The Mental Debt Struggle...

Keedie

I'm so excited! I've paid off another creditor 😁🤗. It's only my mum, but I've finally paid off my car (which I'm ironically now fixing and selling as I can't afford to keep it and I hate driving). But the main thing is that the final £133 has been paid and I've gone down to 6 creditors (from 8 at the start of August 2022).

I'll be down to 5 creditors by the end of October 2022, as that will be the £300 to my mum for our family holiday paid off. Then we're down to The Big 5 (Barclaycard, Creation, MBNA, School Fees and Sky Mobile - although Sky Mobile is rolled up with my phone bill so doesn't bother me at all).

I'm off to see my friend today and hang out at her house, and I met another friend yesterday for a late lunch at Wetherspoons. I'm loving this personal allowance in my budget and I really have no clue why I've never done this for myself before! Too busy focussing on everyone else and their needs I guess.

But I've managed to rework my sinking funds and set up extra sub-accounts on Chase so that I can manage this, and have set up standing orders to transfer them from Monzo, including my weekly spending money which will come through every Friday. So I now have sinking funds for food shopping, family fun, my allowance, travel, holidays, family celebration meals (we eat out a lot as a family for birthdays, Mother's Day etc and this needs budgeting for), household expenses, Christmas, birthday presents and my emergency fund.

I now have 3 main pots in Monzo to manage my finances:-

1. The Burden (Bills Pot for all direct debit such as rent, council tax and the standing orders for the fixed sinking funds like Christmas, birthdays etc) - all of September 2022's bills are accounted for as the pot has enough money to cover now to 30/09/2022. This is a big achievement for me now that I'm managing my budget period for the calendar month. I should hopefully remain in a position to always have this pot covered by my monthly salary from my paid employment.

2. The Noose (Debt Repayments pot for all minimum payments for credit cards and loan repayments) - the money needed for the rest of August and all of September 2022 has been covered in this pot, and this was achievable because I reduced my monthly repayments and used my exams fees pot to top this up. I made the decision to use that exam fund, as I wanted to cover all my direct debits before we hit September, so that when I get my universal credit on 01/09/2022 and any freelance income, I can use that to cover other expenses and our day to day living.

3. The Sink (Sinking Funds pot to hold money transfers for our weekly allowance, travel budget and food shopping) - this account has a nil balance, but will be funded by the universal credit on 01/09/2022 and I've set all regular payments to start from 02/09/2022. As Monzo is so great, it will automatically tell me at the beginning of each month how much is needed in this pot to meet the upcoming payments. I have a spreadsheet where I calculated the monthly totals, but the notifications in Monzo will help me to see what needs topping up as the month goes by, from various income.

September 2022 will be the first month trying to do this new way of budgeting and foussing on a debt/life balance rather than spreading myself so thin that I can't function. So I expect to tweak it in the coming months, and will write down every penny I spend from 01/09/2022 to 31/12/2022, so that I can see where I can save and where I am haemorrhaging money.

I have set an upper limit for all of my outgoings and matched the pots and sinking funds to this, and any surplus income will be split between topping up the emergency fund and paying off debt. Fingers crossed it all works out.

AntoMac

That’s interesting re the energy bills rebate. I assumed it would just be a credit to our energy accounts rather than payments to our account. I’m with Eon Next so will be interesting to see what happens with them.
Anyway, you seem to be back in control Keedie after revising your payment plans. The pot names ‘Burden’ ‘Noose’ and ‘Sink’ are possibly not the most uplifting names though, don’t you agree? 
Technology and the internet really helps with keeping on top of things. I remember having to wait for a paper statement. Mind you, there was no MSE forum then either, but on the upside the access to credit seemed a lot more limited back then as well.

Keedie

😂 I guess they're not the most positive names huh @AntoMac? But bills are a definitely an adulting burden and the debts are like a noose around my neck. So the cap does fit, I guess... But the 'sink' is probably a little drab considering that having sinking funds are a good thing lol.

I think if we had the technological ease of today, but the credit access and mindset of yesteryear, things would be so different. I miss the days of financial simplicity.

I'm assuming that the energy rebate will be a credit to the bill account, but not sure what Octopus will do or how they'll process it, so I'll set aside the money (which won't be much), so at least I'll have a buffer. I hope they don't do it like British Gas, as I'll confused and my bills will soar in winter even with about the energy increases. As I always keep the heating on throughout winter as the cold/draught aggravates my joints and it's too painful to move at times.

Keedie

Yeah, so I really should have tried to suck it up with the direct debit for Octopus even when it was really hard. They've just launched a new bills projection feature based upon 5 years meter readings and projected weather over the coming 25 days. It's in beta test (so a really rough calculation that comes with the caveat of not being wholly reliable or to be taken as gospel), but it's an eye opener nonetheless.

It looks like they'll be applying the £66.67 government rebate as an actual rebate and not as a credit to my account, as my normal £100 direct debit seems to effectively reduce to £33.33. I don't really know how to feel about that. As I'll have to effectively set aside the money and then make a payment on top of the direct debit once the rebate clears, so that it's £166.67 paid to my energy account. That's going to take monetary discipline that I don't always have.

But looking at this approximate projection, my energy charges will jump from an estimated £78.72 in September 2022 to £244.75 by October 2022. And with eye watering charges like an estimated £539.29 come January 2023, my energy arrears will rival my credit card debt 😢. My credit will be wiped out by mid-November 2022 based on this projection and by the end of March 2023, I'll be around £1,600 in arrears. Obviously this would be a bit lower if I reapplied the energy rebate and paid it back onto my account.

I knew it was coming, and I've seen the news headlines about an 80% increase, but I think my anxiety has simply compartmentalised everything, as I've dealt with one emotional, mental or financial battle after the other in recent months. I've been treading water mentally, barely sometimes when I felt like I was just drowning and didn't particularly care if I was taken under. But now that I've got my fighting spirit make and I'm paying more attention to what's around me, this is making me very worried.

I know the graph below isn't accurate, but to actually see a projection like this really concerns me.


So I think it's back to the drawing board with my budget once again. If I can shave off some money from my food budget and reduce my sinking funds, I should be able to double the amount that I physically pay to £200 (plus re-crediting the government rebate for a total monthly payment of around £265). That will reduce the projected arrears to £500ish by the end of March when I switch my boiler to hot water only.



Either way, although this projection tool is in it's infancy, I really needed to see this as it's been a wake-up call and I need to get more focussed on how I'm going to approach things moving forward. Wish me luck 😬.

Keedie

I feel a bit queasy, as I've finally paid the school fees for my son, at a whopping £4,838 for the 2022/23 academic year and I feel a bit overwhelmed and upset. I feel quite defeated to be honest. I'm probably being silly, but I had an internal weep today.

It means that my debt has officially risen (as before now, I could have just convinced myself that I could return the money to my mum although I signed the contract renewal and would be liable for the school fees). Also, more importantly, it's confirmation that my son can't go to mainstream school and that's still heartbreaking. He's made so much emotional and mental progress in the last couple of months, that he could actually thrive in a new school, but trying to get him into one for Year 11 was hopeless.

My son is finally accepting that he will be homeschooled and although he's not looking forward to it, he seems to be excited about things being flexible. I've also been selling him on the idea of us sometimes studying/working in coffee shops or the pub during the day if he uses his headphones as he can attend school anywhere that he has an internet connection. He seemed to like that idea and I told him that sometimes we can study/work in different places to break it up a bit, as we're both at home.

There's a lot of homeschool networks and one in South London that meets up at the local ice rink on a Friday, so we can dip in and out of that ice skating group every few weeks, and do some other activities that are taking place. It's a bit strange as he's at that awkward teenage phase where he doesn't like to stray out of his comfort zone. But I've been pushing him more and more, to meet new people and try new things.

He's joined the young carers group (he's registered as a young carer due to my mental and physical disabilities), because I refused to back down about his attendance and he enjoyed it, and now he's going go-karting tomorrow and he's really excited. There's also a hospital youth group for teenagers with chronic conditions, and he's in the reluctant phase with that one, but he seems open to the idea of going so we'll see. Socially I'm not worried about his homeschooling, as he has his clubs, football, and hangs out with his decent school friends from his old school (he realised who his true friends were and that circle turned out to be smaller than he thought 😢). I'll also heavily push him to join the social networking clubs and groups for his online school, but academically, it's a bit up in the air. His anxieties about his academic performance has kicked in and he's convinced himself he can't learn and he'll fail everything, so I've got a lot of work to do to build his confidence and make sure that he studies without alienating him. He's hard work, but it'll be worth it. That's what I keep telling myself, but I'm exhausted by it all.

But in other news, I've turned my bills parachute pot (where I was saving to get a month ahead on bills) into my Octo Pain pot (to top up my Octopus Energy account). So there's £10 in there as I had my £5 weekly transfer go into that pot. I also paid £6.80 into the PAD pot, £5 into the Christmas pot and £5 to the emergency fund.

I'm getting the car sorted tomorrow morning (hopefully) and fingers crossed it doesn't cost more than the £350 I have set aside for it. If it's too costly, I'll struggle to be able to repair it before I sell it.

Aimingforthegoodlife

The energy stuff is so stressful, and I resent the thought of what I am going to have to pay before it happens, I think you are doing the right thing, refocusing and changing priorities- whether we want to or not! You are doing so well with everything that is going on in your life, so please remember to be kind to yourself! Also, just catching up, it seems your son is settling more which is lovely

Keedie

Thanks @Aimingforthegoodlife, I think we can often see progress in others that we can’t see in ourselves. He’s definitely settling down more, he’s resigned himself to the fact that this is his fate for now. He’s enjoyed his go karting experience today as he text me to tell me that he “smoked everybody”. I’m not too great on young text speak, but I’m working on the assumption that he means he left them in the dust 🤷🏾‍♀️. The main thing is that he enjoyed it and he took himself there as well, so I didn’t need to take him. 

The energy bills are making me very anxious. I hate being in energy arrears as you need to use the gas and electricity, so your constantly burning through any payments you make. It’s like an overdraft that you get paid into. They’re easy to use and notoriously difficult to get out of. 

But in good news, I used my Chase account to pay the school fees and I made £48.38 via the 1% cashback and sent it to my Globetrotter fund as I’m slowly saving for our spending money for our holiday next year. 

Keedie

Morning all, happy 1st of the month 😁.

I need to sit down and do some tweaking to my spreadsheets and rework my budget. I've looked at a few YouTube videos on how others have been managing their zero based budgets and sinking funds and I've realised that I've been making it too hard on myself. I'd be better off snowballing the sinking funds in order of priority for me, so I'd concentrate on Christmas first. This should give me the extra that I need to increase my direct debit for Octopus Energy, and reduce my overall monthly spend as I'm not paying higher amounts to each fund. I should also have more for debt overpayments at the end of the month.

I'm the counter upper for September 2022 on the Payment a Day (PAD) thread, and in August 2022 we PADded a phenomenal £23,679.29! That was more than the PADs for May 2022 to July 2022 combined, and that amount would have wiped out my debt and left me with some savings 🤗. It inspires me to keep on top of trying to get rid of my debt, and we're a friendly and supportive bunch, so if anyone is looking for a great debt free challenge (although some of us are savers too), then you should join us https://forums.moneysavingexpert.com/discussion/5590353/payment-a-day-chapter-18#latest.

shell16

Hiya

Just thought I would catch up with your diary!  With regards the snowballing of sinking funds, its a great idea and we must be watching the same vids!  It looks to be so much more straight forward doesnt it doing it that way?  In the back of your mind you think well if I drip feed this savings fund and that then it will slowly build up but in the mean time something comes up like Christmas and hey ho, not enough to cover it.    Good luck and let me know how you get on with it.

As you say a great total on the PAD thread and I can only echo we are friendly bunch who are extremely supportive of each other.  The support does inspire you to keep on at it, even when times are tough.

Great work on your budget!
Shell x

Keedie

I've been tweaking and re-tweaking the budget, and I think I've got it finally. Well hopefully...

I think I went overboard trying to set things up with the sinking funds, especially in terms of trying to maintain the car, which I've realised I do actually need to keep despite hating driving. I'm back on my walking stick after being on crutches and trying to get around has been an excruciating and exhausting nightmare.

The mechanic said that the problem is with one of the pulleys or something and the belt, and will cost a maximum of £160 for parts plus labour, so it should all fit in the dealbreaker £350 that I allocated for it. I've found car insurance for £30 a month and reduced the amount for our weekly allowances, and at first my son wasn't happy about the drop as he incorrectly seemed to think having his allowance reinstated meant he was rich. But when I pointed out that it was the car or the allowance, he quickly got on board with a lower allowance 😂.

Trying to work out how to run a car, deal with the debt repayments, and maintain my original sinking funds was just not working. As my son would say, "the math ain't mathing", which I take it to mean that it's just not adding up. So yeah @shell16, the sinking funds approach was much better and I've lowered my expectations of what I can actually save up for. We've definitely been watching the same videos as you inspired me with the ones you've been watching and I've found them really useful. YouTube is great for learning about finances and it's made a massive difference to my understanding of a lot of strategies that I couldn't visualise before.

As my priority is still debt clearance, I've allocated £150 a month to my sinking funds and limited them to 3 fixed annual funds, and they are in priority order:

1. Christmas Cheer - I paid £178 into this fund today as a one off so the balance is £223.03/£410 (54.40% saved)
2. Cruisin (Car MOT, Service & Parking Permit) - £0/£514 and this is for 6 month's permit, then an annual permit from March 2023 with the car service paid upfront and not via Klarna in April 2023.
3. Globetrotter (passports, Turkey spending money, airport parking, excursions, hotel miscellaneous charges) - £160.03/£910 (17.59% saved)

I've joined the September grocery challenge and I realised that I waste way too much money on food, I don't think I'll be able to stick to my budget and it's only day 2/30 🤦🏾‍♀️. I need to work out how to meal plan properly as I am confused and disorganised, but those threads on the Old Style Money Saving boards are scary to look at. I'm gonna have to be brave though and try and figure it out though.

We've been doing really well on our PAD thread, with £4,021.55 PADded yesterday! It's always extra motivating when I'm counter upper, as it pushes me to have something to PAD as well.

I'm off to my Bipolar UK support group today and I have my newly acquired weekly allowance, so I will be able to go to the pub afterward and not feel stressed or guilty about where the money is coming from 😁.