Happy Sloth Clawing back

Happy_Sloth

Hi there,  

So this is step 1 of my journey back from the disaster that's been the last 2 years.  

Me and my OH are both in our late 40's during our life we've had every income known to man,  we are not people who where born into comfortable incomes,  we spent most of our early married life earning minimum wage,  we've been though ups and downs, there have been times where we've not been able to feed our kids or heat our home.  While we are comfortable income now we have no always been so.  

While we now have a good income,  some people think that having a good income means not knowing debt, that's sadly not true.  I am proof that the more you have, the more you spend.  We are not super rich but we should be comfortable,  we earn way above the average UK income so why am i constantly struggling? Why does the cost of living rises scare me? Why is my new energy bill giving me nightmares? 

I think the reality is because we where arn't used to having a good income and it happened quite suddenly for both of us. We didn't know how to manage it and spent money on things without ready realising we couldn't afford it.     

The aim of this diary is to get myself and my family back into a space where we live within our means.  

So where we are! where do we want to be? 

We live in a rundown 7 bedroom Victorian Townhouse,  all of our debt has been caused by this monster.  We as a family love this house and giving it up is not an option.  We bought it in 2017 years ago as a shell of a house, with damp problems, rotten windows, no central heating and electrics from world war 1 that where unsafe by anyone's measure apparently light switches aren't supposed to catch fire and yet they did regularly.   

In short It was a mess and we have been living on a building site for 5 years! The good news is that most of the core issues have now been dealt with.   The house still has some issues with heating and ventilation but we are now are the stage where we can start thinking about scaping off the mouldy peeling wallpaper and decorating.  I'll be honest i didn't expect to be living in a house with mouldy walls and no real effective heating system 5 years after i bought it.  I think i was somewhat delusional about how much we could get done.  But for context... i calculated the other day that in the past 5 years we've spent almost £80k on this house. £20k of that was gifted in my father in laws will, the other £60k we've raised ourselves or was raised by the loans you see below.  

£80k ,,, and i've still yet to wallpaper a single room!!! Or buy a single piece of furnisher.  

BUT...... decorating costs money, it's a huge house, decorating is going to cost a fortune and we are already in debt. 

So first vow!  .... i WILL NOT SPEND MONEY I DONT HAVE! 

2nd issue is that me and my OH got into our current career's late in life, this means while we now earn a good income we haven't got the savings, investments or pensions of our peers.  I got my first workplace pension in my late 30's and there is very little in the pension pot.  I know if i want to die in this house i need to seriously ramp up my level of pension savings because at present i think my expected income is just £15,000 per year and my husbands is about the same.  This is not anywhere near enough to upkeep this house.  

Ok so where are we financially.... 

Loan 1) £7040
Loan 2) £2080
Loan 3) £4929
Loan 4) £4619
Loan of Mum £3500 

CC 1) £1164 
Overdraft on Bills Account )  £3000

Mortgage :  £230,000 ish left to pay.  

So as you can see there are a lot of loans,  none have high interest rates,  Loan 2 only has 6 months or so left to run.  

So things we need to do... 

1) Pay off all the loans and CC.   
2) Finish Renovating the house 
3) Pay off the Mortgage 
4) Increase pension contributions


Ok so now we've looked at the BAD....  lets look at the good.  

Positives... Monthly Income... 

• OH £2700 per month
• Me £3200 per month 
• Son £500 per month Rent.  

Pension Payments. 

• I am currently paying £100 extra per month into a personal pension.  
• Both myself and OH have company pensions we are paying into.  (He's paying about £400 per month,  I'm paying about £1000 including company contribution) 

Investments.  

• I have about £4500 in investments.  I use a payment app that automatically takes spare money out of my account. I call this my pensioners holiday fund the plan is not to touch it until retirement and use it for some nice holidays while we are still young enough to enjoy them.  That way even if our pension income is low we will have at least a couple of nice holidays to enjoy.  

Savings 

• I have about £1500 in my emergency kitty,  Again i have a payment app skimming a few of pound each month out of the bills account,  this money is designated for emergency's such as replacing broken appliances, car breakdowns etc.  

runningrafan

Sounds like you have a good plan in place, good luck!

Happy_Sloth

So having looked at the overall... Where are we right now in April!  

Our month runs from the 25th to the 25th or there about 

it's the 5th of April today.

• Our overdraft is at £2,099 on the bills account.. (Leaving at total of £901 available) 
• I have £500 rent due in from my son, making  £901 + £500 = £1401.  
• £1385 due out in bills... (£1401 - £1385 = £16 left!) 

Ok so this month i have £16 left to spend... fantastic... and 20 days of the month left to go.. wow ok... 

So in order to get to the end of the month successfully I really am down to buying a couple of bare essentials.  

YAY ... pantry challenge time...  has anyone seen these on youtube? where people basically live for the rest of the month on what food they have in the cupboards.  Well i guess that's me this month,  i have £16 to get bread and milk but after that we are all out of luck. 

Ok so onto positives... 

We've already done some shopping this month so the cupboards are well stocked.  

As a family we are preppers, We have alot of food in our basement, i'm not going to list it all because honestly it would actual take all day to list it.  Here's some photos though so you get an idea.

As you can see food is something we are NOT short of right now... what is not included in these photos is the 2 other freezers/ General Kitchen Cupboards or dry storage.  Trust me when i say we have ALOT of food in the house right now! I estimate a good 6 months worth. 

Onward to Meal Planning... 



 

shell16

Just wanted to say Hello and welcome.  

Reading your diary entry confirms alot is going on all at the same time.  I too am heading towards my 50's and started my debt journey late in the day only 8 months ago.  Everything appears to be urgent and I cant see how you can do everything all at once.  I appreciate your comments regarding pensions but you do have a lot of debt. Clearing that needs to take priority especially your £3000 overdraft which your bank can call in at any time plus the interest on that will be sky high.  You have an emergency fund which is great!

Can you turn your efforts 100% to clearing debt first?  Like I said I know you and OH are ploughing lots into a Pension and investments which is important but if you dont manage to clear your loans and CC's in time when you retire, your retirement funds will end up going towards paying debt rather than enjoying life.  Its a suggestion only.

Good luck on your journey!
Shell x

Nonnadiluca

Can I just say, when the time comes to decorate and furnish your home, go second hand all the way! You can get lovely furniture, curtains etc for way less than cheap and tacky new stuff. My DGD furnished a large two bedroom flat, including washing machine, dishwasher and fridge freezer for under £500, upcycled a few things and has a beautiful home. Good luck, I'm sure it will be worth it in the long run.

Happy_Sloth

shell16 said:

Just wanted to say Hello and welcome.  

Reading your diary entry confirms alot is going on all at the same time.  I too am heading towards my 50's and started my debt journey late in the day only 8 months ago.  Everything appears to be urgent and I cant see how you can do everything all at once.  I appreciate your comments regarding pensions but you do have a lot of debt. Clearing that needs to take priority especially your £3000 overdraft which your bank can call in at any time plus the interest on that will be sky high.  You have an emergency fund which is great!

Can you turn your efforts 100% to clearing debt first?  Like I said I know you and OH are ploughing lots into a Pension and investments which is important but if you dont manage to clear your loans and CC's in time when you retire, your retirement funds will end up going towards paying debt rather than enjoying life.  Its a suggestion only.

Good luck on your journey!
Shell x

I agree about paying off the debt first and the overdraft is on that hit list.  Overdrafts are tricky things easy to get into hard to get out of.  

It took me years to get out of my overdraft on my sole account,  in the end the way i finally did it was to save up the amount of the overdraft in a savings account and then in 1 lump zero'd it and considered 0 the new bottom line rather than the overdraft amount. Think the problem is atm normal is "In the overdraft"  

We are paying a good amount into pensions, and a trickle into investments (a few £ each month) but i do really think the pension is important at our age.  I know what your saying and a big part of me agrees but i know me... and im scared that if i clear the debt i won't be as focused on making up for lost time on the pension. I'll up the payments to a reasonable level but the 3 lost years while i sorted out my finances will be gone forever.  

Debt does however come before renovation!  because less debt = less interest = more money to spend on renovation.  

Moneywhizz

First step you need to do is complete an SOA and work out a budget that includes all your expenses, even irregular or yearly bills. Once all the  essential outgoings are covered you can allocate what you have left to pensions. savings, debt repayment and future renovations. Your grocery category should be fairly low given the amount of food you have in the house. Looks like you could open a shop! 

Happy_Sloth

Meal planning!  .... ooh I do love a food meal plan. 

Week 1 Meal Plan : Tues-Sunday (5 days) 

I don't tend to plan Breakfast/Lunch as the whole family fends for themselves. Looking at the sort of things they eat i don't think there is any danger. (toast and cereal mostly) We may run out of bread/milk by the end of the week, but i can pop to the shop, the local Asda always has reduced bread available, i actually can't remember the last time i paid full price.  

I am not listing everything we have because there is simply too much to list. Instead i've created a list of food that needs eating, using that as the backbone of the plan.   We have a good amount of staples to mix with it.  

Veg 

• Cauliflower 
• Broccoli 
• Carrots 
• Peppers
• New potato's
• savoy Cabbage 
• Red Cabbage 
• Fresh Beetroot
• Parsnips 
• Leek 
  
• Courgettes. 
  
• Swede
• Sweet Potato's 
• Regular Potato's. 
• Onions 
• Avocados

Other Need to use... 

• Houmous 
• Various Cold Meats 
• Cheese.  
• Frozen Spring Rolls 
• Frozen Indian Sundry's 
• Frozen pork Pies 
• Crème Fraiche
• Creamed Coconut (1/2 pack)
• sour cream
• 1/2 box of eggs (I have 2 new ones but 1/2  a box is close to BBE date) 
• packet of frozen yorkshire puds, 
• frozen stuffing.

Lunches will generally involve,  tinned soup/curry beans and sausages on toast, egg on toast or egg with veggie's or salad.  I have cooked meat, eggs, salad stuff we should be ok for a week.  

For the lunches we aim to use. 

• Little gem lettuce 
• Mushrooms
• Tomatos 
• Spring Onion 
• Cucumber 
• At least 1 pepper.
• Eggs 
• Cold meats  
• Avocado's 
• Houmous 
• Cheese
• Frozen pork Pies 
• Parsnips/potato/Crème Fraiche (turned into soup)  
• Carrots, Onions, Red cabbage (turned into coleslaw)
• New potatos/spring onions turned into potato salad. 
• Beetroot, i don't pickle for long term storage but dunking it in vinegar will mean i have beetroot to go with salads for the rest of the month.  

Dinners.  

• Tuesday : husband has already planned to do a spaghetti bolognaise.  We have peppers/mushrooms/onions and tomato's so i'll get him to do a good clear out of the fridge.  
• Wednesday : Leftover Bolognaise turned into a chill with some chilli flakes and a couple of tin's of beans and sour cream. (Leftovers will then be turned into burritos and frozen) 
• Thursday : Chicken curry,  use up some Creamed coconut/chicken/carrots/onion, potato, swede and maybe some sweet potato.  Add some of the frozen Indian sundry's on the side. 
• Friday  : Leftover chicken Curry.   Add some of the frozen Indian sundry's on the side. 
• Saturday : I have burger buns in the freezer and sausage meat.  So ill make sausage meat burgers with homemade chips and any remaining salad stuff.  
• Sunday : Some sort of roast, i might dig out the goose i have as its huge and takes up to much space in the freezer, with whatever veg is left by that point, Yorkshires, stuffing, roast potato's.  (leftover goose will hopefully be good for Mondays meal plan) 

By the end of the week i anticipate having carrots, potato's, peppers, onions, parsnips still left maybe the cauliflower or some broccoli.   

Happy_Sloth

Morning,  

Last night I sat there wondering what exactly my plan was with this diary, I guess the answer is just to keep a log of the efforts i've made to get my house and finances in order.  It will include debt payments, food diary's, house renovations, decluttering etc.  

I guess the point is to simply record the positive things im doing to make my home life better! 

This morning got an email from my bank offering me 0% on balance transfers for 15 months.  Great i thought until i realised i didn't have any balances to transfer.  The only debt i have on a credit card is on the card offering the transfer. 

It reason this triggered something in my brain is because i realised this is the first time in years i haven't had tons of credit card debt and that triggered me to go and look at my excel spreadsheet where i track all these things.  

Yesterday i said that we'd spent about £80k on the house since 2017.  Looking at the spreadsheet i can see all 80k .. almost all the work i've done on this house has been using various lines of credit. Scary!  

However if i look at the first entry i made which was July 2019, i can see we had £68k worth of debt at that time. 

2020 was rubbish for us... im a contractor working through an LTD and therefore fell though all the cracks in the governments support systems. I paid myself £600 a month and therefore that's all the furlough i could claim.  My husband was also furloughed so down to 80% of his normal and in short between us you can see on the spreadsheet with all the debt we had things where really rocky! but by some miracle we didn't slip backwards on the progress we'd made late 2019/early 2020. 

Coming out of covid wasn't much better, my husband couldn't work due to ill health i finally did get a contract but we where still down to one income yet despite being down to one income + my sons rent,  we have managed to pay off some debt and not gain any. 

My husband started working again finally last month and his first full wage was got last week, all of which was used to correct his bank balance, clear of his Credit Cards and overdraft which is why none of it hit our joint account and why i'm down to £16 for food!  

However through all of this i see one glaring thing!  in July 2019 i had £68k worth of debt... today i have £22k .... it's like im learning! and i credit MSE for that!  i grew up in a generation that learned to "Buy now, pay later"  however just in the spreadsheet i can see how much interest per month that mentality costs.   

So looking back today i feel pretty positive,  if we can manage to pay off debt as we have the last 2 years despite covid. (granted some debt was repaid, via inheritance). Suddenly having 2 full incomes for the first time in 24 months! we should almost certainly be able to get on top of this last £22k. 

So what have i done this morning.  

• I've reduced the amount both my Savings apps take out of my accounts, investments are nice for the future but just not a priority right now, and the emergency fund has £1500 which should be enough to cover any small emergency's, allowing just a trickle to go in moving forward will let me focus on other stuff. 

• Checked my sole account, I've got £181 due out on Monday and i'll only have £159. So that will take me into my overdraft which is un-avoidable at this point i simply don't have the money available anywhere to transfer in.  but i will get £151 into that account the Friday after,  so as long as I don't touch it the account should stay in he black for the rest of the month.  

Next I need to work out away of getting out of my overdraft, I've looked at my accounts and it seems like we are paying about £33 interest every month on that.  

GeorgianaCavendish

You've made such a good start with this diary and sounds like you've got a good plan in place I'm about to move into my own money pit house ... lots of renovations to come so feeling a little bit stressed but trying to keep positive. Good luck, you can do it!  

vampirotoothus

Hi you have been offered a balance transfer, so it sounds like your payments are good. Why not check the link on here and see if you can get a money transfer card to clear the overdraft? Once the bank account is back on the positive things will improve really quickly. 
Also you say you want to start decorating, but there is probably tonnes of prep that you can do, which is free or costs little.
Good luck on your journey V x