My Intentional Journey to Debt Freedom

Less_Talk_and_More_Action

I think you are right @twiggy86. Our mortgage rate has just gone up although not too extreme and still all affordable.  However (on my new app) it shows me that we are now reducing the capital by less each month due to the higher interest rate.  

What we have decided to do, therefore, is overpay the amount of that difference to keep us moving as we were before and leave it at that until everything else is paid.  This currently amounts to about £100 a month and we will do that from next month and, of course, that will be a tiny overpayment each month as the balance (and interest) decreases.  

I do think that’s right about the behaviour side.  I have read and listened to Dave Ramsey and agree with some of what is said.  We tried the approach of absolutely throwing everything at the debt etc and it worked in the short term but we couldn’t sustain it.  We are taking a smaller steps/consistent approach in order to change behaviour and build habits but I definitely agree about the motivation around getting rid of smaller debts and we had concluded that (me and Mr L) yesterday.  

Thanks so much for taking the trouble to comment - I love the views I get on here and applying them to my situation.  

L x 

Less_Talk_and_More_Action

Good ideas @jwil. I have been pondering along those lines myself.  I think having had bad skin when I was younger has lingered with me and I’ve been reluctant to try anything.   

I will start doing a bit of research as I have about 3 months of moisturiser so time to look.  

On a positive MSE beauty front - I have replaced my C*inique Clarifying Lotion (no 2) - £24.00 with S*burys Clarifying Toner - £3.50.  No adverse effects.  Very pleased with that as a starting point 

L x 

enthusiasticsaver

So much around clearing debt is mentality.  I think for you the £8k balance  transfer has taken away the urgency of dealing with that and you are now focusing on your husbands card which is still charging interest and the mortgage? 

I think you do need to do the pots still to stop you turning to credit to pay things like car insurance etc etc and the personal spends is a good idea too. 

I think I would focus on getting rid of your husbands card first as the interest is being charged on that but keep an eye on that £8k as although it has been moved to an interest free deal it is still debt.  When does the deal expire and how much are you paying monthly towards that card?  How much in total do you have to play with to pay the credit cards and overpay the mortgage?  I think I would be tempted to focus on repaying all the unsecured debt first before overpaying the mortgage unless the £8k deal is a long one and you will be able to clear it before it expires. 

PennysIntoPounds

The facial cloth I use. Don't know why it says mini so might be worth looking at other similar items, think the decent ones are all much of a muchness. I like mine though as its soft and stays soft even with multiple machine washes

https://www.amazon.co.uk/Original-Makeup-Eraser-Cleansing-Cloth/dp/B01LVZ6YZB/ref=sr_1_6?keywords=MakeUp+Eraser&qid=1701602557&sr=8-6

Fab work replacing Cliniq*e with Sainsers! Glad it's working out well for you

jwil

Great result with the toner!

Less_Talk_and_More_Action

Thanks for your insight @enthusiasticsaver.  I think you are right.  My husbands card only has £1500 on it but the interest is high (me saying “only” in that sentence probably illustrates partly why we are where we are).  We will transfer the bigger payment for my old card onto his and that will be gone by April.  Re the other card at 0% - it is a long interest free period - 25 months.  So I think the new plan is to focus on the loan (2.9% but still just under 3 years to go) after that. We will look to double the payments which will cut the term down to about 15 months (not exact as there will be an interest refund but no more than 15 months).  In the meantime we will pay the minimum on the 0% and then focus on that after.  

We are going make the small payment to the mortgage each month to counteract the interest rate rise but we can do that and still keep everything else okay.  

Totally agree re the pots and as soon as I thought about  maybe not doing them I knew it was the wrong thing. Personal spends are also part of losing the CC habit as well.  

We have a bit to play with each month - I include petrol in our main budget whereas I get money back for that from work and food could be trimmed as well.  I also leave a bit of a cushion (just in case - although not just in case I see something I want!!!  I’m going to review that as it’s probably not a great idea). 

This is our first real month taking this seriously and working to a budget with pots and following various ideas.  I am really learning from you all and massively appreciate the time people take to post. 

We are having a review next weekend and I’m planning to go back to the beginning and take notes so I can think about it all properly and we can decide what works and where we need to adjust for February.  

L x 

Less_Talk_and_More_Action

Thanks @PennysIntoPounds.  I’ve just had a look at that and put in my wish list.  I have lots of hot cloth cleanser (and cloths) so I will use all that first but I think this is the way to go so I appreciate the recommendation.  

I am very pleased with that saving @jwil especially as I have always loved that Clini*ue toner.  I think lots of the value brands are catching up to be honest.  

L x 

MFWannabe

Less_Talk_and_More_Action said:

Thanks for your insight @enthusiasticsaver.  I think you are right.  My husbands card only has £1500 on it but the interest is high (me saying “only” in that sentence probably illustrates partly why we are where we are).  We will transfer the bigger payment for my old card onto his and that will be gone by April.  Re the other card at 0% - it is a long interest free period - 25 months.  So I think the new plan is to focus on the loan (2.9% but still just under 3 years to go) after that. We will look to double the payments which will cut the term down to about 15 months (not exact as there will be an interest refund but no more than 15 months).  In the meantime we will pay the minimum on the 0% and then focus on that after.  

We are going make the small payment to the mortgage each month to counteract the interest rate rise but we can do that and still keep everything else okay.  

Totally agree re the pots and as soon as I thought about  maybe not doing them I knew it was the wrong thing. Personal spends are also part of losing the CC habit as well.  

We have a bit to play with each month - I include petrol in our main budget whereas I get money back for that from work and food could be trimmed as well.  I also leave a bit of a cushion (just in case - although not just in case I see something I want!!!  I’m going to review that as it’s probably not a great idea). 

This is our first real month taking this seriously and working to a budget with pots and following various ideas.  I am really learning from you all and massively appreciate the time people take to post. 

We are having a review next weekend and I’m planning to go back to the beginning and take notes so I can think about it all properly and we can decide what works and where we need to adjust for February.  

L x 

If you focus on the loan after husbands credit card and pay that off in 15 months would you be able to pay the other 0% interest card in the remaining 10 months? If not I’d be careful about overpaying the loan by so much as that could be wiped out by expensive credit card fees once the 0% runs out 
Do you have any savings? Emergency fund? If not I would build this up and you’ll get better rates on savings account and you won’t fall back into relying on credit again 

enthusiasticsaver

Given most savings accounts pay more than 2.9% at the moment (is that the apr or was that a flat rate with front loaded interest?) there is a case for building up savings as @MFWannabe suggests and letting the loan run its course. I get that psychologically though being debt free asap is appealing so it is whichever you and your husband feel comfortable with.

Less_Talk_and_More_Action

Thanks @MortgageFreeWanabe and @enthusiasticsaver.  

We would be able to finish off the credit card before the end of the interest free period even if we double up on the loan.   Mr L is ahead of me in the retirement stakes and he gets his state pension later this year which adds a good bit of income that we can use to accelerate our progress.  

At the moment we have about £1200 in a savings account that I am calling our EF.  I’m not using that for anything else unless I have to.   We are going to pay  £300/month off the 0% card.  That will be £4500 in 15 months.  That leaves just under £3500 to pay off in the remaining 10 months - the balance is just under £8000 to start.  I would hope that we could shift that sooner but even if we did £350 a month it would be clear.  

I think the loan is just something I would like to clear as quickly as possible.  We have pots for all the things I can think of and that will reduce excessive spending at times like Christmas. In addition we have car insurance, house ins, car maintenance , household etc so we have hopefully thought of most things.  

With the loan, I don’t have to commit to a fixed extra amount - I can overpay and gradually reduce the term but I would have the flexibility to not do that some months if there were other needs.  

Have I missed something obvious do you think?  I’m embarrassed to admit that I do have a really good income but have been just completely self indulgent in how I have spent it  and this process is to change those terrible habits or I’ll never be able to retire. Mr L is much lower maintenance than me.  I feel I am quite well- informed about finances but have never applied that to myself (in the same way I am informed about healthy eating……).  One of my nieces has a young child and she and her husband have a low income  but both work.  She is amazing with money and that makes me a bit ashamed to be honest. 

It’s really important to me to change and get this right - to make the most of the years that I am working and to have a happy retirement with the wonderful Mr L.  

I am so appreciative of you both sharing your thoughts and wisdom and I will be re-thinking all of this at the weekend when we sit down for our budget summit to review the month, consider all the advice and plan February.  Can’t believe this is only month one! 

L x