Sunday, 9 November 2014

Debt Update - November



DEBT

October was a financial disaster! 

At the beginning of each month I calculate what I have to spend and set a budget. However, somehow in October I over calculated by £200! I really have no idea how I did this but come 15 October I checked my bank account and I had £98 left. I was expecting nearly £300 to be available. To say I was shocked was an understatement. Out of that £98 I had to pay £49 for my credit card minimum repayment and £45 for my phone bill. I had no money left. 

I had to cash in my change jar (£48) and dip slightly into my overdraft (only £20). I am starting to see the benefits of an emergency fund (albeit this was sloppy maths rather than a real emergency)

Anyway.....

My debt is now as follows:-

Credit Card 1 - £2,989.11
Credit Card 2 - £4,814.28
Credit Card 3 - £1,871.02

TOTAL: £9,674.41

HOME


My landlord has informed me that they wanted to increase the rent by £100 per month. Given that our rent is already stupidly high, we have decided to move. We are still looking but will hopefully secure a property with lower rent. The problem in terms of debt repayment is that we now have to find money for a removal van (we have looked into just hiring a van but it only works out a little cheaper compared to hiring a removal firm and quite frankly I think a professional will move things quicker), a professional cleaner (its in our lease), letting agent fees and a deposit. I, sadly, expect my credit card will be used this month and my debt will increase.

POSITIVES

On the plus side I have purchased nearly all my Christmas presents and have lucked out in obtaining deals so am under budget. I only have two presents left to buy and I am done!

GOALS

I don't normally set goals, but I thought I would this month. So my goals are as follows:-
  • List at least 10 items on Ebay each Sunday. 
  • Practice yoga x 2 a week.
  • Go swimming x 1 a week. 
I hope your debt repayment is going well. If you are paying off debt check out Money Smart Guide's Debt Pay Off All Stars. 



Thursday, 6 November 2014

Debt Disciplines interview series

I am participating in at Debt Disciplines interview series. Please remember to check it out and all their other fantastic interviews - its inspiring stuff! 

Sunday, 2 November 2014

HAVE A SPENDING FAST


Image courtesy of www.freedigitalphotos.net 

At the beginning of October Michelle at Budget Bloggess posted a challenge to herself to have a no spend year following her realisation that she is a shopaholic. 

Back in 2011 I had to move out my home at short notice. I couldn't afford to move out but had to. I had to find a deposit, one month's rent in advance plus furniture. I just about managed to scrape together the deposit and advance rent from my salary (I had a rare bonus that month) but this meant I had to spend the next 5 weeks solely living off my credit card. I also had to buy the furniture and household items on my credit card. The amount of spending I did on my credit card completely scared me. You would have thought that that would have been my 'a ha!' moment and I would have started paying off my debt - did it heck!! However, it scared me enough to at least be a little more careful with my spending. 

I decided that I had too much stuff and that I did not need to buy anymore items so I vowed not to buy any clothes, shoes, handbags (my particular weakness) and unnecessary beauty products for six months. 

How to survive a spending fast?

Beauty Products 
  • Use a little water to get the excess out of shower gel/shampoo/handwash etc.
  • Put mascara tubes in hot water in order to loosen the excess. 
  • Use a tiny amount of nail polish remover to loosen old nail polish.
  • Cut the ends off hand cream/toothpaste tubes to use it all up.
Clothes/shoes/handbags
  • Have a look through your wardrobe. If you are a spendthrift/shopaholic I bet you have some items in your wardrobe you have never worn or only worn once. 
Triggers
  • Identify your triggers. Is it depression? Payday treat? Feeling down? Feeling anxious? New outfit for a party/date? 
  • Do not go shopping. Seriously, stay away from the shops. 
  • Unsubscribe from store emails. Avoid the temptation!

Benefits of a spending fast?
  • You will save some cash!!
  • My compulsive spending is weaker than ever. I still have my moments but in general I am stronger at not giving in to compulsive buying. 
  • I actually do not particularly like shopping anymore (I am a reformed shopaholic) and enjoy being more minimalist. 
Now I would like to say that my spending fast resulted in me being more careful with my spending but that did not completely occur. It certainly helped me get use to not shopping and having less and my shopping habit is now under control. The debt I incurred since 2011 is due to not budgeting or saving and buying food and holidays on credit cards. 

Have you ever undertaken a spending fast before? How did it go? Are you a shopaholic? Do you have any tips for a spending fast?


Saturday, 18 October 2014

The Debt Trap


As I have mentioned previously my current role is only fixed term so I now need to start looking for a new job. I had an interview yesterday. I thought it went really well but I didn't get the role. In hindsight it was probably for the best. The role was perhaps a little beyond my experience and I think would have been very stressful. 

I have a very stressful career. I need to change profession. Yesterday after receiving the rejection, my mind became rather preoccupied in what I am going to do in the future and how things need to change. 

The problem is though is that my debt traps me. I am trapped to my debt and trapped to my desk. 

There is a particular field I would like to go into. I would be self-employed and I would certainly need to take a pay cut. On the face of it a pay cut is fine - long term I could cope earning less than I do now. The problem I have now though is that because of my debt I need to find at least £180 a month to pay my minimum repayments on my credit cards plus rent and food etc. 

If I had been sensible with my money I would not have any debt and I would have savings. Savings that I could use to live on while I retrain and build up a business. Instead my debt traps me in a career that I do not love. 

Yesterday evening I was seriously contemplating adding the fees for a course I want to do on my credit card, all £1,500 of it. I sat their weighing up the pros and cons. The sensible side of me knows that I should stay in the career I have because of the earning potential and realistically, on my current salary, I should be able to clear my debt in less than 2 years. However, the other side of me is thinking - I can't be in this career for another 2 years!!!!

Quite honestly, at this stage, I don't know what I am going to do. Part of me thinks adding £1,500 to my debt would make me happier but I know it is a crazy thing to do as this idea of mine could go spectacularly wrong and besides I really can't stand being in debt and increasing my debt would make me equally miserable. 

For now, I need to spend the next few weeks researching new opportunities for work whether in my current career or otherwise and continue paying down my debt. 

Do you feel trapped by your debt? How do you plan to become 
free?

This is part of Financially Savvy Saturdays - remember to check it out!

brokeGIRLrich
*Image courtesy of www.freedigitalphotos.net 

Tuesday, 7 October 2014

TEN QUICK STEPS TO PAY OFF DEBT


These are my 10 top steps to pay off debt 

STOP USING CREDIT 

If you keep accruing debt it will be incredibly difficult to pay it off! Go cold turkey and stop using credit. 

MINIMUM REPAYMENTS 

If you have credit card debt aim to pay more than the minimum repayment. Minimum repayments are designed to keep you in debt for longer. Pay something over the minimum repayment - even if it is only £5, anything is better than nothing and eventually those little sums will add up. 

0% BALANCE TRANSFER 

Also if you have credit card debt consider whether a 0% balance transfer is a possibility and whether it is worthwhile. 0% interest is awesome and it is certainly helping expedite my debt repayments but remember there may be a fee and that the 0% period will end eventually. 

LUNCH 

Get organised! Make lunch the night before and stop buying lunch on a daily basis. 

THE LATTE FACTOR

Buy a thermos, coffee grinder and some beans. It is much cheaper than paying £2.75 a day for a coffee. 

CHICKEN

Buy a whole chicken next time you do your food shopping. A whole chicken is circa £5. My partner and I usually get 2 dinners and 2 lunches out of a whole chicken - sometimes a fifth meal and you can boil up the carcass to make chicken stock/soup. 

SELL YOUR STUFF

Ebay, carboot, vintage fair, facebook - choose your poison. Time consuming, yes, but if your debt is from frivolous spending you should make some money back from the crap you bought on credit which can be thrown at your debt. 

BUDGET 

Boring, but budgeting prevents debt and pays it off. 

GET A SECOND JOB 

Or as Americans like to say 'side hustle'

KEEP FOCUSED

We all slip up but get back on the debt free wagon!

Image courtesy of www.freedigitalphotos.net 


Sunday, 5 October 2014

Keeping up with the Joneses



The Daily Mail does make me laugh. This article about the 'squeezed' middle classes had 'Are they serious?!' comments written all over it. Reading through the article it is certainly hard to feel sorry for someone who is spending £15k on school fees because they do not think state schools push children into sport or for a couple earning £108k a year who have no savings and cannot save for a mortgage because of having a fondness for gadgets. 

This isn't an article about the middle classes being financially squeezed because food and energy prices have increased, that article may have accrued a bit more sympathy - it is an article about people not having savings, having debt and (excuse me while I cry) having to 'vacay' in the UK because they have been trying to keep up with the Joneses. Actually, it is a rather unlikely Daily Mail article given the wry sarcasm in the article.

Keeping up with the Joneses is an easy trap. I am guilty of it. Despite my desperation to clear my debt only the other day I was looking at buying some sandals online after seeking an instagram 'friend' showing of her (beautiful) shoes before coming to my senses and remembering my goal of paying off debt. But if you don't have a financial goal, being lured into keeping up with friends is easy.

Reading through this article also makes me suspect that lifestyle inflation is a factor. This is certainly something that has resulted in my debt. At times I think I was financially better off just after I left university. I was only earning £10k a year but only owed about £1k on my credit card (and £13k student loan). As my salary has increased so has my debt. I have bought more expensive clothes, more expensive holidays and gadgets because I thought I should be able to afford them since I was a lawyer earning a decent salary. Here I am now at 32 with no savings, a tiny pension and just under £10k of credit card debt.  I was always living beyond my means.

I had my awakening and am now trying to do something about it. I am not perfect and I am still wasting money but I am trying. Sadly, those in the article seem to either have their heads buried in the sand or are completely ignorant of what it is really like to be squeezed (I grew up with unemployed parents on benefits missing meals - that is squeezed). I hope the comments on the article will wake them up and make them realise that they need to change. 

Are you sympathetic for these people? What do you think they should do?

* photo courtesy of www.freedigitalphotos.net 

Saturday, 4 October 2014

Debt update - under £10k!




My debt is finally under £10,000! I'm so pleased, the debt just looks so much less like this and it has put a smile on my face.

My figures are now:- 

CC1 - £3,069.11
CC2 - £4,862.90
CC3 - £1,921.61

Total: £9,853.62

This month I need to transfer the balance of CC1 as the 0% period expires. Originally I was planning on transferring the balance to CC2 given that the limit on that card had been increased, however, CC2 was charging a 4% transfer fee plus there would be one week's of interest accrued on CC1.  I undertook some research on Thursday and I came across a 0% balance for 12 months with no fee so I have transferred the debt to that. 

Somewhat scarily though, I was immediately (within less than 1 minute of submitting my details) given a credit limit of £8,200! To be honest I was worried that I would struggle to be offered a limit to cover what I wanted to transfer (hence why I was planning on switching debt between my current cards) so when this figure showed up I was completely flabbergasted. My last post on credit cards detailed how I will have access to £17,767.99 of credit. This will now be £25,967.99 - madness I tell thee! 

In other news, my job is fixed term and ends in the new year. After much thinking, I have decided that for the next few months I have no choice but to only pay the minimum repayments and save some money in case I end up unemployed. It is disappointing but I think this is for the best. I have a job interview next week though so wish me luck! 

Thanks for reading and don't forget to check out my blogroll as there are some cracking reads on there. 

How has your debt repayment gone this month? Should I continue paying off my debt or save for my impending unemployment? 

Thursday, 18 September 2014

Credit Card Tricks

This morning was interesting. I woke up and checked my emails and saw that CC2 was increasing my credit limit from £6,800 to £11,800 from November. That is a £5,000 increase! 

This made me think, I started to aggressively pay off my debt in February 2014. Since then all three of my credit cards have increased my limits. CC1 limit is now £12,000 and CC3 limit is now £4,200, come November (based on today's debt), I will have £17,767.99 of available credit. This is potentially a problem for a spendthrift like myself. That is a lot of money to spend......

I've learnt my lesson - I promise. 

Now I know credit card companies will often increase limits on a yearly basis, however, CC3 had not increased my limit in 3 years. I suspect it was because I did not use that card during those 3 years. However, within weeks of me transferring a balance to that card, my limit increased. Surely the credit card provider should be thinking that if I have transferred a balance that I may be in financial difficulty and the last thing I need is access to more credit? Or is the prospect of me spending that money and paying interest just too much of an incentive to increase my limit?


Credit card balances seem to be a double edged sword. My understanding is that because I have had each of my credit cards for a long time (two for over 10 years), and have always made my minimum repayments (even, if at times, late) I am rewarded for this by an increase of my credit limit. The high balances I have in turn now result in me having a good credit record (apparently if I have decent limits, I must be 'good for it'). I find this rather bizarre. Now I know I am the one who spent the money and only I am responsible for my spending, but, my credit limits have continually been increased despite the fact that I have consistently had substantial balances. 

This has encouraged my spending as the money was there available to me. 

To put this into perspective CC1 initial limit in 2001 was £500, it is now £12,000. My highest balance on this card was £9,775.08 in December 2013 with a limit of £11,000. Yet my limit has still been increased. 


I do have a bit of a bug bear with CC1. Since I started paying off my debt (I have concentrated on this card as it had the highest balance and had the highest interest) my credit limit has increased and I am continually being bombarded with letters, emails and text messages about transferring balances to it and transferring money to my bank account. I had never been offered these 'opportunities' until I started paying off my debt. 

As it transpires, the increase to CC2 is somewhat useful to me. I need to transfer the balance of CC1 to keep the 0% interest and I was not especially keen on opening a new card and will now be able to transfer it to CC2. When CC3's 0% interest period expires in February I can then transfer it to CC1 or CC2. But long term, I only want one card so two of these will go eventually. 

Has your credit limit increased once you started paying off debt? Has the increases encouraged your spending? What do you think?

* Photo courtesy of www.freedigitalphotos.net 

This post is part of Financially Savvy Saturdays. Check it out!!


brokeGIRLrich

Friday, 12 September 2014

Fixed Repayment

If you are reading my blog then I expect in general that you are either in the same boat or have been in the same boat.

It seems to be common when reading other debt blogs that paying debt is something which preoccupies bloggers. I certainly notice that I am much stricter with my spending when I am blogging regularly and whilst reading other personal finance and debt blogs. During the summer and my RSI episode my spendthrift habits began to creep up on me again (particularly buying magazines and lunch/coffees). I am taking steps to try and nip this in the bud and am slowly getting there.

On a positive note I am finding that making a fixed repayment to my credit card each month is assisting in paying off my debt. I have three credit cards and due to the amounts I have already paid off, and the fact that all my credit cards are on 0% interest rates, my minimum repayments are now roughly £50, £50 and £80 each month. However, I always pay £280 per month for the £80 card (aka CC1) so at a minimum I am over paying by £200 (more than double of my minimum repayment). I like this method and I recommend it. It is funny how when I work my budget out every month I automatically allocate £280 to my debt repayment. I don’t have to but my mentality is that that £200 is for debt and nothing else.

The other advantage to me with making a fixed overpayment is that if, like last month, I need some extra money, I have a spare £200. It isn’t the same as an emergency fund, but it is reassuring in knowing that I can allocate that £200 to other things if I absolutely have to.


How do you/did you manage and prepare your debt repayments? What method do you use?

Friday, 5 September 2014

September Debt Repayment


I can't believe I am writing my September debt repayment update already. August absolutely flew by! 

My debt figures are as follows:- 

CC1    £3,351.11
CC2    £4,912.02
CC3    £1,970.88

TOTAL: £10,234.01

Which is £541.94 paid off this month.

I am really pleased with my repayments this month although a little disappointed that I am not under £10k as I hoped I would be this month. However, I will be in next months update. Having a single figure credit card balance will be chuffing brilliant! 

I need to be more frugal with money and stop the frivolous spending. The odd £3.00 here and there for magazines and bars of chocolates are starting to add up and I am disappointed with myself that I have gone back to that (especially magazines). The mistake I have made the last couple of months is starting to use my debit card again instead of using cash. From Monday I am back to withdrawing £20 a week out of the bank and that has to last the week for any odds and ends I need. 

This month I have a trip planned to Alton Towers. I obtained 2 free tickets by saving up tickets from The Sun (I promise I don't normally read that paper - I only bought it for the tickets!). However, because of the long journey we are going to stay in a hotel overnight so it has actually cost me £35. But hey, I have never been before and I love a roller coaster! 

Christmas

It is now September and the Co-Op has got its Christmas chocolates out! I hate this, it is far too early. That said, I am planning on starting to purchase Christmas presents with this months salary. I want to spread the cost and most of all, I want to avoid the December crowds in the shops. Normally I am quite generous with buying presents and I know my family expect me to buy them something expensive given that I have a career which has people expect to pay well. However, this year I am being cheap. My plan is to purchase gift sets from Boots as they always have their 3 for 2 deals on. With my family I need to buy 9 presents, so I get 3 presents 'free'. I will buy my boyfriend a present from elsewhere; he's the exception. 

Have you started planning for Christmas yet?

Monday, 25 August 2014

Link Love - Women & Finances


Happy August Bank Holiday Monday readers. It is a traditional one - raining! 

For an update, my wrist is feeling better now although not perfect. I am hoping to get back into the blogger swing of things. I have noticed that my spendthrift habits have started again and I put that down to not being focused. Regularly reading other personal finance blogs certainly keeps me focused. 

Thank you to those who have continued reading during my hiatus. 

Over the past few months I have been thinking about my future finances. I have mentioned my goals before and these have preoccupied me somewhat. As I would like to be a stay at home mum, I need to ensure that I have some income during those times so at a minimum I can make pension contributions and have some savings. I have read time and time again about women who stayed at home to care for their children and have no savings and no pension contributions and end up desolate at 50 following a divorce. 

If you are married, you may have the right to some kind of maintenance/alimony if you divorce, but if you are not married, you have no legal entitlement to any savings/pensions your other half squirreled away during the relationship. I am not married (and probably will not marry my partner) so this scares me sh**less! I am not happy in my career and want to change it. I want to be able to stay at home and look after my children so I have a lot to think about over the next couple of years about how to generate some kind of income if I was to stay at home for a few years to care for my future children. 

As I said, I have been away from the pf world for a few weeks, but have had a good read this week of other blogs and have come across these posts which are of interest to me given my current preoccupation about my finances as a women and the future. I hope you enjoy! 

Cat at Budget Blonde has a great infographic about how to save the pennies as a new mum. 

Lauren at L Bee and the Money Tree provides her view against rushing to marry in your twenties. 

Kylie at The Thrifty Issue has provided her tips for paying off debt quickly. 

What are your concerns as a woman and your future finances? How do you intend to protect yourself?


Sunday, 10 August 2014

Debt Update - minimum repayment woes


So it is debt update time people!!

I am rather late with my update this month, I apologise, but here are my figures:-

CC1 - £3,792.90
CC2 - £4,961.63
CC3 - £2,021.42

Total: £10,775.95

So I have paid off, erm, £189.24.......


This does look bad, but I have an excuse! 

I report my debt updates once I have received my monthly statements which is usually around the 5th of every month. I am usually paid the last Thursday/Friday of the month. The cycle I am in is that I report the CC3 payment (made around 2nd each month), CC3 (around 25th of each month) and CC1 (around 29th of each month). 

However, CC1 minimum repayment date can vary quite wildly. It can be anything from the 25th of the month up until the 5th. This means that sometimes I end up having to make two minimum repayments on CC1 within the same salary - and that is what happened this month. CC1 minimum repayment came out of my account on 1 July (and therefore was reported in last months update ), but the next minimum repayment was due on 28 July - I was paid on the 30 July 2014, so I had to pay the minimum repayment twice out of this month's salary. I couldn't afford to pay £280 twice (a sum I choose to pay each month in order to excelerate repayment), so I had to revert back to the minimum repayment (£90). Accordingly, all my debt repayment for this report is minimum repayment only sums. It's quite tragic. 

But, in a strange way, it has worked out ok. I had to take a few days off sick during July because of my wrist pain and I have only been paid SSP. Therefore, even if I didn't have to pay two minimum repayments out of one salary, I probably would have struggled to have paid £280 this month. So there is somewhat of a silver lining. 

Hopefully next month's repayment report will be more impressive!

As always, I hope everyone elses debt repayments are going well. Let me know how you are doing! 

Sunday, 13 July 2014

Missing In Action

I apologise to everyone who has recently left a comment on my blog, sent me an email or a tweet and for the delays in responding. 

I am currently suffering with repetitive strain injury in my right wrist due to all the typing I do all day at work and at then at home in the evening. At work it is not too much of a problem because I can dictate and my lovely secretary will type for me, but for my blog, it is more problematic. I need to limit typing as well as swiping on my ipad and mobile phone (swiping is particularly painful). It is therefore somewhat difficult for me at the moment to read blogs, review Twitter posts/comments, maintain the blog (technical updates are desperately required) and write new blog posts.

I'll be keeping an eye on my blog, Twitter and the personal finance world but I really need to limit typing and swiping for the time being so my blog may be a little quiet over the coming weeks. 

I've got one post to go up this week but otherwise, I am signing off sick for a few weeks, I think. We'll see how it goes......

Wednesday, 2 July 2014

Debt Update


I am so pleased that June is over! Now don't get me wrong, it was an amazing month but it was a bloody expensive one! I had to attend 5 different birthday dos (2 on the same day), an engagement party plus go to the pub to watch football. It is fair to say that most of my money this month has gone on socialising. 

I was rather upset that England was knocked out of the World Cup so early but on the plus side, I won't be spending this month in the pub watching football (I know I could stay at home and watch the football but it really isn't the same). 

Despite my over the top socialising this month I am pleased with how my debt repayment has gone. My debt is now:-

Credit card 1 - £3,880.20
Credit card 2 - £5,011.74
Credit card 3 - £2,073.25 

Total: £10,965.19 

So £457.40 paid off.  

I am really pleased with this. It is under £11k and by the end of August I should be in single figures. 

This is a short and sweet post this month. How has your debt repayment gone?

Sunday, 29 June 2014

Overdraft: The forgotten debt


Being a good girl, I was reviewing my money recently and was rather confused. Looking at what I received in redundancy pay, what I had paid off in debt and what I recall spending from January, there was nearly £2,000 that I could not account for. This really worried me, I was pretty tight with my money during my period of unemployment, I just couldn't work out where that money had gone. Then I realised - I had paid off my overdraft. 

I have been in my overdraft for years. It was £1,500 so even after being paid I was usually straight back in within a week of pay day. To me being in the 'red' was normal for me. I didn't consider my overdraft to be debt. I expect there are many people reading this who are also consistently in the red or use to be. I didn't consciously plan on clearing my overdraft, once I received my redundancy pay I just saw the figure in credit and budgeted according to that. 

Realising where that £1,500 had gone (the other £457 I finally remembered I had paid to my boyfriend for my share of our new bed) it made me think. I knew I paid a fee each month but I didn't know off the top of my head what it was. Looking into it, I was paying 19.9% interest on my overdraft every month, that was around £300 a year I was paying. I would also occasionally be caught out with fines of going over my agreed overdraft limit when direct debits/delayed debit card payments came out before pay day. No wonder I now feel flushed given the amount of fees I am no longer paying!

I am loving being in credit in my current account. 

Going back to the avalanche/snowball methods, if you are currently paying off debt where does your overdraft fit in? Should you be paying off your overdraft compared to the other debts you are paying? Have you even considered your overdraft as debt?

If you are debt free and had overdraft debt, did you pay off your overdraft first or last?

*Image courtesy of Stuart Miles www.freedigitalphotos.net 

Sunday, 22 June 2014

Guest Post: Money and Happiness: Can they Coexist?


Bre at The Weight of Debt has kindly guest posted for me today. I hope you enjoy!  

Can money buy happiness? You will find people all over the spectrum between yes and no. The reason for this is because everyone has grown up in his or her own vision of the world. No pair of people will have lives exactly the same and in result no one’s opinions are exactly the same. Especially when take into account all the different factors of life including but not limited to: finances, past experiences, parenting, environment, and current events. With that being said here are my thoughts on money and happiness.

Don’t Let it Control You

In my opinion, the biggest contributor to the whether or not money and happiness can coexist is whether or not you control your money or if money controls you. If you currently live paycheck to paycheck with no emergency fund and are stressed to wits end you probably aren’t very happy when it comes to money. Versus someone who has gotten a hold of their budget and have diligently scrounged to save an emergency fund and can now sleep in peace knowing the world could push them down tomorrow but they will survive.

It works on the other side also. If you are very well off financially but are still in debt, are just piddling away your finances, or are waiting for your net worth to make you feel complete you probably aren’t very happy either. But if you are investing properly in your family and giving away money to help those in need you may feel perfectly at peace with your money.

There is a Maximum

In 2010 there was a study by Nobel Peace Winner Daniel Kahneman and his colleague Angus Deaton, that showed happiness will level out after reaching an annual income of $75,000. It stated that emotional well-being will rise with income but only to that $75,000 mark. The study showed that low income was associated with emotional pain such as divorce, ill health, and loneliness. High incomes showed satisfaction but satisfaction in material factors of life, but that does not necessarily mean you are happy.


I was shocked by this study. I don’t make nearly that much at the moment but I would of at least imagined the figure where financial happiness plateaus would at least be in the six digits! However, we live on a lot less and are perfectly content with our lives.

 Spend it on Others

I recently wrote about how Giving is Food for the Financial Soul. I paid for coffee for the person behind me at Starbucks and it made me happy. I fantasized about people for the rest of they day paying for the coffee for the person behind them as a domino effect as my small random act of kindness.

I would find it very hard to believe if you spent money on someone else in a random act of kindness and you then tell me it didn’t make you happy.  In addition giving to others can fill the need for shopping which can help you to control your financial habits if you are addicted to spending!

It All Depends

I personally believe that money and happiness can coexist but it requires some time, budgeting, and personal will power to overcome the hurdles that come along with money, whether it is the abundance or lack of. The great thing is that you are in control. If you currently don’t have a hold on your budget and are unhappy, you can control it and bring happiness back into your financial life.


Bre is a new personal finance blogger at The Weight Of Debt, sharing her journey to become debt free by the end of 2017. She shares the ways she is making extra income, saving money, and all that she learns as she continues to pursue her goals of becoming debt free. Please consider following on Twitter at @TheWeightOfDebt.


Tuesday, 17 June 2014

Frugal Failure: The Potato Ricer


I have been somewhat of  frugal failure this week. On the plus side, I am managing to keep within 'my means' and have paid off some debt. I have not had to use credit to pay for anything since January and I am loving having money in my account more than 2 weeks after pay day knowing full well that I can make my next minimum repayment which is due on 25 June. However, I am becoming complacent.

Being in credit is a novelty for me. I have spent the most of the past 10 years consistently in my overdraft. Now I am in credit. Now I have money.  

I am starting to become a spendthrift again. 

I don't know if I am experiencing a 5 month itch but I bought lunch 4 times last week. I went to Cafe Nero twice this week (it's only Tuesday!!). 

And 

At the weekend, when out food shopping, I put a potato ricer in my trolley without a second thought. Like most people (except those Atkins converts and those 'no carbs before Marbs' lot) potatoes are a staple purchase. I eat them a few times a week. I have been after a potato ricer for a while. I wanted smooth mash, none of that lumpy crap from using a masher. So I put the ricer in the trolley and bought it. 

I have ignored my own rules.

This was such an impulse buy. I didn't go to the supermarket to buy a potato ricer. I should never have gone to the non-food isles. I put myself in front of temptation and I failed.  

I didn't check the price. I just bought it. It was fifteen flipping quid! I should have checked online, I later discovered I could have got one for a tenner with free delivery. I could have got cash back. I could of bought a second hand one. I am a frugal failure.

I forgot one of the rules of debt repayment and money management. Distinguish between your wants and your needs. I WANTED a potato ricer, heck no one ever NEEDS a potato ricer!

Aaaagh!

I like to spend and debt repayment, while at times is fun (it really is - I love watching those numbers go down and reading other people's blogs), it is also boring and you can feel deprived. I am not in the extreme cheapskate league of debt repayers. There are other personal finance bloggers out there who are much more hardcore than myself in terms of their expenditure and debt repayment. But I am a lot more frugal than I use to be and my expenditure has dramatically reduced. This in turn has resulted in me paying off more of my debt. 

I am now though considering whether to have a £20 a month splurge fund, £20 that I can spend on whatever I want rather than what I need, something frivolous and not to feel guilty about it. With that £20 I could go to Nandos once a month (hallelujah to the piri piri), I could buy two, maybe three cocktails on a Friday night, I could buy a copy of Closer magazine (guilty pleasure) decisions, decisions.....

I do feel guilty about buying this potato ricer but I am also sitting here with a bowl of mash with cheese and chives, singing along to the theme tune of Bodger and Badger and bloody well enjoying it. 

Do you have a splurge fund? Are thinking about it? What would you spend £20 on no guilt permitted?

* Image courtesy of www.freedigitalphotos.net

Saturday, 14 June 2014

Quick Post

The Thrifty Issue

If you are looking for some further financial/frugal/thrifty tips make sure you check out Financially Savvy Saturdays, my Goals post has been featured. Plus there are a load of other great articles to read.

PS - I have changed my blogs domain name. This has resulted in all previous comments on my posts being deleted. If you have left a comment and I have not yet replied - I apologise.


Tuesday, 10 June 2014

Debt Confession


I have a confession to make.

I briefly mentioned my university fees in my 'About Me' page but I didn't harp on about it. The truth is my current debt isn't just credit card debt. I also have student loans outstanding from when I started university in 2000. It is approximately £5,000. 

I was one of the first batches of students once grants were abolished in 1999. This meant I had to pay university fees and take out loans for living costs. 

Back in 2000, university fees were a calculation based upon your parents' previous tax year salary. My parents had a fairly low gross income but due to a lot of overtime that my father worked it meant I had to pay a contribution towards my fees. Luckily it wasn't too huge (approx £300 a year). 

My parents though were not in a position to financially assist me with living costs (the fees were a stretch). They are a low income family and had my younger siblings to care for. I therefore had to take out the living loan. In total, when I left university I owed £13,000 in student loans (If you're American and reading this I know this is absolute peanuts compared to what you guys have to pay so I apologise in advance!). 

I don't include my student loan debt as part of my overall debt tally as shown on my blog for the following reasons:- 
  • Student loans are deducted from my salary like a tax. I lose over £100 a month via this tax. However, I have never had this money so I have never missed it. 
  • I only have to pay student loan repayments if I am earning over £16,000 a year. When I was unemployed I did not have to make any repayments. Interest was still accruing but....
  • Interest is currently only 1.5% per annum (it was 4.8% at its peak). 
  • The loan is written off when I am 65. 
I have mentioned what my goals are. If I did become a stay at home mum, I would not have to worry about making repayments on my student loans unlike with my credit cards. Therefore, I do not include my student loan as part of my 'frugal trial'. In the future, I may start aggressively seeking to pay off my student loan but I doubt it. At this stage once I am credit card debt free I would rather save, contribute to a pension and invest my money. 

Do you have any debt/spending confessions you dare to share??

* Image courtesy of freedigitalphotos.net 

Saturday, 7 June 2014

Debt Repayment Strategies - Part 3


Budgeting = boring!!! 


The biggest money mistake I have made is not budgeting. If I had budgeted, I doubt I would be in so much debt. Since knuckling down to clear my debt it has become clear to me that budgeting is crucial. To put it in perspective, this time last year, after I paid all my bills (excluding food), I use to have around £700 a month disposable income and I still could not make that last a month. I would have to use my credit card to 'get through the month'. In hindsight that is ridiculous and I am really quite embarrassed to admit this. 

In case you have not read my 'About Me' page, I am a solicitor and earn an above average salary but I am not a high rate tax payer. 

I now earn less than I did last year but so far (I have been in my new job for nearly 2 months) I am able to keep well within my salary. The secret is that I now budget

As far as I can see there is no one absolute method of achieving budgeting success. You will need to find the best method for you. If you check out the plethora of other personal finance blogs you will find many different methods of budgeting. There are many bloggers (seriously loads!) that love Excel spreadsheets, some bloggers track absolutely every penny, many use apps - there are so many ways to track spending and budget but I won't bore you with them all (although the percentage method at The Broke & Beautiful Life is very intriguing and I may try it in the future).

This is how I budget:

I am a little 'old skool' when it comes to budgeting. I like to budget using pen and paper. When I am paid I write down all my fixed outgoings, rent, council tax, minimum repayments etc. I then set out how much I will spend on food for the month (I get a bit of a break here as my boyfriend can be fussy so he'll pay the extra if he wants something). Whatever I have left is my disposable income. 

With my disposable income, if I have something specific to buy I will set money aside for that. For example, next month I have to get my hair cut so I will specifically set aside money for that. 

This month is birthday central so I have had to set aside money for each birthday do I am attending. 

With whatever I have left, or if I have nothing to buy in particular, I divide my disposable income by the number of weeks in the month until pay day. 

I now also regularly check my bank account (every 2-4 days) to ensure that I am on track. 

I play 'make believe'

If you are paying down debt, you need to find money in your budget. If your budget is tight this may be a problem. 

With debt you pretty much have three options. 

1) You make an over payment when you are paid, 
2) You make an over payment at the end of the month, or
3) You do a bit of both.

I am not here to preach, do whatever you prefer. 

For me I really really really do not want to be using my credit cards again therefore I am quite nervous of declaring 'I will pay £500 towards my debt on pay day'. Plans change and I may need access to money during that month. Instead I pretend to myself that my minimum repayment for credit card 1 is £220. It is actually £94. That £220 is taken off my salary as a liability and therefore does not form part of my disposable income. Therefore at a minimum I make an over payment of £126. The benefit of this to me is that if for any reason I need a bit of extra money, I can just pay £94 instead. 

I roughly have £50 a week disposable income (I know this is actually quite high compared to a lot of people but I grew up in a low income family and I remember the days of no food being in the house). Out of this £50 I pretend I only have £25 a week disposable income. The aim being that at the end of the month I will still have £200 left and that can go towards debt. This also gives me some flexibility to spend up to £50 a week if I absolutely have to. 

So far this 'pretending' method is working for me. 

What is your favourite way to budget?




Friday, 6 June 2014

Debt Update


My debt figures are now as follows:-

CC1         £4,205.20
CC2         £5,081.60
CC3         £2,135.79

Total debt cleared this month = £161.15

I know on the face of it that this looks rather tragic but I am actually rather pleased with this sum. 

You may have noticed that the figures for my credit cards look quite different to last months update. The reason for this is that CC1 figures were finally at the point where I had a realistic chance of transferring the balance to a 0% interest card. 

CC1 and CC2 were both offering current customers the opportunity to transfer the balance so I transferred the element of CC2 that I was paying interest on to CC1, then transferred the element of CC1 that I was paying interest on to CC2. 

Due to the balance transfers, I incurred charges. However, now all my cards are 0% interest so the fee was worth it. I have transferred balances in the past but crucially, the difference this time is that I paid off the fees immediately plus paid another £100 odd on top (£53 is my minimum repayment for CC3). 

In addition, I managed to pay off debt despite the fact that I only received just under the equivalent of 3 weeks' pay at the end of April and more importantly, I did not go into my overdraft(!) This may seem like a completely irrelevant thing to be excited about but for me this is a big deal. 

If your interested in reading more debt repayment stories I suggest you check these out:





How did everyone's debt repayment go this month? 

Wednesday, 4 June 2014

Do you need financial goals?


When I first started reading personal finance blogs I was rather dismissive of this whole 'you gotta have goals' malarkey. It just seemed so, well, boring and obvious. I mean, I want to clear my debt - that's my goal duh!! 

However, since I began to actively pay down my debt I can see now that goals are important. Without a goal, where is the motivation to continue? 

Actually, I think you need two moments to assist in clearing debt and not accruing anymore 'bad' debt, you need an 'aha' moment and you need a goal. 

Aha!

For me, I cannot pinpoint my 'aha' moment. I don't know the date that I cracked and said 'Victoria - NO MORE DEBT!' 

I do remember sitting in my tiny, expensive, flat last year sometime in the summer having a realisation that my minimum repayments on my credit cards were stupidly expensive. However, this didn't stop me racking up more debt. 

I remember when I left my job in December thinking that I needed to get smart with money. 

I remember a sleepless night in February when I was struggling to find a job and getting worried about money. 

But I cannot remember when I said 'enough'. It must have been the day I started my blog! 

Goals 

Having thought about this subject over the past couple of weeks, I have realised what kick started my debt repayment is my desire for things in the future. I would like to buy a home and I would like to start a family. More importantly I would like to stay at home with my children (at least while they are very little) and I don't want to return to work full time when my children are still at school. These desires of mine will not be achievable if I have £18k and rising of credit card debt. 

I am not one for finite rock hard goals - I like a bit of flexibility but roughly my goals are as follows:- 
  • Clear my remaining credit card debt by June 2016. 
  • Buy a property in 2015/2016
  • Start a family in 2016
Actually in an ideal world I would like to clear my debt by December 2015 but that would mean paying £605 per month towards my debt and that is not possible on my current salary but £460 per month, that is broadly realistic. 

My boyfriend has become a little obsessive with buying a property. He is saving for a deposit. I need to clear more of my debt before we approach a mortgage lender to assist in our application being approved. 

Babies! Yay! I really don't want to be scrapping around for money for credit card minimum repayments each month when I have children so I want the debt gone before babies. 

So, ultimately, I want to clear my debt to start a family. 


Do you think it is possible to clear debt without a goal? Did you clear debt without a goal? How do you motivate yourself to clear your debt?

* Image courtesy of chanpipat via freedigitalphotos.net 

The Million Dollar Diva

Sunday, 1 June 2014

Debt Repayment Strategies - Part 2



Last week I detailed a number of debt repayment systems that you could use. What I didn't detail under 'Debt Consolidation' was that you could add your debt to your mortgage. 

If you have enough equity in your property you may be able to add your debt to your mortgage. 

You may need to remortgage (find a new deal) in order to borrow more so that you can add debt to the mortgage. 

Saturday, 24 May 2014

Debt Repayment Strategies - Part 1


Paying off debt sucks. Yes it is fun seeing the figures going down but overall it sucks, especially when you know you still have weeks/months/years to go until your debt free. My debt repayment is an all consuming thought. I spend a lot of time thinking about how I am going to clear my debt and analysing my spending.