioned my loan will be paid off very soon, the last payment is November and I will be £385 a month better off from December pay.  This is such a relief and couldnt have come at a better time!  October energy will rise 80% and then Jan 2023 will rise a further 52%!! 

Im just hoping this pain will be as short lived as possible, Im quite upset to be typing this on here in all honesty.  But by making these choices Im hopefully not going to add further to debt.

I would welcome your comments, am I doing the right thing, am I going to far?

Shell x

SusieT

Th\t sounds as if it will make you happier, and with the price rises you will be coveed, and if you are able to put more to the debts later all to the good. The only thing I wouls suggest is that you pay £1 or 2 more than the minimum so that the credit history does not show as only minimum paid, that mat help to get other 0% offers late on

Snwps

I've been considering having to do this to be honest, and I think many more will too over the next few months. Most of us DFW's have our SOA and budgets all set up to account for every penny, throwing as much as we can to debt repayments. The extra outlay needed for the increase is cost of living, especially the gas & electric over the winter, will need to come from somewhere. So budgets will need to be reviewed. 

You're still being sensible and not slipping back to old habits. Review how you're doing in a couple of months and adjust if needed. 

shell16

SusieT said:

Th\t sounds as if it will make you happier, and with the price rises you will be coveed, and if you are able to put more to the debts later all to the good. The only thing I wouls suggest is that you pay £1 or 2 more than the minimum so that the credit history does not show as only minimum paid, that mat help to get other 0% offers late on

Thanks @SusieT that makes sense to pay just over the minimums which is doable.  I'm still actively completing Prolific and cash out when I hit at least £5. Thankyou so much for your valued comment xx

bigbeff

Don't give up, I think we are all re-evaluating location of funds at the moment. I know I need to look at mine trying to at least pay off CC before electric goes up!

shell16

Snwps said:

I've been considering having to do this to be honest, and I think many more will too over the next few months. Most of us DFW's have our SOA and budgets all set up to account for every penny, throwing as much as we can to debt repayments. The extra outlay needed for the increase is cost of living, especially the gas & electric over the winter, will need to come from somewhere. So budgets will need to be reviewed. 

You're still being sensible and not slipping back to old habits. Review how you're doing in a couple of months and adjust if needed. 

Thankyou @Snwps

It's still really difficult a decision to make but something has to give doesn't it? I'm both extremely thankful and annoyed with myself at the same time!  I wished I had started this DF journey back in lockdown to be fair, but was just enjoying my extra cash available 🤣  On the flipside if I was just starting out now with over £15k of debt, I would be in such a mess so thankful I got myself to where I am now and I am able to make these choices.  

Shell x