Debt free by 40? I hope so.

dinofoot

Well, this is a big step.

I’m honestly not sure how I have ended up with so much debt, it is scary, and I have racked my brains and the only thing I can think is that I have been living beyond my means and have absolutely nothing to show for it. No fancy car, no nice holidays, a house in desperate need of updates and repairs and all I have is debt. There is nothing tangible to explain how I have so much debt, just day-to-day living.

I have managed to pay some off, about £4k but there is still a huge amount to go. I have the means to pay it, but I keep losing motivation and spending more money. I don’t even have much stuff. It seems like I buy stuff and then get rid of the clutter and then rinse and repeat. I am hoping that tracking my spending will allow me to take back a bit of control and really think about what we do and don’t need.

Okay, so here is the debt:

Virgin                   9562

Tesco                  7289

MBNA 1               2828

MBNA 2               1713.7

PayPal                 1652.96

Next                     Approx. £300 – waiting for some returns so I can have an accurate figure

 

In terms of interest, Virgin and Tesco are currently interest free, and MBNA1 is due to start charging interest soon. I am paying about £20 per month in interest on Paypal. I know I should focus my effort on clearing Paypal but I tried this before and ended up spending more. I don’t have the cards for the others so anything I pay towards it is actually payments towards the debt. I think that makes sense.

I have £925 per month to throw towards these debts, more if I can be really careful with my spending.

My plan is to tackle the MBNA1 first as that will start collecting interest soon. I am only making slightly more than minimum payments on the others with the rest going to MBNA1 so in theory should have MBNA1 paid by November. I can then start using that money to clear MBNA2. That should be paid by December. That money will then be split between Tesco and Virgin, but this will take some time to clear. I’m not sure when interest is due to be charged on those, but I will probably need to do a 0% interest shift at some point. I have a spreadsheet covering all of this in far more detail, so I know what I am doing each month but really, I want to track my spending. Just be a bit more accountable for what is going on. That is what will really help me get out of debt and stay out of debt.  

I really need to buy a couple of tyres soon and will also need to do a food shop. Aside from that I can’t think that I need anything. I did have to fill the car up today, that was £70.04. I am going out to dinner next week but that will be the first time I have done anything in months and months and am really looking forward to it. I have switched broadband providers saving us £96 over the year and am thinking about cancelling Netflix, especially as the bill is going up to £15.99 per month.  I recently did a purge of a lot of subscriptions and got rid of Netflix, NOWTV, Britbox and Audible. I have also changed my Spotify to a student one so that is only £5 per month I think. 

My plan is to update my spending each day and any payments I manage to make towards the debt and keep tracking. I’ve seen a couple of forums on MSE about living frugally which I’ll have a look at too.

I would love to have the debt cleared by the time I'm 40. That would give me a few years. It would be great to start my second act with some savings and adventures to look forward to instead of paying off stuff we don't need. 

dinofoot

Just to add to this, I was reading some other diaries and saw that someone puts £100 a week aside for their spending (groceries etc.). I budget £300 per month but one month I calculated how much was spent on food and it was closer to £800!!!!!!!!! I like the idea of having £100 per week and this being spending money. It would cover groceries but also mean that I am not spending thoughtlessly, the money is coming from a limited pot. I would like to give this a go but will probably need to wait until payday. 

dinofoot

Morning everyone! What does today have in store? Frustratingly my yogurt at work is out of date and I haven't been food shopping so I will need to source something for breakfast. I have granola which I would ordinarily have with yogurt. I suppose I could buy some milk and have that. 1 pint should be cheap enough. Lunch has been bought in which will save me some dollar bucks. Must, must, must book my car in to get new tires (tyres? Not sure which spelling is correct). I think that is everything, today looks to be a quiet one.
I'm going to try and do this every morning to set myself up for the day. It's kind of like exercising, get it done and then your day can go only get better. Not that I view this as a bad thing, quite the opposite but if I can plan my day then hopefully I can keep track of spending. What is it they say?  "Fail to plan, plan to fail." So I will plan and not fail. 

vampirotoothus

Hi Dino, I would buy yoghurt if that's what you normally have. Good luck on your journey, I'll be following in the wings V x

dinofoot

Thank you @vampirotoothus.
Today was a good day, only spent on breakfast, sadly they didn't have yogurt so I will need to buy that tomorrow but that's okay because that will see me until the weekend. Good things. Day 1, boom!