My budget before starting to pay off debt was pretty terrible, as were my budgeting skills. I have a degree in Business with Personal Finance and a lot of my studies were focused on financial advice, which is could easily give, but following that advice was a whole other story! So while I was great at drawing up the budget, I was terrible at actually sticking to it. And that deficit in income that didn’t cover our expenditure, plus a few terrible impulse decisions, led us to debt.
We now earn about £3k per month basic, and this year, between overtime and Mr M’s redundancy payout, this works out at about another £500 per month average. But with our expenses budgeted at about £3.4k per month, we don’t have much left over. Granted, this does include debt repayment, as we are making overpayments of at least £750 per month, but even still, it just seems so terrifying to someone like me who likes to live simply.
So one night a few weeks ago, on a wave of anxiety, I drew up a ‘goal budget’ of our expenses, upon debt freedom, in August 2018. This is where I hope some of our expenses will be:
Groceries– £220 per month (this is easily doable as this is what we are spending at the minute, which is half of what we used to spend)
Going Out- £100 per month (again, this has been halved since starting to pay off debt, which has actually been great. Instead of going out once a week, having a hangover on a Sunday and feeling exhausted, we do this once a fortnight which means there’s a bit more balance and I’m really looking forward to the Spring and Summer evenings where we can have out nights in out on the patio with a homemade cocktail and a few friends round)
Holidays– £100 per month (we used to impulsively book holidays which meant doing lots of overtime to pay them off after the fact, but now we are resigned to one holiday per year and maybe a trip to Brussels/Holland to see my sister or brothers who live out there). We went travelling in our twenties and we are off to Thailand in May 2018, so after this, it’ll be out of my system and I’m now ready to spend the next few years at home if it means having to work less)
Our direct debits will be down to about £800, including our mortgage and the basic bills like insurances, rates, and obviously the gym, Spotify, Netflix and Sky Sports for Mr M (this has to be sustainable, after all!).
There are a few more expenses, including savings, but above are just the ones that will change drastically from where we before starting our debt free journey.
Before paying down our debt, we were both constantly stressed out, exhausted and miserable, and always pacifying these issues with the next purchase. I think this is pretty normal today, but both of us want to get out of this way of life. So my hope, by my debt free date, is that we will be paying out £1.7k per month to live a more simple life with less stuff, less medication, less stress, and more lie-ins, more walks in the park, more reading books on the patio, more afternoon naps, more flexibility, more togetherness, more conversations and more meaning.
I’d love to know if you have made this change yourself so tell me your own story below!