3rd August 2020 (Life After Debt)

These posts were originally posted on the YNAB forums and MoneySavingForums (a UK money management site), I am moving my journals across to WordPress to have them in chronological order, and because the YNAB forums are closing as of March 2022. 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 all

So I am Mx Emmin, I live in the UK, I am 27 and I just became debt free! My diary/journal was on an English site before but that forum is targeted at becoming debt free and I wanted to continue my journey beyond that, so I’m moving over here. I thought I’d start with the longest post in the world as an intro.

When I was at the height of my debt I didn’t take as accurate measurements as I do now so I’m not 100% sure how much I had at the height. The highest figure I had recorded was -£2355.04 but that was when I was already a few month into my journey and I suddenly realised that I needed to know how far I’d come.

That doesn’t sound like much I know but as I said, I’m single, and I work in customer service. I’m not paid mountains now and especially back then I was paid near-minimum wage. Plus, because I didn’t have a good grip on my finances, £2000 felt like £200,000.

Then I went through a nasty break up/escaped a really bad home situation, moved to a new city and decided to sort my life out. That started Feb ’19 and now I’m debt free in July ’20! Woop! I think the strangest part somehow is that I’ve saved up for this very nice Debt Free Whiskey which is £65 to £70 on Whiskey (about $80 – $85 for our American readers) and I get to just go out and… buy it. Without worrying about cost? Without stressing over how much it’ll add to my card payment? Strange.

I started out on a UK website – the same one I had my journal on before – which gave me a good starting point. They first suggested an envelope style system, although they called it “piggybanking”, but their suggestion was to essentially have a different savings account for every savings goal. That obviously isn’t hugely sustainable but it gave me a good start, and then I saw people talking about this “YNAB” system in the forums…. I started my YNAB account in late September 2019 and it got extended by a couple of weeks (thanks guys!) and I signed up in November 2019. On January 1st 2020 I started a new budget with reorganised categories because my initial one was a mess haha

So small confession: technically – technically – technically – I still have student loans. But for those of you who aren’t in the UK, they work a little different here. They basically function as an extra tax. A % of my income above a threshold (the exact % and the exact threshold varies according to the year you went to uni) is deducted automatically from my paycheque before the money hits my bank account. If I don’t pay off all my loans within X many years – and I would need to be very well paid to do that – the student loans are cancelled. Very few people pay them off. There is technically a way to overpay, I’m told, but it’s just not worth it for the majority of us unless you receive a big, lottery-style windfall. And frankly if I got that windfall I’d buy a house. So those debts are basically invisible to me, as I said, they just act like an extra tax.

I get paid about £18K a year, and after all deductions – tax, student loans, pensions, some work benefits like dental – I get about £1300 each month in my bank account. That’s about $1600 USD. That’s… ok, if I live a very specific lifestyle. I live in a shared house so rent is lower and bills included, I shop at cheaper supermarkets (admittedly not THE cheapest but that’s more of a proximity thing), I don’t have a car, I never go on holiday, and I have no kids. So I don’t exactly want to be living this life forever. I want to live alone (or you know… with a partner tbd) and I want to have a little more room for spontaneity in my budget, but that’s more of an income problem than a budgeting problem. I don’t think I could afford to live alone, especially not without taking quality of life hits elsewhere.

~*~

Without further ado: My categories. My budget is in a weird place right now – I have a plan for post-lockdown and for during-lockdown but we’re in a sort of weird half place right now that’s really hard to account for.

I have four master categories:

Weekly Spends – this are the categories I’ll interact with most frequently. I might not spend from every category every week (haircuts is on here) but they’ll be at irregular intervals, at least once a month or more often, and they won’t have any Direct Debits

Bills/Immediate Obligations – these are usually one Direct Debit per month

Dog – woof!

Savings Pots – True Expenses go in here as well, things I pay for less than once a month, usually once a year

~*~

Weekly Spends – I’ll say what I can about goals but these categories are affected most by lockdown and have been going nutty since March

Groceries – about £150 – It was higher in the initial stages of lockdown but I’m wrestling it back under control. This could do with being higher, but I think every person on here could say that. 

Household – £20 – this is mean to be things like, an iron, or a laundry basket, things that individually are one off purchases, but collectively there’s always at least one of them per month. This is often one of the first categories I WAM from if I need to

Social Spends – I mean who knows anymore. Pre lockdown it was £60 but I haven’t spent that in months. After lockdown it might be £50 as some new needs have presented themselves

RPG Night – £20 – although again this hasn’t run since late Feb/early March. This was a specific regular social activity I wanted to make sure I was leaving myself money for, when it was coming from the same group as Social Spends I didn’t always leave myself enough money

Clothes – £15 – I don’t buy a lot of clothes. This is just I have enough money on hand in case I need to get myself some new socks, but if I do buy something larger I don’t have to WAM as much

Human Groom – £15 – it amuses me to call it that. I get my hair done at the barbers, so that cost about £15 ish, I’m trying to make room in my budget for manicures but it’s hard to find the money sometimes as more important things keep cropping up. I’ve never had a manicure but I want plain black gels when they reopen. It might be a case of one manicure every other month though.

Takeout and Online Shopping – these are two separate categories but neither have goals. I put money in them when I can. They’re here so that my spending is categorised right. Usually I’ll spend a few minutes figuring out where I can WAM money from, make my purchase, then move the money.

Birthday of the month – £25 – there’s always someone

Stuff I forgot to budget for – £20 – it used to be £25, so this makes me a little nervous, but we’ll see how it goes. I try very hard not to actually put transactions through this category, just WAM from it

Work Misc – £5 – for birthday contributions or leaving cards or whatever

Hobbies and Charity/Artists – same rules as Takeout and Online Shopping

Therapy – £40 – though that price was for people affected by COVID so I don’t know how long she’ll keep me on at that price

That’s my weekly spends category! The list gets longer all the time, no matter how I try to keep it under control.

~*~

Bills/Immediate Obligations

Bus/Tram Card – £55 – That was the pre-COVID price, though I wouldn’t be surprised if it rises soon, it was due to before COVID hit… that being said, right now I’m walking a lot more so I’m not buying the monthly ticket and am just buying odd tickets here and there so I’m not spending the full £55 each month

Rent – £395

Phone – £17 – my phone plan ended JUST last month, so I’m only paying for data now. I’ve found previously that I have about a year post-contract before the backwards compatibility becomes too glaring to ignore so I’m going to use the time to save up a nice chunky deposit

HP Instant Ink – £1.99

Medical – £27 – this is a new category this month. I’ve been prescribed some new medications and I want to be better about taking and refilling my old ones. Before it just came out of my groceries category. I also want to save up for this prepayment card that make prescriptions cheaper in the long run, I just need to pay a chunk upfront. So this category is a weird mix of paying for something on a monthly basis, whilst simultaneously saving up for a yearly expense, but I only want to use one category so that when it’s time to switch to yearly payments I can just move the category down to Savings Pots. For those who don’t live in the UK: we do have to pay a little for our medicine, currently a little over £9 per item, unless you meet certain criteria. Personally I think it’s unfair that I have to pay for the inhalers that allow me to breathe – but the Americans could argue that better than I can haha

During COVID I was paying £20 extra to my landlord/housemate for bills seeing as I was sitting at home all day soaking up electricity, at the time I said it was just whilst I was at home but it would bring a lot of good will if I could continue. We’ll see. I’m writing down £10 a month but I’d like to pay more if I can.

~*~

Dog

Dog Food and Treats – £10

Dog Groom – £28

Dog Vet Plan – £14 – for regular flea and worm treatments and vaccinations

Dog Insurance – £38.40

~*~

Savings Pots

Pride Savings – currently £1.54 per month – it’s only this low right now because I’m just hanging onto all the money I saved up for Pride 2020 and set it as “save £120 by June 2021 then repeat yearly”, until lockdown it was more like £10 per month, current balance £103.80

YNAB – £7.50 – I tend to oversave for this one because who knows what the £ and $ will be doing by then – current balance – £60

Christmas Gifts Family – £10 – current balance £80

Christmas Gifts Friends – £5 – current balance £40

Christmas Misc – £5 – current balance £40

Subscription Service – £3.50 – goal is £50 by January then it will repeat, current balance £29

New Laptop – £30 – I started saving 3 months after I got my current laptop in December, so I’m up to £150 now. My brother who sold me it says this laptop should last 3-5 years so I hope to get a really good one when I’m done

Dad’s birthday holiday – £10 – so a while back my other brother had the great(!) idea of sending our dad on holiday for his birthday. We announced it this birthday and were originally planning to send him next year (although, again, who knows anymore). I promised to have £225 by August, which I achieved a few months back, but I’m still putting aside £10 a month to guard against any last minute price hikes due to certain world events. Or to just give as spending money at the last minute. I’m currently at £245.

Finance Diploma – at least £25, though I’m hoping to save £34.75 – This is a course I was doing and self funding to try improve my career prospects. Current balance £47 as I just spend £153 on an exam ticket (I’ve been mooching study texts off a friend, later modules could be more expensive). The £34.75 is because if I can save an extra £9.75 pm I can pay for a membership to the exam site as well, but right now I’m not confident in my ability to get that extra £9.75

Divorce – £75 – I’m saving up for court fees for when this eventually happens. My goal is £1000 by Feb ’21, I currently have £550

H2B ISA – £25 – For those not in the UK, a Help-To-Buy ISA is a special account to help you save up to buy a house, if you save in this account you get certain benefits when you buy the house and usually a better interest rate (although none of them are great right now), I currently have £684.20 in mine… I have a way to go

Emergency Savings – £100 – My current goal is £3000, I’ll re-evaluate what my savings priorities are when I get there, I currently have £1775.38… £3000 was just a nice, round number I picked initially, a true 3 months saving would be closer to £4000

Fitbit – £5.01 – I just got a new Fitbit two months ago, so my current savings are £10.02 haha, my goal is £130 by July 2022, although I should review that figure in a year or so to see if new ones get pricier

New Years Whiskey – £18.25 – So the very nice Debt Free Whiskey I bought, I’m hoping to make it a yearly occurrence where I toast in the New Year with something nice. For this year, because I started mid year, I have less time to save up then usual, but in future years it’ll cost less on a monthly basis. There’s also the chance that I might not need to buy something this year, depending on how much of this I drink. Hard to say.

Next Phone – £31 – this is the amount I was paying for my phone plan that just finished two weeks ago. So today I have a grand total of £0 saved up heh. I’m planning on saving this money for a year and building up a nice chunky deposit for next time I go phone shopping. If I genuinely manage to put aside £31 a month for 12 months that’s £372, about half of the price of my entire phone last time. A 50% deposit will either massively bring down the cost of my next phone or allow me to get a much nicer phone on similar monthly costs. I don’t want this money to creep into the rest of my budget as I’ll need it available again in a year and I don’t want to overcommit

~*~

I also have four temporary categories that I’m keeping under savings goals for now:

“One Last Brexit Shop” – Earlier in the year I bought in a bunch of dried and tinned food ahead of Brexit in the UK, expecting food shortages, but then Brexit got delayed. I must admit I feel a lot less embarrassed about my Brexit stockpile after how Britain handled things like loo roll and pasta in early March. As a result of that madness, my stockpile got a little depleted during the initial stages of lockdown. I’ve set a goal of £50 by December to buy some more. This technically brings my monthly spending to over the amount I get in salary but not every category hit absolute zero before I get paid again so I can usually scrape together the £8.34 the category wants. When it comes time to buy I’ll move it to the groceries category and buy from there.

[Family Member] wedding – £100 – I’ve never been to a wedding as an adult so I dont actually know how much to save. But this includes a gift, travel to the venue, a new shirt, drinks on the day… the wedding was meant to happen in April 2020 so I don’t know how long this category will be here. When it does, I’ll move the money to social spends so I can safely delete this category to avoid being overrun with categories.

Scrivener – the goal for this category is £50, but with no due date – this is a computer program I want to buy. Similar to the wedding, I’ll move the money to Online Shopping and delete this category when it is time.

Holding category – this is a catch all category where I just put money to keep it out of the way, it’s for a purpose so I don’t want to spend it by accident. I often put money here if I was trying to reserve it for an extra credit card payment, for example, then I would later in the month move it to the CC category. I do not run transactions through this category. For a little bit I held the wedding money in here, until it was clear it would be cancelled.

All of these categories technically come to a little more than £13 over my usual salary, which is why on some categories I’ve said I’m not sure if I can meet them, but I’m hoping there will be little bits left here and there in various categories so I dont have to fill categories from 0 to 100%

~*~

I am not budgeting a month ahead right now, although I am aware of the benefits of doing so. I’m just prioritising my Emergency Fund. However on the 1st August both my Age Of Money and the toolkits Days Of Buffering were in triple digits, so I view that as a positive, even if I am slightly sceptical of how accurate the second is. I think my next priority, once I finish saving for something (Divorce Fund is probably the next big goal to complete) is a “Next Move” fund. I’m renting, so there’s always going to be a next move, and I’ll need first months rent and a deposit upfront (probably about £800 is a good estimate for those two together) and I might need to rent a van or car depending on family availability, maybe even someone to drive for me as I can’t. Unfortunately I didn’t put down a deposit on this place – or sign a contract… hm… – my landlord/housemate just said we’d sort it when I moved it out. In retrospect that was a TERRIBLE idea but so few places accept dogs and it was really helpful not to have to pay a deposit just then. If I have to move sooner than I can save up a “Next Move” fund I’ll end up raiding my Emergency Fund, definitely less than ideal but better than going into an overdraft like previously!

The last thing to say before I end this monster long post is that recently I received an inheritance cheque from  my late Nan of £1000.  (The money took ages to come through so it’s not a recent bereavement) I’m just waiting for it to clear – the solicitor spelt my name slightly wrong on it, so waiting to see if the cheque needs to be reissued or if the bank accepts it.

I’ve decided to split it 

£400 into my Finance Diploma fund

£100 for some creature comforts (a shapeshift binder, when they reopen, and some wireless headphones)

£500 for Canal Boat Lessons. Although, and this slightly cheating and breaking the rules, it’s temporarily going to do two jobs: Canal Boat Lessons/Emergency-Emergency Fund. Basically, I don’t see Canal Boat Lessons happening in 2020. I’ve got an exam happening at the end of this month, and then I honestly think we’ll be in some form of lockdown again, and even if we get out of it this year – it’ll be winter and cold. And, frankly, this year we could do with a little extra in our Emergency Funds.  Sometime in Spring 2021 I’ll actually spend the money on Canal Boat Lessons – but by then I’ll have been putting money into the E-Fund for a bit longer and there will be more to fall back on.  So it’s not going to officially be in my E-Fund category, but it’ll be handily close by if 2020 does something.

Anyway, that’s enough for one post! I get paid on about the 19th of each month, often a couple of days before, so I’ll most likely update around that time!


Literally an hour after I made that last post I thought of another (temporary) category I need: Winter Running Gear. I’ve been doing the Couch to 5K and when the mornings start getting darker I’m going to need some lights and reflective jackets and an alarm.

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