My Intentional Journey to Debt Freedom

enthusiasticsaver

Good idea to hold an end of month review. 

lucielle

Hope the meeting goes well. 

L

Less_Talk_and_More_Action

Hello everyone
Hope you have all had/are having a good weekend.
Mr L and I have had our budget review meeting for January/planning meeting for February.
That in itself is a novelty.  My normal habit was to list all the payments out of the account and then everything else was for anything else - no planning or thinking ahead.
So, the scores on the doors...... (and sorry in advance for the long post).

Things that went well:
- Applying and securing a 0% balance transfer for the majority of my credit card.  This means that all but about £3000 (across myself and Mr L's cards) is now on 0%.   Very pleased with that.
- All pots decided and the agreed amount of money put into all of them. More importantly that money is still in all of them!!!
- Just starting to have a focus and making plans.  Not everything went to plan but I am okay with that - this is a process not the endgame and I am trying to undo habits that I have had all of my adult life and replace them with ones that serve our long term goals.
- Posting almost every day since I started the diary.  I can't tell you what a difference that has made to me.  As well as getting all of your advice and guidance, just posting has reminded me every day that I need to work at this and being intentional involves thinking about things.
- £500 paid off my credit card.  We have a plan for the remaining £3000 and then will plan getting rid of the interest free amount.
- No new spending on any credit card. 
- I have started looking at reduced priced beauty product options - I can actually feel the mind shift in this area and am excited at looking for things that give good results but not at the price I previously paid.  Thank you to everyone that has offered suggestions - keep them coming.


Things that still need some work:
- Coffees related to work in some way (ie usually bought at a Mway service station).  £35 spent this month.   That is a very big improvement on the nearest comparable time period (Nov/Dec) - £105.   So that's good.  None of them purchased on the way to work - also good.  
- Personal spends.  We started off with one amount and then changed it mid-month.  We definitely havn't quite got this nailed so we have had a good chat about that and how it will work in February.  We are both on the same page at the start of the month so this should work better next month.  This is a totally new concept for us so we are okay with it taking a while to bed it.
- Food shopping.  Okay in one way but in another not so much.  I want to reduce our expenditure here.  We didn't exactly overspend but we had money left over from Christmas in that account and we spent that.  We also (from my review on the app) spend £30 at at local coffee shop (small, independent shop that we love) out of this account - and (the worst part) is that I totally don't remember spending that money.   So work to be done on this.  We have agreed a reduced budget to this account - we move it to another bank account and it is the only expenditure out of that account so we have complete clarity on what we spend.
- How we manage our main bank account.  Generally, i review all the direct debits etc to go out, add all of them up every month, look at what's left and deduct our day to day spending and then leave whatever is left in there to just sit around (and spend mostly).  That is exactly what i did at the beginning of January although some of the expenditure went to the pots etc.  But what always happens (and happened this month) is that "buffer" got spent as always - not always clear what on.  See below for plan.

Plan for February
- Not leave any money in our main bank account.  If my sums are wrong we have a £250 buffer (FD overdraft) which we never go into.  Any unaccounted for money will be transferred into another bank account we don't use and don't have any active cards for.   Ultimately, we can transfer the money easily if we need it, but there will be a decision to make if we want the money and we will have to decide to move it and just having that bit of distance from it seems useful.
- Be stricter with personal monies - Mr L in agreement with this so no deviation.
- Think about my motorway coffee habit -much better in January but going home from work is now the biggest problem.  I see this as easier than the morning habit as I have often driven home without stopping so I think this is a temporary bad habit.  I am pondering - I don't really need a coffee or something to eat at this time of day so will initially just try to drive straight home.  Any purchases will have to come from personal spends and eventually that will also stop me I think.  Really pleased with the morning plan - I take two coffees from home and a peanut butter sandwich - that has worked very well and no coffees or paninis purchased in January at this time.   So I'm halfway there!!!
- We have a plan to finish off the interest bearing CC's - last payment should be May but I would be okay if it stretched to June if something unforeseen happened.  It may be sooner if we take the utility credit out.
- Food - we have a budget of £300 and are perfectly capable of sticking to this so will plan and aim to do so.
- We have some big expenditure between now and June - car insurance in March, car service (probably April - I do a lot of miles so the car can need servicing x 3 a year) and an expensive dental crown for me in early June - we have a plan.
- Car insurance - we more or less have the money for this (or what we think it will be).  However, need to see what the actual cost is.  With no council tax in March that should be enough to pay anything over and above what we have put by already.
- Car service - this is an intermediate service (it alternates - intermediate/Full/intermediate) so about £190.  That will be covered by our car pot easily by the time it is due in April (might be a bit earlier as based on mileage but as I know what I am doing in advance I can estimate this reasonably accurately).  Not expecting to have to pay for anything else at that stage - tyres are all good and mostly replaced in the past 8 months, replaced brake pads and discs last year and some other expensive part that I couldn't name.  I get really good wear out of tyres and have only replaced them twice in my 135000 miles - mainly due to the vast majority of driving being on the motorway, less braking etc.  Same with the brake parts as well.  So we should be good to go on just servicing this year.
- Dental crown -  I am due some travel expenses back from work which are currently accumulating.  Different to my normal mileage.  I estimate this to be about £600 (that will be net) and so this will pay for most of my crown - I will be paid this at the end of April.  The crown is £750.  I will pay the rest and then I can claim just over £200 back with one of my work health plans.  Like lots of people now, i have a private dentist.  I did have an NHS one but had a really bad experience with that practice with a newly qualified dentist - they didn't deal with it very well so I left.  I am really happy where I am now, but they are not cheap!!!  I will need some other work doing as well but will be able to plan for that so nothing should come out of the blue.   Once I know more about that and am planning it, we will set up a pot for it (who is this person!).
- We have decided that in May we will remove our credit from our utility account (we are with the Octo people).  We have quite a lot of credit and overpay over the course of the year.   There is no point in that money sitting there when we have interest on a credit card - that may finish off the interest bearing cards sooner than anticipated.   We will still build up some credit over the summer and, for the first time. Mr L will get a winter fuel payment next winter which we will pay into our Octo people account.  So that feels a reasonable approach as well.  We could do it now, but we have probably 3 more high paying months and i would rather leave it there for the moment.

It feels good having the plans for the non-routine expenditure - I'm very much aware that we are £250 a month better off at the moment with no council tax but also no water (£70 a month over 8 months - finished in November.  Non metered) so it feels good to be ahead of that increase in April and not trying to sort it out then.  

All in all, I am pretty happy with January.  Was it perfect - absolutely not.  Loads more room for improvement.  But, the fact of planning, discussing, pivoting stuff etc etc is loads and loads more intentional than previously and that in itself is a massive improvement.  Mr L is on-board and  we have spoken about money much more than we normally do, which is all good.  

Enough of my rambling.  I havn't been paid yet for January (Wednesday) but I feel prepared for February, everything organised and we will see what it brings.

L x 

MFWannabe

It’s really good that you sit down and plan everything 
A couple of things that stand out for me: 
1) water rates seem really high, would you be better off with a meter? 

2) The credit in your utility account, if you’re paying interest on credit card you’d be better off taking this out now and paying it off the card, If you pay enough via direct debit to pay for your utilities then you don’t need credit in there 
3) Do you have a separate account for spends? If not open another account and transfer your spending money into there. I have a Chase account; one for spending money for groceries etc which helps me keep in budget and a savings account paying 4% 

beanielou

Well done. You have achieved so much. 

I was also going to suggest taking out some of the energy credit & paying off the interest bearing CC. 

You get the payment in about a week. 

foxgloves

Well done! That is such a good start. You are quite right when you say that this is a 'process'. It does take a while, not only for new reformed attitudes to become embedded, but also for the budget mechanics to be established in the optimum way. As the chief budgeter in the relationship, it took me 3 attempts to find methodology which worked, & I have continued to refine it over the years. I am thinking our past attitude to money & spending has been quite similar. I first got into debt as a 19-year old student (just too exciting moving to a big city) & although I now joke about my 24-year old overdraft, that is exactly what it was (& of course it was joined by other streams of credit including the evil flexiloan along the way) as I wasn't rid of it until my early 40s - the first debt I cleared once I'd finally had a proper LBM, rather than the odd flickers which promptly went off again as soon as a certain beauty counter launched its latest bonus time offer! It takes time to undo a lifetime of lax money habits & re-establish as a person who budgets, plans for the future & has financial goals. I have tweaked numbers of savings pots, amounts for personal spends, optimum grocery budget, as well as the actual nuts & bolts of writing up the monthly budget itself. While I now have a process which works well for us, nothing about it is cast in tablets of stone.....if something needs altering, or one of us suddenly thinks of a little something which might work better, then it is easy enough to perform a tweak. 
Your morning coffee/peanut butter sandwich routine seems to be going very much in the right direction. It's motivating when you add up what you have saved, isn't it? When we worked out in the early days of our reformation that we used to spend £2000 a year on lunches on our workdays.....well, is there ANY little lunchbreak trippette to M&S foodhall, or cafe worth blowing that amount out of one's budget?
Re coffee on your homeward bound trip? Could this have become a habit more than anything? It's surprising how these can get ingrained. Years ago, there was a petrol station which I always used first thing to fill my car up on my drive to work. I always bought myself a chocolate bar there. It was always the same chocolate bar, & oddly, one of which I am not even particularly fond. Somehow, I just got into a loop of "Stop, Petrol, buy this boring chocolate bar' for no real reason. It stopped when regular encounters with an annoying male, meant I changed to another petrol station to avoid him & found that the boring chocolate bar purchases automatically stopped! Sometimes things do just become habit, don't they?
Well, it does sound as though you have had an impressively positive start to your new financial regimes this month, so I am wishing you well with February! You are right that regular posting does help. We no longer have any debt or mortgage to pay, but I still post because it keeps me accountable in staying debt-free. There is always new stuff to learn from people on here, who are a friendly bunch & I think we all try to motivate each other, really.
F x

PennysIntoPounds

That is a magnificent list and I am very pleased for you indeed.

Would it be worth switching the bank account you don't use to one that has a money incentive to switch, so you get a hundred quid or so you can throw at the interest earning debt?

jwil

You've made a great start, well done!  Good luck for February.

PennysIntoPounds

I just looked it up and it seems as if only TSB is doing the bribe at the mo and that ends Weds, but if you don't want to do that there's also other info about e.g. current accounts giving cashback which might be very handy since you have big spends like car and dentist on the horizon (obviously I don't know how reliable these things are so do research carefully!) 

https://www.moneysavingexpert.com/banking/compare-best-bank-accounts/#switch

Less_Talk_and_More_Action

Thanks so much for all the comments everyone.  I’m going to read them properly (just skimmed over) and reply tomorrow.  I appreciate the feedback so much and I want to digest it properly.   We’re popping over to friends for coffee shortly - walking distance so a nice end of weekend catch up.  

See you all tomorrow.  

L x