Go your own way

gd55

Hi team, I'm new to the MSE forums, having joined in March to help me clear up my credit report and improve my financial intelligence post-IVA. Thought I would get a diary going to tell my tale so far and share some insight on how I'm now 'going my own way' with my money having ditched the debt.

So, here's my story so far...

I guess it started when I went to uni in 2001. Fresher's Fair is not just about free drinks tokens and a load of pens - you went straight to the Barclaycard stand and got your first credit card! Not sure if that's allowed these days! I always worked while studying, had the usual loan (fees were only around £3k a year back in those days), and kept myself afloat without too much drama.

My early years of work passed without too much drama, but in the late 2000s I found myself without full-time employment and ended up being self-employed for nearly five years. I thought I was making it work, but that was only because I ignored the tax man and used credit cards/payday loans.

There was nothing of major concern for a few years and I somehow made things add up, but by 2017, back in employment in a solid job, I got to the point where I had taken on just a bit too much than my salary could cope with. A small car loan, couple of those old credit cards and payday loans, and it was time to do something before I got to the point of not having enough for rent and bills.

A friend had started an IVA a few months earlier, so it made me think about what the options could be. I did some (not enough) research, and ended up going into an IVA myself at the end of September 2017. With hindsight, I don't think this was the best option - I wasn't a homeowner, and total debts were around £17k with only a few missed payments at that point, but what is done is done.

I told no-one of course (single at the time and no dependents) and chugged along fine with the payments.

In February 2019 my contract ended and I was out of work for a couple of months. I arranged a payment break on the IVA, but that meant an extra year would be added, so six years of payments instead of five. Still, that was fine, and couldn't be helped.

Over the next couple of years I started to sort myself out a bit better, and through selling bits and bobs and being a bit more stringent, I was able to make a full and final settlement offer in November 2021. The IVA company said they would only accept the full amount of the remaining 12 months' payments at the current amount, which I just about had.

Got that paid, and on 10 January 2022 I received the certificate of completion for my IVA. Debt free for the first time in my adult life! What a feeling that was. For anyone working on their debt, please keep reminding yourself how that's going to feel for you - it really is a game-changer.

So for the first few months of this year I've been ensuring my credit report is all in order, and joined these forums to get some advice and tips. Now it's on to my future plans - see next post for that!

PS Yes, I am a massive Fleetwood Mac fan.

gd55

Getting the IVA paid off was a huge relief, and now there's money to play with! 

My tastes have become more expensive recently - blame it on my wonderful boyfriend and his love of designer clothes - so now I have the luxury of splashing a bit of cash and setting up a much more enjoyable lifestyle. Dearest boyf has also been instilling in me the importance of budgeting, so now I'm on a massive mission.

Along with the wealth of excellent advice and insight from these forums, I now have a solid plan to fund all the things I want/need, to rebuild my credit worthiness with the aim of us buying a house together, and even having a proper retirement fund too!

It looks something like this:

• Main bank account - salary goes in; all my bills and regular outgoings like food and petrol come out.
• Main savings account - set amount put aside each month for my emergency fund.
• Second bank account - this is where I put my spending money - for getting my nails done, nights out, clothes etc.
• Savings pots within second bank account - for the short-term funds for things like holidays.
• Vanquis and Ocean credit cards - opened this year, with a total limit of £2,000.

I'm tillying the odd pennies from my main bank account to my emergency savings, and rounding up from my spending transactions in the second account to whichever savings pot I'm currently focusing on.

Credit card spending is to aid the credit report health. They're being used for food/petrol, and both are set to pay the full balance on each statement.

I have enjoyed a very healthy salary increase this year, and start a new job soon which will be another great boost, so my savings goals are reasonably ambitious:

• Portugal pot £750 by mid-May
• House move pot £1,500 by end August
  
• Emergency fund £2,000 by end 2022
• House deposit fund TBC

I aim to hit my targets for the remainder of 2022, by which time I will have moved in with my boyfriend, then assess what we can do about saving for a house and getting a mortgage together.

I have so much more confidence in my money management now and can see a much brighter future where I can buy nice things without putting them on the never-never, own a house with my man, and not have to work until I keel over!

That's it for starters I think! I'll keep coming back for savings updates and anything else I can think of that I've learnt or am learning along the way.

I feel like I should end on a top tip or something, which I think would be something about focusing on what's ahead, not behind. You can go your own way!

gd55

Ah payday, best day of the month!

My budget is a bit tight this month - we are off to Portugal in May so I need to put some spending money aside - but it's all good and worth it.

First thing this morning I tillied the pennies to savings, and made the manual payments on my list. I have a to do list in my phone to check the bills off as they go out - so satisfying knowing everything is covered with some leftover.

Aimingforthegoodlife

Love it! Sounds like everything is coming together! Best of luck!

gd55

Finally got around to sorting out the craft stash and some other things I no longer use. Everything listed and so far got rid of a load of STUFF and added the £100 profit to my Portugal pot.

Blackcats

Great background story - thank you for sharing.
good luck with your goals.  It's so nice saving for ourselves rather than giving all our spare money to the financial institutions.

Honeysucklelou2

Thank you for sharing your debt free journey...gives inspiration and motivation for those of us still on that road. 

gd55

Honeysucklelou2 said:

Thank you for sharing your debt free journey...gives inspiration and motivation for those of us still on that road. 

You're very welcome, I'm glad it is helpful. The journey is so worth it, keep taking your steps forward.

gd55

Blackcats said:

Great background story - thank you for sharing.
good luck with your goals.  It's so nice saving for ourselves rather than giving all our spare money to the financial institutions.

You're welcome, and thank you.
Don't get me wrong, I spent all that debt at one point and accepted that I needed to pay as much as possible back, but it is definitely good to be able to put all my money exactly where I want it now.

gd55

Muddling along over the past week - tidying away the odd few pennies, sold a few more craft bits I don't have a need for. Feeling a bit skint with everything going towards holiday spends, but the pay-off when I'm there will be well worth it.

gd55

A few months on and things are going well.

I have moved in with my boyfriend so we're able to start saving now for a deposit for a house. I'm hoping we'll be able to get a good chunk together and sort a mortgage in summer 2024. At that point everything will be off my credit file.

I've now got access to £3.5k of credit across three cards, which I'm really pleased with.

Vanquis, opened very soon after IVA.
Ocean Finance, opened a few months after that.
Capital One, opened last week.

I put food and petrol spends between them and pay off in full each month.

I'm planning to merge Cap One onto Ocean, as that's also provided by Cap One, and just stick with the two cards then and see how it goes over the next 12 months.