This could take a long time

rainbowlife

Well, I have no idea if I am doing this right but here goes. Basically, I have read a number of diaries on here intermittently over the past few years to try and inspire and motivate me to change my habits. I have never taken the time to post but this year, I have decided to take the step of registering and posting on here. Anyway, my aim is to reduce my debt. This is not a new aim but one that I tend to fail it and unfortunately instead of rising the debt increases. I am hoping to change this cycle by being accountable on here and by making a conscious effort to record my spending in the hope it will keep reminding me that I cannot just waste money needlessly and not everything is a necessity or essential. 
2022, started out with the same ambition but there were some positive steps. I did manage to pay off some of my debts and this was motivated by need to buy a house (it is complicated). Anyway, I still have around £24,000 in debt and a mortgage to go with this now. I underestimated the amount of work that was needed to be spent on the house. These are genuine spends and not just cosmetic. I am trying to do as much work as I can myself to keep the costs down and I have been creative with my purchases. I am proud of myself in that I have been able to fund all of the costs myself and I have not used any credit cards. This is huge for me. However, I am unsure how long this will last, given the amount of work that is still needed to be done. 

My aim for the next couple of days is to breath and to work out what my outstanding debt is. 

rainbowlife

So, I have finally worked out what I owe and I have made a flexible plan to try and clear these debts within a reasonable time frame. I think my first aim, is to not add to these debts and to try, where possible, to pay cash for everything. Therefore, I will be prioritising saving some money so I am able to pay for those unexpected expenses. 
Anyway here is a breakdown of the debts:
Credit Card: £3100 %24 months
Loan 1: £5106, 6.9%
Loan 2: 5639, 3.4%
Loan 3: 5284, 7.8%
Loan 4: 3557 10%
Argos:  1100 % 12 months

All of the loans are due to end between Sept 2026 and Sept 2027. Provided I did not increase my debt and I paid off the credit card and Argos, I would be debt free naturally by Sept 27, this feels like a long time to wait. I would like to be debt free sooner especially as I am now focused. 

Getridofdebt66

Happy new diary! 

Its not nice when you see the figures written but it is a good motivater in my experience!

rainbowlife

Thank you. It just seems a long list. I am looking forward to the list becoming shorter 

LookingForPeace

Hey @rainbowlife! Welcome  I'd love to follow you on your journey - I've bookmarked your diary.

Congrats on funding the house costs yourself, that must feel great! 

Do you have a good idea of how much you might be able to put towards the debts each month?

rainbowlife

LookingForPeace said:

Hey @rainbowlife! Welcome  I'd love to follow you on your journey - I've bookmarked your diary.

Congrats on funding the house costs yourself, that must feel great! 

Do you have a good idea of how much you might be able to put towards the debts each month?

Hi,

Thank you for your message and support. It is going to take a long time to get my finances in order!. 

rainbowlife

There are so many things that I genuinely need (as opposed to think I need) like a bathroom (it doesn't have one that works) a kitchen (it has been removed) and not to mention other things like carpets. I am making this house sound awful but it isn't really that bad. Anyway, I am having internal battles with myself everyday regarding staying strong and not getting into debt to get things done sooner. I am trying to prioritise and to keep a look out for bargains. I have found that with a house, there are sooo many things that are needed at the same time or maybe it is just the house i decided buy!
For my debts, I am planning on saving money each month for the emergency fund, the 1p challenge and the £10 per week for a year challenge. I intend to use this money at the end of the year to pay off loan 4 provided there is not an emergency!. I am also going to pay an extra £20 per month off this loan throughout the year as I have worked out that would make a £100 deduction off the capital. I have already made a payment for January. I am hoping to pay Argos off before the 12 month period. If I didn't have to divert money to the house, it would be easier to pay off these debts but I guess the counter argument to that is i never paid these debts off before I had a house. 

I have set myself a challenge for January 2023 and I wanted to have as many no spend days as possible, so far, I have only spent money on myself for 1 day in January. I have had to spend money on 2 other days but these things were for the house (paint etc) so I do not feel I should count these. Anyway, I am busy working out a budget for next month. I have realised I significantly underestimated how much money I spend on fuel each month. 

rainbowlife

So, having worked out a budget for next month it is looking aspirational. I feel I haven't taken into account those spends for meals etc. I've tried not to plan too many things and I've adopted a vague non committal response to suggestions for going out but this can't last forever. 
I've found writing a budget and actually looking at the numbers really does put it into perspective. I can't remember what a lot of the debt I've accumulated was actually for but at the time, I'm sure I would have justified it to myself as a essential! 
Positive achievements so far

1) I've started to be accountable for my spending
2)I have had a number of no spend days
3) I've not increased my debt

Things I need to work on

1) not taking my own lunch to work everyday
2) trying to cut things from my budget 

Sarahwithlove

I know you say these works are essential but how are you coping at the moment without a working kitchen and bathroom? Have you got anything you could sell? 

Sarahwithlove

Also is it 1 bed or 2? If you had new kitchen and bathroom could you rent out a room for example 

rainbowlife

Hi @Sarahwithlove, thank you for your comments. I've got a slow cook so I'm able to make meals. I'm using a combination of friends and family for showers. They are understanding as they know it's not going to be forever. I've managed to find a bathroom and I'm going to do most of the work myself to keep the costs down. 
I've managed to get a second hand kitchen from someone I know who is replacing their kitchen. I'll do the majority of the work myself to keep the costs down.

I will have lots of items as the old me used to buy everything and anything. I'll have a look through and see what I can swap/sell