Accountable

Pinknails101

September! It always feels like the start of a new year to me, I'm not sure why, perhaps its the new school year that's embedded in me (even though that was a long time ago!), Or perhaps it's because my daughter starts secondary school tomorrow! Eeeeek!

I've decided to keep my own debt free diary, to hold myself accountable. I'm not even sure if anyone will read my diary, but bonus if someone does and let's me know if I'm on the right path

Since I was 18 I have been in debt, I'm 32 now. It's been a continuous cycle unfortunately, in debt, out of debt, in debt, out of debt... The common denominator is myself, and that I never learn.

However, I've reached a point where I am tired of being sick and tired of it all.

Admittedly I haven't been good with money over the years, and found myself spending unnecessarily, perhaps at the time it was increasing my dopamine??? But in reality I have nothing to show for it other than regret, sleepless nights and stress.

But the light at the end of the tunnel is approaching!! On the 2nd September 2024 I made my final payment to clear my Council Tax arrears, and honestly it is such a weight off my shoulders. So moving forward I'll no longer paying £269pm (£100pm arrears).

This is my income:

Wages: £2,290.41

UC: £200.00

CHB: £110.93

This is my expenditure:

Rent: £602.77

Council Tax: £169

Gas: £50

Electric: £50

Water: £23.08

TV License: £13.25

Internet: £26

My Mobile: £10

Daughters Mobile: £10

Daughters Pocket Money: £30

Daughters NS&I: £30

Car Tax: £16.62

Car Insurance: £111.92

Diesel: £100

Netflix: £10.99

Spotify: £10.99

Disney+: £7.99

Microsoft: £5.99

BW Legal: £5

Cabot: £13

Lantern: £10

Monzo Credit Card: £162.43

So once I've payed all of my bills I have £1,131.97 disposable, which is insane.

My plan is each month is to do the following (up until December):

Emergency Fund: £250

Christmas/Birthdays: £300

Debts: £300

Allowance ("fun money"): £280 so £70pw

Just in case/rollover (incase my maths is wrong or i've missed something): £100

Now onto the debts;

BW Legal: £1,758.24

Cabot: £93.90

Lantern: £2142.98

Monzo Credit Card: £826.05

After December, when I'm no longing saving for Christmas, I will obviously be throwing more money at my debts, and I've worked it all out that I can get my debts cleared by May 2025.

Now I know I could throw all my money at my debts first, but what I wanted to do was save £1000 for an Emergency Fund and save money for Christmas, so that if something comes up (new tyres for example) and Christmas, it isn't then put on a Credit Card.

I have a Monzo Flex, with a limit of £1500, £826.05 spent on it so far. I pay in 3 so that it is 0% interest. Octobers payment will be higher than Septembers as I've made some additional payments to Septembers already.

I'm also going to try and do as many no spend days as I can throughout the month of September, no more trips to Starbucks for an Iced Caramel Latte (as lovely as they are) and start saying no to social events!

I really want this to work, and I tend to update here as much as I can just so I can sit and read it to see how far I've come!

But if anyone does read this, and has some tips and tricks, I would really appreciate it

xoxo

Sarahwithlove

That's one hell of a disposable income to have been spending with not much to show for it. 

First thing that jumps out at me is your car insurance, are you a fairly new driver? Points? Accident?

£900 for Xmas seems alot, who do you have to buy for? Give yourself a budget per person and remember its the thought that counts. Maybe even come to am agreement to not do presents with some adult friends/family. 

EF is a good idea. Is any of your debt charging interest? I'd recommend making a list of annual expenses to consider saving for after Xmas so that you aren't having to rely on credit for it next year. 

Pinknails101

Hi @Sarahwithlove

Apologies I probably should've explained this a bit better, 12/18months ago I was living paycheck to paycheck. Climbed the corporate ladder and got myself a pay rise, managed to reduce some of my expenditure; paid off some lowells, phone contract was paid off, council tax paid off this month, changed internet provider etc. Stuff like that, so its only really the past 2/3 months or so where I've got the disposable. 

Believe it or not I've been driving for nearly 10 years, no points, no accidents, unfortunately I don't have a desirable postcode, and my car is known for getting stolen, I think my error was leaving it very last minute to find a policy, there were some cheaper ones, but they almost seemed too good to be true? Do you think its worth changing policy mid-way through and lose the years no claim?

I completely agree to set a budget for each person, its only for my daughter, dad, and OH (we don't live together) and my dad has a significant birthday in November. I think what my issue is; is that I'm a people pleaser, I always end up going above and beyond when in reality I don't need to.

So the debts defaulted years ago, and the D/D set up for them are very low as that was all I could afford at the time. Now that i'm in a position to clear them, I want to get them gone as soon as possible!

My plan for next year, once i've cleared my debts, is to give myself £70pw allowance, and just save the rest. I was thinking of putting it into a "somewhat decent" interest savings account, or do you think its worth having separate pots for different things, i/e MOT/Xmas 25 things like that?

Sarahwithlove

Pinknails101 said:

Hi @Sarahwithlove

Apologies I probably should've explained this a bit better, 12/18months ago I was living paycheck to paycheck. Climbed the corporate ladder and got myself a pay rise, managed to reduce some of my expenditure; paid off some lowells, phone contract was paid off, council tax paid off this month, changed internet provider etc. Stuff like that, so its only really the past 2/3 months or so where I've got the disposable. 

Believe it or not I've been driving for nearly 10 years, no points, no accidents, unfortunately I don't have a desirable postcode, and my car is known for getting stolen, I think my error was leaving it very last minute to find a policy, there were some cheaper ones, but they almost seemed too good to be true? Do you think its worth changing policy mid-way through and lose the years no claim?

I completely agree to set a budget for each person, its only for my daughter, dad, and OH (we don't live together) and my dad has a significant birthday in November. I think what my issue is; is that I'm a people pleaser, I always end up going above and beyond when in reality I don't need to.

So the debts defaulted years ago, and the D/D set up for them are very low as that was all I could afford at the time. Now that i'm in a position to clear them, I want to get them gone as soon as possible!

My plan for next year, once i've cleared my debts, is to give myself £70pw allowance, and just save the rest. I was thinking of putting it into a "somewhat decent" interest savings account, or do you think its worth having separate pots for different things, i/e MOT/Xmas 25 things like that?

Well done on the promotion that's great and once the debt is gone will put you I'm a good position financially. Is the property private rented or council? 

Is it your car specifically or the model? Maybe when you don't have debt you'll need to consider purchasing a different one. Do you have 10 years no claim bonus? If so once you get to 10 anything above that doesn't really matter too much. How long until your policy is due for renewal? Definitely make sure you apply in the right time frame, can't remember exactly when it is. Probably should check as mines due in November. Just checked 26 days before renewal is the best time. 

Yes it's easy to do that. But I'd suggest setting rules for presents along with a sensible budget. My mums was always something to eat (selection pack), something to wear (usually pjs or something for xmas lunch), something to do (game/activity), something that smells nice (smelly set or candle) and something we wanted (from our wishlist). I always appreciated them more as I had less presents and it wasn't then just lost in the pile and forgotten about. 

I wouldn't make any overpayments until you have some money saved up and then send a final settlement letter offering a small lump sum to settle it. I can't remember what the recommended percentage is but I'm sure someone else will be able to advise! Even if they reject it they may come back with their own which is usually less than the full amount. 

Tbh with your disposable income I would probably just say allow £350 a month so 70 x 5 as generally 4.5 weeks and then set up a standing order for a fixed amount but leave a buffer in your main account or have an EF thats easy access. You could maybe split it. Some into a more accessible account and some into something like premium bonds where you are less likely to spend it. You want to have a good balance of short term saving goals and long term ones. I.e a new car, deposit on property maybe? Think long term goals as well as short term. 

[Deleted User]

I actually think £900 for Christmas is reasonable. It probably includes other things too. I budget about £1000 a year. That includes updating decoration and presents for 25 people/family groups. I buy my cards and wrapping paper in the after Christmas sales and save quite a bit there. I have a Christmas savings pot which receives about 85 per month.

You have a reasonable income and a sustainable plan. Well done!

Best wishes.

Pinknails101

@Sarahwithlove Thank you! The property is rented through HA, I’ve been here for a good while, so there is a good discount in the future should I ever buy it…

It’s the model, potentioally in the future I may look at getting a different car, however it’s a good run around, low mileage etc, thankfully I’m not one that’s particualry bothered about cars, as long as it gets me from A – B im quite happy. I think I’ve got about another 6-7 months or so but I’m going to set myself a reminder to get a new policy at the right time!

I think that’s so lovely what your mum did at Christmas, and I can completely understand why!

I didn’t know if offering a settlement was worse because you don’t pay the full amount back? I could be wrong? I mean as it stands currently it doesn’t really matter because my credit rating is in tatters anyway, which is another thing I’m trying to improve, but to look at it properly with Experian is like £15pm which I think is ridiculous.

I know there’s other ones out there, but I sometimes I think they don’t give the full story?

Thank you, I’m glad you suggested the £350, I didn’t take into consideration that not every month is 4 weeks, it is usually a little over isn’t it.

I would like to buy a house at some point, so I would just be saving for that; albeit I don’t think I’d have to put a deposit down if I bought my current rented house, which logistically would be the thing to do. I’m quite a way off that yet, so I’m not thinking about it too much. But a holiday would be nice 😊

@[Deleted User] Yeah I always find that I end up spending more than anticipated at Christmas, so I suppose it would be nice to have that buffer. I’ll definitely be getting the wrapping paper as soon as the sales start! I don’t know why I haven’t ever done that before.

Thank you! Just need to start putting plans into action.

 

On another note, the plan for the no spend days hasn’t gone very well already. It hasn’t been much, just odds and sods… I think I might set myself up a wishlist, write down what I want in the moment, and then relook at it a week later and see if I still want it.

I suppose it also comes down to; do you actually need this?! But hey, it’s a learning curve and hopefully I can nail it sooner rather than later 😊

Phoned the Council Tax this morning, just to confirm that the arrears have been paid off and they won’t be taking an extra £100 next pay day, and they said they won’t so that’s a little win !

Just remembered; I’m paying back £70pm in my UC for an overpayment I had on Tax Credits years ago…. Think there’s still a couple of grand outstanding ☹ Need to phone them and find out… would also like that gone sooner rather than later; but it isn’t something that’s on my credit file; does anyone know if it can ever end up on there?

Sarahwithlove

Pinknails101 said:

@Sarahwithlove Thank you! The property is rented through HA, I’ve been here for a good while, so there is a good discount in the future should I ever buy it…

It’s the model, potentioally in the future I may look at getting a different car, however it’s a good run around, low mileage etc, thankfully I’m not one that’s particualry bothered about cars, as long as it gets me from A – B im quite happy. I think I’ve got about another 6-7 months or so but I’m going to set myself a reminder to get a new policy at the right time!

I think that’s so lovely what your mum did at Christmas, and I can completely understand why!

I didn’t know if offering a settlement was worse because you don’t pay the full amount back? I could be wrong? I mean as it stands currently it doesn’t really matter because my credit rating is in tatters anyway, which is another thing I’m trying to improve, but to look at it properly with Experian is like £15pm which I think is ridiculous.

I know there’s other ones out there, but I sometimes I think they don’t give the full story?

Thank you, I’m glad you suggested the £350, I didn’t take into consideration that not every month is 4 weeks, it is usually a little over isn’t it.

Just remembered; I’m paying back £70pm in my UC for an overpayment I had on Tax Credits years ago…. Think there’s still a couple of grand outstanding ☹ Need to phone them and find out… would also like that gone sooner rather than later; but it isn’t something that’s on my credit file; does anyone know if it can ever end up on there?

Ref tax credits, only way would be on credit file is if you stopped receiving a benefit they could deduct from and didn't put an alternative payment plan in place. 

I did wonder if was HA and you'd be able to buy at reduced rate. Would be a nice option later down the line. Whilst you wouldn't need a deposit necessarily you would need solcitors costs etc. So you'd need to eventually save up for that. even if it doesnt become your forever home you could buy it, stay long enough that theres no money to pay back to HA upon sale and then buy somewhere else. The massive discount you get for renting it would be silly to miss out on if your goal is to own a property.

Hopefully if you time car insurance right next time and try save up for annual cost it will be cheaper. You could always do a comparison for it to start in 26 days time so you have a rough amount to save up. Also if you know it would save you alot of money you can consider if worth losing the years no claims. 

Yes that's problem with a weekly amount if you have that 5th week and haven't budgeted for it. I get paid monthly so budget everything monthly. If I know I have something planned I allow for that from my monthly budget and then see how many weekends it has to last me and divide remaining by that to see what money I have free each weekend. Helps me to make sure I have enough funds to last the month. Especially if have an expensive day out planned. 

Settlements don't damage your credit score. It's the initial default that does. Also remember that the total they charge will have added interest and fees. Overall you still probably end up paying them more than the original owed amount before all the extras. 

I use the mse credit club and clearscore myself. Mse you can view a fairly detailed report for free on it. 

[Deleted User]

I have now bookmarked your thread and look forward to reading about your future progress.
Is it your dad, yourself and your daughter living in the same household? Do you receive any other support for your child?
Are you paying into a pension?
Best wishes.

jokono

to look at it properly with Experian is like £15pm which I think is ridiculous. I know there’s other ones out there, but I sometimes I think they don’t give the full story?

Not all banks/ lender report to all three credit agencies, but most do. Clearscore and MSE/ Credit Karma are just as good as Experian.

Pinknails101 said:

Just remembered; I’m paying back £70pm in my UC for an overpayment I had on Tax Credits years ago…. Think there’s still a couple of grand outstanding ☹ Need to phone them and find out… would also like that gone sooner rather than later; but it isn’t something that’s on my credit file; does anyone know if it can ever end up on there?

I've just finished paying for Tax credits, it took over 8 years and it was never reported to the credit agencies. Like @Sarahwithlove says, as long as you keep paying the £70, you're safe. They migth call you to review the payments at some point, but I think £70 is above the minimum you can pay without giving them income/ expenses details. No interest so you can leave it running or increase the payment once the debt is gone.

I've been reading diaries for a long time (mostly lurking) and you're one of the youngest here, well done! You have a good head start, take advantage of it!

Pinknails101

Thank you @Sarahwithlove that makes sense.

That’s what I was thinking, its kind of a no brainer really in regards to the HA even if it is a little while away yet.

I get paid monthly too; but I know what I’m like, if I give myself £350 for the month, it won’t last the month, so I though if I break it down as a weekly allowance that should suit me better, I hope that makes sense? Haha

Right ok, thank you for clarifying that. So I’m aware that defaults sit on your credit file for like 6 years I think it is? Do you know if it is 6 years from the day it went on, or is it 6 years from when it was settled? Or is it more like a monthly rolling basis?

Apologies for all the questions! I just want to get this right first time.

Aw thank you @[Deleted User] Yes it is just the 3 of us. No there’s no other support, but my daughter does see her father regularly, and he happily gets whatever she needs etc; so there’s never really been a requirement for child maintenance or anything along those lines, we manage it well and pretty much 50/50.

Yes I pay 6% of my salary, just shy of £200 per month.

 

Thank you @jokono I did think that would be the case in regards to the overpayment. The whole situation really annoys me because it was back when I was on a 0 hour contract, I was so young and it was just so hard to navigate it correctly at the time.

But I bet you’re glad you’ve paid yours off 😊

Thank you, I do feel like I have a good head start too, I feel very apprehensive about it all, almost like I think I’m going to mess it all up! But yes I have been the same for a good while; just lurking in the background haha.

 

Made the plunge and called the Tax Credits today to see how much I have outstanding: £1632.05. Less than I thought, but not great. If I stick to the 70pm then I’ll have it cleared in just under 2 years, which is fine.

But I think once I’ve cleared the “debt debts” then I’ll do the same again and just throw more money at it… So as of May 2025 (where my goal is to get my debt debts cleared) the Tax Credits balance will be: £1002.05. If I throw an extra £300pm at it then ontop of the 70 then I’ll have EVERYTHING cleared by August 2025.

11 months to go… I better get cracking…

Hope everyone is well 😊

xoxo

Bluegreen143

Following! Sounds like you have a good handle on things. You’ve got a decent income in comparison to expenses and the debts aren’t that high, so hopefully it will be an easy journey 🤞🏼