Debt Free By 2020

MeenaM wrote: »

yes, here is my diary although i've had a bit of a moan on it today !

We are all entitled to a bad day/week/month/year. I will go over and give it a read now!

indigowarrior wrote: »

Heres mine:
I do tend to ramble lol

Thanks for sharing, I will go over and read it now. Just done with Meena's latest post.

Good morning folks

It is 5 am and I can't sleep. Something is clearly troubling my hubby as he has not slept for two nights in a row. I am scared he's not telling me something. I have asked and he assured me that he is fine, just too hot and can't get comfy. I am quite an anxious person by nature, so I am probably building this up into something it's not.

I promised that I would share my plan to get out of debt so here it is!

Plan

As many of you know, I enjoy the Dave Ramsey show and have felt encouraged by the success of people on that plan. I know it isn't exactly MSE-friendly as it focuses on paying off debts smallest to largest. BUT - my smallest debt also happens to be the one with the highest interest. Bearing in mind, I only have two accounts to clear - a CC and a personal loan. This plan works out for me and is sensible, in my case, for the interest I am paying.

First things first, I am building up an emergency fund of £1000. As you can see from my siggy, I am £200 into it at the moment. I will not put emergencies on my CC any more. Only in the most extreme circumstances. I am getting slightly better at cash flowing, which certainly helps. For example, only this month, I managed to cash flow an emergency trip to Scotland for a funeral and I didn't go into debt for it. Sure, I had to use money from my emergency fund, which was sitting at £500 but that is what it is there for. Time to rebuild!

However, there is a twist. I plan to make extra payments to my debts while I am building this emergency fund. The CC is the first to go. I am paying £20 in interest every month and I have had enough of giving Barclaycard my money. The minimum payments are only £73 a month, at the current level of debt, so it would take over 2 years to repay this if I stayed at the minimum.

How do I intend to do this? Budgeting. I have tried doing a zero-based budget as Dave Ramsey preaches, but I find that there is always something hidden in there that catches me out. It has been a learning curve for sure. Instead, I plan to have at least £100 in my current account at all times to cover these unplanned expenses. I suppose by planning it, it is technically in the budget!

I am also planning to find extra money in the coming months. I have been re-selling on a well-known auction site, local selling sites etc. I am mainly getting rid of clutter. I have also been raiding charity shops for bargains. Recently I have found jeans by a high-end company that the charity shop didn't know the value of. I need to iron them and stick them up. I have also been buying at police auction - mainly perfume. These tend to sell very well. I only have 2 in my inventory at the moment.

Question

Can I ask your thoughts on something? I currently spend £250 a month on a season ticket. I have taken advantage of an interest free loan that my employer offers and I pay instalments out of my salary every month. This works out very well as I get the annual ticket which saves a lot of money. I am curious though - would you count this as debt because I haven't paid this up front? I am not proposing getting rid of it - just curious.

That's all for now. Have a great day.