The Mental Debt Struggle...

Keedie

My Barclaycard direct debit has come out, so that's £300 gone - yippee!

That'll be a slow burn that one, but at least it's back in the £8k range now. Yay to me.

I couldn't sleep until 4am this morning, so I'm rather spaced out today. I had a nap yesterday afternoon and it messed up my chances of sleep 😬. Fingers crossed for a better night tonight.

beanielou

Well done. 

Keedie

Thanks @beanielou.

I was pleasantly surprised to see that the tax payment I made at the end of January counted as a business expense for universal credits. They've counted it as a loss for my qualifying period as I didn't really earn anything. The article that I copyedited was tiny small fry in relation to my tax payment, and even with my wages for the month of February I didn't break even, and so they've carried the loss forward to the accounting period.

So it means that only my salary has counted as income this time and the copyediting money was nullified by the tax bill and my other business expenses. So I have a little bit more universal credit for March which will help with closing the gap that I've had from having higher expenses during my period of half sick pay than my combined income actually afforded.

Although I think they might have made a bit of a mistake? When I do monthly income reporting for universal credit it always asks if you've paid into a pension, national insurance or tax and I always say no, as I haven't been and the last 2 tax years I've been owed a tax rebate. So this was the first year I've paid a proper tax bill and I was confused by the calculations (when paying the tax bill and now with the universal credit). Don't get me wrong, I'm not complaining, but Im admittedly confused nonetheless. 

Tomorrow is the final work day of the week and it's getting easier to manage. I was still bored today, but I remembered that I used to listen to the radio whilst I worked, so I put the radio on and it made a world of difference! I'm looking forward to finishing work tomorrow though 😂.

I spoke to my Vocational Rehabilitation Coach today and he reminded me of the resources that he sent me a couple of weeks ago to help with anxiety and worrying etc. I'm starting to sleep a little better, so I'll have a look at the stuff tomorrow and work out what I'm going to work on from next week.

I have my bipolar group on Friday evening which I'm looking forward to. It helps to give me structure that I otherwise lack when it comes to mental health self care. It's like I give myself permission to have something that is all mine. And I get to check in with other like minded people and be myself in way that I can't be with people who don't understand my bipolar mind.

And, tomorrow once I finish work, I have to finalise the budget for March 2024 and do my summary for February 2024.

Cherryfudge

That's good news about the copy editing money.

You sound as though you are coping well with work, which is wonderful. Keeping all the plates spinning when it comes to mental health is going to be a job in itself. I realised I've not gone back to any of the stuff I covered in therapy (which is probably okay as I've moved on a lot) but I could do with refreshing some of what I learned about neuro diversity as I aim to engage more with the work world and also hopefully support people with similar stresses. Your bipolar group is obviously really helpful.

beanielou

Good news on the UC 

PennysIntoPounds

I wouldn't worry about if HMRC have made a mistake if you've reported everything honestly, there are too many system peculiarities that normal people can't ever be expected to be au fait with. I'm still baffled that my NI was considered paid last year because I earnt both over and under their weird bracket amounts. I was literally on the phone like 'take my money!' 😂

I might have misunderstood what you said but I feel I should highlight you saying you don't pay national insurance? Make sure that your state pension is on track, its a shoddy enough amount, without having worked for years then not getting your fair due because of a few years gaps!

Excellent work on remembering about the radio, I love radio so much. Can't wait for my ears to be normal again once the virus I've had for weeks clears 🎶

Keedie

I think work has been unexpectedly not as awful as I feared @Cherryfudge, but that is because I realised that I simply do not really care about it. Since I've stopped thinking of it as something that is hindering my life and I have started to see it as something that is helping me to achieve my goals and pass my time, it's been a lot easier to cope with. I'm still very bored, and I've no intention of being there any longer than is necessary, but for now, I've blocked it out and just do what is required and nothing more.

It's good Cherryfudge that you've made changes since therapy, and that you're planning to use your experiences to help others. It always makes the most impact when we can learn from and teach each other. That's why my bipolar group means so much to me. I can relate to people who just understand what I am saying on a different level to my family and friends. And I learn a lot and get a lot of guidance and support when we have the second part of the meeting where we can discuss topics that we've raised and when we go to the pub afterward. 

I do pay national insurance @PennysIntoPounds, but it comes out of my wages through my employer along with most of my tax, as I'm mainly employed part time. My side hustle is the HR freelancing and trying to break into copywriting and proofreading. But I've never really earned a great deal with freelancing, hence the tax bill for the 2022/23 tax year was a shocker. I'd taken on as many clients as I could and increased my hours at work as I had to pay off that impulsively booked holiday and my son's school fees and my business expenses were very low. But If I owed national insurance then HMRC would add it to my self assessment and I would pay it. But they've not asked me to pay national insurance since I was solely self employed (a rather short stint for about 6 months in 2018 that cut across two tax years). Honestly speaking, I don't understand any of it very well, I just go along with it 🤦🏾‍♀️🤷🏾‍♀️. I hope you feel better soon @PennysIntoPounds, as feeling rubbish for a prolonged period of time is always so disheartening ❤️‍🩹.

I've fiddled around with March 2024's budget yesterday afternoon and today and I think I've finally got it handled. Now, I just need to keep on top of my spending 😬. Tracking everything has been an eye opener and I'm learning a lot more about my budget and spending habits as a result of it. I've even managed to set money aside into sinking funds this month - £145 split across car maintenance (£30), my son's 18th birthday pot (£50), Eid (£20), the gift pot (£20) and build a buffer (£25).

I've dialled back my cash stuffing endeavours and I am just going to focus on one thing in cash for now, which is my food budget. The food spending is still out of control and so only focussing on the one thing will help me. So I've done everything else digitally and updated my Etsy excel budget and expense tracker.

£200 also came out today to go to my mum, so I've got £200 left to pay in April and then that's all sorted! 🎉 I'm going to do my February 2024 spending summary so that I can get everything sorted in my head.

Keedie

February 2024 Financial Summary

Starting Balance = £9,450 | Amount Repaid = £350 (1.48%) | Closing Balance = £9,100
Total Repaid to Date = £14,543.30 (61.51%)

Bank of Mum 3 (school fees)
Starting Balance = £450 | Amount Repaid = £50 (11.11% repaid) | Closing Balance = £400 | Total Repaid to Date = £3,400 (89.47% repaid)
I'm sprinting towards the finish line with this one 🏃🏾‍♀️🏃🏾‍♀️🏃🏾‍♀️!!! Down to the final £400 as of Leap Year Special Day 29 February 2024. But seeing as I'm late with my monthly summary, I'm actually officially at £200 (as of 1 March 2024) as I made a payment today of £200. So as of 1 April 2024 this debt will be forever gone 🤗🎉🤗.

This has been one of the hardest debts I've ever had, because it was borne of a very hard time in my life and it took a lot of courage to put my pride aside and accept the help from my mum. But knowing that it will be repaid before her birthday next month makes me very proud. Yay me!

Barclaycard
Starting Balance = £9,000 | Amount Repaid = £300 (3.33% repaid) | Closing Balance = £8,700 | Total Repaid to Date = £5,466.23 (38.59% repaid)
Well this one took a bit of a sour downturn, as I mismanaged my tax bill to HMRC and left it to the last minute to do my self assessment and needed a money transfer to manage that debt. But the silver lining is that I overestimated how much I needed and that left me with a 'spare' £1,000 which was used to clear a chunk of the money to my mum. I was still going to be in debt, so I figured I might as well clear as much to my mum as I could, rather than repaying Barclaycard with the unused money.

The upcoming 0% plan ends on 1 April 2024 and there's £121.57 on there, but that'll be wiped out by March 2024's direct debit of £300, with the remaining £178.43 going to the next 0% plan. But... that's where it gets tricky. The balance on that next 0% interest plan is £6,508.43 due by 1 February 2025. From April 2024, that will be £6,330 once March 2024's direct debit clears. I'm not going to stress myself and even attempt to clear that on time. So it means that I've got to do another 0% money transfer by Christmas/New Year's, so that I can clear the remaining balance in the kindest way possible. I will be keeping my direct debit at £300 a month and that will take me down to £3,630 by the end of December 2024. And there's zero chance of it being repaid in full by February 2025 without some divine intervention - so 0% money transfer it is. And once that clears in my account, I'll pay it all straight back onto Barclaycard to give me more time to pay off the overall remaining balance without accruing any interest. I've not paid interest on any debt in about 8/9 years doing this method.

Debt Reflection vs Savings Focus

So I started 2024 all optimistic about blasting my way through 2024 and getting rid of that final £9,000 debt. But then I messed up the tax situation and realised that I can't be living to service debts and not have a life and my focus shifted and my debt increased. But I'm not sad about it. I'm on the verge of clearing my debt to my mum. That tax miscalculation forced my hand to get the money transfer, which allowed me to clear the tax liability and a chunk of the debt to my mum. So silver linings and all of that jazz. I'm kinda happy how it all turned out. So after April, I will then have one debt with Barlcaycard to focus on and I'll work on it, one payment plan at a time.

So debt wise things are looking more manageable. Savings wise... that's barely off the ground. So once my debt to my mum has been finalised, I will snowball the £100 a month for my savings instead of applying it to Barclaycard. The emergency fund will get a boost and that will be £200 a month from May to December 2024. Not constantly worrying about debt also makes me free enough to get my sinking funds off the ground. Without those pots of money in place, if an expense crops up, I'll be screwed and end up repeating the same dependence on my credit card like I did in January. 

Which means, I really do need to build a buffer, almost like a homemade overdraft. So that if an unexpected expense crops up, that is not a legitimate emergency, or if a specific savings pot does not have enough to cover the cost of something me or my son needs, I have the buffer to fall back on. That way, the emergency fund stays as an actual emergency fund and not something I can easily dip into. Which is kinda how it all got depleted to begin with 😬🤦🏾‍♀️.

So 2024 is the year for saving. That will give me a solid foundation and baseline to work with. As I'm trying to cut my budget down and get on top of my frivolous spending, and pave the way for future me to have a stress free life. Old me snoozed on the taxes and that came back to bite me 🤣. So I'm hoping future me will be happy with current me, for thinking ahead.... Life is for living and I want to make memories and enjoy the world, my family and friends whilst I have the mobility and sanity to do so.

Therefore, besides better money management, the 2024 goals are:

DEBTS
1. 100% repayment to the Bank of Mum 3 (school fees) - due by 1 April 2024

2. Clear Barclaycard Plan 1 of £6,330 via direct debits and a 0% money transfer - due 31 December 2024

3. Pay £6,750 off overall debt balance in 2024 - due by 31 December 2024

SAVINGS
1. Save £750 for my son's 18th birthday - due by 30 September 2024

2. Build a Buffer of £500 (homemade overdraft) - due by 31 October 2024

3. Save £2,000 emergency fund - due by 31 December 2024

4. Complete 50 Envelope Challenge (£1,275) to establish 2025's sinking funds - due by 31 December 2024

AntoMac

Repaying your Mum really will be a proud and defining moment for you Keedie. I know that accepting the loan from your Mum in the first place was not an easy thing for you to do. I think for many of us accepting help can be even harder than asking for help.
I too have many years of balance transfers and money transfers behind me. If used PROPERLY they certainly are a useful tool in getting debt totals down.
I have started putting some money into Premium Bonds (minimum investment £25) partly because it’s more difficult to access the money, although still very easy. There is a tiny chance of some very big prizes, albeit of course the very big prizes do tend to go to those with the maximum holding allowed of £50,000 worth, which is slightly above what I’ve got!! 

Not for everyone of course but just another thing to consider if you want to make the opportunity of dipping into your savings slightly more difficult. 

Cherryfudge

Your Mum must be very proud of you @Keedie! It's lovely that you're so close to giving her back the rest of her money.

I like your idea of a 'home made overdraft' too. Are you putting that somewhere separate from your day to day funds?