Paying Off My Debt

Not working, having children, spending as if I’m still bringing home a decent income… these things have left me in a mess.

Financially, things are not good. Ha!

That’s OK, because I’ve been here before.

After completing my second degree, over 10 years ago now,  I took a programming job which meant a move across the UK. My salary at the time was less than my monthly outgoings. I had to rent a flat AND buy a car, and I had a huge student loan to pay off. In the first six months I had to supplement my income with credit cards, simply so that I could make ends meet (I wouldn’t advise this).

Luckily, my job prospects were good, and payrises and bonuses meant that within a year I could actually live within my means. Three years later, not only had I cleared every debt, including my student debt, but I’d also saved enough for a house deposit with the husband (then boyfriend).

I vowed I would never get into debt again.

But that was before motherhood and the transition to being a stay at home mum (something I never even imagined I would do).

So, after keeping my head in the sand for the best part of 4.5 years, I’ve finally taken stock.

I owe, today, £5786.06.


One of my 12 goals is to pay this off within 5 years, which means a monthly commitment to at least £96.44 each month towards my debt. That’s almost double what I currently pay back.

Initial problems are that:

a) I’m also paying around £25pcm in overdraft charges. This is £300 a year. I know this figure will reduce as I reduce my overdraft, but by shifting this debt onto a long term 0% credit card, the transfer fee (<£100) will easily beat the overdraft charges, and leave me with more available cash. I’ve made an application, but for the first time in my life I am not sure if I will be accepted. Having to put “homemaker” in the employment field doesn’t fill me with confidence. So, we shall see.

b) Aside from my massive overdraft, I have one other credit card, which actually contains the debt from some work we had done on the house last year. This has been at a 0% rate for 18 months, but runs out in July. This is bad news, as I’m not sure if I can obtain another card to shift this debt to (see above).

So, action points:

  • Wait for card application result (not hopeful, as these things are usually instant).
  • Either shift debt around, or replan budget.
  • Finish monthly budget and consider withdrawing cash at the start of each week rather than using cards.
  • Set up payments to meet at least the minimum repayments.
  • Start selling on ebay!
  • Commit to a monthly summary, to track debt reduction.


Financial Crisis

Cause you can guarantee that a financial crisis will swiftly follow any other kind of disaster, right?

It is, of course, all completely my own fault.

Since I left work almost 14 months ago I’ve never really moved on from the financial mindset of being someone with my own money in the bank. And the last month has seen some slightly, er, excessive spending.

So yesterday, while I was indulging in some (more) therapeutic online shopping, my card finally stopped working.

I had a feeling I might have reached my limits, but it wasn’t until I logged in this morning that I discovered the damage.

Not only had I reached my overdraft limit (a whopping £2k), but the bank had kindly extended it for me because I was still spending money and they decided that my credit record was good enough to honour all the payments that were going out. In one way this is good, because I didn’t miss a direct debit payment, but in other ways NOT so good, given that my overdraft is beginning to look like a black hole that will never, ever be filled, and is now closer to £2500 (gulp).

Anyway, after a LONG conversation, and promises from me to be better behaved, they agreed to waive £150 of charges (jeez!).

I didn’t mention that I’m now a stay at home mum, instead of a handsomely remunerated programmer, and not likely to be earning a great deal of money in the coming months, or that the healthy days of my current account are temporarily resigned to the history books.

But, for now they are happy, and I have a new project (always good, right?).

I’ve known for ages that I needed to budget, but I think I was just spending like this because I wanted to force a situation that I couldn’t ignore (does that make sense?).

There’s always a kind of comfort in hitting the bottom. You know you have to take action. You know you have to do something.

I’ll be keeping careful track of my expenditure – I may post weekly or monthly accounts. These will be boring as hell, so don’t bother reading them – they are here to make myself accountable.

And I’m also gonna have to ebay some stuff to try and recover some ground.

There is four years worth of baby stuff bursting out of the loft… I’ve been wondering how much longer I can actually keep saving everything baby-related before having to accept that we don’t have room for an entire childhood’s worth of clothes, books, toys and other paraphernalia.

It’s all good though. I need to sort out money, and I need to stop hoarding things so obsessively. And I need to be more frugal with our groceries and find more free activities to do with the boys (especially now the weather is improving), so all in all, it’s probably a blessing.

Just another one of those things that happens to come along at just the right time.

And now I’m off to the newsagent to cash in £16 worth of winning scratch-cards, because after 6 months of lying around they are suddenly worth a lot more than they were to begin with 🙂

Spending Scrutiny

Something I’ve been thinking about doing for a long time now is tracking every penny I spend.

I already use a program to track my banking transactions (Moneydance for Mac), and have done for years, but I can be a bit non-specific about spending, for example, listing hundreds of pounds worth of “cash withdrawals” over the course of a year. I have no idea where all that cash goes.

And my categories have fallen into habit rather than specificity – I tend to put a lot of things under “child costs:other” and “groceries” simply because I can’t be bothered to tailor the categories now I’ve been using it in a particular way for so long.


I’m going to start afresh tomorrow, and record every single penny. Daily.

Every. Single. Penny.

This will help with the goals of paying off my credit card debt and in saving for when babe no.3 arrives. It will also help us in the long run, as DH and I agreed the other day that we are almost certainly going to start feeling the squeeze in our current house once babe no.3 is running around as a toddler. I know this is a couple of years down the line, but during at least one of those years I will be bringing in hardly anything and we are already unsure how exactly we would ever be able to afford to buy something bigger than we already own.

I need a revised selection of categories, and I need to add a cash account that records literally the cash in my purse.

Lots to do.

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