January 2021 Debt Snowball Review

Hey budgeting buddies,

It’s that time of the month again, where I simultaneously feel ridiculously happy and horrified at the same time. Happy because I am putting something towards my debt, and it is going down. Then I get horrified that my debt has so little overall movement because the payments for one debt gets overridden by the interest in the other debt.

If you are new here, I should probably explain, that I am currently on a debt free journey where my disposable income is only €430 a month. However, I am determined to pay what I can to my debt and will be debt free… No matter how long this may take.

So… what let’s see what happened with my debt payment this month.

Firstly, I have paid off two debts that I was unaware of. These debts devastated me when I found out about them. It brought up so many negative emotions I had to physically pause everything and re-adjust my mindset. It took me a few days, but I re-adjusted my mindset, and I am slowly coming to terms with it.

Debt number one was for the Overdraft which I thought I paid off in January 2020. (I did, but it went back into overdraft due to miscalculation on my part). I paid that off immediately, with some savings I had in another account. It was heartbreaking, because paying off that debt was what kept me on this journey through the ups and downs.

Debt 2 was a utility bill from 3 years ago. I did spend some time making sure that it was all above board, as I would hate to get scammed just because I am so focused on paying debt that I pay it without thinking. Apparently, I had misunderstood my last bill from when I cancelled the service and that is why I owed the money.

However, it is now paid. I do not owe them any more money. Silver lining here is that this month, I went from having three debt accounts – to five – back down to three.

Here is a little chart, to show you my debt bill for these Miscellaneous debts.  

Paying off the £120 in Misc. debts does mean that the savings I had been creating for my Personal loan 1 has now dropped significantly. Going from £300 to £200. I suspect It will go down more as I had to pay to get my credit score checked, to make see where I am in terms of owing money. At the time of writing, it was at £200.

On a positive note, I paid the budgeted € 100 to my debt savings account, and that has brought my account back up to £287.75. This has shown me that I will have to be putting a lot more money to it after April 2021 (After I have paid taxes).

Onto my usual debt payment activities…

My debt for the personal loan has gone from £3,312.87 to £3,212.48. This is its usual payment of £100.39; but does not include my sinking fund. I can only pay this debt off if I have the full amount ready to pay in one lump sum. As I currently don’t have the full amount, I have the sinking fund where it withdraws monthly from. The sinking fund for is currently at £287.75 (2.86 months’ worth of debt payments) .

On the student loans side of things, this balance is now up to £39.245.41 as of the 13th of January 2021. It has gone up since July 2020, (when I last noted down the amount owed) by about £2,000. That is purely down to the compounding interest. Which I need to start working on as soon as I leave my current job and can get a job which pays me more, and I can start side hustling as well. By September 2021, I will start paying at least £500 per month to this.

Despite putting money to debt, it is slow work. With little disposable income and compounding interest, my debt is going up. However, I am working my plan, and slowly but surely it is going to bare fruit, eventually.

Now most people with be thinking, uh, you need to re-adjust your priorities that student loans are out of control. Yep, it is. It keeps me up at night. But the way the UK Student loans are set up, it’s not worth working towards yet.

This is because the PL1 is not secured and has a monthly minimum payment. The Student loan does not. Also, as soon as I can afford to put £300 – £400 per month to my Personal loan 1, it will be finished in a matter of months.

In total, my debt has gone up by £1,200 since July 2020. This is ALL because of my student loans. Now that I will be building up my sinking fund for my personal loan 1, so this is going to look bad for a while, until I can begin to pay off the interest in my student finances.

Thank you so much for reading! Again, it gets worse before it gets better!

How are your Debt Snowball / debt payments going?

Are you going up? Down?

Also, how do you feel about your debt?

2 thoughts on “January 2021 Debt Snowball Review

  1. Thank you so much for taking the time to comment Tracy! I appreciate more than you can imagine (and no, I am not just saying that! I appreciate the support so much, especially as I know that you are speaking from experience! ❤


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