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  • FIRST POST
    • Moguline
    • By Moguline 1st Jun 18, 2:04 PM
    • 304Posts
    • 880Thanks
    Moguline
    From debt mess to mortgage success in 5 years (hopefully!)
    • #1
    • 1st Jun 18, 2:04 PM
    From debt mess to mortgage success in 5 years (hopefully!) 1st Jun 18 at 2:04 PM
    Hi everyone,

    I've been lurking for a while and thought I'd start my own DFD to keep myself accountable.

    I'm 34, my husband is 35. We have a nearly 4-yr old son. We live in a rented house and have zero savings, and quite a lot of debt. It was years of me overspending obliviously (I blame my upbringing, my parents have always spent every single penny they've earned and I just sort of thought it was normal to always be skint). I started by getting a credit card, then shifting that to a 0% balance transfer card, then kept spending on the old card. Rinse and repeat for years and years. It just plodded along with me making minimum payments. Then, at the end of last year, all my 0% balance transfer windows ran out at the same time, and I wasn't eligible for any more 0% transfer cards. That's when I woke up and started looking into what I can do about it. I had resigned myself to the fact that I'll never have a mortgage and will be poor in retirement. I started looking around the internet for advice on how to handle debt, thinking I may be able to slowly reduce it a bit, and found an article called "News Flash: Your Debt is an Emergency!!" by Mr Money Mustache.

    It was a real reality check for me, but also gave me hope that even on a modest income, I could make massive changes to my lifestyle and thus become "well off".

    I owned up to my husband, who was unaware of the extent of my debt, and started properly reviewing our finances and budgeting.

    I started in January with a grand total of 23786 in unsecured debt. We have already been able to pay off quite a bit. I have consolidated my overdraft and most of my credit card debt into two loans. The interest rate on those is still quite high, as my credit rating is not amazing, but it's less than half the interest to what it was before, so it's a start. I also like the predictability of loan payments.

    Anyway, our goals are now:
    - Debt-free by end of 2019
    - Save a deposit and buy house by 2022
    - Mortgage-free by 2030
    - Retire before 60 (2044)

    Once the debt is cleared, we are planning on using our new-found frugality to learn how to live within 50% of our income, giving us leverage to save up a decent deposit quickly, then subsequently overpaying on our mortgage, then aggressively saving and investing with a view to early retirement. (we also have private pensions through our jobs which are both pretty decent and can be paid out from age 55).

    SOA and all other info in first comment below.

    Any criticism/advice gratefully received!
    Last edited by Moguline; 04-06-2018 at 9:22 PM. Reason: Moved SOA etc into first comment in thread so that the initial post isn't quite so long!
Page 14
    • Moguline
    • By Moguline 1st Aug 18, 9:50 AM
    • 304 Posts
    • 880 Thanks
    Moguline
    I'm very excited today as my new niece was born this morning. I'm very happy she's decided to join the best birthday month there is.
    I had the present for her in my Amazon basket for weeks, so sent it straight off this morning. I order on German Amazon for my German family as it saves so much on postage!
    I went over budget by 5 because I couldn't help myself, but have taken this off the "Other" budget to make up for it. It's not everyday you get a new niece, so I'm not too worried about this overspend.

    Spud has been invited to a birthday party on Saturday so will need to try and find a cheap present for that.

    I've had a couple more payouts from Jobseeker and Ipsos, so now have 4.50 in Amazon vouchers sitting in my account, ready to be used for another friend's birthday this month. Sadly, I can't use UK vouchers on the German Amazon website, but oh well!

    Did a little top up shop at Aldi yesterday which came to 11.50 but should last us until the end of this week. I've been a bit frivolous with my food spending right after payday, so am trying to reel it back in now.

    The frivolous food spending also resulted in a 2lb gain at SW last night, so will need to sort that out as well!
    I made a big summer veg stew last night which is on plan and was very cheap as I used up all the free veg I've been given lately. I've got enough leftover to do my work lunches for the rest of the week too.

    Spud's big birthday present should arrive today, which is very exciting! He's agreed to get rid of a few toys before his birthday to make room for this. We'll take those to the charity shop together later this week. Very proud of my little Spud, he's really happy about giving his toys to help kids who don't have very much.

    Budgets for the rest of the months are now:

    Groceries: 155 left of 220
    Slimming World: 15 left of 20
    Bus/taxi: 27.60 left of 32
    Other 45 left of 60
    Spud birthday party 60 left of 60

    I get paid on the 24th this month, so just over 3 weeks left - not too bad really, I feel like I can do it.

    In other news, we've decided to build up a decent store cupboard of all our staples whenever a cheap deal presents itself. The plan is to just buy a couple of extra things here or there whenever we come across bargains and slowly build it up that way. This will hopefully lower our overall grocery bills, but also give us an emergency supply in case of any disasters haha (I'm looking at you, no-deal Brexit!). I'm feeling a bit like a paranoid prepper, but I'm quite enjoying putting together a list of stuff we'd like to have in at all times. I'm going to clear out a built-in cupboard in my dining room to house these food stocks, hopefully something worth selling will show up in that cupboard too - win win ha!
    Last edited by Moguline; 01-08-2018 at 9:54 AM.
    LBM: Christmas 2017 Highest debt (01/01/2018): 23,786 As of 30/07/2018: 19,570.38 Total reduction in 2018: -4,215.90 DFD of my dreams: 31/12/2019
    • Moguline
    • By Moguline 2nd Aug 18, 11:39 AM
    • 304 Posts
    • 880 Thanks
    Moguline
    Just been on the phone to Tesco trying to find out what the limit for overpayments is as they mentioned overpayment limits in the loan confirmation letter I got. Turns out it's close to the settlement figure, so overpaying by several hundreds each month shouldn't be a problem at all.

    The balance of that loan is showing as 17,800 so I phoned them to check (it was a loan for 14,500). They explained that they always show the balance of the total loan if you go over the entire lifetime of the loan with no overpayments.

    If they did that with my Halifax loan of 17,800 that I had, it would have shown 23,200! Eek.

    So I've reduced the total payable by around 5k by switching to the Tesco loan!

    I actually think this is a much fairer way of showing the loan balance, but it will mean the debt total next month will look higher (even though it's not), if that makes sense. I need to work out how to account for that in the total paid off calculations I do.

    The early settlement figure for the loan would still be much closer to the 14.5k I borrowed. And actually, this way, I can see how much the overpayment I've made has saved me in additional interest right away.

    It means the debt total will look higher at first, but will also go down far more rapidly, as it takes off the payments I make PLUS the interest I've saved by overpaying.

    Can't wait for it to go down!
    LBM: Christmas 2017 Highest debt (01/01/2018): 23,786 As of 30/07/2018: 19,570.38 Total reduction in 2018: -4,215.90 DFD of my dreams: 31/12/2019
    • Gemsy81
    • By Gemsy81 2nd Aug 18, 7:59 PM
    • 163 Posts
    • 493 Thanks
    Gemsy81
    Thats a great saving on the loan, you must be thrilled!
    • Moguline
    • By Moguline 2nd Aug 18, 8:16 PM
    • 304 Posts
    • 880 Thanks
    Moguline
    I am, thanks Gemsy! Lowering interest makes such a difference! It's startling that it's several thousand pounds!
    LBM: Christmas 2017 Highest debt (01/01/2018): 23,786 As of 30/07/2018: 19,570.38 Total reduction in 2018: -4,215.90 DFD of my dreams: 31/12/2019
    • beanielou
    • By beanielou 2nd Aug 18, 8:24 PM
    • 56,269 Posts
    • 227,662 Thanks
    beanielou
    I am, thanks Gemsy! Lowering interest makes such a difference! It's startling that it's several thousand pounds!
    Originally posted by Moguline
    It is scary.
    Lou~ Debt free Wanabe No 55 DF 03/03/14.
    **Credit card debt free 30/06/10~** **Weight loss 2 stone 11 lbs **

    "A large income is the best recipe for happiness I ever heard of" Jane Austen in Mansfield Park.
    ***Fall down seven times,stand up eight*** ~~Japanese proverb.
    It starts with you, it starts from now. *** It is ok to be me.***
    ***Keep plodding***
    Out of debt, out of danger. MFW 2018. No 144
    • Moguline
    • By Moguline 3rd Aug 18, 9:24 AM
    • 304 Posts
    • 880 Thanks
    Moguline
    I've just checked my Experian credit score, and it has gone up to 884, which is in the "good" range!

    So happy.

    That's a long way to come from 620 (Poor) in February.
    LBM: Christmas 2017 Highest debt (01/01/2018): 23,786 As of 30/07/2018: 19,570.38 Total reduction in 2018: -4,215.90 DFD of my dreams: 31/12/2019
    • beanielou
    • By beanielou 3rd Aug 18, 9:26 AM
    • 56,269 Posts
    • 227,662 Thanks
    beanielou
    I've just checked my Experian credit score, and it has gone up to 884, which is in the "good" range!

    So happy.

    That's a long way to come from 620 (Poor) in February.
    Originally posted by Moguline
    Thats good
    Lou~ Debt free Wanabe No 55 DF 03/03/14.
    **Credit card debt free 30/06/10~** **Weight loss 2 stone 11 lbs **

    "A large income is the best recipe for happiness I ever heard of" Jane Austen in Mansfield Park.
    ***Fall down seven times,stand up eight*** ~~Japanese proverb.
    It starts with you, it starts from now. *** It is ok to be me.***
    ***Keep plodding***
    Out of debt, out of danger. MFW 2018. No 144
    • Moguline
    • By Moguline 3rd Aug 18, 9:30 AM
    • 304 Posts
    • 880 Thanks
    Moguline
    Just checked my other two scores as well.

    Noddle has gone up from 572 last month (poor) to 590 this month (fair).

    Clearscore has gone up from 367 last month ("moving on up") to 405 this month ("on good ground").

    Very happy with this overall trend!

    Replacing credit cards with loans was definitely a good move for me.
    LBM: Christmas 2017 Highest debt (01/01/2018): 23,786 As of 30/07/2018: 19,570.38 Total reduction in 2018: -4,215.90 DFD of my dreams: 31/12/2019
    • Purplemumof2
    • By Purplemumof2 3rd Aug 18, 9:39 AM
    • 6,314 Posts
    • 23,366 Thanks
    Purplemumof2
    You're doing great Moguline

    How lovely a new niece, great idea with the German Amazon.
    Official DFW Nerd Club - Member no. 791 - Proud to be dealing with my debts
    MBNA: 6060.00 Cap 1: 170.00 BC: TBC

    POAMAYC 2018 #041 PD 6919.86/7000
    Savings for Christmas 273.72/400
    20p Savers 2018 2 Savers 2018 50p Savers 2018 SPC 11 2018 #003
    • Moguline
    • By Moguline 3rd Aug 18, 8:17 PM
    • 304 Posts
    • 880 Thanks
    Moguline
    A good MSE day today.

    Got a good present for Spud's friend for tomorrow at half price.
    Then got some very cheap party supplies in Wilko in the reduced section which will come in very handy for Spud's own party.

    I was also eligible for a mobile phone upgrade from today, so I called the company but they couldn't do me a deal to match the new customer deals you can get on comparison sites, so I have cancelled the contract and set up a new one. I will get a very new phone and more than twice the data I get now, and pay 7 less a month than I do now.
    I was originally going to go with a SIM-only plan, but my phone has recently started showing signs of aging so I could really do with a new one. And I really need one with a good camera as I sold my DSLR and use my phone for all photos I take of Spud.
    I should still be able to sell my old phone for around 50.
    I'm feeling happy to be getting a new phone and more data for quite a bit less money, but slightly disappointed that I couldn't bring myself to just get a really cheap phone ha.
    I don't really have any other luxuries in life though, and would rather save an extra tenner full I my grocery budget or transport budget.
    In other news, I have decided not to go to the dentist this month. I'll go for free once I'm pregnant instead. A couple more months now won't make much difference and I only need a checkup and 1 filling anyway.
    With this new-found cash, I'll be doing a flying visit to Germany in November. I found some very cheap flights and coach tickets and can do it all-in for 47!
    It's my brother's 30th and I'll be showing up at his birthday party as a surprise. I'm very excited about this!
    LBM: Christmas 2017 Highest debt (01/01/2018): 23,786 As of 30/07/2018: 19,570.38 Total reduction in 2018: -4,215.90 DFD of my dreams: 31/12/2019
    • GlendaSugarbean
    • By GlendaSugarbean 4th Aug 18, 8:40 AM
    • 94 Posts
    • 608 Thanks
    GlendaSugarbean
    That's a very cheap trip! Enjoy
    • Moguline
    • By Moguline 12th Aug 18, 7:57 PM
    • 304 Posts
    • 880 Thanks
    Moguline
    It's been a while since I last updated - been so busy!
    Husband got a loan with 9% interest which we have used to pay off his overdraft and the rest of my Halifax loan.
    As that's now our highest interest debt, it'll be our priority. We'll use any spare cash towards that.
    It's another step in the right direction in terms of lower interest!
    Birthday month has meant we have been a little bit spendy, and we've had a couple of unexpected bills as well, so things are quite tight now for the rest of the month. I've moved the PR application to next month, and have had to take some money out of the savings account to account for this.
    We're back on track now though, with a tight budget that we're sticking too - I guess blips can happen. Still a bit disappointed but at least we've moved on now!
    Only a few days until mine and Spud's birthdays. Gifts are wrapped and party is planned - just hope the weather will be nice next weekend as we had planned a picnic party!
    LBM: Christmas 2017 Highest debt (01/01/2018): 23,786 As of 30/07/2018: 19,570.38 Total reduction in 2018: -4,215.90 DFD of my dreams: 31/12/2019
    • Moguline
    • By Moguline 12th Aug 18, 8:14 PM
    • 304 Posts
    • 880 Thanks
    Moguline
    I took Spud swimming again today.
    Am debating joining as a member. It would cost 13.50 a month to go as often as I want. It's 4 per visit otherwise. I could go on my own in the evenings sometimes, I'd like that I think.
    Something to consider if I keep taking Spud every Sunday.
    His confidence is really coming on, he was terrified of the water at first, but I managed to get him to jump in from the side today, blow bubbles and even submerge his head for a second. His paddling motion is improving too. We are a long way from swimming properly, but definitely getting more comfortable just being in the water.
    LBM: Christmas 2017 Highest debt (01/01/2018): 23,786 As of 30/07/2018: 19,570.38 Total reduction in 2018: -4,215.90 DFD of my dreams: 31/12/2019
    • mark88man
    • By mark88man 12th Aug 18, 9:04 PM
    • 3,223 Posts
    • 6,707 Thanks
    mark88man
    Does he have goggles - my kids loved them and you can get reasonably prized ones which are ok for just splashing around. That and a couple of floats will see him through.

    Well done on doing some consolidation and cost reduction. Makes every you overpay now even more valuable.
    Things happen for a reason. Often the reason is we are stupid & make bad decisions.
    Weight - Fluctuating - less than I was more than I should be
    1/18: CC:11.5K@0% - Car Loan:17K@2.8% - Mort:145K@2.9%
    Decrease in Total Debt 2016:13.4K 2017:8.3K 2018-1H:11K
    • beanielou
    • By beanielou 12th Aug 18, 9:39 PM
    • 56,269 Posts
    • 227,662 Thanks
    beanielou
    So is that you with two loans then?
    Lou~ Debt free Wanabe No 55 DF 03/03/14.
    **Credit card debt free 30/06/10~** **Weight loss 2 stone 11 lbs **

    "A large income is the best recipe for happiness I ever heard of" Jane Austen in Mansfield Park.
    ***Fall down seven times,stand up eight*** ~~Japanese proverb.
    It starts with you, it starts from now. *** It is ok to be me.***
    ***Keep plodding***
    Out of debt, out of danger. MFW 2018. No 144
    • Moguline
    • By Moguline 12th Aug 18, 10:39 PM
    • 304 Posts
    • 880 Thanks
    Moguline
    Thanks Mark88man, yes, I got him goggles a couple of weeks ago and it's really made a difference! Determined to get him to swim fairly soon - I grew up around loads of lakes so love being in the water!
    Beanielou - yes, we've each got a loan and that's it!
    Much more manageable!
    There's around 5k on the husband's one (which is the amount without interest) and 17.5k on my one (which includes all interest - it was a loan for 14.5k). Tesco are weird putting it firm like that, and it's a bit annoying as it's down in my credit report as 17.5k as well when with all other providers it would be down as 14.5k. Oh well, it won't matter once it's paid off anyway.
    And it'll go down very quickly with each overpayment.
    LBM: Christmas 2017 Highest debt (01/01/2018): 23,786 As of 30/07/2018: 19,570.38 Total reduction in 2018: -4,215.90 DFD of my dreams: 31/12/2019
    • Mkaan
    • By Mkaan 12th Aug 18, 11:55 PM
    • 20 Posts
    • 12 Thanks
    Mkaan
    Hi Moguline
    Came across yr diary, and have read it all!!!!
    Even though i dont have any debts, luurve seeing others journey's. Well done
    • Moguline
    • By Moguline 13th Aug 18, 9:47 AM
    • 304 Posts
    • 880 Thanks
    Moguline
    Thanks for popping by Mkaan, well done on not having any debts!! I wish I was in your position haha!
    LBM: Christmas 2017 Highest debt (01/01/2018): 23,786 As of 30/07/2018: 19,570.38 Total reduction in 2018: -4,215.90 DFD of my dreams: 31/12/2019
    • Gemsy81
    • By Gemsy81 20th Aug 18, 1:47 PM
    • 163 Posts
    • 493 Thanks
    Gemsy81
    Hi Moguline - finally caught up with your diary! I am having the same swimming debate also - now I have paid for the intensive lessons, I really want LO to keep going, and our local leisure centre is really cheap.

    I also went down the waiting for the dentist thing, and I am actually pregnant now so it was worth doing! Last time I was pregnant I ended up needed a root canal so it saved me loads!
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