My Debt Diary

Your Debt Diary – Jane Has Debt

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 Jane from @janehasdebt shares their journey so far and the extraordinary challenges they have faced.

 

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

I am stuck in a time warp. Look more like it. I have been trying to get out of debt for the past 10 years. Part of the problem is that I have ADHD – also known as not being able to rationalise anything because of getting into a space of being hyper-focused and also being impulsive. I have fortunately learned to curb everyday expenses both using personal finance tools like budgeting and using the cash envelope system. Critically stopping big purchases due to my ADHD is still a work in progress (like financing cars or buying concert tickets).

For the most part I was doing well but a few years ago life literally flipped me upside down and shook everything out of me within a year’s time. Divorce, passing of mein Kind, my own health issues, and my car was totaled at the other person’s fault. I had to draw my focus somewhere, so I went back to school by taking out student loans, I had to rent/deposit a new place, and I bought a new car to replace my just-paid-off previous now totaled car. Plunged myself into another $23,000 on top of my already 38,000 (total – $61,000).

Then I found Mr. Money Moustache blog and the forums. It was a godsend to me at the time I found it. The diversity of people available and their brilliant knowledge in personal finance saved me. I am still not in a good place with debt. But overall I am in a much better place with my finances – awesome credit score due to bills being paid on time, budget brilliantly, put 10% away in my retirement account, increased my income, increased my net worth and now craft my own cash envelopes.

What is your debt total?

Between health, education needs for my other Kind, and financing another used car (major mistake) – at my highest I have owed $81,120 (April 2018). I am now at $69,324.

What is your “why”?

The worst thing ever was not being able to take extended time off when mein Kind got sick. I didn’t have the family to help, I did not qualify for FMLA (Family Medical Leave Act) and I couldn’t quit my job without sinking into homelessness. Twenty four hours a day I was working full-time, taking care of two in separate locations, attending health appointments and commuting hours at a time. I was exhausted and I was in a flurry of frustrating emotions at the lack of support every corner I turned.

I will never be in that space again.

Are you following a specific plan or method?

I try follow the Dave Ramsey baby steps 1 and 2. I keep a strong budget. Discretionary expenses are cash only (with pretty envelopes). But I don’t always have a full emergency fund. Actually it’s one of my pet peeves because I can never keep it filled up.

What challenges have you faced along the way?

Being in debt for so long…actually I have been in debt my whole adult life. But at the time of being mindful of my debt I have not been able to get my debt down! It’s so frustrating. I’m on a roller coaster without the ability to get off of it. Frankly it is tiring! The last stint was my car breaking down and deciding it was better to finance another than spend the $4,000 to fix it. That was such a bad decision.

I am kind of freaking out about my debt load because die hard planning for retirement is now coming into focus, Um, no bad nursing homes wanted nor do I want to be broke. With a problematic and expensive U.S. healthcare system, it’s a scary thought not having enough money available. Especially when I think of everything else I am concurrently financially managing and/or trying to save up for.

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

The past few months I haven’t been able to snowball. The 4th quarter is when all my annual expenses come due and I didn’t have sinking funds available to cover them. So the snowball portion and payment plans covered these expenses. Fortunately, starting in 2019 my snowball will resume.

As for side hustles, it is not working out for me. I don’t much to sell off and side hustle opportunities are not coming to fruition. I plan on trying a couple of other side hustles in the new year. I’ve started saving my $5 bills to help me fund my emergency fund.

All extra money received (i.e. tax return, bonuses etc) will be thrown at paying down debt.

When do you plan to become debt free?

As long as I stay cash only with discretionary expenses and keep the credit cards out of the picture (because ADHD and CCs don’t mix), I will be debt free 4th quarter 2022. God help me.

 

I’d like to thank Jane for today’s post. Please make sure to visit their Instagram at @janehasdebt.

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 - Jane Has Debt - pinterest

Your Debt Diary – Light at the End of the Debt Tunnel

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 Amy from Light at the End of the Debt Tunnel shares her mission to become debt free by Christmas 2020.

 

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

We have budgeted and tried to pay off debt for years – at least since 2014. Somehow, though, our debt continued to increase. We started with new focus in January this year but found the debt free community in August and are now going “gazelle intense” as the Dave Ramsey community says. We’ve finally stopped adding to our debt and are aiming to start sinking funds in January.

What is your debt total?

£12,431. All on credit cards, all (thank god) interest free at the moment.

What is your “why”?

We want to buy a house. We’d just love to own our own home. We also have a daughter and we want to stop the cycle. My parents were always in debt (still are) and constantly spent more than they had on credit cards. I don’t want my daughter to ever experience this stress.

Are you following a specific plan or method?

I take inspiration from Dave Ramsey but I haven’t followed his baby steps. We are paying our cards off in the order the 0% interest ends. We will also use the sinking funds method because a big part of our debt was car repairs and other unexpected expenses.

What challenges have you faced along the way?

Not having sinking funds has made it difficult to pay down debt. Our debt has actually gone up as well as down since August but I’m working hard on paying it down. I always used to say we didn’t have enough money to put aside for unexpected expenses but something has to change so I’m going to give it a try. Even £50 in a sinking fund will help when I need new tyres or something else!

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

We plan a budget together every month to stop us having to out anything on credit. Our sinking funds will also stop our debt increasing again hopefully. I am listing lots of items for sale that we don’t need anymore, doing surveys and I’ve also recently started matched betting.

When do you plan to become debt free?

Based on our current payments, we are about 21 paydays away! Hopefully Christmas 2020 will be a debt free one! My goal is 18 months though as I’m factoring in our childcare reducing when our daughter starts school as well as my annual wage increase. I’d love to reduce that even further because the long term goal is to save for a house deposit and the thought of it being nearly two years before we can even start to save is so depressing. Here’s hoping we can be in our own home in 3-4 years time!

 

I’d like to thank Amy for sharing her story in today’s post. Please make sure to visit her Instagram at Light at the End of the Debt Tunnel

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 - Light at the End of the Debt Tunnel - pinterest

Your Debt Diary – The Penny Pinching Js

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 The Penny Pinching Js shares their journey so far and the extraordinary challenges they have faced.

 

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

We are in baby step 1 – snowballing our way out of debt.

What is your debt total?

Our debt total is $89k+. Mine alone is $52k and my husband’s is $37k.

What is your “why”?

To improve our credit score and save for a house without worrying about other debt.

Are you following a specific plan or method?

We follow Dave Ramsey’s steps and have taken the Financial Peace University.

What challenges have you faced along the way?

Challenges to date? Oh my, where do I begin! We are actually on attempt number two. During our first attempt I lost my husband’s car keys and used part of the emergency fund to replace them. Recently, our kiddo went into surgery so I had to exhaust my leave since I do not qualify for FMLA until December 2018 and ended up taking leave without pay for a total of 24 working hours. Our home island was hit by a super typhoon and we made the mutual choice of donating half of our emergency fund to relief efforts and using the other half to buy items for our family members still on the island. My car was in the shop for a week and with our emergency fund exhausted, I had to use a credit card that was paid off during our first attempt. That caused us to start all over again from baby step one.

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

To speed up the progress I’ve been working overtime when I can. Thankfully my career pays for my commute hours so I work the usual work day and get paid for my travel to and from the work site which pushes me into 5+ overtime hours a week. My husband doesn’t have that luxury because his salary is fixed since he’s military. I have a small side hustle of teaching dance and I’ve been looking into driving for Uber and Lyft.

When do you plan to become debt free?

We have honestly not established a “debt free date” for the purpose of getting a hold on anxiety and causing meaningless tension in our marriage. We just take it month by month and apply the method we’ve learned. We’ve got a total of twelve debts since I broke the group of my student loans out to individual loans and we’ve paid off debts 1 & 2. Now onto debt 3!

 

I’d like to thank the Penny Pinching Js for today’s post! Please make sure to visit their Instagram at The Penny Pinching Js

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 - the penny pinching js - pinterest

My goals update for October 2018

We are already half way (and a bit) through October so I thought this would be a good time to check up on my progress with the goals I set for myself at the beginning of the month. I often find that if I don’t remind myself of them regularly I can lose my focus. I’m going to be checking in with you around mid month from now to help me stay on track. Here is my goals update for October 2018.

 

Buy all my Christmas gifts:

As of yet I have not purchased anything. What I have done however, is choose several of the gifts I’m planning to buy. Not only this, but I think I have found a couple of affordable options too! I have four people to buy for this year thanks to Secret Santa plans. Better not share any details in case nosey eyes find them of course.

To keep things organised I’ve set up a new folder in my bookmarks. I’m saving all relevant links to gifts in there. I think I’ll be buying everything online, for ease and because I am more likely to find a good deal that way. It also means that if I am unable to afford all of the gifts this month for whatever reason, they are easy to find as soon as I have the funds to buy them.

Continue with “no spend days”:

We are now on day seventeen of the month and I have so far managed 12 no spend days. Considering we have had several evenings of drinking, eating out, a few trips to the shops and so on, I’m really pleased with that. We are going away with family for five days shortly. We are staying in a cottage in the country and plan to cook several meals ourselves. Thankfully I’m not too worried about spending a lot of money and ruining my good streak.

Clear £500 of my second credit card:

On the very first day of the month I put £200 straight over to my credit card. It felt so good to clear such a big chunk in one go! Since then my income has been focused directly at my loan payments. Now that they are made I am able to return my attention to the card and should be able to hit my goal within the next week. As long as plenty of invoices make it out the door of course.

It’s so exciting to be making such good progress. If you read my post about paying off my first credit card you will know how happy I am to be heading towards clearing my second and final card. You can read that post here.

Save half of my tax payment:

Whilst this is the last goal in my list, it is an important one. My tax payment is due at the end of January and so I only have a couple of months left to prepare this. If you read my goals post you will know that I have been so focused on my debt payments over the last few months I forgot to prepare for the end of the financial year.

Knowing that November and December are often quiet months for my income, most of the saving needed to be done in October. As of today I have managed to save £350, so I’m getting on really well. Ideally I’d like to put £500 away in preparation. If work continues steadily I will manage this no problem. I’ve spoken before about the impact stress around debt can have on my mental health. This will really put my mind at ease!

 

I’m actually really chuffed with my progress so far. A few focused days of work and time spent on careful gift planning this week and I’ll be well on my to hitting my goals before the 31st. How are you getting on with your goals? Let me know in the comments and be sure to join in with the linky myself and Charlotte host!

 

goals update for october 2018 - pinterest

How I paid off my first credit card

A couple of weeks ago I finished paying off my first credit card! It had been a goal of mine for over two months and I cannot describe to you how good it felt to phone my bank and close that account. As soon as I hung up the phone I did a happy dance around the kitchen. I’m not joking. Be thankful you didn’t witness those moves. For many people starting out on their debt free journey, getting rid of that first debt total might seem like an impossible mission. To help motivate and guide you, here is how I paid off my first credit card.

Figured out my debt total

Of course, this is the dreaded first step. Before I could begin paying anything off I had to face my debt total. It wasn’t fun, it wasn’t pretty and my anxiety rocketed as I checked each number and added it to the calculator. It had to be done though. In order to understand how you are going to become debt free you have to know what it is you are dealing with.

My total came to £16,814.49. You can read my Starting Point post here. My smallest debt, my first credit card, was at £586.02. If you follow Dave Ramsey’s baby steps and the debt snowball method you will know that this would be the first debt I would focus on paying off. But before I did that, I had a few other things to put in place first.

Created a budget

The next step was to figure out where all of my money was going. I did this by coming up with a budget. Once I knew where my money was going, I would be able to tell it where I wanted it to go. I feel like that is the major difference between getting into debt and getting out of debt for most people. Setting up a budget gave me control over my outgoings for the first time in a long time.

As my income is irregular I had to do things a little bit differently. My total monthly earnings change constantly, so I had to come up with a budgeting method that worked for me. You can read about it here.

Set aside an emergency fund

Next came the emergency fund. This is such an important step and one that should not be skipped. I understand that for most people, by the time you reach this stage you just want to get started on your debt payments. You have to be patient and wait a little bit longer while you save your emergency fund.

It took me around three months to save my emergency fund, which felt like forever at the time. Thankfully I haven’t had to use it yet, but it gives me such piece of mind knowing that I’m covered if anything goes wrong or my income drops drastically in the coming months.

If you have no idea what I’m talking about you can read my post on emergency funds here. In very simple terms it is a pot of money for emergencies, just as it sounds. It’s greatest benefit is that if somewhere along you debt free journey something unexpected happens, such as a car breakdown, you remove your risk of going backwards with your debt progress. No credit cards are needed to make the payments, you have an emergency fund instead.

Focused my over payments

Now we get to the fun stage! For those who follow the Dave Ramsey method, this is where the debt snowball kicks in. Whilst making minimum payments to all of my debts I threw every spare penny I had at my smallest debt, my credit card. This change in the way I handle my finances has made the biggest difference for me. Before I started to focus on becoming debt free I used to pay a little bit of a card off, then a little bit of a loan and so on. Now, I concentrate all of my over payments on my smallest debt.

Some of these over payments came from money “leftover” once I had completed my budget for the month. A lot of it came from things like selling unwanted clothes on ebay and completing surveys on Prolific Academic (my favourite side hustle) too. Everyone will find something different that works for them.

The beauty of using this focused method is that you see much quicker progress with each debt that you have and your momentum really begins to build!

What’s next?

If you have read my goals post for October you will know that I am now putting all of my focus into my second and final credit card. Using the same method as I did for my first I will put everything I have into clearing this total. Even better, I now have the money available that was going into my first credit card (a minimum payment of around £60) which means I will be able to pay this card off even faster.

 

Whichever method you find best suited to you during your debt free journey, having focus and understanding of your money are both key. You have to know where your money is going and you have to tell it what to do. Take control of your finances and you will make progress towards financial freedom!

how I paid off my first credit card - pinterest

Your Debt Diary – Wanna Be Debt Free

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 Grainne from WannaBeDebtFree shares her debt free journey experience and the reasons why she felt the need to pay off her debt so quickly.

 

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

I’m debt free (said in the style of a Dave Ramsey debt free scream!). My partner and I started with around £16k last year and after he was put at risk of redundancy and I realised that we were putting ourselves under pressure to earn a certain amount each month. We set ourselves the goal to pay it off in one year and revamp our budget. Just over a (tough) year later, we have no debt and are looking to start building some savings. I’d also like to learn some balance with money as this is an area in which I admittedly struggle, so I’m working on that too.

 

What is your debt total?

Zero, nilch, nada! But I literally have no savings now, which is pretty scary.

 

What is your “why”?

Originally, my “why” was to take some financial pressure off my partner and I. We were both earning decent money, yet every month was a struggle to make it to payday. I wanted to figure out where we were going wrong, and clear our debt, in order to see of that money in the bank or at least have the freedom to change jobs. When we finished paying off our debt, we both decided to reduce our working hours to get a better work/life balance and spend time with friends and family.

Nowadays, as we stand staring at the mountainous savings goal ahead, my new “why” is basically my five year plan; we are planning on getting married in April and I’d like to start a family and actually be at home with them as much as possible. I want to put our money into building a passive income so that we can be the sort of parents that are there for every school meeting, and have a marriage where we can go out for lunch on a Tuesday afternoon together just because we can, instead of being in work all the time!

 

Are you following a specific plan or method?

I loosely follow the Dave Ramsey Baby Step method because it’s very simple, however, once you get beyond Baby Step 3 it becomes somewhat irrelevant for us UK-based debt repayers! So I’ll be following my own plan soon, including paying off our mortgage, buying an investment property and fully funding my pension.

 

What are you doing to speed up the progress of your money goals?

Being as engaged as I can with like-minded people! While difficult for me to find them in real life, the Instagram #debtfreecommunity is a great place to get motivated, and I find it really helped me to share my journey with this community. I’m also completely obsessed with budgeting (sad I know). I do like to shop and consider myself to be generous towards others with my money, but at the same time, I find that having a plan is key to making your debt free dreams a reality. Especially when your plan includes a treat, because treat yoself!

 

I’d like to thank Grainne for today’s post. It’s fantastic to hear from someone who has already completed their debt free journey and is now reaping the rewards of greater financial freedom! Please make sure to visit her blog at Wanna Be Debt Free UK.
You can read last week’s Your Debt Diary post here.
your debt diary - wanna be debt free - pinterest

your debt diary – wanna be debt free – pinterest

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

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!

 

Can survey sites and ebay really pay off my debt - pinterest

 

Debt Payment Progress – The Starting Point

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!

debt payment progress - the starting point

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