Late to the game – midway through my DFW journey
I only recently delved into and registered for the forums, having long mined the main site for tips.
Long story short: My lightbulb moment that debt needed tackling was right at the start of the first lockdown in March 2020. At the time I was earning little (around £11,000 freelance WFH, having devoted my time to doing up a new house) and suddenly normal earning options were scarce. Although the house is thankfully mortgage-free, I did overspend on the build, and racked up around £25,000 on CC debt and £10,000 on a family loan. A good credit history meant that I managed to transfer some of the debt onto 0% deals, but low earnings were a major problem, as well as interest payments on some of the debt, and looming deadlines of the end of the 0% deals. And a decent new job seemed an impossibility given lockdown.
Income: I took on delivery work for a few months before I found full-time contract work in summer 2020. Those contracts have kept rolling over, thankfully. As someone without secure work (freelance and now contract) I needed to build an emergency fund as well as tackle the debts.
Debts: By October 2020 I had all of the CCs on 0% terms and had cut the total to £17,849. Family loan was still outstanding. I hadn’t started an EF.
I pulled together a daily spreadsheet covering every expense, income and goal and have stuck to it since. I love a spreadsheet. Set a daily expenditure target, with the rest being thrown at the CCs and later savings.
In July 2021 I managed to pay off the family debt in full (by using a 12 month 0% cash deal with a CC that I had cleared). I realise that was taking on extra debt, but family first, right? And I’d already secured 0% on all the remaining debt, so it seemed the right thing to do. In August 2021 CC debt = £13,531 on two cards. Savings pot = £5,027.
Payday is tomorrow or Friday, which is a bit of a landmark as the savings pot will finally exceed the debt. As things stand today, debt across 4 CCs is £7,883; savings pot is £6,495.
CC1 (0% til
Aug 1 2022) £700. I will clear that on pay this week.
CC2 (0% til Aug 6 2023) £3,630.
CC3 (0% til Dec 2023) £2,193.
CC4 (0% til Jan 2024) £1,360.
So that’s where I am.
Keeping on top of a spreadsheet daily has been a great discipline. It’s developed organically over time to include targets, graphs and loads of interlinking tabs to make it something of a hobby.
It’s been so good for me to set a personal budget. On payday, I leave a float for all monthly fixed costs, minimum payments on the CCs and spending money. The CC I’m targeting at the time I overpay. The daily spending money float is purposefully excessive (£40). Anything under the £40 daily limit I chuck at savings, which have built up quickly, as my average daily spend is way less than £40. It means I have some flexibility to do spur of the moment stuff (I’m still buying some bits for the house, for example) but also see my savings balances improve. Savings are split between instant access, PBs (almost instant access) and a S&S ISA (not to be touched).
I’m also unbelievably lucky to be mortgage-free and to have secured decent regular work. But racking up what might have been unsustainable debt was very easy, even for someone that likes to think they're savvy and on top of things.
It's actually been good to leave cards that I’ve paid off dormant rather than cancelling them, as all of those ones are offering new 0% deals. I’ve not taken a new deal for a year or so now, but it’s good to know that they’re there in case my contract isn’t renewed and the existing debt is coming towards the end of term. It's not in my plan to use any again, but they can be a cheap source of finance if used properly.
Thanks for reading
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