Finding the right balance...

Rainbow_brite · 5 April 2018 at 3:54PM

So, I’ve been reading a few debt free diaries on here and for me, instead of the LBM a lot of people describe it’s been more of a slow burning feeling of “there must be more to life than this”. I earn a good wage but my attitude to debt has been to clear something and then accumulate more. I need to change my mind set and strive to become completely debt free. To do this I need to be accountable so starting my own diary seems a good way to do this and keep myself on track (hopefully!)

I’ve done a quick round up of my borrowing and have a plan of action:

Catalogue 1: only £62.70 outstanding which I’ll settle on the 20th
Parents: £230 - not paying interest on this but would like to get it settled so I’m paying £115 this pay day and next to clear
Loan 1: approximately £340 outstanding. Have been making additional small payments on this to get it cleared as it’s my highest interest. Should be cleared by end of May
Catalogue 2: £415.50 outstanding. Currently only making minimum payment of around £25 per month
Loan 2: approximately £700 outstanding. Currently paying £150ish a month with an end date forecast of 24th August
Credit card: maxed to £5800 balance and only minimum payment being made
Overdraft: £3000 maxed out every month. It was previously £4000 which I reduced by paying off £100 per month

My action plan is to settle catalogue 1, loan 1 and the borrowing from my parents by the end of May and then use the snowball calculator to allocate payments thereafter. I do however want to maintain a social and family life whilst paying down my debts as I know I’d give up completely if I didn’t take this approach. This includes a family holiday in the summer and the occasional night out so learning to budget for such things needs to be incorporated.

I’ve made a good start by swapping from cigarettes to an electronic cigarette a couple of weeks ago which should save me at least £120 per month. I’ve also been keeping a spending diary since I was paid on 26th March. Having said all this though I’m under no illusions I’ve got everything under control so open to advice, suggestions and encouragement where possible. Will add my SOA shortly

enthusiasticsaver · 5 April 2018 at 4:11PM

Well done on starting to deal with this.

Do you know why you have accumulated the debt? Is it because of a period of unemployment or sickness or just general overspending and lack of budgeting?

Keeping a spending diary is a good start. If you have a relatively good wage and at your level of debt which is less than £10k then it should be perfectly possible to clear it whilst maintaining a certain lifestyle rather than cutting everything. Focus on what your long term aims are when the debt is gone which helps to keep you focused - ie saving for a holiday, a home or a car.

Rainbow_brite · 5 April 2018 at 4:59PM

Thanks for your reply. The debt started to accumulate when my hubby was made redundant, just on day to day living really, putting grocery shop on credit card etc. We separated almost 5 years ago though so can’t blame it all on that. I’m a sucker for instant gratification I guess and thought nothing of buying things on credit rather than saving up so really trying to recognise those behaviours and take steps to change them

Rainbow_brite · 5 April 2018 at 5:02PM

Household Information

Number of adults in household........... 1
Number of children in household......... 1
Number of cars owned.................0

Monthly Income Details

Monthly income after tax..£1833.25
(this has gone up recently due to a change of role and pay rise. Should be around £100 more but won’t know properly until April pay day)
Child Benefit..........................£82.80
Child Support.......................£135.00
Total monthly income.................... 2051.05

Monthly Expense Details

Household/Personal

Rent................................ £595.00
Council tax........................£100.00
Electricity & Gas...............£82.00
Water rates...................£33.63
Mobile.............................£34.00
TV/phone/broadband........£71.59
TV licence..........................£12.37
Contents insurance..........£10.18
Groceries etc. ......................£150.00
Social/weekend spends.......£100.00
Clothing........................£20.00
Gifts..............................£10.00
Haircuts........................£10.00
Emergency fund....................£20.00
eCig refills........................£30.00
Works lottery.....................£10.00

Debts

Mum & Dad....................£115.00
Loan 1.............................£175.50
Loan 2.............................£150.86
Credit card....................£150.00
Catalogue 1...................£60.00
Catalogue 2..................£24.00
Bank charges/interest....£50.00

Total monthly expenses.................. 2014.13

Rainbow_brite · 6 April 2018 at 10:42AM

Had a minor wobble after doing my SOA but back to feeling positive again. My newly introduced budget leaves me £30-ish per month which I really need to save. I've been determined to take DD on a proper holiday for the last few years and we've been offered a brilliant opportunity for this summer which includes a few days at Euro Disney. As she turned 8 recently I'd really like to take her whilst she's still young enough to appreciate it but it means getting around £1000 together by the end of July.

This will have to come from my pay increase (about £100 per month), any money freed up by paying off catalogue, loan 1 and parents and extra bits I can make from selling unwanted items, surveys and cash back. Good job I love a challenge!!

Long term plan will then be to start overpaying remaining debts from August onwards with the equivalent funds

Rainbow_brite · 8 April 2018 at 10:46AM

Busy weekend, was off on leave all last week but had to work Friday evening and yesterday so not much progress made on the financial front. The money will be paid overtime though and should cover mine and DD's passports.

Managed to cobble together a meal plan for the week at least. The money I have left from trialling my new budget should last and I still haven't smoked so feeling quite positive overall.

Target for next week is to get at least ten items on eBay/selling sites to bring in some extra pennies for the pot.

Rainbow_brite · 9 April 2018 at 4:32PM

Feeling a bit meh today. Drawing positives in that Saturday and Sunday were NSD's and I've made a start on tackling the clutter.

Had a bit of a setback however as I'd booked a few days at the seaside for myself, OH & DD before we got another offer which was too good to refuse. We accepted and I set about cancelling the seaside apartment. Apparently when I booked I chose a cheaper rate which had to be paid in advance and therefore forfeited the free of charge cancellation policy (this wasn't what was stipulated on my booking confirmation but was in the small print however). So, as my parents kindly let me book this on their credit card I now owe them an additional £491.40! Luckily they're in no rush to be repaid but would rather do it sooner so it isn't hanging over me. On the plus side at least I have two holidays to look forward to lol

beanielou · 9 April 2018 at 9:23PM

You will get there.
The good news is that you have two holidays to look forward to

Rainbow_brite · 10 April 2018 at 6:36PM

Thanks beanielou, definitely trying to see it like that although I am a little worried about finding the money to pay for it all lol

Tonight's tasks are:

Looking at things I spend significant amounts on and working out how to get them as cheaply as possible. For example, I've found a website I can get my e-cig refills from for £20 delivered. The same amount from my local shop would cost £27! Little savings like that will add up. Also need to look at my budget and make sure its realistic as I don't want to set myself up to fail and lose any motivation.

Down to my last £20 which I need to eke out for 9 days. Plenty of food in though so I can and will do this!

Rainbow_brite · 12 April 2018 at 9:34PM

Not much to report on the debt busting front but trying to keep up the diary entries as it does help to keep me on the straight and narrow. Yesterday and today were NSD's and I'm hopeful at least some of my £20 will make it in to the holiday savings pot. Feels like I'm just waiting for the 20th so I can start paying some debt off, downside to monthly pay I guess. Still haven't bought any cigarettes which is making a massive difference too.

Have redone my budget for May (will probably just stick to doing this every month as it fluctuates so much) and I'm confident I can make an overpayment on Loan 1 to get that paid off and start saving for our holiday. Also keen to know what my new monthly wage will be although I won't find this out until the end of May as I have overtime to come this month. Think I'll read some other diaries for some inspiration and tips. Hoping for ideas to boost my income and get some overpayments and holiday savings together....

Rainbow_brite · 14 April 2018 at 8:25PM

Productive day today. 16 items up for sale on fleabay/FB etc. Hopefully at least some of them will sell so I have some money to start the holiday pot.

Day off work Monday getting some jobs done at home so hopefully find some more things to sell along the way. The house is bursting at the seams so shouldn't be too difficult! Alcohol free weekend too so not bad going

Finding the right balance...

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