Sorting out my life! Let's go :)

Chooru

I'm thinking posting here will give me the push I need and hold me to account a bit.

For context, when at university, I got myself into debt in order to survive. I was stupid and moved to London for university from Newcastle. I'm now 35 and haven't been debt free since I was 18. It's not impacted me too much - I've always just moved it around, etc, to avoid paying interest. But following my breakup of a 10+ years relationship, I'm having to remortgage on my own and my finances are going to be tight.

Salary is currently around £3010 a month. I've recently left the pension scheme in order for my mortgage to go through, so current income is around £3320 pcm. This will level at around £3100 once my mortgage goes through (currently pending valuation and I rejoin the pension scheme!) and once I get my clearly salary increase at the end of November. At the moment, my plan is to put the extra £300 into a savings account, so I'm unsure how well I'm going to survive once I have to pay the full mortgage myself.

Debts:

Mortgage - £1,201 pcm
Monzo Loan - £7346.70 - paying off £293.88 per month (this is from when we first bought a flat - it needed some work we weren't aware of and wasn't disclosed during the sale - including an entire rewiring of electrics)
Natwest Credit Card - £4931 (Paying off £100 a month at the moment)

My biggest expenditure each month, after my mortgage is petrol. I live quite far from work and it's currently costing around £270 a month due to recent rises (It was £200 up until a few months ago…). Got myself a Costco card to save a bit on that.

My plan is to start chipping away at the Monzo loan as it has interests and I can overpay, whilst reducing the monthly payment amount and obviously reducing the amount of interest I pay. The actual Monzo loan is only £6894 - the remaining £500 is interest. Paying off an extra £100 per month on that reduces monthly payments by £5 and interest by £6 according to the app.

Presently, the Monzo loan runs until November 2028 - that date won't change unless I pay it off in full. Which is unlikely. However, my aim is to pay off enough that my monthly payments decrease to around the £100 mark by the time we get to that point.

By the time I have to remortgage again (well, hopefully move house!) I want to be debt free - this gives me 5 years to clear the full balance of £12,277.70. Feels more than doable.

I also really want to adopt within the next few years. It's something my ex and I always wanted to do, but now we've broken up, I think I'm going to do it alone. I don't want to get too old…

I know it's not terrible, but I know it's not great. I'm somewhat proud of myself. This is the best financial position I've been in in years. I recently saved up enough money to pay off my car loan, which was the biggest interest rate, which decreased by debt from £17,000.

I've also been able to start saving a little bit - currently have around £1600 in savings (although a lot of that will go to mortgage fees, etc over the next month of so!)

ArtyJ931

welcome - what a great post

Rhyddid2026

Welcome to Debt Free Diaries!

We're a friendly bunch.

I'm looking forward to seeing your journey unfold.

Brie

Excellent that you are addressing the elephant in your room! But I'll add a few comments if I may…

I shrieked quietly when I read that you had left your work pension scheme. I know you have a good reason but hope that you will manage to rejoin asap. You don't want to lose out on the benefits (sometimes more than just the pension) including the amount your employer needs to put in.

Have you put together your budget so you truly know what you are spending? It does sound like you've got a good grasp of the numbers but sometimes seeing them down in black and white is quite enlightening. You might want to complete a statement of accounts (see SOA in my signature) and possibly post it back here for helpful comments. Obviously you are in a state of flux with the mortgage being sorted so it may need to wait until the dust has settled just a bit. Do ensure you use at least a couple of months worth of statements to ensure you are using real numbers and not guessitmates.

And I suggest you double check the interest rates on the loan and your credit card. CCs normally have a much higher rate and clearing that first would save you much more money - unless of course you have a particularly good offer currently, like a 0% purchase deal or similar.

Best of luck with it, truly! You seem determined and have good goals to aim for, I hope you get things sorted including the adoption when you are ready!

NormalforNorfolk

A great post and well done for facing the situation head on. As others have commented, I too grimaced when I saw you’d left the company pension scheme, but if I’ve read the post correctly it’s a short term measure to get the mortgage approval? Do rejoin it as soon as you possibly can because you are missing out on your employer’s contributions (check out if there are any limitations on when you can rejoin or can it be anytime). Also with regard to the credit card debt - if you aren’t already on a deal I would look for a good balance transfer deal, either a 0% balance transfer deal or a very low interest transfer deal - I moved a credit card debt a few years ago on a 2 year 0% deal (the fee to do it was worth it compared to a low interest deal with no fee) and then chip away at that balance and most importantly DO NOT spend on that card, just let it act as a home for your existing cc debt. If you haven’t cleared that cc debt by the end of the deal then look for another deal and move it again. Very best of luck - you’ve got this!

Chooru

Thank you so much for the replies!

Yes, leaving the pension scheme was only temporary. By increasing my monthly income by £100 (although it increased it by £300) I was able to get a better interest rate, which reduces my mortgage payments by over £100 once the remortgage goes through. I'll be rejoining as soon as it's all sorted - although the contribution, I believe, is 10.5% (Teachers' Pension Scheme).

Credit card is 0% and runs out in May next year, so plenty of time to get that sorted once my mortgage has gone through.

The £300 I'll be putting into savings I'll use to put towards my Monzo loan once I'm satisfied I'm stable financially once my ex moves out (we still live together and pay 50/50…)