Learning To Live Without An Overdraft

(this has been sitting as a draft for a few months now but I am posting it as it has been a good step on my road to getting my financial life in order)

My final debt vehicle is the £300.00 overdraft on my main current account. Currently I have this amount in my Emergency Fund, so technically I don't need my overdraft at all. But I have been hanging onto it and using it too. Which is why it needs to go - as I will stuff up my mortgage application. The mortgage bank will want to see three months of my bank statements and I don't want them to see my account in overdraft.
On Monday I will be sending my next payment towards my mortgage deposit fund and will clear the little bit of overdraft I currently am holding. Then in the last week of April I will be able to add about £500.00 to the Emergency Fund bring the total to £800.00. Surely I can get rid of my overdraft. 
My bank gives me an interest free overdraft up to £250.00 as standard so really I don't lose anything anyway. I need to get use to living 'cash' only.
I don't have any credit cards but I do have several debt cards and I do not want my debt cards to replace my credit cards. So cash only! 
People will think this crazy but credit is bad - it robs you of not only your future but also your self control and self esteem. Credit is debt and debt is slavery. 
I want to be in control of my money and not let my money do it's own thing. 

 Dave Ramsey's Baby steps in English

Baby step 1

£1000 to start an Emergency Fund

Baby step 2

Pay off all debt using the debt snowball

Baby step 3

three to six months of expenses in saving

Baby step 4

Invest 15% of income into Stocks & Shares ISA's

Baby step 5

Pay off your home early

Baby step 6

Build wealth and give

The above is 'my' baby steps guild for those of use who live in the UK. I am pretty sure that ISA's are the same as Roth IRA's - don't judge me if you think I am wrong (but please do leave a comment. I am at baby step 3 and will be for the rest of the year.

Working The Baby Steps in 2015

I have had a great week and kept to my cash budget!! 
This is a great success for me as I have been struggling with keeping to my spending plan.
Last week I cancelled my current account overdraft and for the first time in months, my current account has been in credit for the whole week. I need to do this until August and then I can send copies of my bank accounts to my potential mortgage company without being embarrassed.
I have completed baby step 1 and saved £1000 in my Emergency Fund. To this I have added a further £200 and added it to my Expenses Account as part 1 of my complete Emergency Fund. 
Now I'm saving for the rest of the Emergency Fund which will take some time and I don't expect to complete this until some time next year. Basing it on my income rather than expenses I estimate I will need another £5500 to cover three months of income.
This is not the first time I have gotten to Baby Step 3 but unlike the last time when I was very half heart'd about saving, I now understand just how important it is to do this - to success long term. 
Sticking to my budget will get me to my goal and this will get closer to my dreams.

Working the Baby Steps

This month it is all about my baby Emergency Fund. 

Currently it is sitting at £300.00 and if I am really, really good about my spending this week it should be at £1k by the end of the month. Another £200.00 paid in next month and I would have completed my next goal to save six months wort of expenses into my expense account. 

Two goals to complete after that are:

1. Save for my tax bill in July
2. Save £1k per month for the next five months

Not exactly Dave Ramsey's Baby Steps but ether way I will have cleared an up coming debt while holding just over £1k in an Emergency Fund (step one and two) and would have started to save towards my fully funded Emergency Fund (step three). I don't think Dave would be opposed to my plans.

As a side note I logged on to Noodle, a free credit check site and found that my credit rating with them is 4/5. Which they stated as being very good and that I should be approved for most loans I apply for. What a laugh - okay I wasn't turned down for that last loan but I might as well have been! 

Noodle also listed me as not being on the Electoral Roll, which I am and received a conformation of that very fact today by post. So have placed an error alert regarding this to be dealt with by Noodle and will check the site again next month.

I'm Debt Freeeeeeee..........

I have done it again...... I am debt free again and this time I will not let things slide, I will save up my full Emergency Fund and stick to my monthly budget, where I will assign every pound.

How much will I need to save in my Emergency Fund?

Well that has been the question since the first time I became debt free back in 2011. Working towards a goal has been my saving grace when it comes to my finances and so I need a goal amount. A ball point figure that will cover all my needs for a three to six months period. Dave Ramsey's baby steps call for 3 to 6 months of expenses but my expenses are really low i.e. 6 months expenses would only be £1,200 which is not enough for an Emergency Fund. But that would be an amount to save towards. 

Part 1. of my Emergency Fund would be to save £1,200.

Part 2. of my Emergency Fund is to save a further £6k.

All going well - part 1. should be done by the end of May but part 2. is going to take a lot longer. It should be done by December 2016. This is budgeting £300 a month but I could pay more towards this goal depending on work.

Having an Emergency Fund is so important and I have learnt this the hard way. I got back into debt because I didn't have an Emergency Fund fully funded the last time. This time I will follow all the baby steps without question because I don't know better.

....Not long to go now!!!

 ....it's March and I am less than a week away from clearing my last debt and being Debt Free again!!!


I have one more loan to payoff and I can't wait to call my bank to get the settlement figure on Monday. Then I am back to Baby Step 1. Save £1000.00 to start Emergency Fund. Saving up £1000.00 shouldn't take 

too long and then I can jump to Baby Step 3. Save 3 to 6 months of expenses into savings. This is the fully funded Emergency Fund and the baby step I didn't really complete the last time I became debt free. I believe it is partly the reason I got back into debt back in 2013.

Getting Flexiable With Money

I am almost there!! As I stated in my last blog, I decided to sell most of my shares and use that money to help clear my Flexiloan account and then close it. And so last Wednesday I jumped online during a fee reduction period and sold the share for £1,900.00 which was a profit of about £700. Not something to be sniffed at as far as I am concerned. It is my first venture into share dealing and I only wish I had brought a whole load more at the start of the venture. Hind sight and all that good stuff. Anyway my Flexiloan is now down to under a thousand and I want to clear that using my Emergency Fund but will hold off until Monday as I don't want to risk having almost no cash in the account should anything problems arise.
Once that is all complete I will be left with my final unsecure loan account which I plan to clear by early February 2015. Then I can say I am totally debt free!! But only until I get my mortgage which should be around October 2015. Between now and then I am going to try and but as much as I can into both my savings account (for my proper Emergency Fund) and my mortgage deposit saving.
Is it me or is it really hard work to keep on the straight and narrow when trying to stick to a budget when clearing debt? I want to get debt free asap but still buy stuff (and I do need what I am buying) well some of it at least. I don't know if buying the next book in a series counts as needed?

Moving On Time Again

I am just back from a weekend away visiting my godchildren. As always I had a great time and spent too much money - nothing was budgeted, as the visit was a last minute decision. Last Tuesday I found out that my job would come to an end the following day. This was not totally unexpected.
During the Christmas holidays I had, had to cancel my Christmas visit to see my godchildren due to my job. So decided on the Wednesday that I would go and visit the children while I could, using my Emergency Fund to pay for all my purchases and then spend the last week of January finding my next job.
This will mean I am a week behind my February budget and will not be debt free until early March. Also I will need to repay my Emergency Fund. Of cause this all depends on my getting a job within in the next seven days. It is very do able but not guaranteed.
My main financial goal for January is to pay my taxes and this is still on-track. My expenses are all up to date and I have funds to cover my first week or so of expenses for February.
My lovely friends are all being so helpful with possible job contacts. So I am very blessed!
Lets see what Monday has to offer.....