The Mental Debt Struggle...

Keedie

Financial Focus - Take Two

The monthly repayments were just getting too much for me @beanielou and @AntoMac. I was getting seriously stressed and not eating or sleeping properly, and I was always anxious about my finances. Getting ill the other day and not being able to freelance, just highlighted how precarious my financial situation is. The loss of income just derailed everything.

So I knew that I had to do something. With all the extra borrowing and moving money around, I'm more or less back where I started in April 2022. So this a Restart (Take Two), but it is much better financially now, in terms of sustainable repayments, but also psychologically in terms of mindset and not feeling like I'm just drowning all the time.

My total debt went from £17,635.97 in April 2022 (with 21.85% repaid) to £22,182.54 in August 2022 😢. It stings quite a lot to soak that in. Actually it's just plain devastating. But it is what it is. At least it won't go in the wrong direction again. And I don't regret the biggest culprit of the debt increase - my son's school and exam fees, as he's finally accepted that he's homeschooled and he goes to school online. So there's progress I guess...

By having a second restart, and arranging the repayments in a way that is kinder to myself and realistic, I have reduced my monthly repayments from £900 to £654 a month, and my contribution after I offset my carer wages from my mum, is £522. I can finally breathe again.

I've decided that from September to December 2022, I will concentrate on topping up my sinking funds for things like birthdays, Christmas, car service/MOT, family fun, travel etc. If I can get them to where I need them to be, I can then maintain them in 2023 whilst I continue to try and get one month ahead on my bills. Once I have the sinking funds in place and the emergency fund on target, there will be no need for credit and I'll be in a much better position as I'll have a plan and will be able to live within my means. And deal with any curveballs from life. Hopefully.

My Barclaycard money transfer came through this morning and so I was able to pay off the balance for that ridiculously overpriced holiday to Turkey, so that's £2,276.04 cleared and I'm spared the eye watering direct debit of £284.50 a month. It's crazy how at 3% minimum payment, the direct debit on Barclaycard for my remaining balance of £9,500 is £285, yet I was paying that same amount on one holiday! No wonder my hair is starting to thin from stress...

I also paid £2,100 back onto the MBNA card, so that card now, after robbing Peter to pay Paul with the balance and money transfers have gone through, is now £3,000. I also put £800 aside for the exam fees that are due in September 2022, so I just have £177 left to find and then I can get them booked in and then concentrate on other things. 

I'm a bit sad about losing my percentage tracker for my debts, as they were getting to be some meaty numbers 😁. But with the restart, my balances are all different now as of this month, so here goes:

Debts (£2,486.51/£22,182.54 = 11.21% repaid)
*Bank of Mum 1 (car) = £150 (0% repaid so far)
*Bank of Mum 2 (family holiday = £300 (0% repaid so far)
*Bank of Mum 3 (school fees) = £4,800 (0% repaid so far)
*Barclaycard = £87.80 /£9,587.80 (0.92% repaid so far) - PAD of £87.80 today as balance transfer negates minimum payment and I wanted a rounded balance 😂
*Creation Finance = £72.67/£1,062.67 (6.84% repaid so far) - direct debit on 02/08/2022
*MBNA = £50/£3,000 (1.67% repaid so far) - £50 direct debit paid today
*SKY Mobile = £1,006.03 (0% repaid so far)
*TUI Turkey = £2,276.04 - REPAID IN FULL - YIPPEE!!!! 💃🏽💃🏽💃🏽

Also, I finally did my 2021/22 self assessment, and HMRC owe me £62.40. I've not requested a refund, as I knew I'd probably just spend it on something else, but still have a tax bill in the future. So once I do the 2022/23 self assessment when I have my P60 in May 2023, I'll have some credit towards whatever my bill turns out to be. At least I'm in not in a deficit in all areas of life 😂.

LittleMissDetermined

Well done for getting it all sorted Keedie, I can imagine you feel much better for doing do, knowing that your monthly payments are more manageable!
LMD x

Keedie

Yes I feel so much better @LittleMissDetermined! I'm not happy with the amount of debt, but as I'll be able to keep my head above water and the payments are more manageable, once I get the sinking funds in place, I can start to make some good PADs. 

I'm aiming to quit my job in December 2024, so if I can clear my debts (aside from my mum by then), I'll be able to survive by temping as my outgoings will be a lot lower. And then I'll be really free. 

Keedie

Morning all, hope you all have a good day. I've been feeling mentally out of sorts and overwhelmed, so I've not had a productive few days. My mind feels like treacle, but I'm trying really hard to not let my son see that I'm struggling so that he doesn't get worried.

I feel much better about my debts since my financial switching things around, so at least that's not so scary now. My brother owes me £552 and he paid £5 today, so I paid that straight to Barlcaycard, and that's my PAD for today. One of my sister's owes me £302.98 and she'll start paying it slowly when she returns to work, and I'll pay all of that onto Barclaycard when it comes through as well. Between what they owe me, it'll be £854.98 paid off Barclaycard before the interest kicks in.

I'm not sure what to do with MBNA as the 0% interest rate runs out in August 2023 and the balance isn't small. It's £2,050. With £900 due in December 2023. I think I might pay extra through my PAD pot and what I've accumulated at the end of each month, as this card has two plans that end in 2023, but Barclaycard has a really heft balance of £4,349 due in February 2024 and £5,146 due in April 2024. So the amounts to clear are a lot higher, and so I'm assuming not clearing them and paying interest is a lot worse. I'm genuinely not sure of a strategy, so if anyone has any advice, I'll be grateful. Thanks x.

AntoMac

Hello Keedie,
Sorry to hear you are struggling at the moment. You have been doing so well and you’ve managed up to now.  If you keep doing your best (and what more can any of us do than our best?) I am sure you will get there.
Money transfer offers are of course a blessing and a curse. I got tangled up in them in a big way and it has taken a long time to get things to a much more manageable position. 
You already have a good part of your debt coming back from your siblings.
What you don’t know and what none of us know, is what future transfer offers are available. For me they have kept coming so if you continue to pay your balances down there’s a fair chance new offers will come up.
So in summary I’ve not given you any help or advice here 😐 other than keep doing your best, and remember that you managed when your total debt was a lot higher than it is now. 

Keedie

Thanks @AntoMac, I really did need to hear that. You're right, I did cope with the debt being higher and I'm sure I'll get another offer for a money or balance transfer at some point before summer 2023. 

I think I'm just so burnt out by it all, and it's still upsetting that my debt is now a lot higher than it was in April, despite paying off £3,853.65. I've been thinking all day about how I can be kinder to myself. I've got a plan to manage the payments, so I think I need to just stick to it, and live life at an easier pace and overpay where I can, and see where I am in 12 months time and what offers are available to me on either card or any new card/deals at the time.

I have a few days to myself, as my son is staying at my sisters in East London and doing some work experience in my brother in law's business. So he's there until Friday, and I will join him on Thursday evening and spend the night. But I get to go the office in the morning, and not have to worry about what he's doing or who he's hanging out with etc. I'm hoping that doing the work experience and seeing how hard people work, it will make him realise that adulting is hard, but hard work is rewarded. My battery died on my way back home, and when it came on, I saw that he had sent me the link to a lovely TikTok saying that he has the greatest mum in the world, so that really touched me. I think he's actually missing me! Usually he acts like my mere presence and breathing is a hindrance to his existence 🙄.

AntoMac

Getting the TikTok is a lovely uplifting thing Keedie. I too have been properly told off by my teenager for crimes such as asking her if she’s ok. All part of the fun! 

Keedie

Well @AntoMac, I often commit that crime of being concerned or checking on his welfare or seeing if he’s hungry etc, and getting the Teenage Death Glare in return 😂! 

The flat is so quiet without him being all teenagery, so I found myself staying at work late so I wasn't home this evening alone. But I managed to catch up on some stuff and printed some of his GCSE history booklets that he needs to go through and catch up on. So at least I'm a bit more organised on his behalf going into the new academic year. He really enjoyed most of his first working day today, and his work experience has been off to a good start as he's been learning some transferrable skills and has gained confidence in speaking on the phone etc.

My weekly auto transfers for PADding was today, and with a little account rounding down my totals were £23.34):

£5 to Emergency Fund
£5 to Christmas Fund
£5 to Bills Parachute Fund
£8.34 to PAD Pot

I also did some more financial housekeeping and moved around some more things to start the ball rolling with establishing and then maintaining my sinking funds. I moved my emergency fund to Chase as it pays a better interest rate (1.5%) compared to Monzo (1%). I rounded up the value to £550 including today's PAD. By paying £5 a week into my emergency fund, I'll be 94% of the way to my target £750 by 31/03/2022. As I moved it from Monzo to Chase, I no longer have round ups going into the emergency fund, as I have diverted those to the PAD pot. I do need to look into better interest rates for savings accounts, especially when I reach my first milestone target of £1,000 saved 😁. 

My Globetrotter fund is for holidays, I'm aiming to have £1,000 saved before I fly to Turkey in July 2023, so that I can pay for things like airport parking, excursions, any clothes or accessories we may need and general spending money. I'm aiming to have some money left over to put towards a new holiday for 2025 (that is paid upfront this time!). So far, I've got £109.10 in that account this mainly consists of 1% cashback from purchases with that Chase account. Although the holiday to Turkey was painfully expensive, the perk of clearing the balance with the money transfer, is that I got a massive cashback payment. I also closed another Monzo pot for the virtual sealed pot challenge as I wasn't paying into it. So my Globetrotter fund is also earning 1.5% interest. Not fantastic, but definitely not to be sniffed at.

I created a spreadsheet to tell me how much to put in each sinking fund for the month, and I opened a few more of those bank accounts with Chase, so that I can set up standing orders directly into the relevant fund. As I got paid today, I was excited as this was my increased wages due to the annual payrise and the increase in working hours. By increasing my baseline income sufficiently, I have been able to put all of the money for the rest of August 2022's bills and September 2022's bills straight into that bills pot. So I am now one month ahead with my bills! In September, I'll concentrate on getting ahead of the Noose pot (where my direct debits and standing orders for debt repayments comes from), so that I can then start to focus on the sinking funds.

It's amazing what restucturing my monthly payments and mindset has done for finances. I'm still crippled by debt. But I've never felt so in control, and feeling like I can actually do this...🤞🏾.

Keedie

It's one of those mornings, where my bed will be my workstation for the day... I'm knackered and too cosy to work at the desk 😂.

I paid my normal direct debit of £32.87 towards our iPhones with Sky Mobile, and at least the outstanding cost for both of our handsets is under £1,000 now. My son is supposed to pay half his phone cost (£8.50 a month) out of his pocket money, but I keep forgetting to deduct it. As the payment for the phones is linked to our mobile phone bills, it's one overall payment and I can't pay extra in the app, as it only shows the option to pay in full. So I think I'll show him how to set up a standing order, so that it goes directly to my Barclaycard just after he receives his weekly allowance. Hopefully that will teach him not to spend everything in his account, or that he has, as he has bills to pay. And it can chip away at that mammoth Barclaycard balance. 

I realised that I have a duty to really help him with his financial outlook, and I think he's in the headspace to listen. So I need to strike whilst the iron's hot so to speak...

[Deleted User]

Hi Keedie, I'm so glad you are feeling in control and have found a way to feel less overwhelmed. You carry so much on your shoulders, time to look after your wellbeing is essential. You can't pour from an empty pot. I was wondering what you do to relax, what makes your smile? I really enjoy painting my nails and giving myself a pamper from time to time. Do you give yourself an allowance each month? It's something I started doing a few months ago. I will treat myself to the odd coffee, a cake, a bottle of wine or a new nail colour. This month I brought myself a book. It's done wonders for my mental health. 

Just some gentle suggestions.

Sending you so much love and support.

Adele xx