Wednesday 29 April 2020

How I'm Managing My Money in 2020

Ok, so again I haven't posted much this year. It's not for lack of trying, or lack of ideas. Sometimes it's down to not having photo content yet (I find having at least one image per post is preferable, rather than having just a block of text), or sometimes I get a bit afraid of publishing my own words and my own opinions online for everyone to see, and judge.

You might be a bit bored of me going on and on about being in debt, and always trying to get out and failing. Well, I have some good news for you all. I am finally DEBT FREE. Yep, you heard me. In one of my last posts about my plans for this year, I mentioned that I had really made a difference to my bank account. For the past year I really dug my head in the sand and worked hard to earn the money I needed to pay bills, and made a few plans to pay off my overdraft and pay back my mum (who had kindly bought my car back in November 2018). I always had enough money for my bills, but I must admit I did sometimes struggle to complete my 'get out of debt' schemes. The reason for this (and I talk about my mindset with money when I talk about my addiction in a post late last year) is that I've had to completely retrain my brain when it comes to money. Ever since I earned my first pay packet in 2012 I had been going off the rails, financially. I had my own money to spend on whatever I wanted. This became a bit of a challenge though when I was having to borrow money from friends, my parents and eventually caving in and getting an interest free student overdraft; of which I just saw as more free money. Bad Saffron.

Last year I had decided that I was going to say "no" to more socials, or find the cheapest way to do that because getting out of debt and not having this anxiety everyday about my finances was my dream. A life I hadn't really lived since before I got my first job. On 17th January this year, I woke up to a notification from my bank that a bunch of money was deposited. I was confused. Who would just give me that much money? Turns out, I had forgotten it was payday. It was my pay check. When I clicked on my banking app and saw how many figures where in the pluses, YES PLUSES. I cried. It's hard to say what emotion this was exactly, because I was crying but it was about something good. Something I had achieved on my own. However, I was sad because I'd never felt this way before. In all the other times I had temporarily gotten out of debt, I didn't stick to it and fell right back to rock bottom. Rock bottom being at the end of my £2,000 overdraft, with my £2,300 Macbook to pay off (may have been a stupid idea at the time) and my £2,300 something debt to my mum.

Although I was out of my overdraft, I still had a significant amount to pay back to my mum. I had another plan for this, you see. I had this all worked out in advance since before Christmas. I was a woman with a plan. I earned enough to pay for my bills, and whatever was left over the next two months I paid to my mum to get that debt over and done with. I wanted a debt free 2020, and I was getting it. Only two big lump sums and it was all over. Flash forward to 9th April and I received my first lot of wages where I didn't have to pay off my overdraft, my Macbook or my mum. My money is mine. Even though it's been three or so months of technically being out of my overdraft, it still hasn't sunk in. I was able to put away some spare money after leaving enough for this months bills into my savings account and I can't believe that I'm someone right now, who has a good head start with a savings account. It's something that's been on numerous new years resolutions and goals lists, and has never happened until now. I just want to shout from the rooftops, because this is a big moment for me.

My other half; Connor, I think still doesn't completely believe me when I say I've changed and I'm going to work hard to stay out of debt. I don't blame him. I was lying to myself all of the other times I got out of debt. I guess that's part of being an addict? In the end you don't even know if you're lying to yourself, and believing your own lies. I kept my finances to myself for quite a few years, and would lie about how bad it was. I wanted to fix it myself, but being the spending addict I was it was so much worse bottling it up. The moment that I spoke more to Connor and my parents about my situation, I didn't feel as though I was living two lives anymore, and having to hide my payslips or banking information. A weight was lifted. All of them had at some point offered to help in one way or another, but it got to a point where I really didn't want to borrow any more money. Enough was enough. I'm an adult, I put myself in this mess and I need to learn to get myself out of it. It's been a huge learning curve, and I really hope that this is a new start.

I have started to track and manage my money using this awesome spreadsheet that Rhianna set up (she's got some banging posts all about getting out of debt, saving, and budgeting which I've found super helpful), she goes through each section on the spreadsheet to help you set up. I had already been pulling my hair out when trying to get out of debt, so it's been handy to customise this spreadsheet for my needs. I must admit I haven't been tracking my money that much, I've done a few months using it and it's so good if you stick to writing down your spends and what they were for. I started a section where I've written down all of the occasions this year where I will need to spend money, be it birthdays, hen do's and Christmas. I now have a set budget for how much I need to put aside to financially prepare for all of these events. I have never done this before. I've lived month by month for so long, I don't know why I hadn't thought of it before. I also created a tab where I've put down all of the monthly outgoings so I know for sure how much goes straight out of my account, so I can see what's left to play with each month.

My next plan, is to open a Lifetime ISA to help save up for a house. I think it will really help putting my money into a dedicated account that I can't just transfer in and out of. Plus, if I reach the maximum £4,000 a year (which according to my plan I could hit that target by the end of this year) the government give you an extra £1000 into that account. There's more information in this article by Money Saving Expert, which I've found really helpful. I'm really serious about Connor and I moving out and getting our own place. I've moved around and lived in other people's houses for so long, I just really want a place of our own. Our own four walls with a sturdy roof. I really don't see the benefit of moving out to just rent, (unless I had to move away for work) because it just costs so much and I really don't earn enough to be able to pay rent and save up for a deposit.

In summary; all of my money is now my own, I use a bad ass spreadsheet to monitor my incomings and outgoings with forecasts for each month and the year, and essentially putting as much leftover wages into a savings account. This is how I'm managing my money in 2020. No more unnecessary shops and hauls, and smart spending not blind spending.

Let me know if you have had enough of my little rants about money, I hope it's not too bad now that I'm out on the other side! Also pop me a message if you would like to see any posts in the future updating you all on my progress.

Thank you for reading, this has felt like the longest journey.

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