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  • FIRST POST
    • BabyStepper
    • By BabyStepper 8th Jul 18, 7:39 AM
    • 315Posts
    • 1,098Thanks
    BabyStepper
    Tidying up the mess
    • #1
    • 8th Jul 18, 7:39 AM
    Tidying up the mess 8th Jul 18 at 7:39 AM
    I am trying to find ways to get me and OH out of the debt mess we are in. I became self-employed a few months ago and my credit card providers wrote to me to reduce my credit limit to just above what I owe. This was worrying and I'm now thinking they might call in those debts at any moment. Me and OH then sat down for the first time to list everything we owe and figure out what to do about it. We are in it together to sort it out but this is where we stand just now.

    Hitachi loan 844 0%
    Lloyds cc 1,311.39 mostly 0 % but 403.68 @17.9%
    Overdraft 2,000 0%
    Santander cc 3,367.30 0%
    Halifax cc 3,242.65 0%
    Barclaycard cc 4,614.38 mostly 0% but 838.75 @ 16.9%
    MBNA cc 5,213.34 0%
    Student loans (1) 8,160 (currently deferred)
    Student loans (2) 27,190 (payment taken straight from wage)

    Total 55,943.06

    We spent 10k we didn't have when we bought our house, front and back doors, new windows and damp treatment. 3k is still to be paid off after our wedding 2.5 years ago. The Hitachi loan is carpets and lino. Student loans have never been on the radar as something to be paid off but they are now. Other than that we have around 6-7k that we both just maintained on cards, not to buy anything in particular, just spending and forgetting about it.

    I need a coffee after writing all that.
    Last edited by BabyStepper; 09-07-2018 at 5:37 AM.
Page 18
    • BabyStepper
    • By BabyStepper 16th Apr 19, 4:48 AM
    • 315 Posts
    • 1,098 Thanks
    BabyStepper
    Nothing much to report, just thought I'd check in to help keep me on track.

    The soapnuts have arrived, let's see how they do in a wash today.

    Millionaire next door was a great investment. It hammered home a new long - term strategy, from paying off debt to building wealth and security for me and OH. This is helping with those moments of impatience and frustration with the debt (much less frequent now but still appearing sometimes).

    My First Direct account is open and the switch is complete. I may move the emergency fund in and then back out to trigger the 100 reward. Or I might wait until payday and move my wage through it, we'll see.

    Plans for the weekend have all been paid for with spends. Then it's only a week and a half until pay day and becoming overdraft free. I got a formal letter yesterday about my overdraft reduction, full of info about how they might call in the rest at any moment. I cannot wait to be rid of this one. So close.

    Other than that not much happening.
    May '18 21,228.07/April '19 14,380

    32.2% paid

    Getting it done

    • Kitten868
    • By Kitten868 16th Apr 19, 6:40 AM
    • 1,185 Posts
    • 2,985 Thanks
    Kitten868
    That's not not much happening. Thats huge strides. I'm really impressed. Nearly there on eradicating your next debt.
    Loan 1 4900/8000
    Loan 2 2900/5800
    Total 7800/13800 43% PAID

    And CC 1250/1900
    • enthusiasticsaver
    • By enthusiasticsaver 16th Apr 19, 7:54 AM
    • 8,373 Posts
    • 19,188 Thanks
    enthusiasticsaver
    Nothing much to report, just thought I'd check in to help keep me on track.

    The soapnuts have arrived, let's see how they do in a wash today.

    Millionaire next door was a great investment. It hammered home a new long - term strategy, from paying off debt to building wealth and security for me and OH. This is helping with those moments of impatience and frustration with the debt (much less frequent now but still appearing sometimes).

    My First Direct account is open and the switch is complete. I may move the emergency fund in and then back out to trigger the 100 reward. Or I might wait until payday and move my wage through it, we'll see.

    Plans for the weekend have all been paid for with spends. Then it's only a week and a half until pay day and becoming overdraft free. I got a formal letter yesterday about my overdraft reduction, full of info about how they might call in the rest at any moment. I cannot wait to be rid of this one. So close.

    Other than that not much happening.
    Originally posted by BabyStepper
    Hopefully you will get your switching bonus soon from FD. I think mine took 3 weeks from date of opening when I got mine. Putting some money in will probably help speed this up. I think I opened mine with 100.

    So close to getting rid of that overdraft. That will be a great achievement. How long have you had it?

    Glad you enjoyed the millionaire next door. I haven't read it. My view on building wealth is cutting back as far as possible within your lifestyle and maximising income and build up savings/investments gradually over time. We were never hardcore though and having recently signed on with an IFA or (lifestyle financial planner as he calls himself) he pointed out that we could have been millionaires had we not helped our children with house deposits/weddings/holidays etc or had nice holidays or invested in our home and cars but then we would be sacrificing all those things just for the sake of a number sat in accumulated wealth. We felt though we did not want to accumulate savings with no purpose for the money and also wanted to live.

    That is why we had separate savings pots. Long term for retirement in investments/pensions and mortgage overpayments. Regular savers/one or two year bonds for major home improvements and new cars and long term holidays. Internet savers for short term savings like the current years holiday, small house projects, car maintenance and emergency fund. So we saved/invested but also spent but looked for savings whilst doing it.

    Was there any one thing you took from the book which will help you achieve your goals?
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • BabyStepper
    • By BabyStepper 16th Apr 19, 1:28 PM
    • 315 Posts
    • 1,098 Thanks
    BabyStepper
    That's not not much happening. Thats huge strides. I'm really impressed. Nearly there on eradicating your next debt.
    Originally posted by Kitten868
    Thanks for that kitten 868.

    Also, I do enjoy a double negative.
    May '18 21,228.07/April '19 14,380

    32.2% paid

    Getting it done

    • Scott-Weiland
    • By Scott-Weiland 16th Apr 19, 9:05 PM
    • 446 Posts
    • 1,037 Thanks
    Scott-Weiland
    I'm glad everyone agrees that a treat now and again is ok. I have been guilty in the past of buying one treat then not being able to stop, but I think it's different this time. Also the first time I have budgeted properly for something like this, not gone '90 for a spa hotel, bargain, let's go!' then wondered why I spent so much (after travel, dinner, drinks, etc are added in). Me and OH have agreed to have a very frugal month next month, OH's idea, good to have him onboard.

    Scott - your comments about beans and bubble bath gave me a giggle - ewww!!! About Dave R, does anyone else do the 'giving' he talks about? It seems the advice on here is to stop all charity payments until you're debt free, not that I made any before anyway, but does he also mean gifts to family and friends? What does he mean? I don't want to become miserly and grabby with what I have, not appealing. I don't belong to a church, I can't imagine giving 10% away either. But it might not hurt to give something (just trying to counteract the poverty mentality again I guess). But how much, and to whom?

    I thought I'd bite the bullet and do my tax return yesterday. It's not due until January next year and I probably would have made some interest by keeping the cash in a high interest account until then. However, it's my first tax return and I didn't want any nasty surprises so I got the books out and did it. Everything filed, sorted and tax and NI contributions paid. Looks like my calculations were correct. By the time I'm doing this next year I will be debt free and have pension payments to add in to my return.

    Talking of which, I have opened a private pension and began the process of gathering up old pensions into the new account. This could take a while so I thought I'd be ready. I'll see how I go with that one.
    Originally posted by BabyStepper

    Sorry re Bubblebath gate lol Bobby Thompson classic joke.

    I think he means dont be donating fivers here tenners here too charities until your debt free which i would agree with. I see at work clients upto the eyes in debt but still paying out 50-75pm too charities its madness. I have no issues donating to charity but get in a good place first.
    • BabyStepper
    • By BabyStepper 20th Apr 19, 6:43 AM
    • 315 Posts
    • 1,098 Thanks
    BabyStepper
    enthusiasticsaver I think the main point I have taken from the book is to be careful about situations that would put me in a position of having to spend even more money to maintain what you thought was a one off expense. He gives examples such as moving to a very wealthy area, where it's not just the cost of the house but the cost of keeping up with what all the neighbours are doing. The wealthiest people live in modest areas where there are little expectations. He mentions children and private schools, how it's not just the fees but the expensive holidays, extra contributions to the school and so on, being thrown into a lifestyle where you will be excluded if you don't keep up financially, for example if you have kids and all the neighbours kids go to private school and yours are left out. There's a lot of emotional intelligence in it but it's also very factual and full of stats. The evidence is right there. My main concern is how easy it is to revert to old ways of doing things, spending money before I have it, keeping an eye out for things like that.

    As for the overdraft, I have had it forever, goodness knows how or when it started, I can't even remember being overdraft free. Very much looking forward to getting rid of it.

    Your savings pots sound very organised, I can only aspire to a system like that but I'm working on it. Me and OH also benefited from help from parents with our wedding, house buying etc and it is just the loveliest thing to do for your children. You have been very generous and I'm sure it's been appreciated.

    All the cash is where it should be and we seem to be on track with our budget again this month so that's good. I am still struggling with car envy from time to time but I would prefer to be debt free so it just has to wait. I'm glad to get a debt paid off in full at the end of this month, I really need the motivation just now.
    May '18 21,228.07/April '19 14,380

    32.2% paid

    Getting it done

    • enthusiasticsaver
    • By enthusiasticsaver 20th Apr 19, 7:35 AM
    • 8,373 Posts
    • 19,188 Thanks
    enthusiasticsaver
    Sounds interesting. I did google the book out of interest and read about the definition of UAW (under accumulators) and PAW (prodigious accumulator). We are definitely PAWs in that while our friends and family spent loads on cars and houses we have stayed in the same house for 30 years. Houses are a definite money pit and constantly moving up and on involves dedicating a lot of disposable income to it. Similarly cars, my DH had a company car while working so that was changed regularly but I used to keep mine for about 5-7 years, always bought outright and avoided the finance deals where possible. Now we intend to keep our retirement cars for about 5-7 years and will then probably go down to 1 car. I think the authors have a point. Not sure how the US housing areas compare to UK though but we live in a nice (suburban I would describe it) area but a friend of mine opted for a massively expensive renovation project on a character cottage in her late 50s and is still having to fund this through working up until late 60s and will have to rely on state pension to live. All their money is going into it. She will keep saying how lucky I am to be retired on decent pensions and I have to bite my tongue. Our financial situation is sometimes down to circumstances (things happen in life we cannot foresee) but sometimes they are down to choices we make. I heard someone else mention that on their diary (xspender I think) and she described it as lifestyle creep. I like to think we have the right balance for us but the keeping up with the Jones's is just making a rod for your own back. There will always be someone wealthier. As for spending before you have money that is common and symptomatic of the availability of buy now pay later, 0% cards, interest free deals which were prevalent 10 years ago and still now to some extent. It is worth bearing in mind that just because there is credit available to buy what you want now does not mean you should.

    It will be great to get rid of the overdraft and then on to the next card. Almost a third gone is fantastic. Just think when you are debt free you will have the money for your car very quickly.

    I had a massive head start with my finances in that my Dad was anti borrowing, a budgeter who liked to spend and I could see the results. Our priorities are our family and holidays but we don't borrow to spend on them.

    I think next year when you are debt free you will develop your own systems of saving for things important to you. You are doing brilliantly.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • Debsnewbudget
    • By Debsnewbudget 20th Apr 19, 8:17 AM
    • 285 Posts
    • 2,679 Thanks
    Debsnewbudget
    I love reading the Mr Money Mustache blog
    He is real hardcore FIRE (financially independent retire early) but a lot of his ideas and thoughts make you stop in your tracks.
    Read some of his blogs when you are ever tempted to spend.
    • BabyStepper
    • By BabyStepper 21st Apr 19, 5:39 AM
    • 315 Posts
    • 1,098 Thanks
    BabyStepper
    enthusiasticsaver The PAW and UAW thing he talks about is really interesting. He has a little formula to work out if your net worth is on track for where you could/should be financially at whatever stage in your life you're at. Basically your age x your pretax household income (from all sources excluding inheritance, minus what you owe) divided by 10. (He has worked this out through his studies). Of the resulting figure, if you're in the top 25% = PAW. Bottom 25% = UAW. If you're in the middle you're an average accumulator of wealth, AAW. For me to be a PAW I would need 135,000 - 180,000 net worth. My current net worth would be 42,000 without the debt, so currently around only 28,000. Both figures are in the UAW zone but without the debt and with 3,000 more in savings I will be in the average zone. That's quite motivating for me. Also glad my networth is positive and not negative at this stage, you can only start from where you are. Most of the wealth he talks about is in house equity, pensions, investments and savings. So not much of it is liquid. And it doesn't need to be because a modest lifestyle is key.

    He also talks about there being a corelation between people who are given money regularly from their parents (the example is $15,000 per year) and those people being UAW. Turns out being given so much money regularly has a negative impact on motivation to make a good wage and accumulate wealth, the extra cash tends to be used as disposable income. While the parents are PAWs and think they are helping, their children become UAWs. I thought that was quite sad.

    My family are all UAWs, even the ones with good incomes, they all spend far too much and there are some very large houses and expensive cars but no wealth. I grew up in a skint family where every penny got spent straight away. I have had some strange beliefs about money in the past, such as that I would never have any so no point in trying. I make an ordinary wage so in reality there is no reason why I couldn't. The reason the book uses a million as a benchmark is because it is a good amount of wealth achievable in a lifetime. You don't need money passed down from family.

    You are so right about moving house a lot, buying expensive cars and taking holidays. These are all important ways you can destroy your wealth if you're not careful. I don't think your wealth is anything to do with luck enthusiasticsaver, it's about good planning and knowing what you are doing. I have friends who have both retired and living a great life, and who will never be able to retire, taking on renovation projects as they approach 60 years old. I just watch and try to learn and know that will never be me. I'm not worried about YOLO, I seem to have a better time now knowing I am making good financial decisions.

    Anyway, this is a long post so I'll stop there. Could chat about this forever though.
    May '18 21,228.07/April '19 14,380

    32.2% paid

    Getting it done

    • BabyStepper
    • By BabyStepper 21st Apr 19, 5:42 AM
    • 315 Posts
    • 1,098 Thanks
    BabyStepper
    I love reading the Mr Money Mustache blog
    He is real hardcore FIRE (financially independent retire early) but a lot of his ideas and thoughts make you stop in your tracks.
    Read some of his blogs when you are ever tempted to spend.
    Originally posted by Debsnewbudget
    Hi there Debsnewbudget. Yes, I've read Mr Money Mustache, he's a bit too extreme for me, I'm more looking for a balance. Early retirement is not something I aspire to but might as I get older, will depend on how work is going and how I'm doing financially.
    May '18 21,228.07/April '19 14,380

    32.2% paid

    Getting it done

    • pidge04
    • By pidge04 21st Apr 19, 5:59 AM
    • 652 Posts
    • 2,124 Thanks
    pidge04
    You are paying off your overdraft imminently...that is absolutely fantastic news!
    Well done...how amazing it will feel to be liberated from that.
    V inspiring.
    O/D 1000/700
    CC 5400/2950
    LOAN 10000/3692
    • BabyStepper
    • By BabyStepper 21st Apr 19, 6:50 AM
    • 315 Posts
    • 1,098 Thanks
    BabyStepper
    Thanks pidge04, it will feel great to get rid of the overdraft, I can't wait.

    I am making good progress but although it all seems under control, I am furiously paddling away under the surface to make sure we have everything we need and keep this plan on track, it's not easy! Thanks for the encouragement, it helps a lot.
    May '18 21,228.07/April '19 14,380

    32.2% paid

    Getting it done

    • Moneywhizz
    • By Moneywhizz 21st Apr 19, 12:44 PM
    • 184 Posts
    • 873 Thanks
    Moneywhizz
    I think getting rid of the overdraft will be a great step forward. Even if you slowed down other debt repayments to be able to log into you bank and see a positive balance will make you feel so much better. When you live in an overdraft it is like you are spending money that you don't have. Not long to go now till that feeling is gone forever. Keep paddling on, you're doing great.
    • GlendaSugarbean
    • By GlendaSugarbean 22nd Apr 19, 6:30 AM
    • 526 Posts
    • 3,994 Thanks
    GlendaSugarbean
    It's such a great feeling when that overdraft is gone. Even better when you check your account and the end of the month and you are still in credit!
    • enthusiasticsaver
    • By enthusiasticsaver 22nd Apr 19, 7:34 AM
    • 8,373 Posts
    • 19,188 Thanks
    enthusiasticsaver
    I think getting rid of an overdraft will motivate you further as there is nothing like a negative balance in your current account to remind you that you are in debt.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
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