Debt Free by 40

Eyebright · 14 January 2020 at 2:03PM

Good afternoon MSE,

It's a new year and like so many the new year has brought with it a LBM for me. It kind of flickered on a couple of months back, and I made a start, but I had a relapse... Now I've truly seen the light and this year I'm sorting myself out and over the next few years I'm sorting out my debts.

I turn 35 in February and have set myself the goal to be DF by 40, so I have 5 years to get out of this hole! I recently consolidated my CC debts onto a loan, and I have a bit of an O/D I need to clear.

My loan is over 6 years, so straight away I need to sort out my budgets so that I can make regular overpayments.
One of the reasons we are in so much debt is we have no savings, and so when we needed a new car, and the house needed a new roof, it went on the CC. So an EF and sinking funds for planned expenses etc are also a top priority.

So my plan of attack is:

Clear the O/D
Create a budget
Start an EF and sinking funds
Find ways to up my income and reduce my outgoings so that I can O/P the loan
Stop spending money on tat I don't really need!

Eyebright · 14 January 2020 at 2:10PM

So my debts are as follows:

1)[strike]O/D on my current account: £144.65[/strike] Cleared 15/01/2020
2) The Loan: £18,691.92- regular payment is
3) HP Creation: £360.60- finishes Jan 2021 36.53/month

Total: 19197.17

The O/D will hopefully be cleared this week, I have hopefully sold an item and have been promised payment tomorrow when the other person gets paid.
I've sold it for £200, so there will be some extra there. I'll need £20 of the extra to have a bit of spending money to ensure I stay out of the O/D until I next get paid. Then any left over will either go towards my first O/P on the loan (even though the first actual payment doesn't go out until the 7th Feb!), or towards starting up my EF which is currently 0.

Siebrie · 14 January 2020 at 2:10PM

Congratulations on getting your LBM!

What have you done with your credit cards, now that you have consolidated the debts into one loan? Have you closed some of them? There is advice somewhere on this Board (sorry, I don't know the exact location) about which ones you can/should close that won't impact your credit score.

Would the insurance company pay anything back for the new roof? Would there be a government scheme that would pay out money if you updated your roof to a certain standard / insulation? The electriticy/gas company?

Good luck!

Eyebright · 14 January 2020 at 2:17PM

My saving goals are as follows:

1) £500 EF to start off with, increasing to £1000 once I've got the debt ball rolling.
2) £500- Christmas
3) £280- Birthdays
4) £500- Car Maintenance
5) £160- Annual Zoo Pass
6) £210- Professional body registration fees
7) £150- House Insurance
8) £250- Car Insurance

I think that should keep me busy, but will cover all the big annual expenses that we should really plan for and never seem to do, resulting in us getting in a pickle or adding on unnecessary direct debits ...

Eyebright · 14 January 2020 at 2:26PM

Siebrie wrote: »

Congratulations on getting your LBM!

What have you done with your credit cards, now that you have consolidated the debts into one loan? Have you closed some of them? There is advice somewhere on this Board (sorry, I don't know the exact location) about which ones you can/should close that won't impact your credit score.

Would the insurance company pay anything back for the new roof? Would there be a government scheme that would pay out money if you updated your roof to a certain standard / insulation? The electriticy/gas company?

Good luck!

Hi Siebrie,
Thanks for your kind words of encouragement! The roof would have been a no go with the insurance company as we knew when we bought the house the roof would need replacing, something to do with the nails used to pin the tiles in place. I want to say they had nail fatigue, or something to that effect, so really we should have saved up to replace the roof when we moved in, like a sensible person would do. But we didn't, so bam! £5.5k onto the credit card when it sprung a leak and all the tiles started slipping...

My plan is to close both my credit cards once the EF is up to date. I've already reduced the credit limit on them both, and the actual cards have been hidden by my OH (who wouldn't be tempted to use them), to stop me from using them when I see something pretty I want to have, but haven't budgeted for!
Thank you though, I'll see if I can find the post about closing them. I didn't realise closing them could potentially affect my credit score!:eek:

I clearly have lots to learn!!!:o

[Deleted User] · 14 January 2020 at 2:43PM

Welcome back Eyebright :wave:

Happy new year and happy new shiny diary

Pmo2
xx

Eyebright · 14 January 2020 at 2:44PM

OK, so here are the things I have put into action already to get started or plan to imminently.

1) I get paid on the 25th of every month, so the first goal is to clear the O/D before payday, so that my new budget kicks in for February, it's a clean slate and I don't have to factor in clearing the overdraft out my new budget. This goal has hopefully been achieved, as I've hopefully sold something, which will be paid for and collected tomorrow.

2) Created a budget- as others have said in their diaries, this is going to be key, as the little daily changes that become habits are going to be the key to cracking this debt and setting up great new habits to keep me out of debt in the future. This includes £10 to put in my purse each week as pocket money. What's left of it at the end of each week will go into a sealed pot and when it's full I'll cash it in to go towards the debts or sinking funds.

3)Meal plan to get the grocery spends down

4) When OT is available at work, do it! I'm working an extra shift on Sunday

5) I've applied for a tax rebate on the .gov website for washing and maintaining my own uniform and for having to pay registration fees. Fingers crossed I get something back!

6) Declutter the house and sell the stuff in the process.

7) Join a few MSE challenges to help keep me focused on my goal of debt freedom!

I'm sure more ideas will come to me over time, but that's enough to get me started hopefully. Anyway I've waffled enough on here, I'm off to read some other diaries in search of tips and inspiration.
If you've read this far then thank you! :j

[Deleted User] · 14 January 2020 at 2:45PM

Looks like a good plan, good luck x

Eyebright · 14 January 2020 at 2:48PM

Deleted_User wrote: »

Welcome back Eyebright :wave:

Happy new year and happy new shiny diary

Pmo2
xx

Hi PMO2! How are things with you? I promise this time I'm sticking around and getting this sorted.:rotfl:
I always fall down after the initial rush of enthusiasm where I make grand sweeping changes. I kind of fall flat, lose motivation at the thought of years of being in debt and fall off the wagon. Not this time. My LO is 3 now, and I want out of this cycle of debt, so I can have savings for her future and take her on holidays and enjoy life.

ETA: I'm off to find your diary, I'm sure I started reading it the other day when I quietly snuck back into MSE land!

[Deleted User] · 14 January 2020 at 2:51PM

Eyebright wrote: »

Hi PMO2! How are things with you? I promise this time I'm sticking around and getting this sorted.:rotfl:
I always fall down after the initial rush of enthusiasm where I make grand sweeping changes. I kind of fall flat, lose motivation at the thought of years of being in debt and fall off the wagon. Not this time. My LO is 3 now, and I want out of this cycle of debt, so I can have savings for her future and take her on holidays and enjoy life.

ETA: I'm off to find your diary, I'm sure I started reading it the other day when I quietly snuck back into MSE land!

Can't believe your LO is 3, that went quick!

I'm ok, still here, still in debt but the end is in sight (I hope!) lol xx

Eyebright · 14 January 2020 at 3:15PM

Deleted_User wrote: »

Can't believe your LO is 3, that went quick!

I'm ok, still here, still in debt but the end is in sight (I hope!) lol xx

I can't believe she is 3 either! However I'm glad in a way, not wishing time away, but I finally get funding for her nursery fees. I've stretched it so get 22 hrs a week (she goes for 20hrs/week)- which means I'm not paying nursery fees. It's going to make such a difference every month!

You have done so well, just got to stick it for a little bit longer. You will get there xx

Debt Free by 40

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