My Debt Free Journey

abaka

Thanks - and we're at Payday so the start of another month of tackling the debt.

I'll do a full review/breakdown of total debts on 1st August.

So today, I made a payment of £30 towards my PayPal of what was left of my wages....IHowever, at the start of the month, I anticipated that this would be around £170 at the end of the month...

So I really didn't do well this month at all...I haven't sold anything, and the sale I keep talking about still hasn't went through which is as much down to me as anybody else.  But I paid more than my minimum payments on most of my debts and still managed to shave off a substantial amoun.  Plus, I still enjoyed my life (more than I should have) and didn't dip into my overdraft/credit cards....So I'm calling it a B+, it's definitely a win, but I can do better!!

On the subject of wins...The NI insurance change somehow made my pay go up by about £80 this month....I didn't expect it to be so much...expected £20-30 at most.  I've now reprofiled that extra 80 into this month's budget.  

Other Payday activities done also.  I paid in my lump sum to our joint account to cover household bills and transferred money which I owed my wife for her paying for tickets to Robbie Williams for her birthday on her credit card so a personal debt is now cleared and I have the main present for her birthday in October sorted in late July (usually I'm the week before type!)  I also set aside money for my trip to Manchester in Sept which will cover my match ticket and my hotel.  Will set money aside next month for spending money. 

Still waiting on any sign of the inheritance money, it feels like it will finally come through this time....But I've been told it's coming 4 times since October, so here's hoping it does finally come through in this current "2 week" window".  I can't wait to pay off PayPal and close that blasted thing down!!!

LittleMissDetermined

I would take a positive balance the day before pay day as a win! Not as much as you would have liked, granted but anything is better than £0 (or a deficit). Well done for sorting out the money for the trips, it's budgeting for things like that which will avoid credit card spending
LMD x

Keedie

Hi @abaka, sorry I've not checked in for a while. I agree that ending with a positive balance at the end of the month, when a short while ago you were overdraft dependent says a lot about how far you've come in a short space of time and that is to only be commended. It's very impressive, as is your approach to paying off your debts, and hopefully with the inheritance on the near horizon, the PayPal will be sorted soon as well.

Sorry about the food poisoning, I had that a couple of weeks ago and it utterly drained me. I hope you're feeling much better now. And yes, it's great to be able to treat the kids knowing that you're able to do so without financial ruin, it's such a comforting feeling isn't it?

abaka

Thanks Keedle!!  All recovered now but it was miserable.

So as it is the first of the month, some of my accounts have new statements and I've began my repayments.  Even after my initial payments, I can tell this month is going to be a tough month, but you can quote me on 26 August when I get paid again, "I will not be in my overdraft!"  

Did an update on all my accounts and the balances stand as follows:

Halifax Loan - 6529
Halifax Card - 4801
Virgin 1 Card - 4049
Virgin 2 Card - 3598
PayPal  - 3561
Lloyds - 2682
MBNA - 750

Decent enough reduction again this month and also comparing to where I was when I made my initial post.  I'm in a much greater place.  I finally agreed the sale with the friend, so I have £500 in my PayPal (480 likely will be used a debt payment as I'll need money for packaging and shipping, and don't think there's enough wiggle room in my account to absorb that cost).

So if the inheritance comes through in the next week or two, plus with my balanced for payments....I can wipe out PayPal and MBNA with a little left to go on my next smallest debt.  My plan once PayPal is off my back is to go back to snowballing with my smallest debt, but I will take stock and develop a new plan (this journey is on it's 3rd month, so perhaps a quarterly switch up might help me keep motivated).

Once PayPal is gone, I will also look into my Lloyds Card, as I currently pay interest on it, which isn't a great amount, but even £1 of interest is £1 less debt I'm paying off....I haven't done it yet as I wanted to keep some financial flexibility with the PayPal threat hanging over me.  But my plan is to Bal Transfer the money on the Virgin Credit 2 Card (which ends 0% on October to an empty Lloyds account at 0% for 14 months and then transfer the Lloyds balance to the newly empty Virgin Card which gives me 0% for 9 months).

Doing that is really short term, but I'm hoping in 9 months time I might have a better offer of balance transfers and may be in a position to consolidate some of my debts.  Worst case scenario, I should be able to clear the £2682 on Lloyds within 9 months.

When I started this, I was in high debts on 7 dfferent creditors.  

*Fingers Crossed* by end of this month, I will have reduced this down to 5 creditors.  In 12 months time, I hope to have this reduced by another 1 and then in 2 years time, I will hopefully have this reduced to just 3 creditors, and in 3 years time....I hope to be debt free!

Loft ambitious goals, but I'm feeling positive as I write this, I was a bit downflated when I reviewed my budget, but typing out my plan and reading my other posts has lifted me.....I might lift all my posts at the very end of this journey and publish them in an actual bound book to remind me for ever of the journey I'm on!!

I'm rambling now!!!

Keedie

A physical book cataloguing your journey and achievements sounds like a great idea! You've come a long way and you're in a good position for when the inheritance does come through. My mum always says that every disappointment is a blessing. Maybe you weren't at the right stage of your debt free journey to have received it beforehand, but now you're in a better position to get yourself into a better position moving forward.

abaka

Mid month update for me.  Things are plodding away.  I did get the £500 for a sale and some other income that has came in means I've reduced my PayPal credit to £2990, however £1300 off that starts to accrue interest from 9 September and the other £1600 accrues interest from 23 September.

Now, the money I'm due from inheritance (which was guaranteed that the cheque was on it's way 2 weeks ago, so as I said, I'm not holding my breath on that coming through this week/month/year if I'm honest)

It does leave me with a bit of a decision as PayPal interest rates are high....I've looked into a loan from my Credit Union....I know debt consolidation is never a good idea but I believe it's the wiser choice for me....So I'm planning on borrowing £2900 from the Credit Union which if borrow across 5 years will be £77 a month repayment.  This is less than my current PayPal minimum payment and whilst it also accrues interest, it's a minimum amount and I do receive a % of the interest back as savings.

I'll think this approach over the next week....If I do take the loan from the Credut Union and the inheritance money comes in, I can just pay off the CU loan early as there's no penalties for doing so.

The main thing for me right now is removing the PayPal threat and the high interest/minimum payments it will incur.

In other news - My daughters passport finally arrived after a 5 month ordeal so we have booked a holiday for Lanzarote in mid September (my mother in law, father in law, brother in law, sister in law and their two kids are already booked so me and my wife and daughter are joining them also)...My wife put it on her PayPal credit but is going to pay it off using money in our savings in time before the interest period ends.   We do have the money sitting there to pay for it, but doing it this way gives us flexibility in our joint account....If my inheritance comes through, I've said I'll pay off any remaining balance so as our savings aren't affected....It is nice to have a holiday to look forward too after 3 years (last trip was 2019) and the last 2 weeks workwise have been hell on earth, so really looking forward to it.  It's all inclusive and I'm not planning on stepping outside the hotel so don't need any spending money either!!!

abaka

So today, finally some good news.  The inheritance money finally came through, waiting on the cheque clearing....But in a few days time I will be clearing PayPal, paying off the holiday and slotting a massive lump sum into my savings.  This is a really massive weight of my shoulder as the PayPal debt could have really swamped me and controlled my finances.

In other news, my employer is also considering two payment of £666 (500 after tax) cost of living payment.  The proposal going to a committee is unlikely to be challenged and means in September and December, I'll have another bit of money come in.

My plan is to pay £200 off debt and keep the £300 in our savings account...I've also made a bit of a change to my monthly budget to allow more money to go into our joint account and our child care costs have went up (The daycare has claimed this is their first increase in 4 years....I've only benefited from two of them though.....wondering if I can pay the lower amount for the other two!!).

So whilst this is great news day, it's somewhat of a step backwards, as I'm going to be paying less of my debt over the coming months....but I've made a massive effort in clearing them, and I'm sure alot of people will be reviewing their debt free targets in light of the current economic mess.  I'm just thankful that I'm where I am now rather than having my wake up moment any later....

Really looking forward to my end of month review now!!!!  PayPal and MBNA will be gone for good!

sunshine_raincloud

Great news on the inheritance finally coming through! Getting rid of that paypal balance must feel amazing! 

LittleMissDetermined

Congratulations on the inheritance payment landing. I can imagine it's a real relief for you to be able to clear the Paypal before the interest hits. 

I am also keeping an open mind of whether I can achieve my debt free date in Sept 23... it all depends on whether I have to sell an organ to pay the electric bill!

Keedie

I'm so so happy for you @abaka! 👏🏾 That's great news about the inheritance finally coming through and cheques these days clear quickly so you'll be able to kiss goodbye to PayPal and MBNA in no time... 😁!

That cost of living payment sounds like it'll be a godsend as well, and in time to help with winter and Christmas.

I don't think you're taking a step back in terms of your repayments in the coming months, as you've done exceptionally well and your mindset change is the real winner here. So look at the next couple of months as you simply taking a breather. We can't go 110mph at debt all the time, we burn out. And then we either splurge and undo our efforts or we become really resentful. Trust me, I've been there a time or three. Chipping away at it makes all the difference, and as long as you're paying, you're in a good position. My debt free date is being pushed back a lot, because of mistakes and choices I've made, but it's okay, we'll still get there.xx