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When I first began following the Debt Free Community on Instagram I was drawn in by the stories everyone would share about their debt free journeys. I find it fascinating to read about the progress others are making and also reassuring to know that I am not the only one in my position.
Your Debt Diary is a guest blog series by money bloggers and members of the debt free community for My Debt Diary. Each week someone new will share their debt story. This week Melissa from www.skinnyspending.co.uk shares her debt free journey so far.
What stage are you at in your debt free journey right now?
Short term there is a light at the end of the tunnel. Long term we have a long way to go which will be clarified below!
What is your debt total?
My debt journey is a little different to most as we don’t have a mortgage (which many people exclude from their debt total), instead we have 2 x £25,000 personal loans and another £12k in payment plans for home improvements. Treating this as the equivalent of a mortgage has enabled us to more than double the size of our house, which is on a farm on acres of land, for £62,000. The house is owned by my husband’s family as it is part of the farm. It means for this amount we get to live in a large family home for a fraction of the cost of owning it ourselves. The payments will also be paid off a lot quicker than a mortgage. If the farm was ever sold we would be afforded some of the sale money to buy an equivalent house. I plan to cover the finer details of this on my blog in the near future.
I also have a credit card with approx. £3500 on it and a car loan that ends in January 2019. These are the debts I am trying to tackle short term as once they are paid off I will be around £400 a month better off.
What is your “why”?
Money was always easy come, easy go for me. I earned a decent amount so never really got into any superficial debt, however I spent money like it was going out of fashion. Then, shortly after the house extension was complete I changed jobs due to stress and then got pregnant. A 10k drop in income, maternity leave, another mouth to feed…all of a sudden money was VERY tight! Unfortunately my attitude didn’t change for a while and although I reeled in my spending and was able to save a decent amount to see me through maternity leave, I found that my budget was always out and at the end of the month I was sticking essentials such as food and groceries on my credit card. Not to mention Christmas. I was trying to keep up with my old income and failing. It was around a year ago that I realised (quite obviously) that I needed to stop spending on my credit card altogether. The loan payments are manageable, so I am focussing on getting the credit card paid off by April 2019.
Are you following a specific plan or method?
Not specifically; I am aware of the Dave Ramsey baby steps and I think the debt snowball is a good idea, however I only have my credit card and car loan (which is set payments with an early penalty fee) to tackle. Once these are paid off we can look at adding more to the loan payments. I also find the debt free community on Instagram very motivating and keeps me on track as well as ideas for earning extra cash!
What challenges have you faced along the way?
Finding the money for events such as hen parties and weddings. Like most new parents both myself and my husband have cut down significantly on nights out, we haven’t had a family holiday abroad either since extending our house 5 years ago but things like this you don’t want to miss out on. We have had 3 weddings this year!
What are you doing to speed up the progress of your debt free journey?
I have drastically cut my own spending and aim to make £300 extra per month in “side hustles” from home. I rarely buy clothes or other things for myself, I have only had one haircut this year and dye my own roots (instead of spending £100+ every 8 weeks), I switched to a sim-only plan on my phone. To make money I have started Matched Betting and selling on eBay, as well as charting my money making and saving on my blog.
When do you plan to become debt free?
Short term – my car and credit card will be paid off by April 2019. This will be an extra £400 a month! Long term, our loan payments have 7 years left currently but this extra cash could speed up the process.
I’d like to thank Melissa for today’s post. Please make sure to visit her blog at www.skinnyspending.co.uk
and on Instagram and Twitter at @skinnyspending
You can read last week’s post here. If you would like to share your story with Your Debt Diary please leave a comment below with your email address or Instagram and I will get in touch. You can find me on Instagram here.