24 months to debt freedom

CL21

Hello everyone! 

Long time lurker of the diaries here and loving the debt free progress people are making. I really need something to help me stay accountable and hope this is it! 

My true LBM is very recent but I’ve been dabbling around paying off debt for a while but just being a bit half hearted about it all. After all everyone’s in debt right?! After getting my debt under £10k I’m right back up to £20k and desperately want to get out of debt once and for all. 

I’ve done my budget (on an excel spreadsheet no less - couldn’t get on board with YNAB) and have worked out a time line for my debt. I think I can pay it off in 15 months but I’d like to get it done in a year. This will mean looking around for things to sell as my job doesn’t offer overtime and as I’m a single parent - and daughter only 10 - that rules out a second job. 

Big thanks to everyone who posts on here. I’ve read loads of diaries and am so inspired. It seems like a lovely community. I’ll post a bit more later on about my background and budget. I don’t want to post an SOA as I know all too well where I’m overspending and my new budget includes personal spends (a tip I got on here) which is where I’ve fallen down before. Although I could be super duper frugal, I know that I’ll just end up overspending and getting annoyed with myself and then spending a bit more! 

The title of my diary refers to my little monzo pots which I’m using to help me budget (I love them!)

**title updated 22.01.23 to reflect my hoped for debt payoff time**

Four_Seasons

Welcome you will get loads of support from everyone on here. Cheering you on x

enthusiasticsaver

Best of luck and good you already know the value of savings pots. £20k in a year is an ambitious target and look forward to following your progress. 

CL21

Thanks Four Seasons and Enthusiastic Saver (something I also hope to become one day!) 

Appreciate the support. It’s definitely an ambitious target and I’d still be really happy if I did it in 15 months but I’m aiming high! 

londoner2019

Good luck! Following your diary! What are the pots used for?

CL21

Thanks Londoner2019 - just looked at your debt payoff so far! You’re doing so brilliantly. How have you found your motivation? I’ve always struggled a bit a few months in (think I’m just super impatient and want it done) 

Pots are for a few things. I started with

Food - this also includes petrol (I don’t use much as I work from home), household/cleaning products and any eating out 
Gifts - this is so that I have enough for Christmas 2022. It’s also my mums 70th next year and will also pay for birthday party for daughter as well as various friends of dd and my own friends. 

Bella - this is for our black lab who’s 15m old and this pot is for her food, flea and worming meds, injections etc 
School fund - a small pot to save for uniform and occasion school dinners as well as school swimming / clubs
Misc - my spending money. I’ve put £75 a month in this to start
Paddleboard - bit of a random one but the reason for this is that we’re not going on holiday next year and we both love paddle boarding but haven’t got our own. This will be fully funded in six months. 

Clothing - my plan is to spend as little as possible and shop second hand as well (we love a good charity shop) but it will be fully budgeted going forward instead of a surprise! 

So - quite a lot of pots but I like to have all of the different categories. I know some people like to have very few pots that cover a number of things but I’m definitely happier with more! 

CL21

Forgot to add that I’ve got a pot for a sinking fund also. That’s for building up a sum of money for emergency and will also pay for my insurances - car/home/pet etc in full. I’d also love it to pay my rates bill in full next year but that’s not totally necessary as it’s interest free over ten months. 

Rates = Northern Ireland council tax for anyone unsure! Also includes water and - for an English girl who used to pay extortionate council tax + water rates - is extremely good value

FootyFanDan

Hey CL21, just wanted to pop by and wish you the very best of luck in your journey. The pots idea are great, I found it difficult to get on board with saving up through the year for things as seeing pots of money lead me into a false sense of security. However this year I stuck to it and it made a huge difference when it came to replacing a cooker, also the car maintenance and xmas haven't felt anywhere near as scary this year. Looking forward to following your progress

CL21

Hi @FootyFanDan thanks for stopping by and for the encouragement re the pots. Great to hear that they worked for you this time - hopeful they will do the same for me! I have tried them before but just ended up moving money from pot to pot once I’d spent what was in one 🙄 This time I have pots for all categories I know I need and some personal spends so this time feels a lot more doable 

LittleMissDetermined

Good luck on your debt free journey! The pots are a good idea and like you, I rely on a trusty excel spreadsheet rather than a budgeting app. 

Personal spends allocation is something I found really useful, I keep mine in a separate current account. Anything I don’t use gets swept into the emergency fund the night before pay day. 

Have you had a look at any of the challenge threads? There are a couple I do which helps me both save (sealed pot challenge) and pay down my debts (payment a day). You may find something which will be both debt busting and motivating. 

Anyway, I’ll be cheering you on. Lots of luck! 

LMD x 

CL21

Up at stupid o’clock for some reason and second time this week I’m seeing 4am! Normally a really good sleeper. Maybe I’m just excited about my new budget 🤣

So, a bit more about me. I live in Northern Ireland - just me and my 10yr old and our crazy Labrador.  I absolutely love it here, the people are so friendly and we live a ten minute walk away from the beach and round the corner from my daughters current school. This would have been completely unaffordable where we lived before. We love walking our pup on the beach and spend a lot of time there in the summer (hence the reason for the paddle board pot) 

Moved to Northern Ireland with my then husband but we separated at the end of 2015 and finalised divorce in 2018. A lot of dragging out done by him which did nothing but result in an extremely expensive divorce bill - my part ended up over £7k. If I’d been sensible I would have save up as I went along but no. No prizes for guessing that I put that on my credit card. Once the divorce had been settled I managed to buy the house we’d been living in by myself. The equity should have been better but we’d borrowed extra to pay off debts. Spoiler alert - that didn’t work and we just ran up more. To buy the house there was a shortfall of £4k which my dad paid for me on an interest free loan. After that, my very old but beloved beetle car died (rip Bob) and I bought a new to me car for £6k. On credit. You can see where this is going. I also had credit card debt. 

So I had my salary and a child maintenance payment to pay the bills with and what seemed like an insurmountable debt. Shortly after that in April 2019, my ex died very suddenly which was a huge shock. I don’t want to say too much about that but needless to say it had an absolutely massive impact on our family and especially my daughter who was only seven at the time. 

I took a new job about a year ago which gave me a substantial pay rise so financially things are looking up but even after paying a lot off I’ve just gone back to old habits and started spending again and this has to stop. Some of it was to replace exceptionally old double glazing but the rest has been on spending above my means. 

I want to do this for myself and teach myself good money habits so that I can retire early but more importantly I want to do this so that I can show DD what good money management is. I was never taught and have been in debt since I went to university at 18. Hopefully I can change that pattern and be a good example for her. 

If you’ve got to the end of this you deserve a medal! I’ll post current debts and a bit more of my debt plan next