Reducing Debt - being accountable and taking responsibility

enthusiasticsaver · 12 September 2017 at 10:06PM

How much your emergency fund should be depends on circumstances. I think in your situation a small one is ok initially as you have your DF to call on so I would prioritise the debt.

Good call on upping the pension. Most effective way of long term saving and after a while you won't notice.

DrSpendLittle · 17 September 2017 at 1:51PM

Just checking in to wave hello - I've been reading diaries over the past few days but completely failed to update mine!

Not much to report - having that 'middle of the month' feeling where my account balance seems low but static. Every £ is doing its job, but I don't feel any particular progress is being made. Itching to get to payday.

Still, were over the hump now, and I've managed well thus far in my first full month on budget as a debt slayer.

However, I'm struggling to reconcile with that impatient voice in my head that realises paying off debt faster equals the speeding up of time. I don't want to wish time away - life is too precious and full of joy - but I do want to be debt free now now now! Impatience has always been my downfall. I suspect this is the bigger lesson of my personal debt free journey. I'm happy with that.

For some reason, I'm itching to make a big purchase - a home desktop computer. Very easily justifiable in all but monetary terms. It's a phase and will pass, but this time last year, I suspect I would have already bought and financed it using store 0% credit. It's nice to see how my mindset is changing, but the old emotions are still very much there. Gotta play the long game. I'll save up and buy one next year.

This month's budget is still on track. Might need to shuffle some money around my ynab categories as my food budget is looking low and my fuel budget is looking flush. But, all doable within the ££s I have left til payday.

DSL

Mummy_bear · 17 September 2017 at 3:13PM

Hi, newly subscribed. You've done so well so far.

Re. Dave Ramsey I kinda skipped steps so to speak. I just wanted to get cracking with my debt busting. But I eventually started putting bits away in my Emergency Fund, small amounts like you have. Was so glad I did as when we had an actual emergency end of July beginning of Aug it was a Godsend. Now building it back up again.

Look forward to your updates.

DrSpendLittle · 18 September 2017 at 2:47PM

Mummy_bear wrote: »

Hi, newly subscribed. You've done so well so far.

Re. Dave Ramsey I kinda skipped steps so to speak. I just wanted to get cracking with my debt busting. But I eventually started putting bits away in my Emergency Fund, small amounts like you have. Was so glad I did as when we had an actual emergency end of July beginning of Aug it was a Godsend. Now building it back up again.

Look forward to your updates.

Thanks Mummybear! We sound in a similar frame of mind with wanting to pay off debt as quickly as possible. I could have put the £883 I paid of my debt this month into an emergency fund, but I just am too impatient to get started debt busting! Look forward to catching up on your diary too!

DSL

DrSpendLittle · 18 September 2017 at 3:06PM

Checking in to say hello and keep up to date.

Working from home today so no fuel or car parking costs. NSD so far but we have no clue what to have for dinner. We have stuff in but not too sure on a recipe just yet.

Super busy at work for the next two weeks, so hoping time flies by to 29th when its payday! Whoooo!

No movement on debt or spends since I last updated.

I've been using my JL partnership card for all food spends this month. The money I assigned to my groceries budget in ynab on 1st September is still sat in my current account. I will pay off the full balance of the card on the 30th using said funds. I do this because I like getting the Waitr0se £10 vouchers. But I also like the comfort of knowing I have the ynab groceries money sat in my current account as a buffer against any unforeseen direct debits (there are none, I'm 100% sure of this, but I just can't shake that old debt fuelled anxiety of having no money in my account to cover DDs). Totally psychological, but it works for me!

I'm tempted to do the same for fuel spends too. That way, I keep the assigned money for both categories (around £300 per month) in my current account until the last day of the month to alleviate random debt anxiety hangover, and then pay off in full on the last day of the month. Positives to this are that I will get more £10 JL vouchers and demonstrate good use of credit. Negatives are what Dave Ramsey always refers too - you spend more using plastic than you do using real money. Plus, it can encourage that 'buy now pay later just this once' mentality which invariably leads to the debt spiral we all know and loathe.

With all that said, I'm confident that I can stick to my budget and only spend what I have assigned that month. I guess I could pay half off half way through the month as a temporary measure / precaution? Does anyone else use credit cards like this to generate cashback? What lessons have you learned? Would you recommend it? Are you really against this practice? Let me know

DSL

wishingthemortgaheaway · 18 September 2017 at 4:16PM

If you are using YNAB though, you won't get into trouble or pay out more than you have. When you register a spend, it reduces the balance on the (for example) groceries budget, but you can record it to the credit card 'account' when you pay off the credit card just do a transfer from the correct account to the credit card to make everything balance properly.
(Or have I missed something about the way you use YNAB?)

ChasingSunshine · 18 September 2017 at 5:21PM

I also pay for pretty much everything on my credit card for the cashback. Only starting to get to grips with YNAB as this is my first month using it. I think as long as you are recording the transactions and the money spent transfers to the credit card account in YNAB then it will no longer be available in your petrol or groceries categories and you shouldn't overspend

CP2016 · 18 September 2017 at 6:25PM

My partner uses his credit card for buying fuel. It's budgeted for and when we enter the transaction in YNAB the budget moves from the petrol category to the credit card category. I think the trick is only spending according to your YNAB budgets and ignoring the bank balances when deciding if you can afford it. If you do that you should always have the budget in your credit card to clear it each month.

glass_half_full · 19 September 2017 at 7:29AM

Hi DrSpendLittle,
Love your diary by the way. I heard Martin Lewis on R5L yesterday talking about using a charge card to generate cashback, the example he gave was the Am*x. I think once the discipline of budgeting and spend control is well established, it could be a good idea. I haven't used a credit card since my LBM but I think I am going to give this a go since it is effectively free money.

DrSpendLittle · 24 September 2017 at 4:53PM

Long time no see!

Had a crazy busy week at work - was in the office most days - and I'm just coming up for air. Went south this week for a meeting and will be going north next week for another couple of meetings. Lots of travel but I'm managing to keep expenses down to just the bare necessities on the trips. This is definitely a change from my previous habits when I would have frittered dosh away on random stuff and numerous coffees that one only really buys when travelling and mooching in shops to pass the time whilst waiting for the train :rotfl:

Still on track with finances this month - had to pay for my ynab subscription which was £37 so I dipped into my EF to cover that. Also had a couple of work related travel expenses and dumped those on my CC so will be paying them off on payday and refunding myself at the end of next month when I get reimbursed. Only about another £10 on top of the train ticket, so all in all, I've survived. Had to buy a new case for my iPad as mine has disintegrated but got a second hand one off eB4y for £15.

Food category is just about on budget. Fuel is doing okay.

Looking forward to Friday when its payday and I can finish my first full month as a debt slayer on a high. I can't really say that I have felt hard done by this month in terms of 'not being able to' spend money. Like I said in my first few posts, I don't really want for anything at the moment. I don't feel like I'm missing out by paying £1000 off my debts per month. Lets see how the next month goes.

Right, I really need to check in with everyone's diaries and see how things are going. This week has just flown by and I haven't logged on since my last post!

Happy Sunday everyone! :j

Reducing Debt - being accountable and taking responsibility

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