My Credit Card Debt Story – I can see the light at the end of the tunnel

My Credit Card Debt Story

I am in much more positive place in 2018 about our debt than I was during 2017. The debt is reducing nicely and its important and satisfying to look back at where I was and where I am now.

I last wrote an update in December, talking about the mental pressures of paying off debt. By December I had managed to build up a nice safety fund of emergency money in additional to debt repayments which simply put my mind to rest and meant that I wasn’t worrying about money every day.

Read the full post here but but I have pulled out this summary paragraph from the post.

As at 5th December my debt position stands at £11,820. This means that since April we have reduced the debt position by nearly £3,700. And I have £2,500 sat in an emergency/cash flow pot. Net position is £9,320 which feels a lot better.

The current position now on 27th February is this….drum roll

The credit card position stands at £9,996 (all sat at 0% interest)…boom now four figures owed rather than five. And I have £3,000 sat in my emergency/cash flow pot. Net position is £6,996!!! In just under three months the debt position has reduced by £2,324.

Happiness

It feels so incredible to know that our debt of £15,500 just ten months ago has now reduced by £8,500. Say it out loud Lynn. £8,500 lighter in debt.

So how am I doing it – paying off big chunks

Today I did a few calculations. I added together the money sat in my business accounts, and took away the money I knew I was going to have to pay out this month plus my salary. March is an expensive month with house and two cars worth of insurance to pay for. I also have an expensive business month with accountant costs being paid and some wages to pay out for some work on my blog. I was left with a positive balance so I knew I could afford to pay a nice big chunk of £1,000 off the debt.

Working hard on Mrs Mummypenny – Increasing my Income

I am working incredibly hard on Mrs Mummypenny and it is paying off over the past few months. January was an amazing month for the business with multiple big contracts agreed. January was my best month for work agreed by 200%. This money is now starting to drip through to my actual bank account, subject to me invoicing and waiting for mostly 30 days to pass before payment is made. Cash flow really is one of the hardest part of running small business.

I have worked with some big clients this year including the Energy Savings Trust, Octopus Energy, WealthSimple, B Bank and Pensionbee. The momentum is building incredibly well and the best bit is that I get to write about subjects I am so passionate about. Switching energy to save money, setting up Junior ISA’s to save for you children, taking the B-Tox challenge or investing for a pension down the line. I am incredibly grateful for my business and what I get to do every day.

Frugal Life continues – Saving money where possible

I STILL struggle with this mindset of frugality, but I continue to live this way. Christmas was a huge challenge and we did end up spending more than we should have done. This did restrict the January debt payment and no over-payments were made during this month. We did keep Christmas light in terms of gifts outside of the direct family and also social events. The boys were spoilt with a Nintendo Switch and we each got a pair of trainers  (hubby’s were in return for a blog post though and I know mine came from the Nike outlet store;-)). We didn’t do too much socially and the Chrimbo food came from Aldi. I received some Aldi gift vouchers just before Christmas so that helped pay for Chrimbo goodies.

We continue to be good with takeaways and restrict them to maybe two or three per month, max. I mostly do good old-fashioned home cooking making huge portions of bolognese and roast chicken. We do a big food shop from Aldi which I try hard to make last for 10-12 days, costing £100 for each shop.

Clothes? What clothes?

I can’t remember the last time I bought clothes for myself, no actually that’s a lie I bought some running leggings from the Nike outlet the same day as buying the boys new trainers. We found some right bargain trainers for £10 each and my new running leggings cost a huge £16. All other new clothes I have had have normally been in exchange for a post on Mrs Mummypenny, or maybe an Instagram picture. I have had a nice coat, jeans and boots gifted to me over the past few months.

Switching and Saving

The mission to keep on top of monthly bills continues. Our house insurance has just been renewed and I have saved £90 on the renewal price by switching. The car insurance is going to cost a chunk more as we now have to insure two cars rather than one from last year. Hubby is excited about his mobile phone contract ending in May. He is moving from an expensive £50 per month contract to SIM only contract that will cost him less than £2 per month, he is already looking into it. Sky is on our hitlist, we are just going to cancel it and see what happens. That will happen in March to coincide with some work I am doing for a client on switching broadband to get the best deal

Additional cost of second car

Something that will cost us more money is the addition of second car to the family. The logistics of weekend football in different locations were getting too much and also hubby needed a car to get to work and do customer visits so we gave in and have invested in another car. A Toyota Yaris hybrid which will cost very little in fuel and is tons better for the environment. As life becomes more managable financially we relent with the freedom of a second car in cost. Soon we won’t know how we got by without it.

£7k left to repay

I continue to march onwards with the debt repayment and intend to repay £1,000 each month, cash flow prevailing. This should also leave a few hundred spare to put into savings accounts, those being Junior ISA’s for the boys and stocks and shares ISA for me.

Lets set a target. This debt is to be paid off in full by September 2018.

I want my debt story to empower others to realise that you can get in control of your debt and get it repaid. That everlasting cycle of 0% credit card balance might not be transferable one day so work up a plan to repay that debt and remove that weight from your shoulders.

I know that everyone has different debt stories and some stuggle to see a way out, that was me just last June and our reaction was to put the house on the market to get at some much needed equity. Thankfully the house didn’t sell and we have been able to repay the money using excess of income instead of having to build a whole new life just to repay some debt.

I have started a series of posts from other writers whom have had debt, or whom are paying off their debt and they share their top tips, so please have a read of them. The first post was from Vicky Eves, of I Beat Debt website.

No one should be alone with their worries on debt and hopefully my story helps you. If you need to talk to someone I highly recommend the team at CAP, brilliant debt advice from the heart.