Inside the Wallet of a (Late) Twenty-Something…
I started this blog mainly in an attempt to track my personal finances and to be somewhat held accountable for my purchasing decisions. I am just a normal, (late) twenty-something, woman, trying to teach myself how to adult. I currently have a good job that I love, I bought my own apartment just over 2 years ago and I’d say I’m pretty financially savvy. I haven’t always been though, and that’s kind of the other point of this blog. If I can encourage even one person to kickstart their debt repayment journey, then I’ll consider it a success.
There are no big salaries here, I earn around £25,000, so a couple of grand below the national average. I live in the North West of England with my Other Half (OH) and we’re lucky that the cost of living is pretty low here.
I graduated from uni in 2011, and before then, had never really thought much about my finances beyond “I’ve £20 in the bank, of course I can go out tonight!”
After graduating, the real world hit me like a tonne of bricks. I was skint, I was pretty much maxed out on my overdraft, I had no steady income, just a few odd shifts at a local bar. My monthly outgoings would have been around 3 times my income, although I wouldn’t have been clued in enough to know that at the time, all I knew was that I was so, so broke!
For the few months or so, I picked up part time jobs to keep me afloat while looking for something more permanent. I was living beyond my means, falling behind on bill payments and generally digging myself further and further into a hole of debt. Things took a turn when I got a steady full time job, nothing fancy, but it kept me busy working 6 days a week and taking all the overtime I could get. As I was on a hourly wage, I was taking home substantially more money than I ever had done before, and after living like a king for a couple of months, I realised I needed to sort my life out.
By this time, I had approximately £2000 in rent arrears, £1000 in council tax arrears and an overdraft on my student/graduate account maxed out to £2000. When looking at this as a whole, I won’t lie, it scared the shit out of me. £5000. I owed £5000.
After several mini panic attacks, when I broke it down into smaller chunks, it actually began to look a bit more manageable. This is where my obsession with tracking my money began, with a simple pen and paper. In fact, I still use a basic budgets notebook to keep myself on track to this day. I’ve created spreadsheet upon spreadsheet, but I still like to have my little budget book to hand! I’ve been using this one (Busy B Budget Book with Pockets for Receipts) year after year. It’s simple and small enough to carry in my bag.
Anyway, I started with my rent arrears and council tax. They were pretty urgent, whereas my overdraft was interest free so could just hang around for a bit longer. I opened myself a new current account and stopped using my graduate account altogether so I didn’t have to look at a nasty minus balance every day!
I paid both my rent and council tax arrears off within 5 months, before tackling my overdraft. I wasn’t quite so vicious with that, as it wasn’t an expensive debt to have, and also I was starting to save a bit of cash again too by that stage.
I paid off most of my debts in 6 months!
I would say that by the time I was completely debt free, I had been working on it for just over 1 year.
After paying off my rent and council tax arrears, and promptly booking myself a holiday to celebrate, I opened an ISA and began what I referred to as “saving seriously”. I didn’t really have anything in mind to save for, but have always wanted to be one of those people who just “has” an emergency fund of a couple of grand hiding away. So that was my starting point.
Since then, I’ve left jobs, started new jobs, been promoted, been self employed and bought an apartment. My salary has varied wildly but I’ve never found myself in trouble financially again thankfully. I’ve gone from barely being able to budget my own weekly wage, to having to learn how to budget a household.
I have, however, found myself falling into my old habits of shopping for stuff I don’t need, spending too much money on lunch and coffees when I’m out and just generally not looking after my finances. I’m hoping that by starting up this blog, I’ll feel like I’m being held accountable for my spending, even if no one reads it!
I’m ready to lay it all bare, I’m tracking every penny of my spending and sharing it with whoever cares to know. Taking inspiration from Cait Flanders, and Refinery 29’s Money Diaries, I’m going to post my own weekly spending reports. For a full year.
My short term goal is to save for a new car, and long term is to pay off my mortgage WAY ahead of time. I’ve found it really difficult to save when I don’t have a goal. When saving for my house deposit, I was pretty ruthless!
In order to come up with a sensible savings target, I need to know how much is left over each month after my general living costs. For years I’ve been so on top of my regular outgoings, bill payments etc. But I have absolutely no idea how much I spend day to day. Does anyone know how much the average person spends on, say, groceries? I don’t know how much to budget! When I was paying off debts, the answer to every “How much should this cost?” question was simply “As little as possible.” Now, I want to be realistic and rather than scrimping for months, I want to actually change the way I spend and get into good habits rather than bad! Hence my daily spending logs.
Confession: I do currently have a small amount of credit card debt to wipe out. A couple of home and car emergencies racked up about £1000 as well as seriously eating into my savings. I’m not overly worried about it as I’ve got it 0% interest for 24 months and am just paying off around £80 a month.
While I’m getting into the swing of my spending reports, I’ll be doing a couple of posts on how I managed to rid myself of my previous debts, and how I went on to save £16k in 2 years for a house deposit.
Come back and check it out, and if you have any ideas for keeping motivated when saving, I’d love to hear them in the comments! Every little helps!
**Disclaimer: I have no financial training or qualifications, this blog follows my personal journey with money, and will look at how I budget and manage money. I am not advising that anyone necessarily make the same choices as me, I’m simply offering another option on how you can save/spend/invest your cash and learn how to budget in the meantime.
**Posts may contain affiliate links. I do not currently use these often, and will certainly not recommend any product I would not or do not personally use.