Life After Debt

There is a forum I go on quite a lot and they were instrumental in helping me first getting cracking with my debt.

I was lurking around a different area of the forum and I found that someone who used to run a thread had started a new one. They closed the old one, which was their Debt Free Diary, when they became debt free in January this year.

Their new thread was about how after they became debt free they had suddenly started experiencing huge anxiety over money, about saving, and feeling immense guilt whenever they spent any money even though they had actual money to spend.

This has got me thinking because I wonder what will happen after I become free from my credit card and overdraft debt.

The truth is I won’t become debt free even when that is clear, as I will still have a student loan, and I still owe my boyfriend money. All it means is I will be free from the highest accruing interest debts.

But I know that I want to live on the same reduced disposable income, as I want to put what I am spending on debt clearance each month towards my savings. Because I want to learn to drive. I want a car. I want to travel. And I want a home of my own. Which means the debt tackling journey will begin all over again.

A mistake people make (I certainly made this mistake) is they say ‘Oh if only I had a pay rise, then everything would be ok!’

The trouble is people match their spending to their income. So if you get a 20% pay increase you will soon increase your spending by 20%.

So I want to make sure when I have paid off my credit card debt and overdraft that I put all that money towards my savings.

Another popular money management term is ‘Pay Yourself First’

Sounds fun doesn’t it? I like the sound of paying myself money.

But what it means is you transfer the money from your paycheck to your savings before you even get a chance to register it being there in your account.

Some companies will do this for you, they’ll split your wage between two accounts. I know that my employer does this.

So getting out of debt is one hurdle. What you do afterwards is the real challenge.

You know there is that statistic of x% of people who lose weight put it all back on PLUS MORE within a year?

I’m not sure if anyone has ever done a similar stat for debt but I don’t want to be in that group.

The sad thing is I have a long way to go before I worry about this.

Rebellion 1. Here comes the money

I have become a lot more open about my debt. Not just on this blog but also to my friends. I make small references to my debt to my Dad, as I am not ready to reveal the full truth, and I wouldn’t dream of mentioning it to my in laws until long after the debt has been cleared, but I am ok with telling people about what I am doing.

I remember in 2003 in one of my issues of Q Magazine there was an advert that scared the hell out of me. It was of a filthy and untidy bedsit, and it was for a bank, or a debt company or something, and it had the words ‘Somewhere along the line life starts costing you money’.

It struck fear into me. The fear that one day I would have no money.

The reason why I feared this was because in 2003, and indeed until long after I started University 5 years later, my family struggled for money. More than struggled. We had nothing.

I was so scared of debt that I was reluctant to start University. I was terrified of credit. I was terrified of bills. I went into panics whenever I spent money. I absolutely hated spending money on food as I thought it was wasted money.

I have long had an irrational hatred of those who are ‘rich’ or ‘well off’. I know this is wrong but part of me can’t believe they may have problems or concerns. This is because every single month of my teenage years was spent living with the fear that this would be the last month in our house before we would lose it.

So really, my getting into debt was a form of rebellion. A stupid, spiteful, self destructive rebellion but a rebellion all the same. I wanted to buy things without thinking about the cost. I wanted to spend hundreds of pounds on food in restaurants because I could. I wanted to buy new clothes. I wanted to see films when they came out. I wanted to drink with my friends. I wanted to buy a vinyl when it was released. I wanted shoes that didn’t have holes in. I wanted to live like a normal person. I didn’t want to care about money any more.

I threw away food that was perfectly edible but had passed it’s ‘Best Before Date’ as a reaction against eating out of date food and donated stale tea bags as a teenager. I spent so much money on ethical toilletries that were more philosophical than I was as a reaction against a point in my life when I had to use a communal ‘mens’ aerosol deodorant as who the hell did I think I was demanding a separate woman’s deodorant when we needed that money for food? (this is a true and disgusting story)

I would go to the cafe around the corner for scrambled eggs when I had eggs and bread at home because their’s was ‘better’

Yes, I was a twat.

And of course, those records I bought would have to be sold for a tiny amount when I realised I couldn’t pay my credit card bill. I cried when my dad bought me a kindle for my birthday when I asked for money.

You know how they say when you deny something, like chocolate when you are on a diet, you just crave it more and more until you snap and eat a 16 portion cake on your own? (thankfully this is not a true story) Well, that’s what I was like with shopping. I had gone years and years denying myself anything, hyperventilating whenever I did have to make a purchase no matter how essential, eating meals that consisted of 7p instant noodles and frozen sweetcorn that one day I snapped. I don’t know exactly when it began, well ok, I have a pretty good idea, but that is a story for another day. All I can say is I was depressed and my career options were so limited that when you see absolutely no chance of ever having any actual money in the near future, then credit becomes your friend, your chance at being happy.

I can honestly say I am now happier than I have ever been, and I think that is why I can tackle the debt, because gone are the days when I would get into states of utter mess when confronted with my bills. Gone are the days when I would have to round up the best vinyls I had, the ones I loved, like Unknown Pleasures by Joy Division, Cut by The Slits and the first Queen album and take them to the local second hand store and get a pittance each for them.

Gone are the days when I would be so embarrassed to tell the boy I needed to borrow money for the Broadband bill that we would get cut off before I could face the truth.

Yes, I have made mistakes. I have behaved disgracefully, I have spent all my money, then money I didn’t have, and then other peoples money.

The past is the past, all I can change is the future, and I do believe I am a better person now.

 

 

I Made a Food!

Today I banished three of my tins from the tin store of hell.

I made the above, a little red bean chilli, adapted from ‘The Bean Book’ by Rose Elliot.

When I say adapted, I mean I went totally renegade on the recipe and added frozen sweetcorn and peppers, paprika, smoked paprika (when one type of paprika just isn’t enough), oregano, and I may have been a little liberal on the garlic.

The jury is still out on whether the smoke paprika was a wise decision.

Still it used up a tin of chopped tomatoes and kidney beans.

I estimate the cost of this meal at being around £1 per portion including the rice (there were two portions). I know it’s hardly the 9p Jack Monroe Burger (she is the food love of my life!) but I am so pleased I actually made something from scratch with ‘real’ food in it and used up some tins from my stores in the process.

I also made a delicious hummus, also from the same book. And in true money saving spirit I didn’t buy this recipe book I borrowed it off my boyfriend’s sister.

There is no picture of the hummus because, lets face it, hummus is just gloopy chickpeas and isn’t exactly picturesque. It is delicious though.

Between my boyfriend and I we also used up a packet of wholemeal pitta breads which had been in the freezer for about 5 months.

I do have a little more time this weekend to cook/make things.

I have really enjoyed doing some cooking of any description and may make some more stuff tomorrow.

In other news we took a small car’s boot worth of stuff to the tip, it doesn’t really seem to have made any difference to the state of our house but at least we no longer have broken crap in our house.

I also was waiting for my statement to come through on the credit card I had ‘cleared’ in January to see if there had been any interest added to it. The new statement said the balance was £0 so I phoned the credit card company to close that card once and for all.

I am still waiting on two statements, but my debt is now around £5576.53 which is down £166.75 from last month.

I started 2017 with £5996.12 of debt so I have already paid off over £400.

Just a few more £1 meals and I will be ok.

Another day, another spreadsheet

I am off work ill. I am the sort of person who meticulously plans out my day. Alright, some days it may be a bit vaguer, with a few things on a to do list and a rough structure, and other times every single minute is planned out.

My point is I don’t do very well with ‘free time’ as I feel immense guilt if I waste time. I feel bad if I waste anything but time is precious.

That’s not to say I don’t sit on the sofa and watch three episodes of Frasier on Channel 4 in the morning, but that’s OK because I actively enjoy that (or am working on my laptop or putting on a wash load at the same time) and that means that that has a value for me.

But sick days are different. I am never quite sure how to navigate them. If I go to the shops to buy cough medicine and someone I work with sees me will I get in trouble? Will I look like I am enjoying the trips to Savers to buy lemsip far too much? Will they think I am truanting?

I have learnt the hard way that being too active on a sick day makes me feel worse, so I have settled for some spreadsheet work at home.

I have long been planning on producing some epic spreadsheet work for my spending records since April 2015. I wanted to produce the data to show what percentage of my income was spent on all the various categories I have of spending.

For the moment I have decided that going that far back will be a bit time consuming and potentially very boring even for someone who loves spreadsheets as much as me. So for now, as I have a very comprehensive record for it, I have decided to just focus on how I spent my money in 2016.

First of all I discovered that 32.235% of my income in 2016 was spent on discretionary, non Bill, related purchases.

My ‘income’ in 2016 was £15603 (in today’s post I am using £15603 as my income amount as that is all the money I had come into my life in 2016, either through gifts, wages, selling things, shopping vouchers etc. In yesterdays post my ‘income’ was £10893.65 as that is the amount I earned through employment in 2016).

Since my income in 2016 was £15603, and 32.235% of it was spent on purchases that could be deemed as ‘non essential’ that means, according to my calculations, I spent £4855.55 on stuff I could have lived without.

Hmm.

That would have done an awful lot to clear my debt, if maybe I had visited the coffee shop a lot less and my cafetiere getting dusty on the kitchen windowsill a lot more.

Now you can appreciate why I am doing a No Spend Year.

Also this has decided something for me.

I am soon to be travelling to the South Coast of England for my friend’s hen party weekend, and I was debating about whether or not I would be allowed to buy a coffee from either the connecting train station shop, or on the train from the buffet cart.

I asked my boyfriend and he said ‘of course you’re allowed’, and I think it is an established truth that if someone else gives you permission to cheat that makes it OK, and I was being persuaded to think ‘I will be on a train for 4 hours and people do get thirsty and need to drink…’ So I was ignoring the fact it would be a ‘solo’ coffee without any sort of social interaction to make it OK.

But I have decided that I am not going to die of thirst or lack of caffeine if I have to go a few hours without coffee, and seeing how much money I spent in 2016 on non essential food (£1056.25 or 7.01% of my income last year) is depressing and it may be around £6 I would have spent in total on my journey there and back, but that’s £6 that could be put to better use.

I don’t want to seem like a killjoy and that I am determined to not enjoy myself this year, but this year is about saying No to what doesn’t matter and saying Yes to having a better quality of life on a budget. And to me a better quality of life involves spending more time socialising with my friends, that £6 could go towards my birthday party fund (I think it is lovely of WWE to hold Wrestlemania so close to my birthday, it’s very kind of them.)

It was the ‘I need this, I want this, I deserve this’ train of thought when purchasing that got me into this mess. And I must tell that side of me to stop being so wanton and instead straighten up.

 

 

I have options (shopping options)

Today marked an important day for my finances.

I said at the start of 2017 that I would be allowed to buy clothes if I bought them with vouchers and spent nothing in terms of cash on them.

Today I got my Tesco club card statement and vouchers through. In the last three months I have collected enough points to be rewarded with £10 in vouchers.

Add this to my faithful £6.50 in vouchers collected across the previous 6 months and I have a nice little pot of possibilities.

My boyfriend kindly agreed that the Tesco Club Card vouchers can all be mine this year, and I know that I can do a club card boost and exchange them for up to 4 times their value on meals out and things, but having looked through the options I don’t think my boyfriend and I would actually enjoy the places on offer.

Today was also notable because I earned 500 points for uploading pictures of my shopping receipts on the great consumer market research scheme ‘Shop and Scan’ which means I now have enough points to exchange for up to £20 in Vouchers, for places like New Look or Amazon.

The old me, if I suddenly had vouchers that were mine to spend, spend, spend would have used them in about 30 minutes.

I am not in a hurry to use them, which feels great, like I am in control, because part of the No Spend Year idea is also to produce less waste, to revamp, reduce, reuse and recycle. So do I need anything?

No.

So they will sit proudly underneath the Hello Kitty magnet on the fridge until I have a real need to use them.

I have also come to realise something just about everyone else on the planet had already taken as an established truth which is that it really pays to buy quality first time round.

For instance, I have always been more cheap and cheerful then quality, because even when I was spending other peoples money (I mean on my credit cards, not that I was going through people’s wallets, honestly guys I’m not a thief!) I had a sense of spending as little money as possible.

As a result of this I buy a £4 bra that lasts about 5 months before the underwire pokes out and it is all stretched and baggy. When if I had bought a nice Marks and Spencer’s bra (is it just me or does it seem that you can do no wrong if you go to Marks and Spencer’s?) for about £25 I would probably still have it 5 years later.

I have realised it pays to buy good quality the first time round through two ways.

One, My Doc Martens. I spent £90 on them two years ago and they are only now beginning to be ever so slightly worn out. They still have, I reckon, another 2 years in them at least. They are certainly the most expensive item of clothing I have ever bought, and I know it’s shallow to say this but they make me very happy.

Also before the No Spend Year began, in late 2016 I bought a pair of jeans to see me through 2017. They cost £30 which given the most I had ever spent on a pair of jeans before was £14 seemed like a fortune to me.

Well, I can happily say they are the nicest jeans I have ever worn. They are beautiful and the quality of them feels great compared to the very flimsy £9.99 jeans I had spent the majority of 2016 in.

So I will save my money from now on and buy higher quality items when I need to instead of trying to buy as much tat for as little money as possible.

A Sneaky Pre-Superbowl Post

A few financial things have taken place since earlier.

I have decided to enter a 10k race which takes place on my birthday weekend as a novel way of celebrating the event. I had decided last year that entrance to races like this would be allowed on the basis that I normally run alongside my friends or boyfriend, and that it involves raising money for charity.

However I lacked the foresight to create a budget and category for this which led to a hasty ‘where the hell do I put it on my spreadsheets?’ and decided it would be another thing for the social category.

Then I checked Facebook for the first time in a long time and saw my friend had posted about collecting the money for the Hen Party weekend at the end of February, so I transferred that money across.

My boyfriend has temporarily lent me the money for both until I go to the cash machine tomorrow (on account of me rounding my bank account down).

This led to an excess of £1.68 in my account which I then paid towards one of my credit cards.

I also have non financial and social anxiety news. As you may have picked up from reading these posts I have a bit of a weight problem.

I record my weight everyday and do a weekly average on Sunday’s. I also use the app MyFitnessPal to monitor my daily calories and nutrients.

I have lost 9 pounds since the start of the year.

I do have the potential to put it all back on tonight with the Superbowl food we have planned, but until that happens I’m just going to do a little happy dance in the corner.

Payment a Day

My bank account as of this moment only has the exact amount of money left for the two remaining bills that need to come out before next payday.

This is because of the following:

I have transferred the bulk of the remaining money to my savings account. I have transferred the money that covers the budgeted categories to keep it safe.

Safe I hear you ask? Yes, you see with the budgeted categories most of them won’t be spent every month, but I will need to have the money ‘saved’ because when I do use the money from that category I will most likely be spending a couple of month’s worth of the budget at that point.

So you can see that my savings account is the logical place for them.

I have also transferred my boyfriend the money for a ticket to a football match we are going to next month.

Which left the bill money, and £3.31.

I am now going to tell you about an idea that is from the forum on the Money Saving Expert website which was created by my hero, Martin Lewis. ‘Payment a day’

Payment a Day, or PAD as it is better known on the MSE website, is where you make a payment-big or small, doesn’t matter-everyday to your chosen account, most usually a debt or savings.

In the summer of 2016 this really kept me on track when I was ‘between contracts’ (unemployed) and wanted to tackle my debts.

My tactic is to round my bank account down to, depending on how flush I am at the time, the nearest £1/£5/£10.

I no longer do a PAD everyday, as I would soon run out of money and eat into my bill money because every penny is now carefully budgeted for, but when I do have a random amount remaining in my account I send it to one of my debts.

So I know it is only £3.31 but that is £3.31 I have sent to my credit card that I won’t ever be paying interest on again. It is small, but I have paid extra to my debts.

And paying extra is what counts.

Believe me there was a point in my life where if I had £3.31 left in my account which couldn’t be withdrawn I would be going from shop to shop looking at things to that amount that I could buy.

It didn’t even matter what I was buying.

So this means my savings account is now at £100 which I’ll agree is frighteningly small for a adult-ish girl without a permanent work contract, but that is the largest balance I have had in that account for YEARS! It is triple digits! (just)

I will dip into that savings account, as it has my work expenses money in it, but putting it in my savings account first is a statement to my intention of spending as little as possible.

Today was a good day.

 

January 2017 Financial Review

Hi everybody,

It is the end of the first month of the year. I am 1/12 of the way through a No Spend Year and it is time to assess how I spent my money this month.

HOME £5/£2.50

WORK EXPENSE £5.90/£7.50

SOCIAL £161.07/£25 (ooops)

HEALTH £13.50/£5

GIFT £27.87/£25

TRAVEL (DAY TO DAY) £2/£10

So good points:

I was under budget on a couple of categories.

There were no ‘forbidden’ purchases.

Nothing was put on a credit card (not that it was going to be but still I celebrate small victories).

Some budgets will be inflated this month but will balance out in the long run.

Due to my payday being before the end of the month some of these expenses were from my December-January pay and some were covered by my most recent payday.

January will be a weird month anyway as my account balanced was increased from having Christmas present money.

Bad points

I am over budget on most categories including a very, very high balance on my Social budget.

And that is all that needs to be said.

Hmmm.

Let’s look at my January accounts:

MONEY IN

£1485.62

MONEY OUT

£1378.45

DIFFERENCE

£107.17

Which in theory is great, except I don’t know where this £107.17 profit has disappeared to.

Better than my ‘January 2017 Accounts’ spreadsheet telling me I am in debt this month, but it is confusing.

I need to reign it in this February. I don’t have Christmas money going spare, I only have what is in my account and purse. I will have to be careful.

The Overdraft Has 10 Months To Live

Hey everybody,

I had a brain wave today.

3/4 of my credit card debts are on 0% interest cards, with a smallish balance left on the remainder.

I also have a £1000 overdraft.

And it gets worse.

I pay interest and bank charges on being in my overdraft (Ok, truth is I live in my overdraft) but whereas on the credit card that charges interest some of the payments I make go on clearing the balance, with the charges I pay for the overdraft absolutely none of it contributes to clearing that debt.

I am paying the bank for being in debt, and the bank gives nothing back.

This is sort of fair, I mean I used the bank’s money to buy things, so why should the bank help me pay that money back, and banks are a business after all.

But it means I am paying a bill that gives me nothing back, I am going nowhere with that debt.

So I have decided that instead of focusing on the 0% cards (for the moment at least) I will be paying £100 towards my overdraft each month that I can so I can clear that debt.

And once it is clear I can then use the money I was paying in charges and in clearing the debt towards the 0% cards.

There are a few methods of clearing debts that experts recommend but it tends to boil down to two, Avalanche and Snowball.

Snowball is where you pay off the debt with the lowest balance first, focusing on one at a time and getting a mood boost when you clear a debt.

Avalanche is where you pay off the debt with the highest interest rate first, which saves you money in the long run.

I spent most of 2016 doing a mixture of Avalanche and a very ineffective method called ‘Shotgun’ (which is where you pay a little bit extra to all your debts) which I didn’t know was a bad move until I learnt about it in Peter Dunn’s book ‘Your Money Life: Your 20’s’ .

In theory Avalanche is the best method, but after reading Peter Dunn’s book I switched to Snowball as I’ll admit it, I’m a sucker for a sense of achievement.

Now I am switching back, just temporarily, to Avalanche.

I have wanted to leave my bank for a very long time and now that I have transferred the credit card debt I had with them to one of the 0% cards, it is just the overdraft I need to clear.

I had a bad moment late last year. I wasn’t sure if just part of my overdraft charged interest or whether it was all of it (once upon a time part of it was interest free), so I went to the bank based at my work to ask.

It was clear that the counter assistant didn’t quite grasp what I was saying and asked a probing question ‘Are you living in your overdraft? Because we can arrange for you to see a financial counsellor’

And I just panicked as this was the bank based at my work, so it wasn’t outside the realms of possibility that someone I worked with would be behind me in the queue, and I thought this was a very personal question (though well meaning).

When I reach a state of anxiety, my boyfriend says it’s like ‘the shutters come down’. Meaning I go into an unreachable place. I panic. I get ‘Fight or Flight’ and mine is always flight. You can try to ask me what’s up and I will just look at you and not speak for a very long time, not because I’m trying to be a dick or because I don’t know what to say, but because a million and one thoughts are going through my head and I have frozen because I’m trying to compute what to do next.

So I basically stammered my way out of there, leaving very swiftly, and I’m pretty sure I stress ate a giant chocolate bar or something (I’m a stress eater, hence me being overweight as I am perpetually stressed by my anxiety)

So ever since then I have been determined to clear it.

Wish me luck.

Today’s gonna be a good day

Even though today is a day off work for me, when I woke up naturally at 6am, I decided to get up.

I checked all my credit card statements as it is the point in the month when they get released and I crunched the numbers on one of my many, many spreadsheets and from December statements to now I have paid off.

£166.37

I also did a little bit of data work to compile the money I have available to me before payday-going through every wallet and ‘category envelope’ (I put my Football training expenses in a separate envelope after I withdraw it on payday to keep the money safe)-and then compare it against the expenses I still have between now and payday.

As mentioned my brother is coming to stay so I made a little budget for that, and then I saw what I had left.

I had enough to clear my credit card with the smallest balance (£86.47) with £30 left over.

You may think, what is so great about £30? That can barely buy you a sock in a fancy shop.

The £30 seems like a fortune to me, because whereas before I would have run straight to the nearest clothes shop and bought something, anything, now that I can’t buy material possessions and can only buy experiential things, this means I have £30 to add to my savings for the next big gig, or holiday or theatre/cinema trip.

I think I have finally twigged that when you save, you have money for the future.

So if you include clearing my smallest balance card today then my total debt payments since December are now:

£252.84

Which means by debt is no longer £5996.12

It is £5743.28

A small but powerful deduction.

Today I want to call one of my credit cards that after a balance transfer actually sees me 38p in CREDIT on it and close it.

I also want to go for a jog after a weekend of indulgent food.

Right now I am watching a NFL Highlights show, and then I will do update my spreadsheet about February’s Expenses vs Income.

I feel good.