Attempting to become a grown-up...this will be a challenge - debt free and buy a house!

hereagain22

I have never done this before but decided to pop a diary on as the thoughts are driving me mad so if I can have an outlet hoping that will help. I am obsessed with planning, crunching numbers, looking at dates, I am driving myself absolutely crazy.

Plan is: avalanche debts and save for a deposit to buy our first home.

My credit file is not great, but my husband's is decent.

I have a rough avalanche plan to pay off our last debts and save for deposit and avalanche will be done before May 26 (hopefully much sooner!) 

Then it will be a bit of a waiting game for some of my defaults to drop off as most of them are from around covid times so 2020. A few of them are later though so I know that this could be an issue and may need a bad credit broker - but hoping that if I can build it back up as best as possible plus OH's file being decent we might not need to do this (concerned about extra cost of 'bad credit' mortgage).

One default is from last year and I am fuming about that - an old card that I had forgotten about, then remembered and made a payment, then they stuck it on my file plus a default. So annoyed - I should have just left it as it would have timed out. FUMING! 

Main thing stressing me at the mo is: obsessed with checking credit files, I have accounts with all of the agencies and look at all the time, checking when things will drop off, obsessing over dates etc. Trying to cut this down.

I am also really panicking about us being able to afford a house - we are both on pretty much minimum wage. I am studying for a degree alongside work and hoping that might open up some doors for me to progress (due to finish summer 26).

I have made so many mistakes re money (still am) and it has been a really tough journey and trying to control the emotional spending. I have spent many years in debt and I am now very focused on trying to move away from a reliance on credit....oh but also making the biggest purchase ever of a house but this is for future us - hopefully we could retire and own our own home. That would be amazing security for future us - I am not sure whether this is even doable, I feel like there is so much stacked against us. 

We are also dreaming of relocating to be nearer the coast and it feels like a very far off pipe dream, but with discipline and better money decisions, we could do it? It would also buy us more time for my file to improve as we would need to rent first and get settled in the area before buying. More time for those old defaults and issues to drop off...hopefully never to be seen again!! (Looking at you AGG you f******s) 

Things are a bit rocky at the mo with outgoings too high, but this will be improving by June this year so I am trying to hold on to that optimism and start really knuckling down on the avalanche and saving for the deposit. 

Goals are:

No more Klarna, PPin3 etc (cringe I know) 

Avalanche remaining debts

No more emotional spending

Focus on sticking to budget properly

No more credit accounts

Debt list as of today:

OH debts: 

Vehicle finance - £294 (ends May 25) 

Vehicle finance - £3,128 (due to end Aug 26) 

Card - £209

Card - 198

Klarna - £200

PP - £300

My debts:

Card - £179 (fuming!) 

Catalogue - £493

Card - £399

Catalogue - £223

Catalogue - £923

Plus potential additional £600 from old card account that has popped up on my credit file from a dodgy AF company - AGG - but fighting this one as no info has been provided and it is very old. Very fuming.

I am full of shame, self doubt, the works. I am just not sure whether we can do this. We keep talking about this dream of buying a house, where we would ideally like to go (this would be a big move).
I really want to make this happen but I am also not sure whether we can.

foxgloves

Your future dreams rely on what you do now in the present. It is possible to change even very longstanding bad financial habits - I was in debt from the age of 19 to 46 with the lightbulb moment going off at about 43. Now both debt-free & mortgage-free, when I look back, one of the most important changes was to stop making excuses to justify buying things I couldn't afford & didn't need. Once we were seriously working on the debt-busting, I found the following mantra helpful....."If I need to put it on credit, use my overdraft or take out a loan to pay for it, that's not my money, that's someone else's money, so I obviously can't afford whatever it is". It's that change of mindset which acknowledges that the income you have coming in every month is your money. There isn't any more. It sounds obvious, but we definitely regarded credit as simply an extension of our own funds instead of the expensive noose it becomes. 
As a fellow dreamer of retiring to the coast, I'd suggest you stop number crunching that far into the future & really concentrate all that focus on creating a monthly budget which facilitates both paying down your debt & getting good practical habits in place to strengthen your finances for the future. Have a really good detailed look at your spending over the past 3 months & identify where the regular money leakages are. For us, a big one was buying lunches out every work day. Taking packed lunches saved us around £2k a year! Meal planning has been another brilliant saver as it prevents top-up shops....we all know how they work....pop in for milk & bresd, come out £30 lighter! Takeaways.....another big saving as we now have about 4 a year rather than 1 a week. All these good habits within the framework of a strong budget provide the foundations for future dreams becoming a reality.
Good luck!
F

hereagain22

foxgloves said:

Your future dreams rely on what you do now in the present. It is possible to change even very longstanding bad financial habits - I was in debt from the age of 19 to 46 with the lightbulb moment going off at about 43. Now both debt-free & mortgage-free, when I look back, one of the most important changes was to stop making excuses to justify buying things I couldn't afford & didn't need. Once we were seriously working on the debt-busting, I found the following mantra helpful....."If I need to put it on credit, use my overdraft or take out a loan to pay for it, that's not my money, that's someone else's money, so I obviously can't afford whatever it is". It's that change of mindset which acknowledges that the income you have coming in every month is your money. There isn't any more. It sounds obvious, but we definitely regarded credit as simply an extension of our own funds instead of the expensive noose it becomes. 
As a fellow dreamer of retiring to the coast, I'd suggest you stop number crunching that far into the future & really concentrate all that focus on creating a monthly budget which facilitates both paying down your debt & getting good practical habits in place to strengthen your finances for the future. Have a really good detailed look at your spending over the past 3 months & identify where the regular money leakages are. For us, a big one was buying lunches out every work day. Taking packed lunches saved us around £2k a year! Meal planning has been another brilliant saver as it prevents top-up shops....we all know how they work....pop in for milk & bresd, come out £30 lighter! Takeaways.....another big saving as we now have about 4 a year rather than 1 a week. All these good habits within the framework of a strong budget provide the foundations for future dreams becoming a reality.
Good luck!
F

Thank you for the wise words

OMG yes - the pop to the shop things, yes, just to go get a few bits and then £30 lighter, this happens A LOT! 

We definitely overspend on food - the top up shops and snacks...we like a lot of snacks!! 

We now use Hellofresh for our main food shop which is a little more pricey than buying stuff separately, but it really works for us as it is a fixed amount each week, we have no imagination food-wise, can't meal plan etc so choosing the weekly meal deliveries is a life saver for us. It has definitely saved me on food shops as I would just wander round aimlessly grabbing things and then end up with a trolley full of random stuff and still not even have a full week of meals after a £100 tesco shop or whatever :O 

Definitely agree on the credit side - I have always used some kind of credit and most recently the klarna and pp in 3 stuff, which is just a way of enabling my emotional spending and I have stopped using it now! Just got to pay if off then get rid. I am consciously not looking at sites that tempt me to buy stuff now. I have been making a real effort to stop the impulse/emotional buying for the past few months and this has much improved.

I am good at planning out the budgets, we just don't then stick to it and the dynamic is that like one of us will get tempted by something and even if the other one is being strict, you then give in to the temptation so it is a bit like one of us is the good and one the bad and it swaps around! 

There are a few things just pushing us out of the comfortable spending zone and they will be gone in a few months so I am feeling positive about that, just need to make sure I don't replace them with new things :O 

foxgloves

Well, the top-up shops sound like a money-leakage right there! We like snacks too but they're not a free for all as we buy what we consider a reasonable amount for the week from.our grocery budget but on a 'when they're gone, they're gone, basis. So if someone wanted to eat say 7 bags of crisps over the weekend, any extra crisp purchases would then need to come out of their own Personal Spends money.
We both love to cook from scratch so we don't buy any ready meals. We meal plan for the week ahead, then grocery shopping list is written & unless there are awesome bargains on genuinely useful stuff, we stick to it. I budget £350 per month for groceries, including cleaning stuff, loo rolls, etc. That's for 2 of us (including big hairy husband with a huge appetite) & 2 greedy cats.
Yeah, good idea to pay off the klarna type stuff. The only reason those BNPL payment schemes have ever existed is to get people to buy things they can't afford.
I shall wish you luck & say that there's no bag of tat I could come home with.now, which would make me feel as good as finally achieving debt-free did.
F

dreaming

Good luck with starting your debt-free journey. I read that you feel you can't meal plan so use HelloFresh. You could use the deliveries to start meal planning by noting down over 3 or 4 weeks what you are eating and enjoy, then using the cards provided try costing out the same ingredients and doing it yourself. Voila - a meal plan! I used HelloFresh a couple of years ago when I had a period of convalescence following an operation so they can be useful but if you look at the savings you can make by planning measl yourself you might realise it is very worthwhile.

hereagain22

foxgloves said:

Well, the top-up shops sound like a money-leakage right there! We like snacks too but they're not a free for all as we buy what we consider a reasonable amount for the week from.our grocery budget but on a 'when they're gone, they're gone, basis. So if someone wanted to eat say 7 bags of crisps over the weekend, any extra crisp purchases would then need to come out of their own Personal Spends money.
We both love to cook from scratch so we don't buy any ready meals. We meal plan for the week ahead, then grocery shopping list is written & unless there are awesome bargains on genuinely useful stuff, we stick to it. I budget £350 per month for groceries, including cleaning stuff, loo rolls, etc. That's for 2 of us (including big hairy husband with a huge appetite) & 2 greedy cats.
Yeah, good idea to pay off the klarna type stuff. The only reason those BNPL payment schemes have ever existed is to get people to buy things they can't afford.
I shall wish you luck & say that there's no bag of tat I could come home with.now, which would make me feel as good as finally achieving debt-free did.
F

Yes - definitely something for us to look at. Trouble is we both do it so it will be tough to get out of it! 

That's a good idea with your snacks and budget plan. 

Yes I agree and very annoyed that I have been using them - ok for odd purchase but for a lot it really stacks up. 

I feel very committed to changing my ways, at the moment it feels like a huge mountain to climb so trying to think of one thing at a time like starting the avalanche and then quitting the BNPL etc. I am gradually saving into the deposit fund as I go along just to keep that motivation going on that side. Trying to do lots of different things at once :O 

Thank you  

hereagain22

dreaming said:

Good luck with starting your debt-free journey. I read that you feel you can't meal plan so use HelloFresh. You could use the deliveries to start meal planning by noting down over 3 or 4 weeks what you are eating and enjoy, then using the cards provided try costing out the same ingredients and doing it yourself. Voila - a meal plan! I used HelloFresh a couple of years ago when I had a period of convalescence following an operation so they can be useful but if you look at the savings you can make by planning measl yourself you might realise it is very worthwhile.

Yes I have been saving most of the cards - I have a huge pile to sort through and get rid of duplicates! 
We like the convenience of it being delivered too as that stops me wandering around grabbing things like supermarket sweep haha 

Thank you

twiggy86

hereagain22 said:

Yes I agree and very annoyed that I have been using them - ok for odd purchase but for a lot it really stacks up. 

I feel very committed to changing my ways, at the moment it feels like a huge mountain to climb so trying to think of one thing at a time like starting the avalanche and then quitting the BNPL etc. I am gradually saving into the deposit fund as I go along just to keep that motivation going on that side. Trying to do lots of different things at once :O 

I just wanted to challenge a couple of points here (from a perspective of trying to offer guidance, zero judgement!) 

Saying that is "ok" (I'm assuming you mean BNPL) for some things (to me) suggests that you haven't fully changed your mindset yet to be committed to getting out of debt! BNPL avoids the need to properly budget and exercise patience at waiting for the things you want. It also means that if you continue to use it, whilst paying off your other debts, you won't full the full effect of your debt busting efforts - as you pay with one hand but are adding with the other. Mindset, motivation and seeing results I have found really are key to continuing with debt busting. It is better to properly budget, set up sinking funds and save up (obviously some situations will arise, particularly early on where you don't have enough or hadn't anticipated!)  An emergency fund will also help with this. 

I say all of this as someone who bought a table on interest free finance, although I had the money to pay for it - and instead threw some of that at the debt. I regret that decision and can't wait until all the payments are made and I free up that payment each month! 

hereagain22

twiggy86 said:

hereagain22 said:

Yes I agree and very annoyed that I have been using them - ok for odd purchase but for a lot it really stacks up. 

I feel very committed to changing my ways, at the moment it feels like a huge mountain to climb so trying to think of one thing at a time like starting the avalanche and then quitting the BNPL etc. I am gradually saving into the deposit fund as I go along just to keep that motivation going on that side. Trying to do lots of different things at once :O 

I just wanted to challenge a couple of points here (from a perspective of trying to offer guidance, zero judgement!) 

Saying that is "ok" (I'm assuming you mean BNPL) for some things (to me) suggests that you haven't fully changed your mindset yet to be committed to getting out of debt! BNPL avoids the need to properly budget and exercise patience at waiting for the things you want. It also means that if you continue to use it, whilst paying off your other debts, you won't full the full effect of your debt busting efforts - as you pay with one hand but are adding with the other. Mindset, motivation and seeing results I have found really are key to continuing with debt busting. It is better to properly budget, set up sinking funds and save up (obviously some situations will arise, particularly early on where you don't have enough or hadn't anticipated!)  An emergency fund will also help with this. 

I say all of this as someone who bought a table on interest free finance, although I had the money to pay for it - and instead threw some of that at the debt. I regret that decision and can't wait until all the payments are made and I free up that payment each month! 

Hiya, thanks for your comments, I just meant generally it can be ok for some people for those bigger purchases, if you have the discipline to not spend away on it willy nilly  

My plan is to close the Klarna account down when paid off so that I am not tempted as I have in the past just put lots of small things on there and then it stacks up which is not at all fun. I agree re sinking funds etc and one of my goals is for us to have an emergency fund for the first time ever! :O 

Ah yeah I can see the logic in the int free finance but I don't know if you find this too - but for me, having to buy something outright in one go definitely makes me think harder about it! Putting something on an agreement just makes me buy more as it's like oh it's only x this month...that's how they get ya I guess! 

hereagain22

Feeling very stressed about the AGG issue that is still ongoing and has caused me huge anxiety.

I have made complaints to AGG and Experian.
I have done subject access requests via ICO for all 3 x and Experian have said they are passing my issue over to a team to be looked at. Just fuming!

In budget news - I have been having a few issues with our budget and I have tried to simplify it. I have changed the breakdown of what we spend and divided it between me and my husband - rather than just one big list. I think this might help me understand the figures a bit more and where we are coming unstuck and not following the budget. 

My hub has bought lunch stuff to make sandwiches to take to work so this is helpful but as he works long shifts rushing around tiring physical work, I don't mind him buying food out and about I think it is fair enough that we budget for this. 

Still feeling very stressed about a few money related issues and it kept me awake Thurs night (as well as other reasons) which made for a very grumpy me on Fri, but had a relaxing weekend at least. Payday for us both is Friday so a lot to sort out but first time trying to stick to budget religiously. 

hereagain22

I have also seen an internal transfer opportunity which would be higher pay. I am not sure whether I would like the role / whether I would get interview etc. It is tough as I like my job at the moment but certain aspects are driving me mad so I have one eye on a move. But also the uncertainty of a move is feeling very stressful at the moment so not sure.