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24 months to debt freedom

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  • TheAble
    TheAble Posts: 1,621 Forumite
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    edited 5 December 2021 at 12:40AM
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    Honestly just don't get all this "pots" business, though I appreciate it works for many. Why not just have one pot - your cash savings - and anything that can't be paid from your salary just comes out of that? And then behind your cash savings sit your liquid investments, and behind your liquid investments sit your less liquid investments and so on.

    Going back to an earlier post - does not 47 pots suggest you have too many lines of expenditure..?!
  • enthusiasticsaver
    enthusiasticsaver Posts: 15,778 Ambassador
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    TheAble said:
    Honestly just don't get all this "pots" business, though I appreciate it works for many. Why not just have one pot - your cash savings - and anything that can't be paid from your salary just comes out of that? And then behind your cash savings sit your liquid investments, and behind your liquid investments sit your less liquid investments and so on.

    Going back to an earlier post - does not 47 pots suggest you have too many lines of expenditure..?!
    Personally we do the same as you but I guess many find the multiple pots system works for them. I found I ended up constantly transferring between the pots and our current account and it took a lot of time sorting out what was in each pot and recording the ins and outs. I understand in the early days of budgeting though some find it reassuring to split the earmarked funds. 

    I just think of our e saver as one pot covering multiple lines of expenditure attached to a current account with our monthly spends and bills money in it. We each have a current personal account for personal spends. An emergency fund in separate savings account and investments to draw on should they be needed and to supplement pensions. 
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
  • joedenise
    joedenise Posts: 16,818 Forumite
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    TheAble said:
    Honestly just don't get all this "pots" business, though I appreciate it works for many. Why not just have one pot - your cash savings - and anything that can't be paid from your salary just comes out of that? And then behind your cash savings sit your liquid investments, and behind your liquid investments sit your less liquid investments and so on.

    Going back to an earlier post - does not 47 pots suggest you have too many lines of expenditure..?!
    No.  It's all in one account but I have everything separated out on YNAB.  Some of the pots are monthly ones, eg groceries, mobile phone bill, gas/elec bill etc.

    Others are for annual bills, eg car servicing, motorhome servicing, scooter servicing, vehicle taxes, pots for various insurances - house, car, motorhome, scooter etc.

    Then of course the money which is only used when absolutely necessary eg Emergency Fund.

    Just because you're happy to have just have one pot to use for everything, being on a pension I prefer to split my money up so I know how much is available at any time.  I can of course move things around if necessary but I try not to do that too often!

  • CL21
    CL21 Posts: 253 Forumite
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    Thanks @EssexHebridean and glad to meet another fellow pots lover! 

    I have previously had these virtual pots before and ended up spending from them but the difference was that I didn’t have a budget - or an EF - so I just ended up spending from them because I had no idea where my money was going. Now all my money is allocated and with realistic amounts plus misc spends for me so I’m not going to move money around going forward unless I change my goals. 

    @TheAble fully appreciate that this might seem a bit weird to some but I just love seeing all my saving goals being fulfilled individually. As above, it’s all one account; the pots are virtual. It’s just a way of tracking - YNAB works for loads but I couldn’t get on board with it at all. I think if you find something that works for you and helps you get out of debt then I’m all for it. To each their own 🙂
    Credit Card 1 - £6249.99 £4,900
    Credit Card 2 - £13,481.47 £12,985

    Total debt - £19,731.46 £17,885

    Emergency fund £930
  • CL21
    CL21 Posts: 253 Forumite
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    In other news I’ve started re-reading my Dave Ramsey book and this has reinforced what other wise people on here have said - I need an emergency fund! I did know that in my heart of hearts but as usual I’m trying to run before I can walk. Think I’m just so keen to get my debt gone. 

    Was going with £500 but am going to aim for £1000 now. That will delay debt pay off a bit but I think will be worth it for peace of mind alone. 
    Credit Card 1 - £6249.99 £4,900
    Credit Card 2 - £13,481.47 £12,985

    Total debt - £19,731.46 £17,885

    Emergency fund £930
  • warby68
    warby68 Posts: 3,050 Forumite
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    I couldn't cope with 47 pots and do the more general everyday bills account, annual and irregular bills account, personal accounts plus savings.

    I think the first step in splitting money is identifying 3 things - your regular (ie weekly/monthly) bills, your less regular and less predictable ones and make sure these 2 are well and truly covered and set aside before the 3rd which is discretionary spends. If all your money in one place its so easy to 'feel' rich when you aren't and its just a timing issue.

    You'll find your own happy medium on pots with time.
  • EssexHebridean
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    I think the “non-pot” brigade are imagining it being far more complicated than it is - for us, at least! Almost everything that goes into the majority of ours is automated - set as a standing order to go on an appropriate day of the month, it just happens without me thinking about it. My personal ones are manual but that’s partly down to a potentially “mobile” payday, and partly choice, takes me a couple of minutes when I’m paid, so not arduous at all. A lot of ours only see money transferred out on an occasional basis - the holiday account gets a lot of traffic once a year, the car account is more often, and other like my clothing account are more of a constant flow in and out but it’s still the same transfer I’d be doing if the money was all in a central savings account too, so no additional work. 

    For me the major benefits are several - it means we have the facility to jointly save a known amount  for particular annual events - the account we save in through the year for our trip to the Good Food Show is an example of this as we save from our personal spends not from the joint account. It also means that the areas we budget specific amounts for are covered when needed - and I can see at a glance how close we are to having money we need for holiday, for example. Finally- and possibly the most important for us - it means our long term savings are able to grow (mostly) without seeing lots of fluctuations in the balance all the time, and that in itself is massively motivating. (From our perspective we also know at a glance where we’re at in terms of available cash if that “right” Hebrides property shows to the market without needing to go through and work out  how much of that money is “real savings” and how much is budgeted for other spending. 

    From the outside it certainly appears that the “all in one” method would be far more labour intensive to keep track of - I assume that’s where people’s spreadsheets etc come in but for me, having it all at the tap of an app - or a couple of apps, anyway - is much more straightforward and doesn’t rely on me remembering to note transactions manually to keep track, either. Horses for courses! 
    🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
    Balance as at 01/09/23 = £115,000.00
    Balance as at 31/12/23 = £112,000.00
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  • GeorgianaCavendish
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    Welcome CL! It sounds like you are already super organised and have a good plan in place for clearing the debt. 

    I’m a big fan of pots too, I use Monzo pots to help organise my spending under my monthly budget and I’ve got a Virgin savings account with pots for things like holidays, haircuts and Christmas. I know they don’t work for everyone but I’ve struggled with budgeting in the past so the pots are a good way for me stay on track. 
  • CL21
    CL21 Posts: 253 Forumite
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    Welcome CL! It sounds like you are already super organised and have a good plan in place for clearing the debt. 

    I’m a big fan of pots too, I use Monzo pots to help organise my spending under my monthly budget and I’ve got a Virgin savings account with pots for things like holidays, haircuts and Christmas. I know they don’t work for everyone but I’ve struggled with budgeting in the past so the pots are a good way for me stay on track. 
    Thank you! Yes I think they’ll help enormously to keep me on track. I really like the way Monzo is set up for that reason alone. 

    Congratulations on being so close to debt freedom! I’ve read your diary and can’t wait to see your virtual debt free scream. What a wonderful way to start 2022. Looking forward to seeing your next steps x
    Credit Card 1 - £6249.99 £4,900
    Credit Card 2 - £13,481.47 £12,985

    Total debt - £19,731.46 £17,885

    Emergency fund £930
  • enthusiasticsaver
    enthusiasticsaver Posts: 15,778 Ambassador
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    CL21 said:
    In other news I’ve started re-reading my Dave Ramsey book and this has reinforced what other wise people on here have said - I need an emergency fund! I did know that in my heart of hearts but as usual I’m trying to run before I can walk. Think I’m just so keen to get my debt gone. 

    Was going with £500 but am going to aim for £1000 now. That will delay debt pay off a bit but I think will be worth it for peace of mind alone. 
    I agree with you even if it means a delay to overpaying the debt.  An EF is an essential when moving away from using credit cards as a first option.  Having to add to credit card debt in the case of an emergency is a massive demotivator.  
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
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