Dreaming of being Debt Free

Debt_Smashing

So thought I'd try do a review for myself.
I looked back at a soa from aug 23, 
Since then I've payed off (approx)
6500 in various debts (that are completely gone)
7000 off the massive loan
And saved away an extra 3200.
Worked it out to around 556 a month for the tackling debt and saving.
Honestly don't know how it's been done. I know some were set bill like the big loan, or minimum payments, but to look at it like that, how much I've had to put towards things (just in that specific time frame).
God knows what it was in the time before that, just throwing money at stuff , which I could have just been enjoying instead.
Either way it's an achievement I've stuck it out so long.
Guess it just shows the determination , and just doing it, monthly after month, eventually will pay off.

Debt_Smashing

£7 left in bank. Pay day tomorrow.

Had some over time this month

Debt_Smashing

So I've done it!

Emergency fund is fully completed (3 months worth) , total of £4500.

I let out a sigh of relief that few like it lasted a good few hours.

New problem. What now? But what a wonderful problem to have.

I've set up 2 new pots, one for each kid, I've placed £100 in each, planning to start with £25 a month for there future, not sure for what yet , but I'm making a start. Even if it's just to get them driving lesson or whatever.

Ive also set up a car pot, for mot/service/upgrade. Again £100 to start, no fixed amount yet. But a target for £1000 so I don't have to use that emergency fund if it breaks.

Thinking of upping up pension contributions too at work. Currently at 8%, work does 4%. Maybe just 1% to start, and to build it to a total of 15%.

Thats as far as I've got.

Anything that you think I should be doing please say, as this gear shift still feels very alien.

in_need_of_direction

a treat pot?

joedenise

I have loads of "pots" including Medical (for dentists, opticians, OTC meds etc). Are you planning a holiday? If so a Holiday pot which should also include spending money.

Debt_Smashing

https://forums.moneysavingexpert.com/discussion/comment/81864767#Comment_81864767

I should. Not treated myself to anything in years.

Ill probably wait a month or so first. Let things stabilise, plus both kids birthdays coming up. But that is an idea. To have a birthday pot and Xmas one.

https://forums.moneysavingexpert.com/discussion/comment/81864833#Comment_81864833

Yes we have one planned. £65 a month, we haven't been abroad for 6 years, so started putting away last year. No spends as of yet.

Thanks for the ideas.

Debt_Smashing

So I've set up a few new pots, some with goals. And started them off with a good chunk as I doubt I'll have a good a month's pay now for a while.

Xmas - 100/500

Birthdays - 100/400

Car fund - 100/1000

Child 1 future fund 100/will add 25pm

Child 2 future fund 100/will add 25pm

Sinking fund - 100

Still no pot for fun.

Btw, I've seen these sinking funds on others diaries, it's basically an unexpected fund it I've read it correctly? To expect the unexpected, and you don't have to use your emergency one? If not, it's what it will be for.

Debt_Smashing

So been looking into this 50/30/20 thing for finances now I'm on track.

50% for needs, 30% for wants, 20% savings/investments.

Anyone use it? Is it a good base to build upon?

Switching from intensely paying off debts and getting my emergency fund fully funded, to this now, I feel very unsure.

Needs category is currently about 68% if I've done it properly. And wants is 5%. Im sure I'm probably over that in both.

In regards to saving, if it is 20% , and I have set a challenge that I want to hit the numbers I've put down for the reoccurring bills like Xmas and birthdays, as the dates will always be the same,

So 20% of 2000 is £400 per month to be saved

Birthdays - target 400 (by Jan 🤞)

Monthly be 33.33 a month

Xmas - target 500 (by Nov)

Monthly be 41.60 a month

Kids Future funds - No target, just regular contributions

Monthly 25 x 2 , making £50 a month

So £124.93, or £125 to round it off.

That will still leave 275 to invest/save it into the car or sinking fund.

Or is birthdays and Xmas more of a wants category? Also as my work place pension is pre tax, at 8%, should I include that in the saving? Or not. I'm pretty unsure.

Either way, I'm on a positive footing.

Humdinger1

Wonderful news @Debt_Smashing ! Not sure re your questions on pensions and savings pots. Others more knowledgeable than me will be along shortly no doubt. Love Humdinger xx

Debt_Smashing

Thanks @Humdinger1 , hopefully. Feel bit lost right now. Also I know it will take a while to find my feet in this new position I'm in. But it's definitely a better problem to have!