Overhauling for the second (and last) time

overhauler

I initially started a thread a few months ago after realising I was struggling with my debt 

I don’t, in the grand scheme of things, have a lot of debt but have a lowish income and little disposable money to throw at it currently so it’s slow progress

I have 10 debts, totalling just over 5k and made the decision earlier in the year to let them default/stop paying 

I went via step change to set up a DMP which they arranged at £230 per month, I only managed this for 2 months before failing 

if I’m honest I think I was wrong with my budget, setting it too frugally so as soon as something such as school uniform costs came up, I just didn’t have the funds without not paying the DMP

i decided to spend a couple of months tracking every penny to see where I was spending, there isn’t much slack and I have some much needed house repairs/improvements to do alongside this but it helped me to see where I was going wrong 

as of my next payday (26/09) I now have a semblance of a plan in place 

debt wise I have 6 of the 10 on a much lower repayment plan totalling £64 a month with 4 left to organise 

I have 8 spaces open in my starling account:
- Essential bills
- Other bills
- Food
- Petrol
- Personal spends
- Debts
- 100 step challenge
- emergency fund

i know exactly how much needs to go into the bills pots, have set a realistic budget for all the other pots with £100 allocated to personal spends 

everything leftover once allocated will go into the EF, I am not sure just now how much this will be as am due a pay rise this month but aiming for £250

i haven’t allocated anything towards the house budget/clothes/birthdays/Christmas and am aware of this and know they will need to be accounted for moving forwards but I want to do the first month or so and then reassess potentially splitting between personal spends/EF/a further pot for those spends 

I have been reading other diaries and the challenges and have a few aims for myself, my month will run to align with my payday so the next month will be 26/09-28/10 with the challenges being:
- 100 step to debt free - 1 step= £50.50 I am aiming for 2 steps per month with debt free date of 11/2028
- 15 NSDs per month minimum 
- end the month with something in the EF
- post for accountability 

i am currently living paycheck to paycheck so if I can end the next month with anything at all I will see that as a small victory and a positive start 

I built up the debt whilst training for a career after leaving education and working low paid jobs but should now see my wage grow quite well over the next couple of years 

long term goals are:
- debt free
- emergency fund
- rebuild credit score
- pots for each of life’s expenses that are budgeted for over 12 months
- save to buy house

i do think with focus and predicted wage increases that i might be able to pay off the debt quicker than currently calculated and can then look at repairing my credit so I can get a mortgage in the future 

that is a long opening post, I will leave it there for now and although I am not officially starting until 26/09 I will start my accountability from today and keep updating any spends until the next pay day 

gwynlas

Congratulations on making a start, you did the right thing in reducing ayments to make them more manageable.
Be careful with Christmas as it only 3 paydays away and if December pay is early then a long wait for the next at the end of January.

overhauler

Hi Gwynlas, thank you your input

you are right that it will come round quickly, I am going to really keep myself accountable this year with Christmas and not spend for the sake of it as I have in the past

my kids are older now (11 and 18) so on one hand, it’s easier not buying toys etc they don’t need/want as have outgrown them but it also means the things they ask for tend to be much more expensive 

This year the EF pot will be more like a general savings pot that will have to cover things like that but from January I am going to have a separate pot for annual expenses such as birthdays/Christmas and also a clothing pot 

my eldest son has just started work, although currently only part time, whilst he thinks about what he wants to do and has been applying/interviewing for full time roles and apprenticeships so will cost me less on a monthly basis as now pays his own gym/phone etc and isn’t asking for money to go out now he is earning himself

i am going to take the remainder of this year as a learning curve and just aim to end each month in a better position than the previous one and see how it goes 

each month I pay off some debt is a step in the right direction after all and I’m hopeful that by posting and being aware of spending it will make me consider whether I really need to make a purchase before doing so

birdsfoottrefoil

Good luck! Hope the diary goes well 

Sarahwithlove

Good luck it sounds like you have a good plan in place. 

overhauler

Thank you for the well wishes

10 days until payday 

but if a spendy day today, needed petrol ready for a couple of work trips this week at £30 and did a top up shop which totalled £24

i will take a packed lunch with me when working away tomorrow but will have to pay for parking whilst there at about £5 

when I work away next week it’s for a couple of days so have booked a hotel for 2 nights (via work booking portal so no cost to me) and will also book train via work so no cost but will have to buy evening meals and claim back in expenses at later date 

Sarahwithlove

At least you can claim the expenses back. Do you get a set limit? If so try not to go over it. 

overhauler

Yes, evening meal can be up to £20 and I find it quite easy to stick within it most of the time

Only a small spend today of £3 for parking and £5 for lunch which I can claim back 

overhauler

So, payday tomorrow… finally 

I am really, really happy to say that I ended this past month with everything paid for and added my first payment to the emergency fund saving space today

it was only £2 but that’s the first month in a while where I am ending in a credit rather than having bills to catch up on when I get paid so I am very happy with myself for that

tomorrow I will do the money shuffle and allocate everything to their spaces from my wages, I think I will be around £40 short from my wages for covering everything but on top of wages I will get child benefit, bank transfer from partner for his share of bills and eldest has now started paying board now he is earning 

I will post again tomorrow confirming all money allocations for the month, challenges I am starting and debt balances

i have 3 debts not currently on a repayment plan but I have reached out to all of them to make the arrangement so hopefully that will all be sorted soon and I can concentrate on seeing what I can do to build the emergency fund and then once that’s in place start to bring my debt free date forward 

twiggy86

Well done so far! I wanted to comment to say there is not "only" about the £2 in the EF! A BIG learning from me is that all the little amounts add up and over time make a big impact - for me, this applies to both spending and saving. So if I think of £2 as "only £2", I'm more likely to spend £2 here and £2 there, which soon mount up during a month! Hope that makes sense! 

overhauler

That’s a really great mindset to have and I will look to adopt  that moving forwards, thank you so much @twiggy86