debt free

Your Debt Diary – The Money Freak

October 24, 2018

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 Claire from The Money Freak shares the ups and down of her debt free journey as she nears the end.

What stage are you at in your debt free journey right now?

I’m currently paying off my debt. So far it’s taken me 2 years!

What is your debt total?

My debt total is now £2k. At the beginning it was £12k.

What is your why?

My 18 year old son has Autism and mental health issues. So I need to be able to support him financially, possibly for the rest of his life. I also want us all to be able to afford to enjoy life, not just survive it. As a child, I grew up in poverty and it really affected me. I do not want to continue that.

Are you following a specific plan or method?

Yes, I follow the Dave Ramsey method. I adjust it slightly to fit the U.K., as it’s a USA based plan.
Things like student loans work differently, so I don’t include them in my debt snowball. And fortunately we have much lower health care bills due to having the NHS.

What challenges have you faced along the way?

The biggest challenge has been keeping myself motivated. That’s primarily why I started my blog and Instagram account, to find like minded people. I don’t know anyone in real life who considers paying off their debt a priority. So my online support is really important to me.

What are you doing to speed up the progress of your debt free journey?

At the moment, I am concentrating on reducing food bills and keep my costs over Christmas as low as possible. I spend way too much on food, so that is my main priority.

When do you plan to become debt free?

Hopefully, all going well, I will be debt free in April 2019!

I’d like to thank Claire for today’s post. Please make sure to visit her blog at www.themoneyfreak.co.uk
and on Instagram at www.instagram.com/the_money_freak

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.

Your Debt Diary – Laura from @ljsdebtfreejourney

October 10, 2018

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 Laura from @ljsdebtfreejourney shares the ups and down of her debt free journey so far.

What stage are you at in your debt free journey right now?

I started my debt free journey in June 2018, so still relatively new. But I have learnt so much in that small amount of time

What is your debt total?

I started at £14,003 exactly, currently at around £13,800. It pains me to put it down on paper, such a massive amount of money and not much to show for it in my life!

What is your “why”?

I am a cliché, I guess I was never taught the right from wrong. My parents always had debt as long as I can remember, I never thought anything bad of it – that is until I found myself there. It all started at 18 with a store card, unlimited clothes, it felt amazing. Then came credit cards, nice car, nice holidays etc. I moved into my first rented house at 18, bought lots of house things and lived the free-spirited teenage life.

Then 3 years ago I met my partner, and for the first time in my life I didn’t want nice things anymore. I wanted to be able to see a future with my partner, our own house, a dog, children, see parts of the world. And I couldn’t see the future. All I could see was the sheer amount of money I owed and no way out. Having to spend more on cards each month, just to be able to get through the month because of how much interest I paid. Something had to change!

Are you following a specific plan or method?

I hadn’t up to now. My main focus was learning the ways, how other people were dealing with their journey. I switched most of my credit cards to 0% and took out a personal loan with the rest at a much lower rate. I seem to have adopted the Dave Ramsey plan without even realising it. I’ve already started sinking funds for things, de-cluttered the house and used earnings from surveys to start my emergency fund. This seems to be working this far so most likely the method I’ll carry on with.

What challenges have you faced along the way?

My biggest challenge has been getting my partner on board. He’s very black and white in the way he thinks, he’s never had debt, he works hard for his money but never lives beyond his means. Sometimes he doesn’t understand how I got to where I am and whilst I’m not after any sympathy, some support is needed. Over time, as I’ve learnt my ways and started to make progress he’s come on board a little more. Now I feel much more comfortable to discuss it with him and he’s been quite encouraging at times. My only other challenges are myself. Allowing that inner spender to come out and trying my best to keep her down!

What are you doing to speed up the progress of your debt free journey?

I put a lot of time and effort into the little things to help now (cashback apps, survey sites). In doing this and putting that money away, I find my salary doesn’t get dipped into anymore. This means there is more money left for snowballing on top of my minimum payments or planned spends instead of using the credit card. It really is amazing how clearer things become after a bit of organisation!

When do you plan to become debt free?

I originally said 5 years, but as the days go by I can hear that biological clock ticking away in the back of my mind – This is my motivation for doing my upmost to make this much sooner. Fingers and toes crossed, but we all know this will only go away from hard work, not luck!

I’d like to thank Laura for today’s post. Please make sure to visit her on Instagram at @ljsdebtfreejourney.

Finance Book of the Month – The Total Money Makeover

July 16, 2018

As part of my journey towards becoming debt free, I am making it a priority to educate myself about money. I want to have a better understanding of handling finances, financial mindsets and many other useful topics. My favourite way of doing this is reading. This is a part of my journey that I’m particularly keen to share with you as I believe you could get a lot of value from it. Here is my finance book of the month.

Finance book of the month – The Total Money Makeover

This week I would like to begin by sharing a book I have mentioned many times before already. A lot of you may have already read this, especially if you are also on a debt free journey, but I want to share it none the less.

The Total Money Makeover by Dave Ramsey is what I would describe as the most effective and most sensible approach to debt payment. The book provides you with a straightforward method to handle your money. It is easy to read and to understand. When you are already in stressful situation, possibly even a full on panic about your finances, the last thing you need is the confusion of unfamiliar words and complicated guides.

Dave’s money makeover system is made up of several baby steps, set in a specific order, that help you handle and control your money. He begins with building your emergency fund. I spoke about this here earlier in the month. He then progresses through debt payment, further saving, preparing for retirement and so on.

The Total Money Makeover is not the sort of book you read once and forget about. You will find yourself referencing it again and again. It will be relevant even once you are in the habit of handling your money well. I have just read it for the third time myself. As the title suggests, Dave’s intention is not to help you find a quick fix for your money. The steps guide you into healthy money habits that you will keep for life.

You can find The Total Money Makeover here on Amazon. (This is an affiliate link. I receive a small commission at no extra cost to you if you choose to use it. Thank you!)

https://www.amazon.co.uk/gp/product/1595555277/ref=as_li_tl?ie=UTF8&camp=1634&creative=6738&creativeASIN=1595555277&linkCode=as2&tag=mydebtdiary-21&linkId=b5421f231e544a87201db271924def21

The Total Money Makeover by Dave Ramsey

I absolutely encourage you to begin reading (or listening to audiobooks) as part of your debt free journey. Not only do you learn something as a result, but it also allows you some time to switch off from all the other goings on in life and just focus on the book in hand, literally.

Claire from The Money Freak reflects on her own experience of discovering Dave Ramsey and his method in her blog post here.

Beginning a Budget – When you have an irregular income

July 13, 2018

Two weeks ago I shared this post, You Need a Budget, and discussed the difficulties I was having as someone who has an irregular income. After some research and trial and error I have come up with a method that seems to be suiting me well. It is basic and very flexible as you will see, but it works. I imagine it will change over time but it is definitely a good start. These are my thoughts on beginning a budget.

Beginning a Budget

To get the ball rolling I did a lot of reading on different methods used by bloggers, authors and other financial advisers. For those of you who, like me, have an irregular income you will find that trial and error is the only way to discover what really works for you personally. You need an adjustable budget that shifts with good and bad months of income.

Some months will naturally pay better than others. This can make even the simple act of writing a standard income figure nearly impossible. A good place to start would be to find your income average from the last 12 months. This will give you a fair guideline amount to work with.

As a starting point, no matter your income type, I would highly recommend the Total Money Makeover by Dave Ramsey and more specifically his app called Every Dollar. This app allows you to set up your budget as well as keeping track of your baby steps. This is ideal if you’re on a debt free journey!

Tracking my Income

Most of my freelance clients pay within a couple of days to one week of an invoice being sent. It is therefore possible for me to plan for my income around one or two weeks in advance of payment. I simply keep a running note of work in progress or work due to arrive and an estimate of the payment date for that project. All of my invoices are stored in one place, meaning that I always have an idea of what’s due.

As an example, in one week I might invoice for three different projects which come to a total of £450. I know they will be paid into my account in three days time as this is the agreement with my client. This total is now an income value that I can use to handle my outgoings.

There is always a risk of payment problems and delays can happen. As I work with such a short window, numbers can rise and fall quickly. This is why I recommend having an emergency fund in place. If a bad month happens, I’m not in a panic.

My method of keeping track of my income is very basic and lacking in sophistication, but it seems to work.

Tracking my Outgoings

My budget is split into two types of outgoings that I need to keep track of. There are the set outgoings such as bills, my car insurance, my phone and my loan payments which are defined amounts withdrawn on certain dates. These don’t change and so they are straightforward to track.

I always have a note of these payments in my diary to ensure I never forget them. I also keep a note on my phone of the next payment due, which I update each time a payment is made. This is just an extra measure I take to make sure that I am always on top of things and nothing takes me by surprise.

Collectively, my personal set monthly outgoings come to just short of £450. As part of my budget strategy I therefore always keep £500 available in my account. This gives me piece of mind knowing that everything is covered. When some money goes to a bill and the total drops, I top it back up to £500.

For the not so regular outgoings, my approach is very simple. I think before I do. These outgoings are normally made up of things like nights at the pub, popping to the shops and trips home to Glasgow. Budgeting money for these is all about staying in control and planning ahead.

Take a trip home to Glasgow for example. I normally plan these a month or so in advance. I know that petrol for my drive normally comes to £60 for a round trip. This can be a lot of money when it has been a slow month. Planning ahead makes it manageable as I can prepare for it and set the money aside.

For the smaller things, I look at my expected income and upcoming payments and decide if I want to and more importantly NEED to spend that money. Would it be more sensible to keep it back for another day? If the answer is yes, that’s what I do.

Telling each penny where to go.

So where does everything else end up? This is the stage in a budget where many people falter. They know their outgoings are covered so what more is there to worry about? In fact, this is a key point that Dave Ramsey highlights over and over. If you don’t tell your money where to go it will disappear.

If you are looking to save, use this “extra money” to save, if you are looking to pay off debt this is where to place your focus!

Once my account reaches £500 I have to tell the rest of my income where to go. For me, a small amount goes to savings. Currently, at time of writing, I am building my emergency fund so this is my focus right now. When this is complete this money will go straight to debt payments. For this I will use the debt snowball method, which is a topic for another post.

I’m incredibly excited for the day when I can change my budget entirely, moving from debt payments to investment and savings. It’s a long way off at the moment but I will be sure to share that change with you when it happens!

Budgeting can be overwhelming when you are first beginning your financial journey. The best first step to take is to note down as much as you can and open your eyes to what is going on with your money. Where is it coming from and where is it all going?! When beginning a budget use a simple system that suits you to get started and make your way towards financial freedom!

You can find a fantastic in depth guide with more advice on writing a budget over on themoneyfreak.co.uk.

I’m taking part in the Monday Money linky with Lynn from Mrs Mummy Penny and Faith from Much More With Less

Can survey sites and Ebay sales really pay off my debt?

July 9, 2018

If, like me, you have a pile of debt that you are looking to get rid of you have no doubt started the hunt for new ways to make money that will allow you to pay off your debt as soon as possible. You want it gone and you need ideas.

So many money making blogs will provide you with an abundance of tips and tricks, from ensuring that you cancel all of your unwanted subscriptions to taking on six more jobs to earn those extra pennies. OK six might be an exaggeration, but you get the idea. Two suggestions that come up every time without fail are try survey sites and sell your unwanted things on Ebay. But can these really make you enough money to pay off your debt?

Can survey sites and Ebay sales really pay off my debt?

The short answer is, yes.

Don’t get me wrong. I understand why people question it. You’ve found a t-shirt you don’t wear much anymore and popped it online for a fiver. After fees and postage you’re left with enough to buy you a sausage roll if you’re lucky. Then you try a new surevy site and after getting chucked out ten times and earning 15p in the process you figure it’s not for you.

Here’s the thing. It’s about more than the odd t-shirt sale. You need to look past the initial frustration and see the bigger picture. Figure out which sites work for you with some trial and error. Once you click with one or two you’ll be off. Have a bit more patience with it and you will begin to see progress, I promise.

OK, what are my options?

When it comes to selling, there are loads! We all know of the old classic Ebay. It’s straighforward to use and has a huge customer base, so you know your listings have a good chance of selling! Girl on a Pension has written a great post filled with tips for new Ebay sellers.

Have you thought about using Facebook or newer apps like Shpock? Each one is definitely worth a bit of research, but from experience a good piece of furniture can be sold within the hour on Facebook marketplace as it is so accessible to so many people, whilst Shpock seems to really suit smaller items like clothing and shoes.

This post by Wotawoman Diary provides a great indepth look at online selling to get you started and the tips are transferable to all selling methods!

Spend some time researching your options and weigh up the fees and ease of use of each. Maybe put an item or two on each and see which you prefer. Once you have one you enjoy using you’ll be far more motivated to make the effort!

The same goes for survey sites. There are so many available now it’s mad and they are a great way to make money. From experience however, some are far better than others. My personal preference is Prolific Academic. I spoke about it before in this post. It’s easy to use, and once you’ve gone through all of the prescreening questions you’ll only be sent surveys that are relevant. That means you’ll never get kicked out, hallelujah! In the last month I have made just short of £50 with this site alone.

Commitment to the cause.

I apologise if this causes offence, I don’t mean to question the importance you give to your finances…however, having been through the stages of “debt’s normal” and “oh it’ll be fine” I do understand the feeling of not wanting to put in the extra effort for the sake of a couple of pounds. It feels like a lot of work when the payout maybe isn’t the highest.

It’s definitely important to consider just how important being debt free is to you. The harsh reality is that the more priority you give something, the more likely it is to happen. This is particularly true for debt as it is such a challenge to face and an unpleasant one at that. When you really want something, you’ll work for it. You’ll stop seeing frustrations and hurdles and start seeing opportunities.

The compound effect

This is the one simple detail that convinced me that survey sites and ebay can really pay off my debt. Lots of small things can add up to something incredible. This is called the compound effect.

The other day I made £3.27 from selling a top. I consider that a small amount of money. It could just about cover a coffee.

But then we take the more open minded perspective. If I were to make a sale like that every day of the year, that tiny amount becomes £1193.55. Now that’s a significant amount of money! What if I was to add to that £1 worth of survey earnings for each day of the year? Well that’s another £365, so the total is now £1558.55. Would that help you to pay off your debt? It would help me!

With this sort of progress comes motivation, and it is incredible what you can achieve when you’re motivated! Dave Ramsey (author of the Total Money Makeover) has a famous saying, “Sell so much stuff the kids think their next”. Your mindset shifts when you start to see results and you begin to see opportunities to make money everywhere.

Yes, survey sites and Ebay sales really can pay off my debt!

Keep it simple. Find what suits you, work at it, build momentum and then really watch the numbers grow!

Debt Payment Progress Report 1 – 06/07/18

July 6, 2018

Every two weeks I will be sharing my debt payment progress report with you. I’ll share my new debt total and all of the things I have done to make this happen. I think this is important for two reasons. It will help me record my journey and share with you what works and what doesn’t. It will also help me to stay motivated!

My new total!

As of July 6th 2018 my new debt total is £16,662.42

That means I have made less than 1% progress so far. It is a tiny amount. A total of £151.87 in two weeks. But it is a step in the right direction! (I should note that I have paid in more than this, however some money has gone straight to interest, which is why the numbers below are larger than the net amount that I have paid off)

How have I made this progress?

As I am in the early stages of paying off debt I only use a handful of money making and money saving methods at the moment. Here are the ones I have used this past fortnight:

freelance work – £150
prolific academic – £38.95
ebay sales – £48

Of course my main income method has been freelancing. (I’ll talk about this more in a future post) I have to say though, this month has been incredibly quiet and my income has been far lower than normal. It makes me happy that I’ve been able to pay off so much, given the low income!

Prolific Academic is another income method that I have been using for a short while now and I love it. For those of you who aren’t familiar with it, Prolific Academic is a survey site that offers a good variety of well paid, interesting surveys.

The best bit in my opinion, is that they never chuck you out mid survey, which often happens on other sites and can be so frustrating. You have to go through so so many prescreening questions at first, but push through. This makes sure they send can you relevant surveys. The more questions you answer, the more surveys you’ll receive.

Some days ten surveys pop up, other days I’ll be lucky to have one. The key I’ve found is to keep the page open in a tab when I’m working and check on it every hour. I made £25 in one day last week alone!

I have a referral code if you fancy trying it out: click here. I receive a small kick amount of commission from your first withdrawal with no extra cost to you if you decide to use the link, thank you!

Reflections for the next two weeks

As you can see, my income making methods are few and far between at the moment. My goal for the next fortnight is to expand on these using new apps and websites so I’ll let you know how I get on. I’m also looking into new methods of saving money where I can. If you have any recommendations, do comment them below!

This post may contain affiliate links

What is an Emergency Fund?

July 4, 2018

At the beginning of the month I set my goals for July 2018. One of the major targets I included was to set up my emergency fund. Those of you who have been a part of the #debtfreecommunity for a while will know exactly what I’m talking about. But for those who are new to the concept, what is an emergency fund?

What is an Emergency Fund?

Quite simply put, an emergency fund is a cash buffer. A pot of money that you set aside for a rainy day.

Whilst on your debt free mission, it’s natural to want to throw every single penny you have at your debt payments. You want the total to go down as quickly as possible! One hurdle we all face at some point however, is the appearance of unexpected payments. Unfortunately life waits for no one and no matter how careful we all are things pop up that we don’t plan for.

Before you get on your way with debt payment it is important to take some time to set aside some money for this very occasion. Dave Ramsay, author of The Total Money Makeover recommends that you save £1000, or £500 if you are on an incredibly tight budget or low income. (His book is an incredible financial guide and one that I will talk about in more depth at a later date.)

Whilst in the process of saving your emergency fund it is important that you still make all of your minimum payments to credit cards, loans and other forms of debt that you have. The sooner your fund is in place, the sooner you can give your debt your full focus. Once you’ve completed your emergency fund you can progress with debt payments knowing your safety net is in place.

What should I use it for?

That horrible morning when the boiler breaks down on the coldest day of winter. The dread of hearing your car give up on the way to work. An unexpected loss of income when have urgent payments to make. All of these fill me with panic when I look at an empty bank account and know anything could happen that I haven’t prepared for.

This is what an emergency fund is for. You will feel a huge sense of relief knowing that you have a pot of cash which is easy to access and can dig you out of that horrible situation immediately.

What should I NOT use it for?

Your emergency fund is NOT there for days when you’re a bit tight for cash. It should not be the go to when you have the January blues and fancy an “emergency” holiday and it is absolutely not to be dipped into for that quick coffee because “it’s fine, you’ll just pop the money back in when you get paid”.

This can be really hard to deal with in moments of weakness when your mates are off out for dinner and you hate missing out but it is so important to stick to your budget and keep your emergency fund for emergencies only. It will be tough but you will be so unbelievably grateful for the pot of money that saves you on a day when you really do need it.

Where should I keep it?

Your emergency fund should be liquid. In other words, it should be in a savings account or current account that is separate from your day to day spending money but still easy for you to access. There should be no penalties for withdrawals. It should be accessible immediately in case of, you’ve guessed it, an emergency.

What do I do if I have to use it?

Top it back up again. It is as simple as that. Once the emergency is dealt with, your emergency fund might be a few pounds down or it might be completely empty. Pause your debt payment and go back to minimum amounts temporarily. Then top your emergency fund back up to the £500 or £1000 that you originally had. Knowing how much it has saved you in an emergency will make it all the easier to fill up second time round!

Charlotte Musha has written a great in depth post about the emergency fund, baby step one, from Dave Ramsey’s perspective in this post.

This post may contain affiliate links.

My Goals for July 2018

July 2, 2018

My first goal setting post!!

This is the bit I get excited about. I LOVE setting goals and making plans and writing lists. It always gets me motivated to get a move on and take action. What I would say though, is that I do often find myself losing motivation and chopping and changing my goals quite often too and so this is something I need to bare in mind and try and try and tackle. Here are my goals for July 2018.

My goals for July 2018:

Save £500 for my emergency fund. Anyone who has been in the #debtfreecommunity for more than five minutes will understand the importance of having an emergency fund. Add to this the unpredictability of being self-employed and this is a vital first stepping stone for me!
Put £1000 into debt payments. I want to make a good start on my debt payment this month. Once the emergency fund is in place, the first £1000 is going straight to debt!
Find one new income method. As you will have seen if you read my Starting Point post here you will know that I currently only make money from my freelance work and through Prolific Academic. I want to diversify my income so this is an important one this month!
Take time to nurture my mental health. The main focus of this whole journey for me is of course money and debt payment. What I have recognised however is that I need to pay attention to my mental health if I want to remain motivated and productive. I’m not sure what I will be doing yet and how I will be looking after myself, but it’s something I want to spend some time on. This is definitely a topic I want to explore in more detail in a future post.

So there they are, my goals for July 2018. I’ve kept it simple with just four. I think the fewer I set, the more focus I can give to each and the greater chance I have of achieving them all!

My Goals for July 2018

You can find my lifestyle blog Sunshine and Rain here, where I chat about my more day to day, non-financial goals.

This post may contain affiliate links.

Debt Payment Progress – The Starting Point

June 25, 2018

This is the point where I hold my breath and lay all my cards out on the table for you to see. I find this terrifying, but it has to be done. The debt payment progress record starts here. This is my starting point:

Debt Payment Progress

With each update I share I will be keeping a debt payment progress. As I am at the beginning of my recorded journey I am currently at the 0% mark. This is difficult to admit as I have been making minimum payments for a while, however due to interest my total still remains around the same. The reality isn’t nice, but I have to start somewhere.

Breakdown of debt

My debt is made up of four different things: two bank loans and two credit cards. I have very recently paid off an overdraft of £500. I do also have a student loan of £9000, however I won’t be counting this for now. The debts are listed here from highest to lowest and I’ll be tackling them in the opposite order. The debt snowball is the method that I will be using. I have read up on this before, but I’ll be looking into in more detail so I can use it effectively!

Bank Loan One £7524.85 – 44% of total debt

Bank Loan Two £6003.42 – 35% of total debt

Credit Card One £2700 – 17% of total debt

Credit Card Two £586.02 – 4% of total debt

Income Streams

Whilst I am constantly jotting down notes filled with ideas for businesses and money making methods I currently only have one. I am a freelancer specialising in architectural drawing and I work from home. I make anywhere from £500 to £2000 on average per month at the moment. This fluctuates regularly due to the nature of the work.

Beyond this, I spend small amounts of time using platforms such as Prolific Academic. This method earns me a small amount each month and it is great for a small extra boost to my monthly total! You can read about prolific academic in more depth here.

A further income stream I am very keen to explore through this blog is passive income. This is an avenue I have briefly explored in the past and I would love to give it more time and consideration. The key point is that I need to diversify my income by finding further ways to make money.

Methods of Saving

Due to my terrible spending habits I do not currently have a routine for saving money, nor any goals for that matter. This needs to change and I will be working on this from day one.

If you have any thoughts, I would love to hear them!

This post may contain affiliate links.