12th August 2019 (It Begins)

These posts were originally posted on the MoneySavingForums (a UK money management site), I am moving my journals across to WordPress to have them in chronological order. I’m not sure how much of other people’s words I’m allowed to copy across from one site to another, so in some sections I may summarise conversations.

Hi 🙂

So I feel a bit silly posting on here. I’ve seen a lot of people on here with higher debts and lower income, but mine was really stressing me out and it’s taken a lot of hard work to build healthier financial habits.

So: some background. I am 26 years old, and relatively newly single. I’d been tracking my bank accounts for a while but not really doing anything about it, mistaking that for budget. The earliest my records go back is May 2017. At that time my overdraft was £1633. I don’t know what my credit cards were then.

In October 2018 my marriage blew up (don’t worry – I’m happy about it now, though it was upsetting then). We ended it, but neither of us had literally any savings for a new rental deposit.

I managed to intently save for a few months, finding money I didn’t know I had, and scraped up a rental deposit in a few months. In fact, by February 2019 I had £1000 of savings! That’s now at £700 but I’ve moved house twice since then, once into family and once into a private house share.

Basically I’m learning how to budget for the first time. I started trying to get my finances in order in October 2018, but as I was leaving my marriage and moved city and then moved house again my bills kept climbing. In February 2019 my various debts peaked at £2335.

I still have a lot of bad habits to unlearn. I was in a bad place mentally for a long time and I got into the habit of spending and putting the payments off for later. I found Martin’s Piggybanking technique very helpful.

Today (12th August) my debts are:
Santander Credit Card 1: £379.01
Santander Credit Card 2: £983.47
Overdraft: £150 (my greatest achievement!)
Argos Card: £134.94
Total: £1647.39

All my credit cards are in interest free periods. The Argos card is on a Standing order to pay off before the interest free period runs out. That was a mattress purchase, as I left my old mattress (and bed) behind with my ex. I plan to do a balance transfer in January and combine the balances of the two Santander cards. The only debt there that is costing me money is my overdraft as I get charged £1 a day every day I use it.

Today my savings are:
Emergency Savings: £700
H2B ISA: £374.81
Xmas Savings: £80
Total: £1154.81

The Emergency Savings are a mental balm – the months when me and my ex had to live together because we couldn’t afford to move out were horrifying. I just want to have enough money to hand to be able to pay a rental deposit if I need to. In the long run I want to have £2000, maybe £3000 in Emergency savings (I read three months savings was a good goal) and I want to save up to buy a house… BUT paying off my debts is my priority. The Xmas savings I only put aside £10 a month, but it goes a long way come December. The H2B ISA I only put £5 a month in so I don’t feel like I’ve given up on that goal.

(Edit)
One thing that might not come across from those numbers – because I only recently started tracking my debts in detail – is that the nature of my debt has changed as well. When my debts were at their peak, most of it was in my overdraft, which as I’ve said charges daily. Santander student/graduate accounts allow up to a £2000 overdraft, free at first, but I didn’t pay any of it off before it started charging. Now, the majority of my debt is on my credit cards, which are still in their interest free period. Also the nature of my slip ups has changed. At my worst, I was overspending on alcohol. A lot. I was in a bad place mentally. Better now! My most recent slip up was £80 on some Dr Martens. Now, should I have bought £80 shoes with my credit card? No. I should have saved up the money first and bought them outright. BUT. I wear them regularly and I feel strong and happy and they will last me years. That certainly wasn’t true of the alcohol, and I spent more than £80 a month on that.
(End of Edit)

I have multiple spreadsheets set up to try help me track my budget. As I said, the piggybanking thing helps most, so I have a weekly spends account. My weekly spends amount is probably higher than it could be but I can only make so many changes at one time.

As I said, as of today my overdraft is £150, and that’s thing I’m most proud of. I was planning on reducing it by £50 a month, but last month I managed to reduce it by £150! And now this month, a week before payday, I haven’t gone into it at all! There’s still another payment to go out so it’ll be a photo finish as it whether I go into it. I might get out of my overdraft five months ahead of schedule.

The other thing I’m doing is sliiiiiiightly embarrassing. I’ve basically set up similar to a sticker reward chart for myself. It’s not literal stickers – I give myself points on a spreadsheet for good things I do. I call it FXP because I’m a huge nerd and every time I earn 1000 points I “level up” and give myself a small treat (under £5). I’ve been doing it since 15th June and I’ve levelled up once. I have weekly factors and bonus points for the entire month. It’s possible to lose points as well as gain them. I feel silly about it sometimes – but if it works, right?

I’m hoping to get out of my overdraft next month, and then really start cracking down on the credit cards. Theoretically… on paper… I could pay them off by Christmas but it would involve some pretty painful cuts and I don’t know if I have the self control for that. Also, my laptop is dying. I’m stretching it out as long as I can but I think sometime in the next 12 months I’ll have to buy a new laptop and I’m a bit of a gamer so that’ll be expensive.

I’m always worried my depression will flare up again and make managing my money impossible, make me fall into the same traps as before, so as long I’m making progress I want to avoid the super painful cuts that will make me miserable. Even if it means the progress is a little slower than I’d like. I’ve still got to live, right?

Mostly these days I feel more in control of my finances and that’s really helping. My overdraft is the priority as it costs me immediately. I have three budgets: one for now, one for my plan for after I get out of my overdraft, and one for my plan after I get a balance transfer card.

I just want to be able to live comfortably, without worry. I want to be able to save up for a holiday: right now that’s not even on the cards. I want to save up for a house! I saw some people on the forum talking about YNAB and I like the idea of “aging” my money.

This might be a very short Debt Free Diary compared to some. It’s more about me learning how to spend money and manage my finances like an adult.
Sticker charts and all. 🙂

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