debt

These Psychological Tricks Will Help You To Get Out Of Debt

November 9, 2018

If you are in debt, and sick of it, know that you are not alone. Statistically most of the people you meet are going to have some kind of debt in their life, if they don’t already, so the last thing to do is to feel as though you are the only one in that kind of trouble. The truth is that it is very common, and because it is so common there are a huge number of people out there who have learned how to deal with the situation much more effectively. In this article, we are going to take a look specifically at a few psychological tricks which you might be able to use in your attempt to become debt free. By taking a look at these and utilizing them in your own life, you might find that you can much more effectively and quickly rid yourself of debt. As such, they are definitely worth taking a look at.

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Fix Your Eyes On The Prize

Because it can be so easy to get despondent about your debt, it’s necessary to try and find a way to keep looking forward to the future, to when you can hope to be free of it. A great way to do this in particular is to keep focused on some of the things that you will be able to treat yourself to when you are finally free of debt, so that you can then know what you are aiming for in a more concrete way. Having the specific goal, for instance, of buying a new car – and looking specifically at Mercedes-Benz Special Offers or whatever car you are keen on – will ensure that you can find it easier to keep looking forwards to a brighter future. Fixing your eyes on the prize – a car, a holiday, whatever – can be powerful.

Don’t Take It Personally

It can be so easy to think that there is somehow something wrong with you just because you are in debt, but actually this line of thinking is not a very helpful way of going about things. If you want to be rid of debt sooner, you will need to stop yourself going down such psychologically dark spirals, as they ultimately only lead to binging and over-spending again. Instead, remember that anybody could be in your situation, and that it is much more an accident of fate than anything else. There is nothing inherently wrong with you, and no reason why you can’t lift yourself out of your debt, given time and a little effort.

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Avoid Compartmentalizing

If you look closely at your debt habits, you will probably notice that there is one thing you tend to do in your mind when thinking about money. In all likelihood, you find yourself compartmentalizing your debt away from your money in general. This might even seem sensible or logical, but you will actually find that you get much more done in the way of results if you simply think of all of your money as one, including whatever debt you might be in. Seen in that way, you can hope to treat it with much more respect, and therefore get out of it much sooner.

How I paid off my first credit card

October 8, 2018

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!

Failure can happen on your debt free journey and that’s OK

September 17, 2018

Whether it’s a blip or a major set back, failure can happen on your debt free journey. From using your credit card on something you know you shouldn’t have to needing to spend £1000 on your car repairs, it happens to all of us. The important thing is that you learn from it and ensure that you do everything you can so that it doesn’t happen to you again.

Reasons we fail on our debt free journey.

There are so many things that can make us feel like we have failed. From personal experience, lack of planning can be the most common cause. When you’re in the midst of throwing everything you earn at your debt payments it can be so easy to forget about extra costs in life. Of course, we’re all aware that birthdays, Christmas, Car MOTs and many other things cost money, but as they are not weekly or monthly costs we can often lose sight of them.

When I first began to face my debt this was something that caught me out on more than one occasion. With an irregular income from being self-employed and the desperation of trying to cover all of my bills and fees, I was often left short when it came to going out with friends or covering Christmas gifts. At my lowest point, I went to the ATM to withdraw £20 to cover a dinner, only to find I had -£35 in my account. I had forgotten about a bill that was due to be taken from my account on that day and there was nothing I could do about it.

Of course, this is not a mistake that only those in the early stages of their debt free journey make. Several months into my own I feel like I am on top of things. Then earlier this week I realised that in January my tax bill is due. I’ve been so focused on my debt free journey that I’d forgotten to ensure that money was set aside. Thankfully it is not a huge bill, just over £1000, and I will be able to save for it in time. Unfortunately I will need to slow down my debt payments until I have that money set aside as a result.

What can we do to avoid them?

Use an emergency fund.

If you’ve never heard of an emergency fund before, take a quick look at this post and then come back. Once you know and understand an emergency fund, it doesn’t need any more explanation. Have one in place and if an unplanned expense arises you will be ready to deal with it.

Use a budget and stick to it.

You need a budget. It’s as simple as that. At the beginning of each month, sit down with a calendar and get familiar with your money. Everyone in the family who contributes to the pot should be included. Know where your money is coming from and where it is going. What events do you have coming up? Are there any big expenses expected? Should you be saving a little extra than normal? Planning ahead this way will definitely save you from hitting crisis point.

If, like myself, you have an irregular income read my budget for irregular income post. When your income is uncertain it can be tough to prepare for unexpected outgoings. On top of my budget and emergency fund, I now keep a float of £500 in my current account. This helps me combat potential slow months and ensure my minimum payments can always be made.

Use sinking funds.

Sinking funds, no they have nothing to do with boats. They are essentially saving pots with names. Whether you choose to use separate accounts, have money jars in the kitchen or just keep a note of what is going where, the idea is simple. Instead of having general savings, allocate portions of your savings to specific things.

Let’s use the money jars as an example as often something physical is helpful. You might decide that over the next year you need to save for a family holiday, Christmas, birthday presents and car repairs. You allocate a jar to each of these and decide how much each will need. Now every time you put money into savings you divide it appropriately between the jars.

How does this help you avoid bumps in the road with your debt? It removes the surprise of irregular costs. You won’t be caught out by something unexpected arising because you already have a fund ready and waiting to cover it.

Track your spending.

Over the last couple of weeks I have started to track my spending whilst tracking no spend days. Each evening I make a note of all of the spends from that day and of course if there are none, it counts as a no spend day. This might sound ridiculously simple but it has had such a positive impact on my spending habits!

Within just a couple of days of starting my efforts were already having a positive impact. I managed to avoid going to the shops for snacks, picking up a few unnecessary items on amazon and getting a takeaway. As you are forcing yourself to be more conscious of where your money is going you take a second to consider it first. Try it and see what happens. Set yourself a challenge to have X number of no spend days in one month and see what impact it has!

Remember, failure does not mean that you are no longer able to tackle something. It’s difficult to face, but it can teach you so much. Take each hurdle that you face as a learning opportunity and keep going. Keep working hard. You’re doing an amazing job and soon you will be debt free.

How do we get into debt?

September 10, 2018

Here on My Debt Diary I talk a lot about what I’m doing to get out of debt. Everything from putting together an emergency fund, saving money and making extra money to make sure that my debt total goes down as quickly as possible. The same goes for the debt free community as a whole. What we don’t discuss so much, is how do we get into debt in the first place.

I reached out to a handful of fellow money bloggers who each have their own story to tell when it comes to debt. Whilst debt is equally horrible for each and every one of us, no two of these stories are the same. Instead of surrounding them with a narrative, I am going to leave each blogger’s words as they are.

Perry Wilson from Stupid is the Norm

“I’ve been in crap loads of debt and been bankrupt after a customer went into liquidation owing me £44,000. Had the BMW’s and luxury yacht holidays all on ‘chucky’. I got into debt to impress people who didn’t actually give a toss. Stupid Is The Norm apparently.”

Victoria from LyliaRose

“Before I hit 20 I got into serious debt (£17500) and hit debt crisis. It was all irresponsible and personal debt from a bad shopping addiction and depression. I was always trying to make myself happy, but made things a lot worse. I spent 5.5 years on a debt management plan paying it back.

Unfortunately I am now in debt again in my 30s, but I can afford to repay this. I took out a home improvement loan a few years back after buying my first home that needed totally doing up and I’ve recently got a 0% credit card to pay over £3000 for dental work I need done this month. Though I’m in debt again I can afford the repayments this time and it doesn’t feel so irresponsible as it’s actually paid for an investment.”

Claire from the Money Freak

“I started getting into debt when I had to give up my job to look after my disabled son. Taking him to his appointments weekly in various places (often a few hours journey away) was a killer financially.”

Francessca from From Pennies to Pounds

“I went into debt over stupid things…I basically had no money due to an unsupportive spouse who wouldn’t let me leave the home to work or help pay for childcare costs so I was stuck in the house with my baby and would scroll through social media…as always happens with that, I wanted what the influencers had and couldn’t see why my daughter shouldn’t have the same things and opportunities as others just because of her Dad.

I had depression at the time which didn’t help as I didn’t really think things through rationally – I had never been in debt before and I won’t ever again.

Oh and a bit went on my wedding as I had to pay for basically all of that myself too! I soon realised that it was a silly mistake and I wouldn’t be able to pay it off, but I turned to earning extra cash from home and managed to pay it off all by myself. (And now I’m getting divorced)”

Mel from Mels Money Mindset

“My story is actually my partner’s story. When I met him, his dad had died about 6 months beforehand and he left his well paid job to move back in with his mum (she lived about 4 hours from where he was living at the time).

He just went crazy with the credit cards. As well as drawing out cash on them for things they did need like food and to pay bills, he also started buying things he didn’t need…for example 4 x DVD players! By the time he got regular work again it was too late – he was up to his neck in debt and it soon got to the point where he couldn’t even afford the minimum payments because of all the interest charges and late payment fees.

It took us a couple of years of hard graft and some serious negotiation to get him out of debt, by which point we were living together and had a baby on the way and to this day we will not have a credit card again. We’ve been debt free over 10 years now, but I still worry about it, even though we are in a much better place financially. In the wrong hands credit cards or loans can be dangerous.”

Eileen from Your Money Sorted

“I went into debt at college, because everybody else seemed to be living off their overdrafts and student loans! I decided that being sensible with money, saving it up from my summer job to see me through the year, was boring, and I would just “join the club”.

While it meant that I could spend wildly, and have a blast in my final year, it also meant that I finished my degree with unnecessary debts. I absolutely detested the feeling of getting paid, but still being in the “red”, so I vowed once I had my overdraft paid off, that I would never be in overdraft again. And I have stuck to that vow!”

Chermaine from ChammyIRL

“I made the silly mistake of taking a loan out for someone else. Six months later he stopped paying me and I started struggling to meet payments, more money was borrowed to help me get by and it snowballed from there. Never did get the rest of it back but all debt is now fully paid off.”

Whether we get into debt in an attempt to keep up with the Jonses, because we don’t have the maturity to understand what could possibly go wrong, or because of the challenges that life throws at us, we all have one common goal and that is to be debt free.

I’d like to thank all of those who contributed to today’s post. Talking about debt is difficult and it is something we all need to do more often.

You can read about my own debt story here.

Debt and Mental Health

July 23, 2018

This is a topic I want to bring up both because it’s personal to me and because I think it’s important to discuss. Debt and mental health go hand in hand, but I don’t think we take enough time to recognise that.

I would just like to begin by saying that I am in no way a medical professional. My thoughts are simply reflections from my own experiences. It is so important to speak to a professional, be that your GP, therapist, or another qualified individual, when you are dealing with mental health problems of any level of severity.

Debt and Mental Health

When we discuss debt we have to recognise that it is not as simple as a number on paper. The number, our debt total, is the focal point of our debt free journey however it is not the only factor in our mission to become debt free. There are many other really important things to consider, and mental health is one of them.

Mental health itself affects us all to an extent. For some it can be a bit bothersome, for others it is entirely debilitating. Add to that the worry of debt and the pressure, concern and overwhelming emotions are amplified.

When you have a negative number against your name, no matter the size, there are so many negative connotations connected to that. On a surface level it suggest that you might not be able to handle money well. That you might even be irresponsible with your finances. As such it is entirely likely that anyone might worry daily about that negative number and how they might be able to pay it back.

Now factor in someone who spends their entire day worrying about everything in their life already. Someone who overthinks others’ opinions of them. Someone who is triggered into depression by a concerning letter from the bank. The debt is a concern, but it suddenly becomes clouded by a whole other layer of thoughts and feelings and fears.

My own experience

I personally experience anxiety and periods of dealing with very low moods that can stop me from functioning normally. Some days I will be incredibly bubbly and outgoing, other days I want to switch off from the world and speak to no one.

This can be incredibly dangerous when it comes to my debt. If I am already having a low mood day and a text comes through from the bank to tell me that I have gone into my over draft or my credit card sends me a notification to tell me that I’m over my limit I might choose to deal with it straight away. There is also a chance that I might switch my phone off and pretend it hasn’t happened.

I imagine that many others are on a similar boat to myself. Sometimes you find your situation manageable and can face it with a rational mindset. You can make sensible decisions as to how you will handle each account and manage your money well to pay them off. Other times, you will pretend that there is nothing to worry about.

As I am still in the early stages of my debt payment journey, I am also still very new to figuring out ways to help handle my anxiety and low moods that occur as a result. I have to say that opening up on My Debt Diary is proving incredibly helpful for me. Everything is written down, including my thoughts. My head is a little clearer as a result and I can focus on moving towards financial freedom.

Methods to handle metal health

Beyond writing about my debt journey, I have a couple of other things that I do to help myself and my mind when I find my debt over baring.

Put on something that relaxes you.

A film, some music, white noise, whatever it may be. I find that putting on something that is familiar to me, even in the background, can help a great deal. Often that means a film or TV show that I’ve watched a hundred times before. Instead of there being another distraction in my environment, there is something familiar and that seems to calm part of my brain down. This one is key when I’m having a horrible day but really need to get on with some work to meet a deadline.

Use the Calm app.

This one is a recent discovery, but I’m really enjoying it so far. It has useful features such as the 7 Days of Calm guided meditation that introduces you to taking a mindful pause each day. While there is a premium version, it’s basic features are free, which is useful when you’re looking to save money, not spend it!

Fresh air.

Whether it be sticking my head out of the window for five minutes (yes I do this…yes my neighbours probably think I’m a bit strange but oh well) or going for a walk, getting some fresh air in my lungs definitely helps my brain to calm down. My mood tends to determine whether I go for a walk or not. When my anxiety is at its worst the thought of leaving the house is hellish. If I’m feeling up to it however, I always notice an improvement in my mood after a long stroll.

For more ideas, you can find a fantastic post here from Wanna Be Debt Free about self care on a budget.

It goes without saying of course that talking can be the best way to relieve stress and worry. As I mentioned earlier, blogging is really helping me to calm my brain with regards to coping with my debt.

Debt is still a big taboo subject for most of us, but that can be such an unhealthy thing. If you can, speak to someone you love and trust openly about your debt. Ask for no judgement, only support.

This is a topic that I will definitely be writing about more in the future. As my journey progresses and my debt total goes down, I imagine that my methods with dealing with my own mental health will change. I really hope that I will find the confidence to talk to more people about it, not only for my own sake but in the hope that others will then open up in return.

If you are looking for further help with debt, Claire from The Money Freak has written a great post with some useful contacts to help you.

Debt Payment Progress Report 2 – 20/07/18

July 20, 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 20th 2018 my new debt total is £16,492.32 (My starting debt total was £16,814.29)

In the last two weeks I have paid off a total of £170.71. At first when I worked this number out I was disappointed. It’s only slightly higher than my efforts last week and it’s such a small amount in comparison to my total. It’s still an amount though and that is what’s important! I’m still reducing my debt.

(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. I have also been putting money into an emergency fund.)

My new total debt payment to date is now £321.97, which I have calculated to equate to 1.9% of my debt total.

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. It is a goal of mine to expand on these in the coming weeks. Here are the ones I have used this past fortnight:

freelance work – £225
prolific academic – £16
ebay sales – £22

Of course my main income method has been freelancing (I’ll talk about this more in a future post) and I have some good news; I’m getting busier again! I mentioned last week how quiet I had been and it was getting to the point of becoming a serious concern, however the work load is now returning to normal.

Projects are still being completed and invoices are still being processed so it will be another week or so before I start to see a little boost in my income but I know it’s coming and that’s what matters. I’m hoping I can may off a larger amount in time for my next debt payment progress report as a result!

Prolific Academic is an income that I have spoke about before so I won’t go into detail again. If you’d like to read more you can find my thoughts in this post here. 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

I definitely need to stop putting myself down if my total payment for the fortnight seems small. The important thing is that I am making progress. The process of updating you with each progress report is definitely helping my motivation and reminding me that my debt total is getting smaller and that is what matters!

You can find my previous reports here:

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

The impact quitting my job had on my debt.

July 11, 2018

The transparency of the debt free community is incredible and really helps me to relate to each individual who is currently making their way through a mountain of loans and credit cards at the same time as myself. As such I want to be completely open about this whole journey. A big part of that is my income. In particular, I want to discuss the impact quitting my job had on my debt and where I am now.

My intention isn’t to send you a word of warning or anything, I just love hearing about what other people do for a living and their career progression. If you do take something away from it, even better. It’s a long one so grab a cuppa!

The Whole Story

It does make me nervous to talk about the impact quitting my job had on my debt because not only was it a very personal decision, but it was one that no-one else supported.

Back in 2015 I graduated from university with a masters degree in Advanced Architectural Studies having studied for six years and spent some of that time working on placement. The week I was due to hand in my masters dissertation I had my first job interview and I was successful. Work started the following Wednesday, the day after hand in. I had done it, I had achieved the dream of securing a great job!

Then the distractions started to happen. I’d be half way through a morning of work and find myself looking at interior design courses and “how to start your own business”. I didn’t dislike my job, my but I wasn’t as passionate about it as I had hoped. Just two months into my first job my boss called me into his office. I was doing a great job, but he needed someone with more experience he told me. The first thing that hit me was panic; I had just bought a new (to me) car with my first credit card for this job and now after two months I had been let go. I packed up my stuff, left and sat in my car crying on the phone to my mum. It wasn’t the best start.

The next couple of days were spent frantically searching job sites. I came across one that had already expired, but the listing looked interesting and the office would be really handy for me to get to. I sent off a quick email and crossed my fingers. A couple of hours later I received a reply. “Hi Emma, thanks for your email. I’ve actually already hired someone for the role but I love your portfolio. Would you be able to come in for a quick chat?”. YES, yes I would. I booked my meeting for the next day.

They loved my work so much they offered me the job anyway! Again, very quickly after, I started working and things were going really well. I preferred this office as it happened, so it turned out to be a positive changes. My boss was great and the work was more interesting. Oddly, I was still distracted by other things. Courses like how to start a blog and how to build an Etsy business would be hidden on a tab behind my work. None the less, the work was good.

As the weeks progressed I continued to enjoy the work, however I would find my mind wandering constantly. Sitting in the same seat every day doing the same work was starting to get to me. Many of you will be thinking, yes Emma that tends to be how jobs work. I didn’t have an immature attitude to working, but I had started to recognise that I wasn’t keen on this set up.

At the three month mark I get called into the meeting room…here we go again. As it happened, it was really good news. My boss was offering me my contract. He wanted to make me a permanent employee! Incredible…so why don’t I want to sign it?! I thanked my boss and took the contract and then didn’t touch it for a week. When he chased me for it I made my excuses and did nothing. Then I asked to speak to him. I had taken the time to think about things, I said, and I was very grateful for the opportunity, but I wasn’t going to sign the contract. In fact I was going to be leaving. I didn’t want to be an architect.

My boss was stunned, my family and fiance were stunned when I spoke to them about it. Honestly I was a bit caught off guard myself that I had said it out loud. I had worked so hard for so long for, but it just wasn’t clicking.

For the next couple of weeks as I worked my notice I made an attempt at putting a plan together. Earning money was of course the main focus. In my head I had decided that I was going to sell wedding stationery. It would all be designed on Photoshop by myself and then sent to the printers before being posted to the customer. Wedding stationery was expensive so I could make good money quickly from this.

In reality, I was starting from scratch with no business experience and no understanding of marketing. The day I began my wedding stationery “business” I was so full of enthusiasm and motivation, but as the days went on and the money wasn’t coming in I started to crumble. My face always said everything is great, because I had convinced everyone that this was a good idea, but inside I knew it wasn’t working. I hadn’t prepared and that was plain to see.

Now this is a debt blog and I imagine that you can see where this is going. I mentioned before that I had just bought a car. That had to be paid for. I also had a phone and other expenses. They require money too. For a couple of months I was able to live off of the wages that I had earned in the architect’s office, but they began to dwindle.

The very worst day I can remember was waking up one morning with the intention of getting on the bus to travel twenty minutes away and having to ring my dad for a lift because I couldn’t pull enough change together. All I could find were a few 10p coins in my purse and some coppers from the sofa.

Still trying to fool myself that money would come in eventually I used my credit card here and there for little things. Then I got close to the limit…then I reached the limit…then I had to get a second card…and so you see where my debt reared it’s ugly head. From here the nasty snowball of payments and panic took hold and I knew something needed to change.

I feel like I have gone on for long enough now, and I have definitely shortened the story, but this gives you a good idea of the steps that I took to get me to where I am currently with my debt total. The positive I can take from it all is that I have learnt a lot. The naive and ignorant me from three years ago is now a very different person.

What do I actually do now?

In one of my first posts, Debt Payment Progress – The Starting Point, I briefly shared some insights into my work.

I now spend my days freelancing. In what you might ask? Architectural drawing of course. After taking several months to explore different avenues, some OK and some dreadful, it was pointed out to me that I do have a strong skill set as a result of my degree and the time I have spent in professional practice.

I stripped away all of the expectations of a big architecture firm and qualifying as an architect with a fancy title and looked at the straightforward options that I had. Freelancing was one of them. It would be possible for me to be my own boss, work from home and set my own hours. I could breathe again. Just like that, I felt like I had control back.

The journey from that point has been a tough one, I can’t lie, but it was the right one for me. I could definitely share more on the last 18 months in a future post if that would be of interest for anyone looking into freelancing as an option. Just let me know in the comments.

If you have reached the end, thank you so much for taking the time to read. It is a lengthy story but it is such a key part of my debt journey.

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!