My debt story, feelings and thoughts – A December Update
Back in September was the last time I wrote about my debt story, and it came with a confession. A tough time cash flow wise and spending wise (double impact) saw the debt rise. By September the debt was at £14,500. Down just £1,000 from the initial balance of £15,500 uncovered in April.
Since then I have been working super hard! Sept/Oct/Nov were good months for Mrs Mummypenny. This meant that not only could any overdrafts (at one point I was £2000 overdrawn) be paid off, I was also able to set some money aside for an emergency fund and pay off more of the debt.
Today 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.
My feelings about this debt.
This is a really difficult one, and I won’t lie, its often on my mind. I am proud of the fact that we have managed to clear the £3,700, I really am, as I know this is a huge sum of money. But….there is still so much to pay off. At this rate, it will take another three years to pay it off. I just want to be in a position without this debt looming over our heads.
It is a stressful thought having the debt. There are feelings of guilt when it comes to spending money on nice things. There is pressure on the family when we have to take decisions to not do things. The thought of a holiday comes with the added pressure of can we afford it. It’s even more difficult when we have come from a place where we have been in the past where we have just spent money without thinking of the consequences.
Christmas is a particularly stressful time as it does cost money. We have managed to reduce the number of gifts we buy, mainly just for the children but it’s still an expensive time. I am planning on an extra £600 being spent this month on gifts and food.
The debt is interest free, which is a comfort. The balance is split between two credit cards, A virgin card has £5,000 on it and only has one year of interest free until Nov 2018. The remaining balance of £6,800 sits on an MBNA card with another three years of interest free credit. The priority moves to repaying that Virgin card.
I have put the minimum payments up to £200 per month. And when I have excess money it will go into this card first.
Building up my Savings/Emergency pot
I was feeling very uncomfortable in September as I had no money set aside. I was thinking that the best thing to do was to put as much money into my debt as possible. But the problem then is that the money is gone, into the abyss of the debt. The new plan is to split my monthly excess money 50/50. After the lucrative Nov, I was able to put £1500 into my savings and then another £1400 into credit card repayment. This gives me more control, not only am I paying off the debt but am also building up that safety net.
I continue to plough on. Hopefully by this time next year I will have halved that balance. That’s my aim to get it down to just money on the long interest free term MBNA card, so a balance of just £6,000. I am also aiming of having at least £5,000 in my savings, emergency fund. This will be dipped into for holidays and bigger expenses, but I would like to keep the balance at £5,000.
I also want to start making a contribution to my pension pot. Its sat there growing with the money saved from the corporate world but I would like to add to it. Maybe just £100 per month, but any little helps there. I also want to start adding some fund to an investment pot, maybe a stocks and shares ISA from Fidelity or a fund from a company like Vanguard.
To achieve this plan I need to be working hard on Mrs Mummypenny. I need lots of big months like November was. I continue to work hard, chasing all those leads and diversifying my income as much as possible. In November, I managed to earn good money from various other sources of income. I am keen to get to a 50/50 mix of sponsored posts versus other work.
10% of my income came from taking part in case study work for brands and interviews. And 14% came from doing some marketing consulting to help a brand with blogger outreach. It was also a great month for book sales at £150!! It’s very important to establish many different income streams when you are a blogger.
The bigger plan for Mrs Mummypenny in 2018, well I am still working on that one!!