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 so this week I share with you the confessions of a personal finance blogger.
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’ve 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. By June 2016 the money was gone. I swopped the £8k credit card debt over to a new card with a long 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 means 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.
Next is £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. Every month 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 (it’s redone every month currently) and £3k is what we spend each month on mortgage, food, petrol, bills. There are definitely 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. With money due 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 can’t 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’ve repaid.
If you want to help in any way please share this post. 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. Not forgetting more FB group members, more people clicking on affiliate links and more people buying my book. And all of this will turn into money.
Thank you for reading.
33 Responses
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.
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
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.
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.
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.
Well done for declaring it Lynn 🙂 you can do it – I have a few debt articles on my blog which I hope can help you, or send me a message and we can make a plan together for you (it’s what I really enjoy doing)
Thank you Fran I really appreciate the offer of your help, particularly as I know you have been through it. xxxx
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
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?
I agree…maybe it was the universe working. Thats the key though working hard and money will come.
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!
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.
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.
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.
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?!)
Oh wow..definitely the law of attraction at work. Drop me an email lynn@mrsmummypenny.co.uk if you need any help or my budget spreadsheet. So glad you found my site:-)
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
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.
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.
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
What an inspirational and honest post, you had me hooked and couldn’t stop reading it. You’ve done really well to be so open about it. You sound very focused and know what you need to do, hope things have improved for you since you wrote this x
Thank you Alison:-) Being open about it has been the best thing ever. It gives focus and belief that we can pay it back. We have repaid around 3k of it so things are going much better.
Debt is a reality for a lot of the world. Thanks for your authenticity!
It helps to inspire others who are in debt and on their own personal journey.
Good luck in the Rockstar Finance bracket
Thank you!! I didnt win my battle, but I did do very well with votes. Thats what I hope, that my story inspires others.
Lynn, thank you for your lovely advice on the question I asked in the Blogging Your Way to Riches Facebook group.
I’ve had a great Friday night reading through your blog, getting inspired to get rid of my consumer debt and make more from my blog!
Thanks xx
Ah so glad I could help Laurie. Your blog is great and you have such a story to tell as well, I can see why your page views are so good. And glad to have inspired to rid of that consumer debt.
Thanks for sharing this Lynn.
It’s an eyeopener and also I love that your partner quit his job to pursue his dream business, even though things weren’t perfect for you at the time. Reality is, there is no real price of happiness.
You are right, there is no price for happiness. Partner quitting job at the same time wasn’t the best timing:-(
Thanks for sharing your confessions of a personal loans bloggers in UK. I’ve learnt so much from your blog. Keep writing Lynn.