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So close to debt freedom... preparing for what's next
in Debt free diaries
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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
Mortgage Free - done
Building up the pension pot
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!
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.
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 🤷♀️
Mortgage Free - done
Building up the pension pot
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!