My Intentional Journey to Debt Freedom

PennysIntoPounds

Just seen there are new bank switching deals available if you're still considering that

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

Less_Talk_and_More_Action

Hi everyone
Thanks for all your comments.  This is probably going to be a long post (be warned!).  Busy busy week at work so not much time to post but I am catching up now.  Lots happening on the money saving front here as follows:

General finances:
Mr L and I have had a really good discussion this morning and have decided to change some things about our approach as it stands at the moment. We are going to:
- Carry on saving into the specific pot for our Silver Wedding and Christmas.
- Have one other pot under the heading of Emergency Fund.  Mentally (at the moment) I am finding lots of pots challenging and it is easier to have it in one place.  This is already at £1100 and when it gets to £2000 I am going to leave it at that and re-purpose the money that was in pots towards interest bearing debt.  
- We discussed this for quite a long time - we both understand and agree with the approach of pots and sinking funds and definitely see ourselves all-in for this in the future.  But whilst we still have debt on which we are paying interest, I don't see the benefit of having money sitting there as insurance against something that might not happen.  But (and it is a big BUT) I definitely get the point of breaking the credit card habit - hence we are going for an emergency fund of £2000 to hedge against the unexpected.  We are comfortable on this - all our domestic appliances are fairly new, our car is well looked after and already has new tyres and brake discs/pads from last year, we have good insurance for the dog and the excess would be easily covered by 25% of the emergency fund.
- I think the bottom line is we are just not at the point in our journey which enables the final approach to be in place (does that make sense - it does in my head).  I mean that this system (pots etc) is what I expect us to be doing at the end and at the moment we need a slightly different approach.
- We have agreed we will re-visit this every couple of months and we will have Mr L's state pension to add to the mix in four months which will make quite a bit of difference as well - although we have a plan for that - see below.

Car Insurance
- We have gone round in circles on this.  We have had several quotes better than our existing insurer - I am not willing to take the gamble on the very cheap ones - I drive an awful lot of miles every year so the chances of some kind of accident - even a shunt - are higher probably.  I don't want to deal with a live chat rather than a person.  The cheapest quote did have lots of good reviews on Trustpilot and a good Defactq (sorry - spelling) rating but all the one star reviews related to claims which would be the one part that I would want to work properly.
- I had a good experience with a claim with our current insurers but it was about 6 years ago.  However, one of the salon assistants when I went to get my hair done (the hair is non-negotiable from an MSE point of view) had her car written off before Christmas and she is with DL and said they were excellent.  As that is much more recent experience than me and I trust her opinion, having known her for a number of years, that has cemented my view that we will stay where we are.
- We had a couple of quotes from other big names that were a little better than DL but not enough to persuade me to move.
- I am happy with this decision - I totally recognise that i could have saved money here but I also know myself and know that if I had gone for a cheap and completely unknown (at least to me and everyone else I have asked) insurer would cause me a lot of stress and with all the travelling I do, I don't need to add that to it.  Decision made.

Credit cards
- I had decided to take all your advice from many posts ago and take back my credit from Octopus and pay towards my card.  At the point we decided to do this, Octopus decided to reduce our DD from £200 to £107 (we submit very regular meter readings but don't have a smart meter).  I then increased it back to £200 as that's what we want to pay (we may revise at the end of the summer) at which point the app says we can't take a refund until our account is back in order - despite the nearly £700 in credit!!!  I'll give it a few more days but will contact them if it doesn't correct itself.  We've taken a refund before via the app with no problems.
- I have some outstanding tax due back on mileage and some other mileage to come back- that's going straight off my card.
- We anticipate my card will be gone by the beginning of May - I had thought sooner but it was more than I thought it was after the transfer.  That timescale would be good.  We then have a bit on Mr L's card but should be clear of all of the interest paying CC debt by July which is great.  Onto the interest free card and the loan.  

Loan
- We are going nuclear on this and when Mr L's state pension comes in (every 4 weeks from July) we are going to start paying the loan off early - that extra money each month will shorten the term to mid 2025 instead of beginning of 2027.   As this is extra money it doesn't have any impact on anything else and we thought if we did this before we got used to having it, that would work well.  We are paying interest on the loan - albeit a low amount as it was taken out for house stuff before everything went haywire with interest rates.

Other
- I have set up a payment which will pay off the interest free CC by the time the 0% period ends so I can forget about that really.
- Moisturiser - the search continues.  I like the Weled* Skin Food light I spoke about before and will use it all up but it isn't proving as moisturising as I want.  I also want an SPF.  Someone has recommended Cere V facial moisturiser which is SPF50.  It is a little more expensive than the W stuff but is on 3 for 2 at boots at the moment.  Has anyone else used this?  I'm not rushing - I'll use up what I have and still have odds and ends of other stuff.
- I have done well on the buying coffee on the way to and from work by which I mean I havn't bought much - about £8 this month so far which is a massive improvement.
- Personal spends - we have temporarily abandoned this (again, I think this is something for when we are debt free rather than now) in favour of a joint entertainment pot - this has worked well this month and we will keep it under review
- Mortgage - once the interest paying CC's are gone we are going to set up an overpayment each month.  Everything else will be under control and we will be able to afford it at that point.  Once the loan is repaid we will be putting a large amount to overpayments each month to try and reduce it as quickly as possible.  We will re-visit the sinking funds once the cards are paid off in July and set up something for next year's car insurance if nothing else - we will still have about 8 months so plenty of time to accumulate it and I'll allow extra as it will no doubt go up again!!

@PennysIntoPounds and anyone else - I like the thought of the bank switching but it makes my brain hurt.  How do people do it - do you switch your main bank account or how does it work?  I see posts where people have made loads of money but I just don't get it to be honest.  We have switched our main bank account twice and I obviously understand the process but I don't get how you do it without moving everything which would do my head in to be honest.

My brain is exhausted now.  I can't believe how much my thinking has developed over the past 8 weeks or so - I do definitely feel that things are clicking in and things I had to think about (driving past the drive thru for example) are becoming more automatic.  I havn't made a single purchase that I havn't thought about (massive improvement for this impulse purchaser) and the intentional part of my journey title is definitely getting there.  We were saying this morning that despite still having a way to go, we are both on board and have a plan and are really positive.

One of the other things that I have improved a lot is my mindset - I am a bit of a negative person at times in terms of having a lot of regret for the financial actions and mistakes of the past.  We could have paid our mortgage off twice for what we have wasted over the years but I genuinely feel that I have moved on - I know there is no point dwelling on it but it has been hard not to.  Having a proper plan and process, posting on here, all the support and encouragement and the re-visiting and amending plans as they work or don't work has been so positive for me.   Long way to go but for the first time in years I am optimistic that we will get there.

I have some of your threads still to catch up on - I love reading them all.  Next week l am likely not to catch up until the weekend again as I have a few days away.

Enjoy the rest of your weekend everyone.

L x

beanielou

Some great points in your post. 

My only thought would be to keep your EF at the current level til the interest bearing card is gone. 

Bank switching is so easy & and you basically don’t have to do anything. 

I am hoping to do one soon. 

foxgloves

I also find myself thinking about the silly amounts of money I have wasted in the past. I know I've taken a comedic approach to some of my many 'debtisodes' in my previous diary, but now that I am a reformed character, it does still sometimes annoy me that I failed to put even a small amount into monthly savings, because this would have been perfectly possible. I think that while regrets are natural, there is no sense in dwelling on it. That ship.has sailed, has it not, & at least I did reform my bad habits early enough to be getting us into a much better position for retirement. 
It was interesting hearing about how your partner's state pension will soon add into the mix. I have also been thinking about this because while I am still a fair few years away from my state pension, I am older than Mr F so will start getting it when he is still working, as well as my work pension, which I haven't entirely decided when to take. It will be interesting looking at how this affects things.
It's good that you are both discussing different methods of achieving your financial goals. ....& your drive-thru coffee expenditure is looking much better! 
F x

jwil

All sounds good!

I don't do pots either, I prefer to have everything in a couple of accounts.  It might change in the future, but that works for me now.

In terms of switching, you can just get a 'spare' account, make sure it's got a couple of minor DDs in it (even just a charity donation of a couple of £) and then you can just keep switching this account.  If you and Mr L both do it then you can both get the switch bonuses.

I don't like to switch my main wage account, and only occasionally do our joint account, but I have another account which I'm happy to move as and when.

enthusiasticsaver

I think you are right to make a few tweaks to your plan bearing in mind you still have debt.  A £2k emergency fund is fine and saving for Christmas and your silver wedding is enough to be going on with as well as sorting out your debt.  

I have just renewed my car insurance and paid a bit extra to go with an insurer I know. It is still massively cheaper than my existing insurer AA who had the nerve to hike my premium to over £550 when last year it was £235.  I have changed my car so obviously the new car is worth more but there is no justification for that.  I have just paid £250 to LV today for a fully comp policy so less than half what AA quoted me. Not used DL for a long time. I keep forgetting them as they do not come up on comparison sites. 

Well done on reducing impulse purchases. 

PennysIntoPounds

Sensible emergency pot and foreseeable event spends pot then focus on interest bearing debts sounds a very sensible approach

As does your car insurance decision, being mse isn't necessarily about getting the cheapest deal (though that's great when it's plausible!) but about getting the best deal for you to feel secure in the circumstances. And often just making a decision based on having done reasonable research is an absolute win, rather than being all in a dither and missing opportunities/not being able to get your finances straight

Exciting to be able to see where you can get rid of debt and focus on others, May will be here in no time! Wise to chuck extra pension money at it before you get used to having it imo

Re moisturiser, as I think I've mentioned I use Olay Day Lotion moisturiser which isn't very expensive and has SPF15 and UVA/B protection- the product doesn't particularly advertise that it's got UV protection, I presume because they want people to pay for the more expensive versions! It's really light and a little goes a long way. I'm wondering if I should find a SPF30 now I'm middle aged but there are also schools of thought that say we don't get enough sun in Britain as it is and that SPF15 for normal daily use is quite enough...

On bank switching, I have to admit to not being very mse on this as my circumstances mean I'm anxious about changing accounts around as I don't want to make a mistake that could impact me being on our mortgage when we hopefully get one as I'm a dire enough investment as it is! I don't feel well informed or time rich enough to be able to learn the difference between what is a non or soft or hard credit check and my absolute priority is to be able to get a roof over my head that I have some rights over, so I'm steering clear for now. Mr PIP has done it before though and it all went smoothly, but he had an account that fulfilled the criteria of having a certain amount of direct debits going out and a certain amount of money going in. A hundred quid or so is a nice Brucie Bonus but not life changing enough for you to be stressed by it, so if you're not feeling it then save your energy for focusing on your actual plans

I know it's easy to say, but none of us know what twists and turns life would have taken had we made different decisions. You are at this point now, with a home, a job, decent health, a lovely partner, and a plan for how you want things to be. You're doing great x

(And you thought your post was long!)

Cheery_Daff

Good that you are trying things out and making the best decisions for you! 😊

I've only started doing bank switching in the last few months - I was always put off because I didn't want to switch my main account. But you don't have to! 

I had a spare current account with existing bank (easy to open if you don't already have one) and I just switched that. Easy peasy. MSE lists the conditions, eg have 2 direct debits, or pay in a certain amount in the first month (which you can immediately transfer back out).

There's a Lloyds one open at the minute - that's the first one I did and it was very straightforward. There's usually a thread about each switch on the Banking forum.

Worst that can happen is that you mess up the conditions and don't get the switch bonus, but if you read carefully that won't happen. 

I was scared thinking the bank would think badly of me 😂 but in reality they don't think of you at all.

I will warn you it will likely generate a lot of post! We've done both of us at the same time for each switch, so you get confirmation letters, new bank cards, pin numbers etc - often arriving in a big pile on the same day here as we're in the middle of nowhere and the postie doesn't come every day.

Good luck! 

Less_Talk_and_More_Action

Thank you for your comments @beanielou, @jwil, @PennysIntoPounds, @Cheery_Daff, @enthusiasticsaver and @foxgloves.  I appreciate everyone who takes the time to read and post.
I've just read my very long post again and I am really positive about it all.  I'm sure it will all change again as well, but I know that it will all be thought through and considered.

Money saving actions today

Car Insurance - bitten the bullet and paid it this morning.  It is now done and I am not going to think about it. We are going to start a pot for next years in August when the interest paying CC's are done and will budget for about 20% higher next year.  If it's more than that, the difference shouldn't be too much and the two non- council tax paying months will pay that.

Bank switching - hmmm.  Still not sure I can cope with this but we do have a spare account lying around so I am going to look into it.  One of the reasons is that it actually would suit us to have a different account and we probably would use it for a while.  At the moment, the spare account is dormant - we don't have any cards to use on it but it is useful on the app to park money in if I want it out of the way.  I'll look into it. If it starts to be too annoying I'll just abandon.

Submitted a tax back form to HMRC this morning for tax relief on mileage - I regularly forget to do this (this is for tax year 22/23) so pleased to have that out of the way.

Set up the regular payment to the 0% credit card so it pays off in the time period of the rate.  Glad to have done this as I don't really need to think about this now.

We went and had a coffee this morning but had loyalty card stamps for one of them and the other one cost us 2.50 between us but we had a nice time with a couple of dog-walking friends for an hour.

Thanks for the moisturiser info @PennysIntoPounds I'll have a look at Olay.  I saw some in the supermarket this morning that was a good price but no SPF. 
We are doing completely plant based at home for lent (alongside the 30 plants a week stuff for the microbiome) with the hope of carrying on after.   As we are veggie anyway and try and eat lots of plants hopefully this won't be too hard.  My food intake has veered to the ultra-processed side recently and too much cheese, butter etc. I have quite a bit of weight to lose, so obviously am not a saint on the clean eating front but generally do better and feel better when we do plant based at home.  I still do a bit veggie when out as some menus aren't great but as we don't eat out loads this seems a reasonable compromise.  I will be interested to see if this has any impact on my skin generally which has also not looked great in the past few weeks.  Generally i have pretty reasonable skin but looking dull lately.  Partly winter no doubt but we'll see how it goes.  I have a Weleda Skin Food moisturiser to use up after the one I'm on so will keep going with that and see where i'm up to in a month or so.

Anyhow, probably enough for a Sunday.  Mr L has had a marathon cooking session today from a recipe book we have had for a while but which we havn't really used.  Enough food for the week is more or less sorted.  I am away for four days and usually that is a reason to eat loads of rubbish at work's expense.  This time I am taking cooked lunches for each day and some fruit and nuts for the evening in case the hotel food is rubbish - havn't stayed there for a while.  They are nice though so I'm sure I could have a salad sandwich if all else fails.  I am determined to stay plant based whilst there - I'm away a bit too often to see it all as an occasional treat!

Enjoy your Sunday afternoon and the week ahead.  Probably won't post much until later in the week or next weekend but I have probably rambled on this weekend enough to last a while!!

L x 

EssexHebridean

Just look at you two sitting down and having a full on financial planning conversation?! 

On the pots - a lot of ours are for the "big annuals" as we pay things like insurances annually and not monthly, then we also save for things like holiday. So our car  maintenance pot includes the insurance and servicing for both cars, MoT Tests, depreciable items like tyres, wiper blades etc, things like screenwash and any cleaning costs (as it's not easy for us to clean cars at home so we usually take them to the jetwash) plus contingency in case of any bits of work needing done or whatever.