Change in my Saving Plan to Paying Off the Student Loan

~ Rob

Should I save/invest money or payoff my debt? I have been thinking about this over the last few weeks. You could look at the numbers and work which is best option but for me I favour clearing debt first before investing.

Good or bad credit (debt) affects many of us. If you are head over heels in bad debt the interest rate and money you pay back will be higher than your saving returns so the debt wipes out any savings you have. The obvious answer is to pay off any bad debt.

I’m happy with my good saving habits, I’ve watch it start at £0 and grow fast thanks to my extra business income. I’m also happy with my new found budgeting skills and can keep expenses down. I’m no financial expert but I have a plan and that is the most important thing. And when you have a plan you can adjust your plan to your needs as required.

From here I’m now going to suspend and slow down on my savings plan and focus on clearing off my student loan. I’m re-evaluating my master plan and my debt eats into my net worth big style. While it’s comforting having savings and I’m happy with the amounts saved but it hit me hard that my debt beats my savings down. I want my debt gone so the big push is to get all debt cleared faster.

Although you don’t start repaying any student loans until you graduate and hit the minimum income threshold. At the end of the road the student debt you amass needs to be paid back and interest is mounting from day one.

Making the minimum or slower student loan repayments will cost you more in the long term. Unless your plan is to wait for the debt to be written off in your 50’s or to put it bleakly you die before its all paid off. You may even die of fright when you look at a student loans financial figures in real terms.

I think my motivation to save isn’t as great as the new motivation to pay off debt. I did wonder if I should use my saving to pay some of the debt off. Then I kicked that thought out of my head because it would undone all my good saving habits.

Whatever choice you make it will affect your net worth. Anything that gets us closer to faster retirement is a good thing and been debt free will grant us freedom. When you make that last payment you’ll feel happier and debtless. Which is great.

I’m Saving a Fortune By Eating In

~ Rob

The money you spend on takeaways, fast food and dining out mounts up. You can also shell out a lot of money for work dinners, breakfast and drinking from coffee shops.

I know it’s easier and more convenient to go out for a meal or order a takeaway but it’s far cheaper and quicker to cook at home. You can make the same meals at home for pennies compared to the price of expensive restaurants and retail snack shops.

Half the time we claim to be too busy, when in fact we are too lazy to cook our own food. The result is often spending money we could and should save. Calculate how much you spend on fast food and dining out each month? What is the total for the year?

Over paying for food, drink and bottled water will zap the money in your wallet. I’ve become a bit of a chef so I get family and friends together for a meal. During the summer it’s barbeques and as colder nights draw in its curries, chilli and stews.

Getting good wholesome food on the table doesn’t have to cost the Earth. I’m loving Lidl, Aldi, Wilkinsons and you can make great savings on groceries and household items by taking the time to shop around.

While there is nothing wrong with eating out once in a while, you can make the same things at home that you buy at overpriced food outlets. In the end paying for convenience really costs us a fortune.

You Can’t Plan For Every Expense

~ Rob

I have a budget that is working towards paying off my debt which is great………however I’ve been invited to a wedding of a friend I’ve known for 10+ years. This is an expense to me and my budget didn’t plan for, naughty budget.

When an unexpected expense happens and you haven’t planned for it, or other people or organisations are good at spending your money for you is when you’ll lose track of your costs.

I’ve worked out the costs and with the wedding presents, travel, hotel booking and beer consumption the cost will be around £350.

If I choose not to go and say “no” to seeing his marriage it will be sad and I’ll need to think of a really good excuse like I’m on holiday in Africa, I’m in hospital for a sex change operation or I plan on being dead that weekend.

I’ll also be a bit of an arsehole by declining to witness him getting hitched because my budget says “NO WAY”. Sure that £350 quid would be nice to pay into my debt but I’m not a cheap stake, I don’t intend to miss his and his soon to be wife’s big day, her body is sweet and seeing her in a tight wedding dress would be a nice sight. However I digress.

There is a time and a place to be frugal and a time and place to spend money, am his friend not a tight jerk, therefore I’ll be there for this big day despite the unexpected costs. Along your debt journey you need to factor in some fun, treats and celebration or you’ll go insane on your debt journey.

There have been times when I’ve had to say no due to the terrible state of my finances and I couldn’t afford it no matter how appealing a budget strip club is. You may feel forced to spend money on these unexpected events and you’ll need to learn to say no if you’re to succeed with your money management. Living in the moment isn’t always a smart choice. As for this wedding, I wouldn’t miss it for the world.

While you can include expenses like birthdays, Christmas that happen every year when it comes to your budget the fact is you can’t plan or allocate for every unseen expense. Therefore it’s important you plan for unexpected costs. I suggest you budget for surprise expenses by adding a entry in your budget for them. It will also avoid turning to using your credit card to pay for stuff like this.

I suppose I could use my some of my emergency fund to pay for it. C’mon on surely getting married is classed as an emergency.

Dam, I just realised he’ll want a stag do too. That’s another £100+ gone, maybe I’ll tell him that I’m dead after all. Dead people save a lot of money.

New Accurate Budget

~ Rob

The new budget format now includes my income from my day job and the savings plan. I’ve also included my month websites income figures which vary from month to month.

If the website figures stabilise and increase I may consider quitting my job.

Entertainment is now back in line with the budget, it has gone overboard the last few budgets so I need to be more frugal and cut back in that area.