well 2021 was the year of change and getting my head out of the sand

anna42hmr

Hope no one minds me posting this here, but wanted somewhere to write it down the progress so far and for the future.   

2021 was certainly a year of change for me and huge upheaval.  Two weeks before xmas 2020 my dad was taken into hospital and unknown to us all (him included) he had very advanced heart failiure, long story short dad spent a spell in ICU and though he battled for 11 weeks, he unfortunately never came home and passed in February.   This the triggered a huge upheaval for us all, especially my mom, for whom i had to help assist with sorting everything else out after, as he was the centre of her world.

What this did bring to the forefront is that you never know what will be around the corner and what the future will bring, and kind of shocked me into action to really getting my head out of the sand in general and with finances in particular.  So once we had all the admin etc sorted out to ensure mom was ok financially after loosing dad and getting all that wrapped up, kind of as a distraction, i decided to sort myself out fully.

To be honest, i was lazyish to a degree with my non mortgage debts, priding myself at the fact that since day 1 of the mortgage have overpaid, intending to clear it sooner etc (especially as a single home owner with only my wage to live on, over paying the mortgage felt extremely important to me).  However this to a certain degree was at the detriment to my other debts.

 I had a number of credit cards (6 at one point with balances of varying amounts), all at 0% which i just ensured was paying minimums on and a bit more here and there, and relying on the fact that if needed could BT to another detail if and when needed  - after all this had worked for the last 10 years or more for me, but really not reducing the balance by a significant amount.  

It was a huge shock when i finally sat down and added up the balances of these card debts

this then frightened me, as not earning a huge amount (under 30K) with my sole income also paying a mortgage, was a high portion of my income.  So after a couple of days panicking i decided to get my head down and work out how best to tackle this and came across the debt snowball method, and dave Ramsey.

Debt snowball made sense to me as they were all on 0%'s and as such no interest rates to clear for the avalanche style, i did deviate for one card, the very first one for the debt snowball purely because the 0% was due to end sooner  (that card was luckily only 2nd in the pecking order, so just swapped the 2nd smallest for the 1st smallest to be paid first, then went to the smallest once that had gone)  

I have to say that dave Ramsey is very marmite and i am very much Dave ish but found listening to the podcasts (among other Finance ones) kept this to the forefront a bit more.   

I ended up reducing my budget, cutting out my random spending and actually using is it needed vs wanted, is it worth it and can i get it cheaper actually helped in this progress - not to mention working from home and covid which cut spending more the last year or two as well.  I also had a lump sum in my account which was meant to be for a cancelled holiday (was meant to be going to the states for in 2020 and then 2021 which was cancelled both times) so decided well thats not happening so will be using that money to the debt snow ball).  i stopped the overpayments to the mortgage and diverted that to the snow ball, as well as did a number of new account openings and switches for the switch incentive payments (did Santander, HSBC, nationwide and RBS etc) in succession and threw that money there as well.

In total in reviewing my debts position I am now in compared to this time last year, I only have 1 credit card debt left (£2K balance) which i am aiming to clear by my 40th in April at the latest, and the debt itself is £12,012.24  less than this time.  

So my aim for 2022 is to continue to clear the last credit card £2k before my 40th birthday in the spring, and then resume mortgage OP's and increase my emergency funds to prevent need to reply on 0% deals and make better use of sinking funds pots. 

Tiredbutdetermined

Well done on making the most of 2021.
You have done an amazing job with the debts. 

anna42hmr

thanks  i appreciate it, i think seeing the figures come down and using apps to track the debt has certainly helped me and has given me encouragement to keep going. 

beanielou

Wahat an amazing start.
Be proud 

anna42hmr

Well since i posted this, several things have changed, i have been fortunate enough to have been gifted 2K from my mom this weekend to clear the last part of the debt, mom hates credit cards and always has done lol she's of the old school of if its not in my account i am not spending it! It was only at my dads suggestion they had one for emergency back ups and also for section 75 cover for larger purchases that she ever agreed to have one lol.  

However apparently it is something she has been mulling over for a few weeks when she found out the extent situation with the debt and how far i have come this year off my own back (as to be honest she had an inkling i had credit card debt i was paying off, but no idea of the extent of the amount) .  As she feels i have made huge progress on the matter she has gifted it as a last way to clear my debts so i can start the year with a fresh start, also saying its something dad will have wanted her to do as well.  

So it is with the grateful opportunity moms gift has given, that i can now concentrate on building up a reasonable emergency fund (lol the irony of this is i have also had to dip into that due to a burst tyre thanks to driving over a nail in the road - at least hadn't had to put that on card due to the fund) and resume overpaying my mortgage for this month rather than when i anticipated doing so later in the year.  

Tiredbutdetermined

Huge congratulations. That must feel
amazing.
Good luck with the EF. Do you have a figure and a date in mind?

anna42hmr

thanks, yeah it does,  i want to get my emergency fund to around £3K-£4K and hoping to get that done by June/July (currently sitting at £600 thanks to the new tyres) i think.  I have also submitted a request to start overpaying the mortgage again , so hopefully that will be set up in time for my next mortgage payment (due 27 January).

As i am on my own, and solely responsible for the mortgage and bills, want that paid down and off as soon as i can do, think putting a pause on that as well as taking stock of my outgoings etc has really helped, and am really pleased that basically my unsecured debt has reduced by £14K so at least that gives me more security as well. (£12K through my actions and £2k thanks to the kind gift from mom)

Even phoned up yesterday and cancelled the last 0% card once the £2k payment i had made the day before had cleared.    

I have also started listing out thinking about more sinking funds etc to start putting into a budget better once the emergency funds are in play/increased.