confessions of a personal finance blogger

My Confessions of a Personal Finance Blogger – Debt




The Confessions of a Personal Finance Blogger

I am well known for my honesty in the blogging world. I am specifically chosen for brand campaigns for my authenticity and real life relatable stories. The posts that always perform best are the ones where I admit my flaws and talk about how they happened and how I am going to try to fix them.

I have written about my financial mistakes, my mental health struggles, my weight issues. I have talked about the truth of being a parent, the reality of being a business owner, the death of my parents and my health issues. No holds barred.

Debt

Until it came to my debt. I am not shy to talk about this with my friends. I really want them to know why I have had to say no to a 40th New York holiday this year or centre parks last year or why I might suggest a dinner at a friend’s house rather than go out for food. My friends know that I am still in the early stages of a new business and they know I have credit card debt. I always have had a balance sitting on an interest free credit card.




But I have never outwardly expressed it on here, confessions of a personal finance blogger. My blog (my baby!) where I write about all the frugal things I do and money saving ways I live my life. I have always lived my life in a money saving way but where I save on some things I splurge on others (prada handbags). I have always lived my life in the moment, wanting things now (refer back to the death of my parents, could explain it, I’m no psychologist or anything). Things have always been paid upfront on a credit card/loan and then repaid over time.

I do have some savings. Once upon a time, only 2 years ago, I had £40k in my bank account and just £8k sat on interest free credit cards. I had just taken redundancy so was rather cash rich. I saw no reason in paying off the credit card debt as it was interest free. This £8k was the hangover from our house extension where we had overspent.

That 40k burnt a hole in my pocket, the first thing I did was hit Selfridges and bought myself a redundancy present, a Prada handbag. £600 gone. It was hubby’s 40th birthday so we went on holiday to Las Vegas and New York and spent maybe £4k in the process. Hubby went to Barcelona, to the Belfry for a golf weekend, and we had a £500 lunch for his birthday. We then went to Spain with the family during the summer holidays and spent another £5k!! So, in just a few months that was £12k ish spent.




The remaining money went on living expenses whilst I was growing the business. There was pretty much a whole year with us slowly reducing our living expenses and using up the remaining £28k. In my first year of trading I made very little money, a few £k. I made some money matched betting and eBaying. By June 2016 the money was gone. I swopped the £8k credit card debt over to a new card with a longer interest free period, adding a bit debt to it from our monthly spending. Suddenly it became £10k.

But then Mrs Mummypenny started earning money, decent money. We had radically reduced our monthly spends from £4500 per month down to £3000 per month in a year. I was able to draw money out of the business and pay towards our monthly bills of £3000. But of course, things happen that mean the monthly £3k isn’t just it. Christmas happens, birthdays, car repairs. Another month worth of expenses went onto the credit card.

Then my 40th birthday arrived in March 2017. I had to celebrate that and do something special. Vegas was booked and it went on the credit card. I had a birthday party which cost £500.

Reality check

Here we are now April 2017, just back from Vegas where I didn’t win enough to repay what was owed. One of my first admin things to catch up on was calling all the credit card companies, getting an up to date balance and timings of when the 0% ends. I needed a total of all the money owed. I also worked out how much money we have and are owed. Thankfully Mrs Mummypenny had a busy Feb & March so I am owed a large chunk of cash.

The debt comes to £15,500.

There you go, the hard-cold number. Pretty big hey. Easily done over a period of time where I was no longer bringing in the £4k per month that I used to earn at EE.

Let’s Rationalise this and come up with a plan.

First things first the debt needs to be restructured. Meaning a new 0% card needs to be organised whilst my credit rating (who knows how?) is still 999 on Experian (everyone check it for free here!). I was able to transfer £7,500 (with a hefty 3% fee) over to an MBNA card which is 0% interest free for 42 months.




This means that I have £1,000 of holiday spends on a Halifax foreign currency card that needs to be repaid now, as interest is payable from 5th May. Check.

I have £1,500 on a business credit card that needs to be paid off as a priority as there are interest charges.

I then have £5,500 on a Virgin credit card which is interest free until November 2018. I have 18 months to pay that one off.

I am not 100% sure how I am going to deal with all of the above, but I am going to seek help from a couple of personal finance friends who have got themselves out of debt. I will report back on the how in more detail.

The positives of Money we have and are owed.

There is good:-) We have money in a shares ISA, some annoying Tesco shares worth 50% of what I paid for them, savings, money owed to my business, money in Mrs Mummypenny accounts. This comes to around £9k. We have 3 months’ worth of household essentials in the bank.

Cutting back

I have re-done our budget again (its redone every month currently) and £3k is what we spend each month on mortgage, food, petrol, bills. I am sure there are more cut backs to be made within here. I know what can be cut back, it just takes a strict mind to say no to a few things in that budget (sky sports, school dinners?, childcare, no convenience co-op shops). I have already managed to change the mortgage and save us £100 per month with the new deal starting from July. The obvious things like energy, broadband, insurance, TV are as low as they can possibly get!

If anyone reading this needs a copy of my budget spreadsheet then please contact me lynn@mrsmummypenny.co.uk.

And Mrs Mummypenny is on the up. My monthly income increased by £1000 per month from Q4 2016 to Q1 2017. Q2 is going to be even bigger as I know what work I have agreed and what money is due to be paid during this quarter. This trend can only continue up.

Hubby left his job two weeks ago, so he needs to get going with starting up his dream business to ensure that we can pay the mortgage beyond 3 months. There a whole other story there, mainly on how to set up a business that requires a capital investment for set-up. And that sometimes you cant settle for unhappiness you have just got to walk.

The Secret and the Law of Attraction

Both hubby and I have been reading The Secret and The Magic and 100% believe that everything will be okay. Money will come as long as we believe it will. I have faith that very soon Mrs Mummypenny will be bringing in £5k per month. It’s not far off I am telling you!

We are visualising money and have belief it will come. We are practising gratitude and affirmation in bundles. I don’t feel worried about the money owed to others as I know it will be resolved.




So, there you go my reality. I’ll report back soon on how we are doing with manifestation of money and how much we have managed to repay.

If you want to help in any way please share this post, as we all know our family is not the only one in this situation. I will get more traffic, more social media followers, more email subscribers, more FB group members, more people clicking on affiliate links, more people buying my book. And all of this will turn into money.

Thank you for reading.

22 comments

  1. You are not alone. Today I had to write down all my debts – if we were to, say, increase our mortgage (it’s small) to wipe out our debts, how much would my bit come to? It came to £17,600 – 13k of that is on a single credit card. My rating won’t allow me to switch to a 0%, not even £500 of it. So every month I pay £250 to my credit card, and £120 of that disappears as interest. It wears you down. We’ve been self-employed for over 15 years and we know all about the peaks and troughs of work/no work … but we know we’ll be ok. Luckily while we weren’t earning, our house was increasing in value at a silly rate. Fingers crossed we can increase that mortgage and start all over (again)! Good luck with that CC of yours x

    1. That £120 per month must be killing you…there must be a way around it? Experian do the credit matcher thing that gives you 0% card more likely to accept you. Do you know Sara from debt camel? She might have info for you, she commented in the FB group. Shes an amazing debt blogger and advisor at CAB.

  2. Getting the real numbers in front of you is the first step so well done. I would follow Dave Ramsey’s advice and use the snowball method. Clear the smallest debt first then the next one up. The satisfaction of clearing one will keep you motivated.

    1. I always wondered what snowball meant in simple words. So yes thats the Halifax, then the Barclays, then the Virgin then the MBNA….and the 2 smallest ones are the ones that are not interest free. Thanks hon xx

  3. Lynn, you are not alone. When my fitness business dropped, 2008 declined hit here, we were hit hard. My business at that time was a secondary income and that fell. I wanted to go to coaching school which cost $, so we buckled down but still had to make ends meet monthly. We are just now coming out of the deep waters, a bit more to go, and needless to say I just started a new business. So kuddos to you for being so beautifully transparent. No one is perfect and we need more women to come forth when truth no matter how it looks and feels! You are pioneering the way!

    1. Oh wow thank you for your amazing words Kim. Honesty has always been the right way for me in life and after listening to a few inspiring podcasts and books over the past week or so I had the urge to write this post. It feels good to release and come clean. Im so glad you are coming out of it and you will always do well with your business brain and motivated mind. Hugs xx

  4. Thank you for sharing. I especially like the bit where you talk about your plan. This is key to getting out of debt plus your positive attitude. Good luck with it, you’ll smash it all soon I’m very sure. I look forward to reading your updates.

    1. Thank you Cat. I def need to add more meat to the bones of the plan, as to be honest Im not 100% sure how Im going to tackle it except pay off as much as I can each month. At least £300 starting now. Perfect blog content with #debtstory updates. Positivity wins in life, surround yourself with positive people and all will be good.

  5. Sounds remarkably close to my story and I too have switched to mbna. I had a few hundred here and there and during a difficult patch, it ended up being a few thousand dotted around on various cards. I’ve often thought positively and yet the situation doesn’t get any easier, but I work hard and occasionally the odd surprise cheque does arrive or some random rebate or refund … so perhaps that’s the universe doing its thing?

    1. I agree…maybe it was the universe working. Thats the key though working hard and money will come.

  6. Well done Lynn. There’s no shame in being financially imperfect – we all are to some extent! I heartily endorse Dave Ramsey’s snowball method for clearing debt fast and staying motivated while you do so.

    FYI – we also overspent on our building project, and currently have nearly £20k in debt, half on an 0% credit card till December 2018 and half to family, also at 0%. I’ll have it paid off by middle of next year latest – that day can’t come quickly enough!

    More power to ya!

    1. I’ll look into the snowball method..you are right its the motivation to pay it off that is needed as well. 12 months to pay off 20k…impressive.

  7. Appreciate the honesty and help in your article. Its just annoying that the same article is littered with ads from loan companies charging obscene apr! 🙁 I know that’s not your fault, just the key words being picked up, but it rather goes against what you’re trying to do.

    1. Do you know what I thought twice about putting the ads in. Im going to look into Adsense to see if I can block certain companies that I dont agreee with. Thanks for pointing it out.

  8. Thank you for such an honest article. I’m trying to improve our family’s income after a short period of my husband being redundant and now (thankfully) being back in work but with a big salary drop and much larger petrol bills! I’ve just chanced upon your blog and this was the first post I read and you mention ‘The Secret’! I’ve literally just read this and so this article was so apt! (The law of attraction at work?!)

  9. That was amazingly frank – my eyes watered at your spending! £3000 is a lot of monthly outgoings though. My household income is only two thirds of that so I’m sure you could save a lot of the money doesn’t manifest! Still cynical about the Secret. I believe in the power of positive thinking and self confidence but not any universal power. Just started reading your book

    1. I live in Hertfordshire where our mortgage alone is £1050 per month. Bills are another £750, council tax is an eye watering £180 per month:-(. I think we can maybe make savings of £500 per month? Ive already found £150 with mortgage and childcare changes so Im on a roll. Dont be cynical, its just a positive way of thinking. I struggle with the science (I am a mathmatician) but I know that when I am grateful, positive, surrounded by positive people amazing things happen to me, opportunities that bring money with them. So its my hard work as well. But its a more of a belief system.

  10. Very frank and honest. I too have struggled with credit card debt. 9 years ago, my balance on 4 cards was over £20,000 – each one was maxed out, because the companies kept raising my balance, and I wasn’t strong enough to resist the temptation. The scary thing was, my only income was incapacity benefit and disability allowance, and the companies knew that yet still kept upping the balance.

    The worst part was, even though I was married, and we had a pretty good income coming in, my husband knew nothing about it, and I was afraid to tell him as he was always on about how good his first wife was with money. When he eventually found out, it wasn’t pretty, but it was the best thing that could have happened.

    I determined to pay every penny back out of my own small income, even though he’d enjoyed some of the benefits. At first it was just a few pounds over the minimum, but for the last 3 years I’ve been paying back between £300 and £400 a month. That brought the interest down quickly and started paying off the principal. It will all be cleared by September this year.

    I’m not proud of what I did, and that I wasted so much money, but I am proud that I’ve paid it all back myself, and haven’t had to seriously compromise my lifestyle to do it.

    1. Oh my gosh, well done you for having it cleared by sept. I am so glad hubby found and and that got you to face it. Scary times. I know its so easy to do and yes they companies give you more and more credit. Im so impressed tha t you are paying back £3-400 per month, thats what I need to be doing but feels like a huge stretch. Any extra money I earn in a month will go on the cards. Thank you for sharing x

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