Balance crept up ever so slowly... Now the wake up call

Didisdebtfreejourney · 2 May at 8:14PM

Hi again,

Now that I have a fully funded car MOT/service and car tax fund and £500 emergency fund, it's all guns blazing on repaying the debt. Basically any pound spare that is not in direct debits or allocated a job (ie. food, petrol) is going towards the debt.

I get paid twice a month (one self employed, one agency) as well as child benefit. So a percentage of all three will be going into the debt.

Now don't get excited, I don't get paid very much as I am very much part time. But I do expect to be able to make enough to make a decent overpayment every month. Especially since I managed to get my interest frozen for a month (£49 saved is not to be sneared at!).

So fingers crossed I can get it all sorted by September 25🤞 as I've now crossed the £1250 threshold!

Debtfree2026 · 3 May at 4:25PM

Just come across your diary- you are doing so well and a debt free date of September must be so encouraging!

My debt is high - well, it was at £27K before I had my light bulb moment and is now £21K so I am making real progress, but my debt free date is currently August 2027, which seems such a long time away! I have pots now as well and this has massively changed how I manage my money. We are a dual income family, working in the family business but lack of financial awareness and responsibility meant we were often in our overdraft, and I didn't really have a clear idea of what was leaving our account on a monthly basis. Since overhauling and having a proper budget, we haven't been in our overdraft at all this year.

Cheering you on!

Didisdebtfreejourney · 5 May at 2:44PM

@Debtfree2026 That's huge progress 💪, cheering you on too! Thank you for stopping by and leaving a comment, I really appreciate it!

I do think it does take that lightbulb moment. And unfortunately debt seems to take so much longer to clear than it does to accumulate 😅.

Didisdebtfreejourney · 5 May at 2:57PM

So today is an exciting day as I was able to pay a nice chunck off. I had made a £100 payment a couple of days ago previously to that (for £1250 to £1150) which was partly eaten into by the new statement's interest fee (back to £1205)...

Fair enough the interest is going down as the principal does but it does feel like swimming against the tide at times!

So if all goes well when the payment goes through I will have broken the "thousands" and will be finally in 3 digits (£905)!!! And that is all thanks to having a little set aside for emergencies, covering ny direct debits, saving as I go for tax purposes and having sinking funds in place for the car. Realistically I need many more sinking funds but for now the priority is getting rid of the debt as it costs a lot of money.

I may also have some family debt 😅 (no interest, money that was lent to us by family and that we ought to be paying back sooner rather than later). It is quite a large sum. However, so far I have been concentrating on the main expensive "official" debt which is why I have only focused on it on the thread so far. So although I will be debt free as per say regarding banks/credit card companies, I still morally owe to family.

The good thing is once the "official" debt is sorted, the initial momentum should help clear it quicker. Then, fingers crossed 🤞 I can start baby step 3!

Didisdebtfreejourney · 5 May at 3:37PM

Ps: that's not all interest. I have separate purchases on that same card with installement over 12 months so there are fees attached to that as well as the amount I need to cover those each month. I have 3 more payments to go on those now.

That's my lesson learned on those "pay in installement" features of my credit card!
Not only do they not show in your balance so it gives a false sense of security, you're stuck paying £10-16 a month for 12 months (or 3 or 6 months) with fees but lose all progress if you cancel the plan...

Didisdebtfreejourney · 10 May at 1:38PM

Hi again,

So I made the decision after thinking about it a lot to sacrifice the 20% I put aside from my self employed earnings this month to put towards the credit card. I thought it made sense as:

- I'll have more cash flow once I pay the credit card off to go towards the 25/26 tax year

- even if I don't have quite enough as a result in April 26, there is a grace period of 8 months and a bit to pay even after filling in the self assessment form (to give the money transfer time as it's not instananeous as I found out last April).

- it will in the short term boost morale and lessen the interest (over 30%!) for next month, helping to pay more of the principal next month.

Some people say it's a not brainer but not being able to pay taxes is my number one fear as a newly self employed person!

So I can officially say that after making that £110 payment, I am down to £792 in card debt, so very close to the £750 milestone on my tracker!

I'll have a little victory dance 😄 then come back down to earth and ponder/budget how much I can afford to put towards the debt next payday 🤔.

Didisdebtfreejourney · 10 May at 1:42PM

And if you're wondering how I went from £905 to £902... I have a "angry tax" where if I feel angry at my husband for wherever reason (my fault or his fault), I put £1 towards the debt to take that energy and give it a positive intent.

Maybe it's not the most healthy approach (we do talk things through and get along 98% of the time at least) and my -diagnosed!- ADHD makes it hard to keep my cool sometimes but this approach seems to work for now. Apparently it's known as the snowflake method? (Not the anger tax bit but the smaller payments).

Didisdebtfreejourney · 15 May at 7:30AM

Hi again,
Got paid this morning for my agency work, not much this month by any means, but enough to bring the debt under £750!! It now sits at £737 after a £51 payment (the extra £1 is an anger tax for this morning). So that's another tick on my tracker, which is quite exciting 😁.