So close to debt freedom... preparing for what's next

Shineyhappy

I am glad that you are nearly rid of that loan. The extra money will no doubt be used in a more worthwhile manner.

I am a spendthrift, if I have money in my current account, then I want to spend it. I accept this as I feel the money burning a hole through my pocket like larvae. To combat this, I simply don’t keep money in there. I have bought Premium Bonds on payday, made overpayments to my mortgage on payday, set up regular saving accounts where they transfer the money out, upped my pension contributions, set up a Stocks and Shares Isa direct debit and cancelled my overdraft. I figure better to be safe than sorry.

so in short, in terms of spendable  cash, I am always fairly skint. I transfer a bit to a holiday fund each month, but that’s untouchable as I love travel.

The government has also realised some green bonds that sound like they should be ethical but I haven’t read much about them 

elbree

Strether2020 said:

CL21 said:

I recommend Vanguard for Isas - I have one for my daughter and one for me. I’m only going to save a very small amount next year while I’m paying off my debt but will absolutely go back to saving as much as possible when I’m done. They’re both stocks and shares Isas and the vanguard platform is really easy to use - both have done well so far although not much in them yet. I’m not sure about ethical investments though, sorry. 

You should go great guns on the saving if you’ve been used to spending £200 a month on debt. Going to use this diary as my inspiration for when I’m also debt free as I’m a year behind you. Can’t wait to see how you get on 

Thanks so much for the recommendation! I'll definitely look into this. Saving for my daughter is a huge motivation! 

Ethical investing looks hugely complex... but if I have the sense that my money is doing something good in the world while I save and invest (not funding damage to the environment - and also not profiting from other people struggling with debt!) that would be amazing. Anyway, I've got three or four months to figure this out! 

And I look forward to cheering you on as you head into freedom from debt! I honestly can't believe I've reached this point, but if I can, you can! 

Hi @Strether2020, congrats on your amazing progress. I think the drip feeding the debts with tiny payments is a brilliant method and one I now use to try and build up savings pots. On ethical investments I'd recommend the app M@neybox. It does ethical stocks and shares ISAs. There's a function which rounds up your spare change and puts it in for you, I love it. Good luck! 

Strether2020

AllNightDiner said:

No self-flagellation: you must give yourself only praise for working yourself out of a problem! 

Just tonight, I read this reflection from Maya Angelou: 

“I wrote about my experiences because I thought too many people tell young folks, ‘I never did anything wrong. Who, Moi? - never I’… They lie like that and then young people find themselves in situations and they think, ‘Damn I must be a pretty bad guy. My mom or dad never did anything wrong.’ They can’t forgive themselves and go on with their lives.” 

Ah, I love this Maya Angelou quote, @AllNightDiner - so true, when you're struggling with debt it feels like everyone else is much better at managing their money than you are! Thanks for sharing! 

Strether2020

Shineyhappy said:

I am glad that you are nearly rid of that loan. The extra money will no doubt be used in a more worthwhile manner.

I am a spendthrift, if I have money in my current account, then I want to spend it. I accept this as I feel the money burning a hole through my pocket like larvae. To combat this, I simply don’t keep money in there. I have bought Premium Bonds on payday, made overpayments to my mortgage on payday, set up regular saving accounts where they transfer the money out, upped my pension contributions, set up a Stocks and Shares Isa direct debit and cancelled my overdraft. I figure better to be safe than sorry.

so in short, in terms of spendable  cash, I am always fairly skint. I transfer a bit to a holiday fund each month, but that’s untouchable as I love travel.

The government has also realised some green bonds that sound like they should be ethical but I haven’t read much about them 

I really like this way of thinking about it - skint in the right ways! My tendency is also to just spend money I have (even money I don't have - hence the permanent overdraft I was maintaining). 

I'll take a look at those green bonds; if they're still available when I'm in a position to invest, I'd definitely consider those. Thank you! 

Strether2020

elbree said:

Hi @Strether2020, congrats on your amazing progress. I think the drip feeding the debts with tiny payments is a brilliant method and one I now use to try and build up savings pots. On ethical investments I'd recommend the app M@neybox. It does ethical stocks and shares ISAs. There's a function which rounds up your spare change and puts it in for you, I love it. Good luck! 

Ah, thanks @elbree! That app looks brilliant - I love the rounding up idea. I've been doing that a lot manually for debt payments, but once I'm in the new realm of saving and investing I'll need to make the process as easy as possible for myself, so this could be perfect! 

Strether2020

Just a quick update to my diary before Christmas. I've made some nice progress on the credit card, with some little payments - helped by a couple pf canceled Christmas parties... :-(

I'm feeling confident going into the New Year that I can finish the job and pay off all my debts by the end of April. I woke up at 3 this morning, and instead of worrying about money and debt I was thinking about how I'd use my freedom from debt to help build a better future. I'm so grateful to have become part of the community on this forum and for all the positivity and support. 

AllNightDiner

Great to hear you are going into the holidays feeling so good! 2022 will be your year of freedom. Well done.

Blackcats

well done. I'm debt free now and I know I can sustain it because my mind set has changed.  I'd had very brief dalliances with reducing debt but that was really only about giving me headspace on credit cards in order to spend more money.  Your mindset has changed too and it's fabulous to read your diary.
I've set up a regular monthly saver into my stocks and shares ISA.  It goes out on payday so I really am paying myself first.  I'm still enjoying watching my money grow for me and my future rather than the credit card statement which showed the horror of the interest applied to the bill each month meaning that my payment wasn't making much difference to the balance at all.  I used to be very good at ignoring that bit of the credit card statement though 🤷‍♀️

Shineyhappy

@Strether2020 how is everything going? I hope you didn’t go to financially crazy over Christmas, New a year and the sales?

Strether2020

Thanks so much for checking in, @Shineyhappy! That's really good of you. 

It's been a tricky few weeks, with the family catching covid one by one... we're all fine, just in a state of chaos! But on the debt front, things are going really well (probably helped by not spending much during illness!). I've made steady payments off my final credit card debt, which is now down to £293. And yesterday I made the final payment on my personal loan! It's an amazing feeling. I took the loan out for £11,000 in 2014, to pay off credit card debts which had got out of hand... the pressure of the loan repayments meant I then built up new credit card debt, fell behind on monthly payments... all until my lightbulb moment in 2019. So I can't quite believe that I've paid this debt off now! It's like I've not only paid off the loan, but also the long-term credit card debt from years before then. I'm now hoping to pay off at least £200 from my credit card next month, and then in April when I've paid off the last chunk I can start my new plan of using my money in positive ways instead of to pay off debt!

I cannot describe how it feels to have reached this point. For years, even decades, I've struggled with money, and struggled to believe that I could ever manage to get a grip. Because I was in such deep debt, I could never see my way out - apart from through more debt. So over three years, to have turned this round from £18,500 - well, it's totally transforming the way I see myself. I just keep thinking about how I chipped away at this, not giving up when it must have seemed so hopeless, and I think "was that really me?" So I guess that, for me, getting out of debt has been about so many things alongside the money. Self-worth, a sense of purpose and direction... debt eroded all that; and now I'm in a totally different place. 

I've formed a plan for when the last debts are paid off. I was paying a minimum of £200 a month off my debts, so instead I'm going to put £25/month into an ISA for my daughter; pay £20 a month as an overpayment on my mortgage; and make charity donations of £25 a month to causes that mean something to me (including to charities that work in areas relating to debt). The rest, I'll save and invest into an ISA. I'll try and keep the little habits - the micro-payments when I make mini-savings - and put that money into my ISA and into mortgage overpayments. But I'll also make sure to enjoy a few things with friends and family, knowing that debt isn't weighing me down! 

Not quite there yet - but that's what I'm thinking!