Financially I would describe myself as dysfunctional. I have a relatively high income, high outgoings and very little to show for it.
I started my own business at 24 and have been successful BUT my income fluctuates massivley. I have gone 3-4 months without net earnings to then have £15K land in my account the following month. This has lead to a real difficulty in setting a monthly budget for our family. Bills pile up and then get paid. We put off doing thigns and then splurge. All the time never managing to ‘get ahead’ of our spending needs. We are now earning a more regular amount but the ‘wants’ pile has a big list on it – new car for the misses, new car for me, re-decorating, move to a bigger house……… and we are about to fall into the trap I have always feared – spending every new £ I earn on those extras.
I have never been a ‘good’ saver. I wouldn’t descrive myself as lavish but then again who does?! The problem is I have never been very disciplined with money. As a family we have become numb to debt. Feeling like it is just a fact of life. At it’s peak I had over £200K of unsecured debt. Admittidly this was business debt taken on to aquire a bolt-on to my business but not all of this was so. Today our unsecured debt is £20,793.82 and really it should be £0. Well I say zero – £5434 of this is a 4yr 0% loan for a Sofa purchase and new bathroom so is OK debt. That’s still £15,359.82 of debt on credit cards, overdrafts and loans. Debt I should have paid off a long time ago but because I can service it and it doesn’t stop us doing what we want today it just sits there slowly reducing but not really by much.
- CC 1 (used reguarly) – £5,172.57
- CC 2 (not used) – £5,629.52
- Overdraft 1 – £1909.02
- OVerdraft 2 – £374.71
- Loan 1 – £2274
- Loan 2 – £1434
- Loan 3 – £4,000
Also due to my financial dysfunctionality my credit score whilst OK is not what it should be so I can’t shuffle the credit card bedt onto 0% deals etc. This means I am currently paying £220/m in interest alone.
I do have a positive net worth though and am building savings in a S&S ISAs and property so it’s not all bad but I want to blast through this debt in the next 6 months and ideally have it under £10K. This will be one Credit Card 1 and Overdraft 1. I’ll do posts on how I plan to do each of those in the coming days.
I aspire to be financially secure and independant and the start of this is choosing to live off of a budget and clear debt!