Watching my mindset shift and nudging it slightly along the way...

everypennytowardsfire

Hello everyone,

Long time lurker, first time poster here. Having found so much inspiration from reading this forum over the years, on and off, I have finally decided to register properly and become a more active participant, and to start my own diary to keep myself accountable and focused on my journey towards financial freedom.

I am hoping to explain my situation and provide more context for everything in due course, over the next few days/weeks, but here are a few details about me for now:

I am in my early 40's and live with my OH, as well as my 19-year-old son who is one year into his 4-year university degree and who also sometimes stays with his dad for extended periods of time, especially during term time (due to a shorter commute).

My OH and I are not married and our finances are separate which suits us both fine as we definitely don't have the same attitude towards money. He does on the whole have a sensible approach to spending (most of the time) but he hasn't quite caught the MSE bug yet and to be honest I don't think he ever will. Last night, as we were chilling after dinner and I was (as usual these days) caching up on some diaries on here and looking for any updates on the best savings accounts in the MSE app etc, he was (also as usual) browsing through some golf stuff to buy. I actually said to him - this is the perfect summary of how different we are money mindset wise: I like to relax looking for ways to save money, and you - looking for ways to spend money! He did agree that is does sum us up!

While we do keep our finances separate, my OH does contribute to the monthly bills and we both do grocery shopping over the course of the month (without a set strict budget with regard to each of us contributing a certain amount but it does seem like we are both pulling our weight), although again, usually not together, as I do prefer to make fewer trips to the supermarket per week (but plan my shop more strategically) and I like to go yellow sticker hunting at quieter times (usually on a Friday or Saturday evening). I also like to take advantage of every possible offer, discount, cashback option and loyalty card I can get my hands on, whereas he usually just pops in to one the supermarkets on his way back from work to pick up a few bits for dinner several times a week and he can't really be bothered with any of that!

I bought the house we live in 3 years ago and the mortgage is in my name only. The outstanding amount is much higher than what I would like it to be (£273,397.19 as of today) but I was limited as to the area/part of the country I could buy in due to my son's school as I didn't want to disturb his education. I have been dreaming of escaping to the country for ages though and it is definitely something we are not ruling out possibly even in as little as a couple of years' time when my mortgage fix ends in September 2025 (as a side note, my decision to go for a 5-year fix three years ago was one of the best decisions I've ever made and I feel so grateful for it in the current crazy times). The mortgage deal ending might be the reason why we will feel we have to move anyway (rather than simply deciding to follow our dream to have a more rural/relaxed lifestyle) as I dread to think how much my installments will go up by unless things improve substantially by then (although I'm trying to save and prepare myself for the likely increase as best as I can in case we are unable to sell right at that time or are unable to move for any other reason).

In any case, I do hope to get rid of that massive mortgage way sooner than age 68 as per my current mortgage term, and while the plan is to start overpaying by as much as I can once I've got rid of all my debts and met my savings objectives, realistically I am likely to also want to move somewhere cheaper soon-ish (in the grand scheme of things) and get rid of a big chunk of the mortgage that way too. It's not worth killing myself to be able to afford the London premium (we live in Kent but not far from London) without actually being able (or having the time or energy) to enjoy any of the perks that come with living so close to the capital. I would much rather just visit London for a day or a weekend trip to do something fun/go to the theatre or visit my friends and enjoy a much more relaxed lifestyle living elsewhere than feel like I have to constantly stretch myself financially just so I can afford to live here. I am also a bit of a crazy plant lady so would love to have a much bigger garden one day (while keeping the overall price of the property much lower hopefully).

My current total CC debt figure is £16,093.53 which is much higher than I would like it to be (but it is about £2,300 lower than it was in February when I resumed my journey towards FIRE with renewed focus and energy, after a period of a much more relaxed approach, having lost my financial mojo a bit). On the plus side, all of it is on 0% with repayment dates between October 2024 and June 2025 (after my most recent rejigging over the last couple of days) so there is some breathing space there.

I do also have a massive student loan balance, currently showing as £24,223.66, although it should be a little lower as my most recent payment - from my most recent salary, which I have already received - has not been deducted on the website yet. This is a debt I am really desperate to get rid of as it's something from a different lifetime in a way but which is still weighing heavily over me now financially (I took it out while doing my first degree which, while enjoyable, didn't lead to anything much employment wise, for a number of reasons, and I ended up retraining/doing another degree - with no additional amounts borrowed or fees incurred - after that). It is also currently charged at 5.5%, all the more reason to try and get rid of it as soon as possible (I will provide some details as to how I'm hoping to tackle this over the next couple of years in one of my posts to follow).

The other plus side with regard to the debts (apart from the dreaded student loan) is that I do also have some savings and investments (again, I will aim to provide some more detail on that soon). The money is all in various accounts but when I've recently added all the amounts up, I realised that the total figure is not far off from covering the total amount of my CC debt (I think it was around £15,200 but I will have another look again and calculate a more accurate figure), which was a great relief. 

I am soon to be between jobs (between careers even, in fact) - I have recently resigned from my job and am currently working through my notice period. This is again a whole other topic, best left for another post now probably, as this one is turning into an essay as it is! But this is one of the reasons why I'm holding onto my savings rather than simply paying most of my debts off using the savings, which I could do otherwise. I am going to need a decent emergency fund/cushion to see me though the beginning of this new chapter, should I need to rely on it. I will try to avoid depleting the savings though and/or adding to my debts to a significant degree over the next few months - I will explain what my plan is with regard to all that soon. 

I will also try and do an SOA although that is going to be a little tricky right now, with various amounts likely to fluctuate month to month in the near future, until things settle. 

While looking at/thinking about some of the amounts and issues mentioned above, over the last few days/weeks, and while preparing to start a diary on here, my original idea for the journey over the next few months/couple of years was to focus on repaying my current debts (once the work situation was all sorted) while also accepting that I would most likely have to either borrow more (or pay down significantly less) in order to meet some of my goals and objectives that have been kind of set in stone for a while. For example, my house needs renovating - even though we've been living here for nearly three years it still doesn't really feel like home to us (well, to me for sure), but the need for improvements to it still stands even if we were to move in a couple of years. So the way I saw it was that I would need to figure out the funds to do that (which most likely would have meant borrowing more or simply not reducing the current CC balances, apart from paying the minimum payments of course), while trying to live as frugally as possible.

However, while reading some of the other diaries (and posts on some of the other boards) over the last couple of days - last night even - I have noticed my mindset shifting. I have realised that with my current ratio of savings and debts (with my net CC debt being much lower than it seems at first), and with some savings accounts now paying decent (ish) interest rates, it dawned on me that perhaps with a bit of patience, an extra frugal attitude and with a slight change of approach and priorities, I might be closer to that tipping point along my FIRE journey - when everything might finally start to fall into place, with the snowflakes slowly starting to form a little baby snowball, as I move away from being in a net debt position to being able to build and grow my savings using compound interest etc - than I thought I was (or would be for a long time).

I think my main focus right now (with regard to spending or saving decisions) should be to work on becoming truly debt free, including getting rid of my student loan, with that 5.5% interest rate that hurts my eyes... (although of course I do appreciate that many people on here are in a much worse position, with much higher debts charged at much higher rates, so I am grateful for my situation even as it does make me feel uncomfortable and as I'm focusing on improving it). I need to be taking advantage of decent savings accounts and trying to save as much as possible (once on top of the job situation). While I am still an absolute eternity away from being able to support myself with passive income just from my savings and investments, rather than with income from a job I hate (as per the perfect form of FIRE), a girl can dream and it will definitely not be achieved or brought forward by borrowing more/holding off on paying net debt, even if I would be able to justify those expenses/decisions to myself (it would be wonderful to finally live in a nice, freshly renovated house for example).

So I have decided to change my approach as I noticed my mindset shifting - I want to prioritise becoming truly financially free above all else. From now on, as inspired by other forumites that do the same, I will attempt to only spend money (on things big or small) once I have earned it/saved up for it first. Yes, perhaps I will have to wait for that shiny 'new' house a fair bit longer but who knows, I might be able to become free a whole lot sooner as a result. That is definitely worth a sacrifice or two! 

I guess it does show that there is always something to improve on even if we already consider ourselves to be quite financially savvy and our mindsets are always evolving (or can evolve). I look forward to learning even more from everyone else on here, especially now I have finally decided to de-lurk!

Thank you if you have read this far. I hope you join me on my journey.

All the best to you all on your journeys too. We've got this!

outoftheviciouscircle

Welcome. Keeping a diary really is a great way to keep you focused.

Good Luck!!

WinterWarrior

Good luck, you can definitely do it. Every step is a step towards your goal.

[Deleted User]

What an incredible introduction! I have bookmarked and look forward to seeing your SOA.

everypennytowardsfire

@outoftheviciouscircle @WinterWarrior @[Deleted User]

Thank you all for your lovely comments. I thought I would have scared any would-be readers/contributors off with the length of that first post! Glad to see some of you have persevered and have not been completely put off! 😉

I will be back with some more posts soon. Off to read the weekly email now. I have been subscribing to the emails for years but haven't always been consistent with reading them properly or soon enough after receiving them to be able to take advantage of any time senstive offers that might have been of interest etc. I have recently decided to make it a weekly habit to read the emails on the evening they arrive and it's something I enjoy and look forward to. I almost see it as a bit of 'me time' (I realise that probably sounds a little sad 🤣). It makes me feel like I'm up to date with everything MSE/financial and even if I'm not able to act on some of the advice from the email right away, it does give me a chance to plan to do that over the rest of the week, as and when I can, and it hopefully means I won't miss out on any deals or any crucial advice I should be aware of.

Hope everyone is enjoying their evening, whatever you're doing 🙂

everypennytowardsfire

I got a message from DS earlier when I was at work asking which specific account within the savings/investing app that we both use I keep my money in as he had just realised that his has been sitting in a prize account that doesn't pay any interest, rather than an instant access account that does, ever since we both opened our accounts back in March. We did a little financial check-in at the time (towards the end of his first year of uni) and it turned out he still had a fair amount of his student loan money for the year left over, so I encouraged him to move some or all of it into an interest-paying savings account that he could access anytime, rather than letting it sit in a current account that doesn't pay anything. I told him about a couple of accounts that I use and was very pleased to find that he actually followed my advice and opened those same accounts straight away (the prize account was added on automatically). I do try to impart some of my financial 'wisdom' (hard-earned to say the least) onto him but I feel there is only so much you can say to a teenager or a young adult before it starts to sound like preaching or nagging so I aim to do it in moderation and I always prepare myself for the possibility of defeat. I feel very fortunate that despite the fact that I might not have set the best of examples for him when he was younger (as my various LBMs didn't come until later), he does seem to take on board what I say to him now, and while not a hardcore saver, he definitely has a much better approach to spending money than I ever did at his age (and for many years after). Some of what I do does seem to rub off on him, and his dad - who inherited a very frugal mindset from his exceptionally thrifty mum - would have been a good influence over the years too. So I was a little disappointed for him about the mix-up with the accounts although we did both find it quite funny as well. I mean, he could have received a message out of the blue telling him he'd won something in a draw he had no clue he was even in! Although sadly that didn't actually happen. Well, at least he's realised his mistake now and transferred most of his money into the correct account, while keeping a small balance in the prize account just in case, after I told him I do the same.

bigbeff

Welcome! Good luck with your journey! 

Just a thought, is your student loan one of the old style where they only take when you are earning a certain amount and wipe after so many years? Have a read of this… https://www.moneysavingexpert.com/students/student-loans-repay/ … if that’s the case, I’d just ignore it and pretend it isn’t there as payments will come out of your wages.

Good luck whatever you decide, it is doable! 

everypennytowardsfire

Thank you for your comment and the link @bigbeff - I will have a proper read tomorrow. 

Yes, it is one of those. I took it out in 2009. 

My rationale for wanting to get rid of it as soon as possible is that unless there is a big reduction in my earnings over the next 10 or so years, I am likely to repay it over that period, rather than it being written off in the future, and if that is the case then I would rather pay it off much sooner, instead of it weighing over me for all that time.

I didn't use to mind the SL quite as much when the interest was 1-1.5% but it's now 5.5% so the payments that get deducted from my wages don't seem to reduce the balance by as much as they used to. Every month around £200 is taken but the balance only goes down by about £100 because of the interest.

I know that one way of looking at the SL is to see it as just another tax but considering it's something I took out years ago to pay for a degree I don't even use to earn my salary, I really just want it gone. It would be amazing to be able to just keep that extra £200 every month (or get paid the same but work a little less) and not be constantly reminded about a decision I made as a much younger person, that hasn't turned out to be the smartest or the most beneficial, from a financial point of view at least. I feel like it's something that's holding me back. It is also very likely that unless I choose to make voluntary repayments, the balance will go up over the next few months (when my earnings are reduced, with either lower or no automatic deductions being taken for a while), and it's something I would really like to avoid.

When I first started repaying the loan, the balance was around £40K, and the fact that it is much lower now has only been possible due to the fact that I was working like crazy, for weeks and even months on end without a proper day off (I was either doing a normal day shift, a long day or a night shift, when I was 'off' before and after but didn't have an actual day off to relax properly or not be recovering after a night shift), for around 3 years in the run-up to buying the house. I was making a lot of money - on paper - but barely saw any of it as it got deducted as either tax or SL. My motivation was to maximise my annual income so that my payslips looked good - to increase my chances of being accepted for a mortgage - rather than the money itself (although I was of course saving for a deposit as well) so I kept going regardless. There were months when about £450-£500 was going towards the SL.

It was a very low point in my life, for a number of reasons. I was desperate to buy and knew I would have to do it on my own due to a complicated relationship situation and I was paying a high price mental health wise for that work schedule and the dream of owning my own home. I feel that if I allowed that balance to go up now, even by a tiny amount, it would invalidate all that effort that went towards it all at the time and the sacrifices I made, so I have promised myself that I would not let that happen. I am hoping to either keep reducing the balance slowly (but surely) or at the very least maintain it during any periods of lower earnings so that I don't feel like I'm letting myself down.

However, I am also mindful of the advantages the SL has over a standard loan and that I should only really voluntarily pay it off if I'm confident that I would never have to borrow money again in the future, as any other borrowing would likely be at a higher rate and repayments would continue regardless of how much I was earning. So my plan is to save as much money as I can towards repaying the SL but without actually physically paying it off for now. I will keep the money in a separate dedicated savings account, ideally one with a higher (or at the very least the same) rate. My goal is to never touch it other than in a real emergency or another situation where I would need to borrow money again. We'll see how it goes. 

I am also planning on doing similar with my mortgage OP money, rather than physically overpaying for now. As my mortgage is still thankfully fixed at 2.24% for another couple of years, it makes sense to keep the money in a savings account that pays a higher rate instead. I am using one of my regular saver accounts (7%) for that. I am also putting a small amount into my S&S ISA every month for the same purpose (although here the return is not guaranteed or predictable so it's a bit of a gamble).

bigbeff

Sounds like you have a good plan. I wish you luck in your journey and I'll be following. 

everypennytowardsfire

I have recently applied for a refund from my energy company as my account was around £525 in credit. I requested £378 back which was the maximum suggested amount that I could withdraw based on my predicted energy usage. I have just seen that it got paid into my bank account today. I have transferred it into my instant access savings account for now (which currently pays 4.51%).

I wasn't sure whether requesting a refund was the right thing to do but in the end I thought it made sense for two reasons:

1. Hopefully the money can earn me some interest until it's needed again (be it for future DDs or anything else really), rather than just sitting in their account earning them interest

2. By bringing my pre-paid balance down, I'm gaining a new incentive to try and limit our energy usage and keep our bills as low as possible so I don't end up simply repaying what I've withdrawn (whereas if I'd left the money there, I might have been tempted to have a more relaxed approach seeing as I'd already said bye to that money)

everypennytowardsfire

Been feeling a little deflated for most of the day today. Wishing I could fast forward some aspects of this journey. I know I need to be patient as I literally have no other choice. I can only progress as fast as I can. I have to believe that I will get where I want to be eventually as long as I remain disciplined and consistent with my approach. Many of the stories I've been reading about on here are proof of that and are a great source of inspiration and hope normally. That being said, I do sometimes struggle not to fall into the trap of imagining how different things could be now if I'd had my LBMs sooner, not made some of my stupid financial decisions when I was younger, heard of FIRE earlier etc... I know there is no use in focusing on regrets, and really I have also been quite lucky as my overall situation could be much, much worse, but I guess it's only human to not always be at your most upbeat. Just need to let it be and let it pass sometimes - no use in beating yourself up about not feeling the most positive about everything all the time.

I'd planned on doing a couple of posts on here today focusing on numbers but I felt that thinking about it all wasn't doing me any favours so I did some gardening instead. I do find gardening quite therapeutic so that helped a bit. I made the mistake of watching some Escape to the Country after dinner though and that definitely didn't! Oh well, tomorrow might be a better day.

Anyhow, I was able to make a start on my SOA tonight after all so I've just spent a couple of hours doing that. Hoping to finish it on Tuesday when I'm next off.