Single, self-employed and debt-free by March 2024

specialhat

I thought it might be good for me to start a diary of my debt repayments. I have not been in debt for many years, and manage my budget pretty closely, but this year I renovated my house (it desperately needed it) and had to borrow some money. I didn't want to spend all my savings as I am single and self-employed and need an emergency fund.

Here's where I'm at:

Savings: £7,930 (not including my 'salary' and 'tax' savings pots)
Tesco credit card: £4,756.98 at 0% until Feb '23. Min payment 1%
Sainsbury's credit card: £11,136.90 at 0% until March '24. Min payment 2.25%
Owe a friend: £800 remaining of £1200 (paying £400 in Sept and £400 in Oct)
Total current debt: £16,693.88
Debt minus savings: £8,793.88

I forgot to include my debt to a friend when I posted elsewhere in the forum yesterday. I am determined to pay this out of my income rather than my savings and she suggested I pay it in stages.

I pay all my self-employed earnings straight into an instant-access savings account, out of which I pay myself a set amount on the 28th of each month. It's much easier to keep a handle on my budget this way and it builds up a buffer for when my income fluctuates.

I am currently in the fortunate position where I can afford to pay £1,000 a month towards debt. I have already paid off the following in August:

Tesco: -£335
Friend: -£400
Sainsburys: -£265
Total: -£1,000

I will pay off the same amounts in September/October.

After October it will change to:

Tesco: -£760
Sainsburys: -£240

At this rate I will have £1,046.98 left of the Tesco bill by the time the 0% period ends, so I am decluttering and selling unwanted items on eBay and Gumtree, plus trying to make savings elsewhere, to raise the extra. If I still fall short I have my savings which I can dip into. So far this month I have made an additional £186.55 and counting through selling various things. I have also reduced/cancelled a number of other bills, such as mobile phone (reduced by £7.54pm), an app subscription (cancelled saving £4pm), broadband and TV (reduced by £4.50pm) and switched to taking food into the office with me when I have freelance shifts (saving around £30pm). I have also banned myself from takeaway coffees and I calculated I was spending around £19pm on these!

I do have some further house expenses to come (I need new blinds for the window and French doors in the kitchen) but this will come out of savings.

Wish me luck! Once this debt is cleared my goal is probably to be mortgage-free in 10 years but let's get this out of the way first 

AntoMac

Good luck. I respect anyone brave enough to work for themselves.
Good to have your savings to fall back on in the worst case scenario. Assume you’re getting the best bit of interest you can on your savings? I know rate’s aren’t great at the moment but it’s still worth looking around to get the best return you can.

specialhat

AntoMac said:

Good luck. I respect anyone brave enough to work for themselves.
Good to have your savings to fall back on in the worst case scenario. Assume you’re getting the best bit of interest you can on your savings? I know rate’s aren’t great at the moment but it’s still worth looking around to get the best return you can.

I've been freelance for nearly seven years now and much prefer it to being employed for many reasons. Staff jobs in my industry pay pretty poorly so I earn far more as a freelancer for starters - and for fewer hours.

My savings are definitely not working as hard as I could. I had a lot of them in Premium Bonds before I had to spend the bulk of them on the house, and I was getting a really good return (averaging £50 a month), but now they've dwindled I'm not really getting anything. I keep a £400 float in an account that lets me withdraw money immediately (rather than the next day) but has a terrible rate, and have a bit in one paying 1.2%, but I do need to shop around for something better.

Martico

Good luck specialhat!

Your situation is very similar to mine (self-employed / house cost overrun / CC debt now on 0% deals).
I've built a buffer for in-case as well as for tax returns. Those savings are in a mix of PBs and 1.5% instant access savings. 
And now after solid contract work for two years for one company, I'll be on a work hunt again. So the buffer is definitely worthwhile. 

I'm starting some current account switching for extra funds, and for chipping away extras on the CCs I've been doing surveys with Prolific Academic. 

Wishing you luck! I'll be following your journey. By the look of it you have things nicely in hand at the moment

specialhat

Martico said:

Good luck specialhat!

Your situation is very similar to mine (self-employed / house cost overrun / CC debt now on 0% deals).
I've built a buffer for in-case as well as for tax returns. Those savings are in a mix of PBs and 1.5% instant access savings. 
And now after solid contract work for two years for one company, I'll be on a work hunt again. So the buffer is definitely worthwhile. 

I'm starting some current account switching for extra funds, and for chipping away extras on the CCs I've been doing surveys with Prolific Academic. 

Wishing you luck! I'll be following your journey. By the look of it you have things nicely in hand at the moment

Ah our situations sound really similar! Thanks for posting. I also do Prolific surveys - I'd forgotten about them until yesterday and I need to get back into the habit of checking for them regularly.

Where are your instant access savings?

I just sold another top on eBay for a princely £3 which will be even less after fees :rofl: but every little helps. I'm currently dumping my eBay earnings into their own savings pot and I think I'll move them across to the Tesco card at the end of the month for a psychological boost.

Martico

I started with Chase a few months ago.
Instant access is 1.5%, top-up at 5%, and they give 1% cashback on most regular spending.
I've also set up a "burner" current account with Starling with a couple of DDs. I'll use that one to start switching for the welcome bonuses

AntoMac

I had the wrong kind of phone to get the Chase app so have stuck with Coventry Building Society. Instant access account going above 1.5% from September and 1.85% on Limited access account (6 withdrawals/year)

specialhat

AntoMac said:

I had the wrong kind of phone to get the Chase app so have stuck with Coventry Building Society. Instant access account going above 1.5% from September and 1.85% on Limited access account (6 withdrawals/year)

I can’t see an Instant Access Saver on the Coventry site - am I being dim? They have an “easy access” one but it’s only 0.85%.

specialhat

I’ve also done a freezer/cupboard audit and I reckon I can cover myself for food for the best part of a month if I supplement it with bread/veg/cheese/chocolate (life’s essentials). I did a good job running down my supplies before the renovation but they’ve built up again.

If I have anything left in my current account at the end of each month I’ll also siphon that onto the Tesco card.

AntoMac

Ah my apologies. Looks like the accounts I have must have been existing customers only as I can’t see them on the Coventry website either. 

specialhat

My mortgage is with them so I might log in and see if I get different offers.

I received my annual Amex cashback payout today. £90.26 has gone straight into my savings pot for my Tesco credit card. (This is the pot in which I’m trying to save extra for the £1,046.98 shortfall I’ll have when my Tesco 0% deal expires.) I’m enjoying watching that grow and I’m undecided whether to keep it in there until the deal ends or bung it onto my CC monthly.

I’m currently at £281.20 out of my £1,046.98 target with an additional £10.03 profit due today from eBay sales.

I also need to sell two chests of drawers and a rug, and have a few more items of clothing still listed on eBay.

It should be a low spend day today as I’m at home doing chores and decluttering today. I just need to do a small top-up shop for vegetables and milk.

Have a good Monday, everyone!