Saving for the Future

~ Rob

Now my debts are back under control and I’m making a steady income it’s time to look at my saving goals in the short and long term. If I can pay debt back quickly then surely I can save money just as quick.

Here are My Saving Targets:

Regular Saving: Save £250 per month in a Savings Account.

Emergency Fund: £6,000 – Just in case of any financial emergencies to give me some breathing room. I call this my Kitty and I will put any extra leftovers in each month. People change, change jobs, lose jobs, circumstances and situation change so my Kitty will be money to fall back on just in case.

Travel Savings: £3,500 – Set aside for holidays and seeing the world with my girlfriend.

House Deposit: £25,000 – This is the big one. Buying land in nice areas is expensive so a large deposit will be needed to get a foot on the property ladder. I’ve been renting for several years since my student days. I love the property but it lacks something, I have come to the conclusion I want a place that I can own. The problem with renting is it always feels insecure and temporary. You can’t add your own personality to the property or breathe any life into the rooms because of the rules of the tenancy agreement.

Retirement/Pension Fund: At least 20% of monthly income.

Your saving potential will depend on your monthly expenses, outstanding debt and the amount of income you bring in each month. Could you live off less? Do you actually need all the money you earn each month? If you can live off less you can save more money.

These are big saving goals I’ve set for us. I thing the first saving goal should always be an emergency fund. It’s important to have a cushion of money to fall back on, just in case. Saving for the future and life’s little setbacks is vital, so build up your kitty.

The aim is to save around 20-30% of my income but it will depend on how the business side of things go. Getting into the habit of saving will provide for your future.

New Budget

~ Rob

Yes you guessed it. It’s new Budget Time. Yes I know the budget screenshot is missing because it had some errors in it. Let us pretend it all went well. I warned you I suck at budgets. My slide line incomes seem to have hidden that the budget was out on the columns. I suck at using Excel too :-). Luckily all the stats in my left box are accurate and correct.

I’ve had a great few months, all my debts are paid apart from my student loan which has £40,110.44 still owing, the last bit of my 2nd credit card and £3,500 to Mum and Dad. They have no idea what a mess I was in financially. I want to surprise then by paying them back the whole amount in cash.

Now that I’ve nearly paid off my credit card and the car loan is gone I feel I can tell my family what I’ve been up to in the last eighteen months or so. I still have my credit card but the balance will soon be £0 and I’ll use the card to track expenses and pay it off in full each month.

I have undergone an incredible change over the last year. This simple life and frugal living is the way forward. Life seems much easier, as my debt goes down I’m starting to feel “free”.

I’ve outgrown overspending and feel ready to settle down. My budgeting isn’t perfect or tracks every single penny. Nothing is concrete but I can work with it and keep on track.

I’m happy to have made a start. Try it yourself and see what feels right and see what comes next. My next targets are to finally start saving. So that’s the plan for the next 12 months.

The End Of My Credit Card

~ Rob

My relationship with one credit card is finally over. Yesterday I made the final payment and closed the account. It was a happy day and an important milestone. I’d had that card for 5 years and it was generally maxed out for 4 and an half of that.

Not receiving any credit card statements and making any payments will feel strange after so long. It’s a strangeness that I can live without. It’s too easy to get reliant on using debt that you almost do it without thinking.

Need or want to buy something – out comes the credit card. Want to treat yourself and short of cash – out comes the credit card. This is the habit and bond you need to break. Your credit card isn’t doing you any flavours if you can’t clear the balance every month. If you’re in this position you need to fix it.

Now is the time to detach from using your credit cards and rid yourself of the hold they have on you. Clearing the debt balance will opens up new possibilities, for a start you’ll have more money and be happier without the burden.

Being closer to debt freedom is a great feeling. Tonight I’m going out to celebrate and the first round is on me.

I’m done with credit cards but not done with debt just yet. After the victory celebration there is still work to do and with every pound that’s paid off I sense that life will only get better.

Throwing money into your debt lifts the financial burden and makes money management so much easier. Bigger payments means it will happen faster. From here I intend to aggressively pay off my loans and keep shrinking my debt levels.

I want less debt and more wealth.

Budgets Comparing Old to New

~ Rob
Old budget and new budget

I’ve been launching a couple of other websites and being working on them other the last month or two and I realised I haven’t published a budget on here for a while so here is the latest version compared to my first one. (sorry it’s a bit squashed)

As you can see lots of changes and saving having taken place and debts have been taken off the debt section. I’ve paid off the expensive credit card, car loan and my overdraft.

Entertainment is finally back on the list but I went over budget by -£66.00. Naughty, Naughty…but I think I’ve earned it.

I Have Money In My Old Savings Account

~ Rob

Today I checked a savings account from my old bank and was surprised to find it has nearly £278 pounds sitting in there untouched and unfunded for years. It was going to be my emergency fund but I opened a new savings account and forgot about it.

After some careful thought I’ve decided to empty my savings account. Why I’m getting rid of my emergency fund goes against what I’ve read about personal finance however I think putting this money into my debt will make me bigger savings than leaving it in the bank earning a pittance.

Leaving that money there earning next to no interest doesn’t make any sense, especially since I’m paying higher interest on my debts and the UK inflation rate is higher than my saving interest.

Some people many think it’s not a smart move, yet for people in credit card debt it makes logical sense to spend any savings on your debt. Therefore today I will withdraw all of my savings and pay it into my credit card that is costing me the most.

We are taught and recommended to open a savings account to earn interest yet in these economic conditions it’s hardly worth it. While saving money in the bank is nice my purchasing power is fading away. Every day that money is worth less and rots away a little. Compared to my debt having a savings account is actually losing me money.

The best course of action is to closed the account and put the money into my credit card debt. I’ve analysed the risk and hopefully I won’t get the sack, get made redundant or experience any unexpected emergency like anything breaking down or needing replacing.

The plan will then be to rebuild my emergency savings fund after I’ve wiped out the debt on both my credit cards. Let’s hope am not given my P45 on Monday :-/