My Debt Free Journey

abaka

Probably by the time the cheque clears I might have to pay a few days interest but only on a small amount thanks to my payments.  

But it felt so relaxing going to bed last night knowing that a huge weight has been lifted.  Of course, as eurphoric as knowing the impact it has on my debts, it was also sad as it's bringing a chapter of my life to close.  This cheque was for the sale of my uncles home, where he lived with my grandmother so a house I'd spent plenty of time and stayed/lived in numerous times over the years is now gone.  It is staying in the family per se, as it's been bought my second cousin but I doubt I'll ever step foot in the house again.

I did update my budget document today and officially deleted the payments planned in my next two wages for PayPal & MBNA which will now be going to my next pressing debt which is Lloyds (I still pay interest on this which is a low % but now that the PayPal is all but resolved.  I will aim to start reviewing this matter.

The electric bill is actually my biggest concern over the coming months.  I don't use the gas much beyond hot water, and even in colder months it's not usually on an awful lot.  But the electric is going to be our biggest expense I feel.

I'm not putting any real goals on my debts with cost of living.  I've already achieved a huge chunk of what I wanted to do, and reducing to what I have reduced by and also clearing two creditors from my portfolio of debt is something I'm very happy with....

 The ultimate goal is debt free still but circumstances may change how quickly that is.  If I'm still in debt when I'm 40 (5 years away) I'll be extremely upset though!!

abaka

So I’m expecting the cheque to clear tomorrow with my inheritance.  Whilst I’m taking £4000 to clear my debts, I’m also taking close to £1000 for myself.  I want to buy some stuff I plan to keep as a memory of my uncle.  I had toyed around with the idea of doing this or using that to pay off my debt but I feel like I’ve been burned out recently and need my hobbies to keep me sane.  So I’m planning on buying back some of the stuff I sold when my debt was at its highest.  My decision was swayed this week when the seller of these particular items announced he’s unlikely to offer these much longer and I want them in my collection, so I feel like I’m going to bite the bullet now to ensure I get them.

Im also going to use some money to clear my wife’s credit card for our holiday in Sept.  The plan is to pay that back to me once we can, rather than using our own savings/money to pay for the holiday. 

So all being well, I should have about 3000 (with 1800 to eventually return for the holiday) to go into my savings and that will be a good nest egg to have in the event that I can’t get balance transfers etc to service my debts.  I’ve never really had savings before so this will be a nice test for me.  Although I am putting it in another joint account so my wife can also see what’s in the account as I want an insurance policy to ensure I don’t dip into it now and then.  Although I do believe the corner has been turned and I won’t do that.

Am I being selfish and stupid for not putting more money toward my debt and not putting my money into my savings? I feel somewhat selfish for wanting to buy something as I still believe I don’t deserve anything considering how I ran up debts etc, but at the same time.  I feel like I have learned a lesson and I’m buying stuff I want, but not increasing my debt to get it,  which was the whole point of this journey.

Im not sure if I want people to reassure me or talk me out of buying stuff for myself…

sunshine_raincloud

I think it is a tricky decision and only one that you can make knowing how you feel and your circumstances. I think it needs a lot of consideration and isn't something to be rushed. It sounds as if the seller is trying to put pressure on you to buy the items back? How easy would they be to sell again if you bought them back and regretted it? You may find that once you have the items back you feel like you would have preferred to have the money for debt and feel like you have undone some of the good work you did right at the very beginning! Or you may feel like it is something that you needed in order to keep the momentum up with the rest of your debt-busting. It is necessary to treat yourself occasionally (for me I have paid for my first holiday abroad since before covid as well as the odd new item of clothing!) but I would have a think about whether you need to spend the whole £1000. Maybe figure out how much using the money for debt would bring forward your debt free date by? The motivation of having the feeling of freedom of being debt free as soon as possible is what is spurring me on at the moment! This journey is a marathon not a sprint though for everyone and each one is personal so don't feel bad about doing something you need to do to protect your mental health! I'm sure other people may have different thoughts. Take care!

Keedie

Well, I think getting out of debt would be the best thing (for me personally), but I understand the need to have something that's just for yourself @abaka is essential. Your inheritance is life changing, as it is enabling you to be in a much better financial position than you previously were, but you have to remember that you only have that money as your uncle is no longer here. So doing something or having something that reminds you of him is not a bad or selfish thing. We are after all only human. 

When my dad died, I got £2,100 and I closed my overdraft (about £800 as it was stressing me out) and I've never touched it since. I brought paint for my son's bedroom and mine, laminate flooring for his room and a new luxury carpet for my room and he got upgraded to a double bed (which he's still grinning about!). We gave our rooms a nice makeover and I didn't have any left over, and I still had to do a buy now pay later for our TVs and my new wardrobe, but they were all paid in 3 payments each with no interest and I shopped in the Black Friday and Christmas sales for them. I'm still paying off our mattresses with Dreams, but I don't regret the way I did it. Now, I could have been in less debt if I'd used it all for my finances, but when I walk on my carpet, or I hang out in my son's room and he's lounging around in his bed, I feel content because I improved our home environment and that's a gift from my dad. My brother used his to travel and clear up some debts, one sister is launching an online business and used the money to get her equipment and the other sister cleared some debts and put some in savings.  
Everyone manages things differently.

I think the bigger question isn't if you should allow yourself 10% of your inheritance to treat yourself, it's whether or not you really need the item that you've recently sold. I think you should definitely have a treat, but for the right item. If it was something that you never wanted to part with but felt you had no choice and so you definitely and desperately want it back, then go for it. But if it's something you'd want to wait for, if it wasn't on sale at the moment, then leave it. You were able to sift through what you wanted to sell and parted with, I guess the items that you either liked the least or would fetch the most revenue. So the item that you could potentially buy back, I'd say, think about whether or not it was something you could live without or if it would complete your collection or feel good to have it back. There's no wrong answer and either leaving it or re-buying it, isn't going to cause the end of the world. You'll just have to future project your thinking, and see if you'll be happier after you've brought it. As that after all is the main thing.

abaka

The items I'm buying are not buying back from people I've sold too so it's not a case of a seller trying to rush me.  These are custom made costume pieces that are made in runs.  The seller has confirmed that as these are tricky items to make and the material is running low he may remove them from the catalogue which was always going to be the case but I figured it would be another year or two before this does happen.  Either way, I'm not using any more money for the debt.  I'm not using my uncles money to pay off debt (the 4000 I am taking is being paid back as soon as I've no other monthly payments to make) as he would hate the thought of the money going to some faceless corporation instead of being enjoyed by myelf or my family.

These are items I did not want to sell but I knew they represented valuable assets that could be liquidised and replaced at some point.  My plan was always to replace them. 

After sleeping on it last night, I think I will buy the products assuming I can get in on the run (prop/costume communities are not just picking an item up on a shelf, they are usually made by one person who will do them in runs etc and the current run is almost full (waiting on confirmation from the seller he can take on my order).  If I missed this run, I would kick myself for ever so that's why I want to get them done when I have the money....and as Keedle suggested, it's something I'll have to look back on and know my uncle bought when I look at the items in my collection.

sunshine_raincloud

Okay well it sounds like you have made the decision that is right for you  It sounds like you will get a lot of enjoyment from having the items! 

abaka

End of the month update for me with payday tomorrow....I'm feeling in a rough for wear state today as I was at a concert last night and had a few(too many) drinks.

So again, I've stayed clear of using my overdraft this month but last night's drinks and a cheeky chinese on the way home meant I don't really have much money left to pay off any extra on my debts.  Last night played a big part in this but honestly I need to get better at not eating out when I'm in work.  Planning to start bringing lunches in with me for any days when I'm in the office moving forward.  

But the big update - Inheritance has cleared...It came through the other day (Tuesday) but I think I wanted a few days of looking at it in my account before I did anything with it.

But right this moment - I have paid off my full MBNA and PayPal balance which means I've cleared around 3500 off my debt in one swoop. 

I'll do a full breakdown on the debts on 1st of the month.

This is the 3rd month of my diary, and for 3 months I have managed to avoid any spending on credit cards or any utilisation of overdraft.

As I've said - I will be using a bit of money to treat myself to rebuild some of my collection....and I think I need to do this to not only reward myself for the progress I've made in debts but also to enjoy the money that has been gifted to me from my deceased family member.  At least I'm spending what I have which is the huge difference between me now and then.  3 months back, I would have said, for example....I have £200 here in my bank....I'll spend £800 sure on my credit card...and use that £200 in my bank to pay some of my other debts so I'm not increasing them that much.....Which eventually led me to being in over £20k worth of debt....If nothing else has came of this, I've learned control it seems.

Keedie

I think you've done fantastically well @abaka, and I also looked at my balance for a little while when my inheritance came through, and just exhaled, before I did anything. I hope you manage to get in on the run with the costume that you want and you're able to enjoy the item. 

Your attitude to your debts has made a big difference, and it's great that you're able to drink a lot and enjoy a cheeky chinese and not be in an overdraft or spend it on your credit card.😁

abaka

1st of the month update. 

Another month where I have not went into a negative balance on my bank balance and not increased the balance on any of my cards.  Whilst I did purchase something on a credit card this month for the added protection it gives, I did pay the balance off straight away.

August proved to be a very expensive end of month.  Family were over from Isle of Man and we had a few dinners out and then taking trips etc hit the coffers.  From here on in, it's going to be a pretty tight few months. 

September is a crazy month, I have a trip to Manchester this weekend which is now with my wife instead of brother, as he had to pull out last minute due to work and it's just as well, as his wife who is 8 months pregnant is currently in hospital so in many ways it was a blessing he had to pull out last weekend as we'd likely be having to do it now in a crazier panic!!  I had to pay £80 to change the name on the flights, I owed my brother £40 for a gift we bought for our dad so we agreed he would pay me £40 back for the flight change but with everything going on this week I didn't want to mention it, so might just take the £40 loss on that myself.  Also in September, we have a week holiday in Lanzarote, it's all inclusive and I'm not planning on leaving the hotel so only going to take €100 with me and I'll have my card with me (plus I'm keeping some free cash set aside just in case) and it's my nieces birthday next weekend......

This also begins what I call a crazy end of year, October is also my wife and sister in law's birthday, November is my mum's birthday and then we have Christmas and another niece's birthday in December....Plus a new nephew/niece arriving in October, so these 3 months.  If I manage to avoid going into my overdraft these months I'll be extremely proud.  I think this will be my biggest challenge since starting this journey...but one I'm prepared for!!!!

Now onto the debts as they stand today!! (I've been looking forward to this one)

Halifax Loan -   6737    6729     6529       6431

Halifax -            4941    4850     4801       4751

Virgin -              4191    4099     4049       3999

PayPal -            4059    3928     3561       0

Virgin -              3748     3648    3598       3548

Lloyds -             2947     2712    2682       2655

MBNA -             2778     775      750         0

So my total debt at 1 August was £25970 and on 1 September that figure has fallen to £21,384.   

I'm less worried about the Halifax Loan as the repayment each month isn't that high and the interest rate is minimum so if looking at Credit Card debt which is my main concern as the payments added up are much more than the loan and the interest rate (if I was paying any would be much higher), that has fallen to £14953 from £19441 in August and £22,664 on 1st June when I originally took stock on everything.  I know the windfall from inheritance helped out a lot with this, but the card debt has fallen by £7711 and I only used £4000 of my inheritance so almost £4k was from my own focus and making difficult choices in selling items possessions/belongings.

Moving forward, I'm going to change my tactic a little, I had been paying the lowest balance each month but considering where I'm at now I'm going to swerve and start paying off as much as possible into my higgest debt....The reason for this is because, the interest rate becomes active on that in February 23 and it is quite high....I plan on pumping as much into that to get it reduced so that it's easier to do a balance transfer or worst case scenario, if I have to keep it where it's at, I'll at least be paying a lower sum....I'm hopeful I can potentially get that balance down by a third or a half by the time Feb rolls around.

Other things I need to do this month...my Lloyds card is charging interest but it's a very very small amount....but it's still interest and the virgin card with a balance of £3548 ends it's 0% offer in October.  So I'm planning on transferring the £3548 onto my newly cleared MBNA Card which has a 0% offer for 9 months (not great but it kicks the can further down the road and 9 months time may have better offers available to me!!) and then transferring the Lloyds balance of £2655 onto the Virgin card as it has an 11 month balance transfer. 

My plan is in 12/18 months time my debts will down by a further sizable amount that I may be able to do multiple balance transfers to combine the debts into as few as place as possible.  The ultimate goal is still debt free in 3/4 years. 

lucielle

All achievable and it sounds like you have a plan.
L