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    • Moguline
    • By Moguline 1st Jun 18, 2:04 PM
    • 742Posts
    • 2,387Thanks
    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 asap
    - Save a deposit and buy house by 2025
    - Mortgage-free by 2040
    - 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; 02-05-2019 at 10:34 AM. Reason: Moved SOA etc into first comment in thread so that the initial post isn't quite so long!
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    • ohshithowdidthathappen
    • By ohshithowdidthathappen 5th Jan 20, 10:40 PM
    • 461 Posts
    • 1,856 Thanks
    When we bought our first place, we were 23 (18 years ago). OH was on 30K and I was on 15K, the bank lent us 4x his salary and 1x mine, 100% mortgage with fees put on a credit card! It bought a 2 bed terrace that recently sold for 310K.
    If I use the same multiples for 2020, 4x OH salary today plus 1x mine = 345K. Only a little more than enough to buy that exact same 2 bed terrace! That shows how mad prices have got, it's only the rising market and the resulting equity that's allowed us to move up the housing ladder
    Total unsecured debt: 8500/45393 81% paid.
    Aiming for DFD of 03/21
    • Moguline
    • By Moguline 10th Jan 20, 6:16 PM
    • 742 Posts
    • 2,387 Thanks
    Realised that that Vodafone were still billing me for broadband that I cancelled in November! Cheeky so and sos!
    I called them and got it sorted, will receive a refund in the next 7 days -40!

    I also finally called about Bean's child benefit and will get the first payment in the next 7 days too.

    Both of these payments are very welcome as there's only 70 left in the grocery budget for the rest of the month.

    Hope everyone is getting on well.
    Current debt (01/11/2019): 18,941 32.3% paid
    • Moguline
    • By Moguline 15th Jan 20, 4:45 PM
    • 742 Posts
    • 2,387 Thanks
    Both the vodafone refund and the child benefit back payment arrived in my account today so the grocery budget has been replenished which was needed. Can't wait to see the end of January!
    Current debt (01/11/2019): 18,941 32.3% paid
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