Breaking through the £37k of debt

rumpetroll

I've been thinking quite a bit lately about when and how I want to retire. I've been in my current job for 10 years, it's very mentally demanding, I'm spread too thin and find that I'm always juggling way more than I should be, it's getting better as we've expanded my team and I've got a really good lead working for me now but ideally I'd like to take on 2-3 more staff but the budget doesn't allow it. On the upside, it's very flexible, I can work from anywhere, work hours that suit and I have a lot of annual leave (not that I always get around to using it all).

I expect I'll work here until I retire, the only reason to move would be for a stress free job but that would involve a significant pay cut so unless I'm in a position to almost retire then that's not really a possibility anyway.

So when do I plan to retire? As soon as I can, however the realistic scenario is in roughly 20 years putting me in my early 60s, the figures to retire are a combined total of just over £900,000 in pensions and ISAs although I suspect to comfortably draw down what we want to retire on we would need closer to £1.1 to £1.2 million. There is also the scenario that if the company I work for gets bought then the value of the shares that I own will see me with enough to retire immediately, if this happens in the next 7-8 years then I may continue doing some kind of work but it will definitely be a stress free role, after that I will just retire.

What do I need to do to hit my target? Continue with my company pension scheme which is at 9% income plus invest ~£800 per month in my ISA and SIPP. At the moment I've paused paying in to my ISA and SIPP while we're paying for the wedding but will resume again after we're married and as the debts get paid off I should be able to contribute more to these funds. I don't plan on putting our lives on hold to fund this, we'll still be going on holidays and enjoying our lives but I will be putting as much as I can in to this to bring my retirement forward as much as possible.

I know it might seem odd to be thinking about retirement at the moment when we've got these debts to pay off but I've just been thinking about what it is I enjoy in my life and what I want to be doing with my time, and I can tell you it is definitely not working.

enthusiasticsaver

I totally understand why you would want to bring a wedding forward given your fiancés mother’s health but I think I would struggle with £22k on the wedding when you have £36k of debt still. 

Have I missed the plan to repay or are you just moving on to 0% deals as they expire? The savings presumably are earmarked for the wedding which is sensible not to take on more debt. 

Getting rid of debt and the mortgage will all help with early retirement. We retired at 58 after our children were financially independent and the mortgage paid off. Being a high earner does obviously have advantages in that it gives you a big shovel to repay the debt or build up savings. 

rumpetroll

Thanks for your comment @enthusiasticsaver, yes the savings are earmarked for the wedding and a quick look at this months figures we are now around £5400 above what we need for the wedding so that will be used to pay down the next card when the 0% expires, I suspect I'll also have to do a 0% transfer on that CC too given that the balance is at £10800 and only 3 months until that expires. After that we should be able to put somewhere in the region of £1000 a month extra to paying off the debts, so including the £670 current minimum payment we should be clearing over £1500 a month from the cards after the summer. If we can stick to a minimum of £1500 a month then we should be clear by November next year.

rumpetroll

Finally made some extra payments to the credit cards this month, I usually keep a modest buffer in my main current account just incase but it never gets used as I know exactly what's coming out of that account and all daily spending goes on the cashback credit cards that are paid off in full the next month, so I've used this buffer to pay down the smaller credit cards by and extra ~£600.

I took a few days off in February to do some decorating and get some odd jobs completed around the house, I think because this is so far removed from my day job that I actually really enjoy all this and it's a nice change of pace.

I'm due a bonus from work but debating whether to take it as cash to put towards the debts or to have it paid directly into my SIPP as a salary sacrifice pension payment, it's worth a little over £6k if I pay it into the SIPP but if I take it as cash then I only get around £2350 after tax and NI, it just seems such a waste to pay the tax on this.

- February 2024 -

Debt

As mentioned above I paid off some extra on the smaller CCs, I originally paid off some on CC1 but then realised I'd be better off getting rid of CC2 quicker so also put some money to that one, I know it would probably make more sense to pay off CC4 first as that's the one closest to the 0% expiring but CC2 offers good 0% deals and I should still have a chunk of cash to put towards this in June when the 0% expires.

CC1 - £1800 / £2463 (27%)
CC2 - £1880 / £3104 (39%)
CC3 - £10139 / £7676 (-32%)
CC4 - £10849 / £12239 (11%)
CC6 - £8799 / £9500 (7%)
Finance - £962 / £2405 (60%)

Total Debt - £34,429 / £33,642 (-2.3%) - Hopefully this will be back below my starting debt figure next month.

Wedding

We've pretty much got everything sorted now, booked a room for the wedding night, we served notice to marry and have finally got the last bridesmaid dresses bought. The only thing outstanding now is someone to have the dogs, this is proving much more difficult than I expected, everyone I've contacted is either fully booked or on holiday. We could potentially leave them at home as we've got people staying the night but it's quite a long day for them if they're left alone.

Target Fund - £22,000
Already Spent - £7879
Savings - £20,549
Total - £22,000 / £22,000 (100%)

Additional Savings Pot - £6,428 (+£3,544) - This will be used to pay off CCs when the 0% deals expire

rumpetroll

February has been pretty rough so far, I have an issue with my leg that I've had for years, I think it's the result of an old injury, it crops up every few months and is usually painful for a week or 2 and then goes away but it's been lingering now for a good few weeks, it's not so bad that I can't do anything but it's bad enough that I can't really exercise on it. I've seen the GP a couple of times, and a couple of physios and even had an x-ray, the only "answer" I've been given is that it's age related deterioration, I don't buy this as it's been a problem since I injured it as a teenager but until my 30's it was just something that sometimes "popped" out and it was extremely painful but I could push it back in and it would be fine again, but I think whatever it was has fused or moved now as it doesn't pop out any more and it's not as intensely painful but it hurts for much longer. Anyway, that's a frustration and I'm sure it could be improved but I fear that I'll have to go private to get anything actually done.

Aside from that I was also ill at the start of the month, and while I'm fine now I've been left with a really annoying cough that just won't go away.

So with all the above I've not been to the gym or done any training for a while, hopefully get back in to it this week though.

I've also got to have a difficult conversation with one of my staff and unfortunately going to have to let them go, they're one of the senior members of the team but just aren't up to the job and are probably less productive than our juniors. It's a real shame as the rest of the team are doing great.

rumpetroll

I haven't posted an SOA before and I wasn't really planning to, but I was just going over my spreadsheet and thought I'd chuck it all into the SOA calculator. I'm not really looking for advice on ways we could cut things down, yes groceries are high and yes the entertainment budget could be smaller but without making compromises we're not willing/needing to make this is where we are. OH has a small income but I don't include it here as she uses that to buy clothes for her and the children, school stuff, the odd meal or day out etc. When she's finished her qualifications and the youngest is a bit older so she can work full time she will be bringing in a bigger wage and some of that will go towards the bills etc.

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household			2
Number of children in household			3
Number of cars owned			2
Monthly Income Details
Monthly income after tax			6657
Partners monthly income after tax			0
Benefits			0
Other income			0
Total monthly income			6657
Monthly Expense Details
Mortgage			2120
Council tax			219
Electricity			150
Gas			80
Water rates			75
Mobile phones (x3)			35
TV Licence			13.25
Satellite/Cable TV			17.99
Internet Services			39.99
Groceries etc			890
Clothing			50
Petrol/diesel			20
Road tax			12.5
Car Insurance			87
Other child related expenses			62
Medical (dentist)			26
Pet insurance			40
Buildings & Contents insurance			22.5
Life assurance			44.11
Presents (birthday, christmas etc)			150
Haircuts			20
Entertainment			230
Holiday			400
Gym			13.99
Child Benefit Repay			219
Child Maintenance			600
Total monthly expenses			5637.33
Assets
Cash			21150
House value (Gross)			660000
Shares and bonds			0
Car(s)			13000
Other assets			0
Total Assets			694150
Secured & HP Debts
Description	Debt	Monthly	APR
Mortgage	460749	2120	3.29%
Total secured & HP debts	460749
Unsecured Debts
Description	Debt	Monthly	APR
CC1	1775	25	0
CC2	5795	56	0
CC3	9885	253	0
CC4	6951	108	0
CC6	8711	88	0
Finance	842	120	0
Total unsecured debts	33959	650
Monthly Budget Summary
Total monthly income			£6,657
Expenses (including HP & secured debts)			£5,637
Available for debt repayments			£1,019
Monthly UNsecured debt repayments			£650
Amount left after debt repayments			£369
Personal Balance Sheet Summary
Total assets (things you own)			£694,150
Total HP & Secured debt			-£460,749
Total Unsecured debt			-£33,959
Net Assets			£199,442

Lonelygambler

Hey - I will tracking this diary! Keep up the good work on your savings / wedding and debt. 

rumpetroll

Thanks @Lonelygambler, I've just had a read of your diary and will follow your journey, good luck with everything that you have going on at the moment it sounds like you've taken some really big steps.

rumpetroll

I've just made an overpayment to CC4 for £1550, I also did a balance transfer of £3800 from CC4 to CC2 for another 24 months @ 0%.

This leaves CC4 with a balance of £5400 and a little over 2 months left at 0%, I'm quite confident that I can clear this but I have another CC that is offering 12 months @ 0% as a backup.

Having gone through my spreadsheets it looks like CC4, CC1 and the boiler finance will all be cleared before the end of the year as well as £1880 from the original BT on CC2. CC6 will need another BT at the end of the year and I'm hoping with how much will have been paid off by then that I should get some good deals, I'm expecting our debt to be at around £20k by that point down from the £33k it's at now.

rumpetroll

It's been quite an expensive month, a £1300 vet bill which I'm hoping will get refunded from insurance quickly and 2 of the children needed new phones, both have birthdays coming up so that's their birthday presents but it was more than I had planned on spending on them this year.

- March 2024 -

Debt

Starting to clear down CC4 now as it's only got until June on 0%, I cleared some with a BT to CC2 and then paid off £1550, so £5400 left to go and current savings fund covers this.

In total that's £1908 paid off the debts this month.

CC1 - £1800 / £2463 (27%)
CC2 - £1880 / £3104 (39%) - Original 0% BT

CC2 (2) - £3915 / £3915 (0%) - Second 0% BT

CC3 - £9885 / £7676 (-28%)
CC4 - £5400 / £12239 (56%)
CC6 - £8799 / £9500 (7.4%)
Finance - £842 / £2405 (65%)

Total Debt - £32,522 / £33,642 (3.3%)

Wedding

All quiet here this month with no spends, some balances will start becoming due over the next month or so.

Target Fund - £22,000
Already Spent - £7879
Savings - £20,176
Total - £22,000 / £22,000 (100%)

Additional Savings Pot - £6055 (-£373) - This will be used to pay off CCs when the 0% deals expire