Life

Have I Paid Off My Credit Cards?

June 24, 2019
Picture of me standing in front of a fancy store, Reiss.  Have I Paid Off My Credit Cards?

In April I wrote about my financial stress and credit card debt since then talking openly about money has become less taboo.  I had quite a few direct messages from friends and readers who are also in the same situation.  In the past month a new Instagram account, My Frugal Year started and within a few weeks had over 10,000 followers.  The account is a honest update by a mother who is working towards reducing their families £25,000 debt.  Read through the comments especially the ones about childcare.  It is eye-opening.  My friend Ghenet wrote about improving her money habits here.  I find it so interesting hearing about different people’s views and Ghenet’s tip about carrying cash is fantastic.  It is similar to the Bare Foot Investors jam jar idea and one that I know works well for many.

In April I started to really scutinise my budget and allocated funds to pay off my credit cards by June.  In total there was £4,500 to be dealt with.  Based on the figures I was confident this debt would be gone within a matter of months.  It hasn’t happened.  I am halfway there and am proud of that.  There have been a few reasons as to why, and I thought it might be helpful to share. 

Overall though my mindset has changed drastically.  I now really mull over any upcoming purchases and ask myself ’will this item stop me feeling financially stressed?’.  Nearly always the answer is no.  Fortunately, it seems there is a trend to scrutinise and save.  Telling friends I can’t afford to do that has become more understood, and less embarrassing.

Credit Card Interest Is A Killer!

Whilst I budgeted for payments on my credit card of the outstanding amounts, I didn’t factor in the monthly interest.  For every payment I was making £100 went on interest.  Not taking this amount into the budget meant I was always going to fall short.  It might seem obvious and I would argue it was something I knew, but I was again being blind to the actual interest amount.  Still learning even at my age!

My Tenant Moved Out Of My Flat.

I have an investment property in Australia and it basically pays for itself.  Unless my tenant moves out and there is time between tenancies!  My tenant had been in the flat for three years, so it was unexpected that they would move.  When this email came through I wasn’t as panicked as I may have been a few months ago.  I had set aside money and a large savings pot.  Yes, it was meant to pay off the credit card but I had to use £1000 to cover the month of vacancy between tenants.  I did it and the new tenant has signed for a year. 

My Sister Is Getting Married!

I can’t wait for this and our family is celebrating the event in October.  I have been able to save money buying my bridesmaids dress on sale and wearing a pair of shoes I already own.  I have always said since my sister and her fiancé announced their venue, I would pay for the photo booth.  Rounding out at £350 this was in the budget and is being paid to them next month.

I Slipped Up!

A couple of times I have slipped up.  A dinner in April with a friend who wouldn’t be around for a few months.  Unplanned and thus unbudgeted at the end of the month.  This meant an extra £30 went on the credit card.  In May I was in Richmond and bought some fancy hand cream and toothpaste.  I didn’t really need them and didn’t have the money for them.  I was feeling really frustrated with how bored I feel not being able to spend.  I popped the £35 on my credit card and now have mixed feelings when I use them.  Sometimes I berate myself for spending this money.  When I am kind to myself I acknowledge that it was a slip, I haven’t died and that it was a time when I was bored with being so thrifty.

My Student Loans Are Paid!

I didn’t speak about this in my first post, but I have been dealing with paying back my student loans.  For the past few years I was lucky that the Australian government didn’t require repayments whilst I was overseas.  This all changed in 2017 and they called in my loan.  An income-based test, that didn’t account for my actual ability to pay, determined I had a year to pay it all.  Incredibly stressful but as of April it has all been paid.  I always intended on paying back the loan and now it is done!  No confetti cannon or acknowledgement letter from the Australian Government which does sting a bit.

Selling My Ceramics

In July I am hoping to sell lots of ceramics at a craft market.  My first goal is to cover the cost of the stall, £40.  Then I hope to sell enough to cover a terms studios fees, £300.  I will be taking enough stock to potentially make £800.  This would be the dream and I am looking forward to my first stall.

Honestly Having To Be Financially Thrifty Is Boring!

I am so bored with being so on top of my finances and monitoring every penny.  I find documenting receipts time consuming.  If anything, the frustration I have with constantly having to evaluate every purchase is draining.  It is testing how kind I am to myself as I am easily frustrated with my past actions.

Realistically I now believe I will have paid off these debts by the end of this year.  This coming pay day I will be moving the remaining debt to an interest free credit card.  Having nine months of interest free payments will ensure I hit my goal.  Then the next step is to save up for my wedding celebrant training.  Next year I want to have paid off the credit cards, completed the celebrant course and be selling my pottery!

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