Feeling Motivated

MacNCheez

Howdy and welcome to my DebtFree diary. (which I hope very soon will be a savings diary)

 

I have been a long-time lurker on this forum and have learnt SO much, i just wish I had known

about this site when I was £17k in debt in 2019 following a mixture of bad choice, bad habits and doing what I could to survive.

 

But here we are 2024, one year away from 30, I've finally met the love of my life and we want to buy a house (IN THIS ECONOMY?!)

learning what I have, I want to make sure that when we come own a house, we're not in a position where we're struggling with

the mortgage alongside mountains of debt.

 

A few points:

I currently live at home with two family members (not parents)

I have cleared most of my aged debt (only £1k left), however, I took a loan this to get a car after writing off my previous one

I have 1 default on my record.

I am a part time Uni student.

 

Goals:

Clear as much of my debt as possible before buying a first home.

Save as much as possible before buying a first home.

To manage my money better and learn good habits.

Complete my university degree and get a better paying job

 

I am hoping this diary helps me achieve at least 3 of the above goals.

After my bills are paid, I am also able to save and have some left over, I could be stricter however and maybe do some things to make the most of my money.

 

I will post a full SOA soon but I will give a brief overview below

I have two debts

- Paypal - £1018 - 25.9% - Minimum is £40.99 I pay £100 a month

- Abound Loan - £7118.15 I think around 17% - I pay £250 a month and the odd £50 where i can spare as overpayment

I do not have any other credit cards or overdraft, they scare me.

 

I get paid £489 a week and try to do over time when times are busy and work from home when I can to save fuel costs.

I have £2200 in savings. Equal amounts in a rainy day saver and HTB ISA.

I had a lot more saved, but my cat fell ill, luckily insurance paid half that back. Car had service and MOT - I took out a service plan for the next two years (23 a month, works out cheaper for the two services). The two front tyres in the same month as a poorly cat dented the bank though.

 

I am looking forward to the new year, my phone contract ends so I can go to SIM only.

I was very MSE and traded in my old phone and got a big discount on the new headset but the contract has gone from originally £53 up to £70 a month. It's not crippling me but its a lot of money especially for a phone which is not even new anymore! I was thinking if I can get a SIM only contract for say..£20, I can start putting that £50 towards my loan to pay it down quicker.

 

I am praying my insurance goes down in Jan, I'm currently pay £141 a month...

So, my starting questions-

Should I use my savings to pay off my PayPal? I paid £100 at the beginning of this month and interest was £18ish.

It'll upset me to see my savings go down such a large amount but I know I'll be saving loads more in the long run. I don't it anything on my PayPal credit now as I just want it down. Should I then close the account after its done?

 

Is there any benefit to getting a credit card? so many people tell me to get one for any emergency or to 'better my credit rating' but I don't want to risk any adverse effects on my credit file. firstly, the hard search. Secondly, I've worked so hard to get my score up (I know its just a number) from 115 back up to 521 (clear score) although it sits at 982 on Experian. I have had 4 years of no missed payments and don't want to risk doing anything to damage it anymore than i previously already have.

 

Will the default have a negative effect on my chances of getting a mortgage and will it affect my partner if we do manage to get one?

(I think it was around £60 and was paid as soon as i realised it was on there, I'd had no correspondence due to moving house and other factors- Vodaphone)

 

I know I'm not in a particularly dire situation so I hope its OK to post here.

I am aiming to update here at least every week if not more, so if you've stuck around, I hope to see you again.

 

MacNcheez

MFWannabe

Pay off PayPal, it’s madness to pay that interest rate when you have savings to pay it off 

MacNCheez

Hi thanks for commenting.
I think I will, I currently have £900 cash, So I thinking about it, it wont seem such a big dent to my savings. 

MFWannabe

Sorry it was such a quick comment earlier 
Welcome to the diary board 
Pay off PayPal and then throw everything you can at the loan 
Then I’d stay clear of any form of credit 
When it’s time for you to look at mortgages consult a broker, there’s also a mortgage page on the forums where you can ask questions when you’re ready 

MacNCheez

Thank you for the welcome. 

I will arrange the full payment to PayPal in the morning, I have been umm’ing and err’ing about it got a little while now. 

Before this loan, it had been years since I had gotten any credit as I just didn’t need it. 

My partner and I have both agreed, when the time comes if we can’t afford to buy any furniture for our place, then we will simply eat dinner on the floor until we have the cash. we won’t get anything on credit, luckily we both have some bits from when we both had our own places 

MFWannabe

👍 Good attitude to have x 
When the time comes look on freecycle and local Facebook selling pages, it’s amazing some of the stuff that gets sold and or given away on those 

MacNCheez

Got a spare moment before I settled into bed tonight and scheduled that payment. Bye-bye PayPal. 

vampirotoothus

Welcome, it's great to have a plan! Well done on getting rid of Paypal, that was absolutely the best move. Can you increase the payments to your loan now, or do you have to make one off payments? V x

13thlegion

MacNCheez said:

Got a spare moment before I settled into bed tonight and scheduled that payment. Bye-bye PayPal. 

Hi, welcome, and great job. That's £18 interest per month automatically back to you forever now.

I would urge you to build up an emergency fund cushion again before overpaying the loan. As you know, never can tell when something crops up car/cat/something else related. Still throw some stuff consistently into the HTB ISA as well as the bonus on saving there is great!

Your phone sounds like it's about halfway through contract at least? The inflation related increases can be killer. I have a sim only for my daughter that is pretty much unlimited for £10 a month on a rolling monthly contract. When does your phone contract end?

And it's not a bad thing you wanting to avoid credit cards. There is a way of using a 0% purchase one to lower your car insurance, but if you'd rather not, that is totally understandable.

londoner2019

Welcome! Well done on getting rid of PP. You can now build up an emergency fund, build up savings again, without that monthly interest. In fact, that interest you were paying now goes straight into savings, meaning you're building it up quicker.

Good luck with everything - you have a fantastic attitude and your partner's support will help you immensely. You're on this journey together.

Sarahwithlove

Wow £70 is a lot for a phone contract. When does it end? 

Well done on paying off PayPal it's definitely the best move with all the interest you are paying. 

Realistically how long do you think it will be before you can afford to buy your own place? 

How long ago was the default? It will have some kind of impact until it drops off. If it was recent it may be worth reaching out to Vodafone to explain what happened and see if anything can be done.