Replanning the plan

A couple of weeks ago or so, I decided to write my budget for 2019.  Mostly I have the same outgoings every month, I know when the irregular bills are due (car insurance, water bills etc.) and I know when my planned holidays are.  So I wrote a budget for next year based on the fact that I would have cleared all my consumer debt (loan/credit cards), and I would have ‘spare cash’ each month to put to something else.

Now while clearing my debt has been key this year, and I’ve been focussed on paying off my remaining credit cards, in the back of my mind the fact I’m currently paying for a car has always sort of bothered me.  Technically it is also debt, until such times that I own it outright, and in reality I can’t claim to be full debt-free until it’s paid off. So I put together a budget where I’d save as much as possible next year with the intention of paying off the car in January 2020, about 14 months early.

However, by chance yesterday I read a newspaper article about the fact that in the UK many young people (I think it was from around 20-35 yrs) are struggling to get on the property ladder, as wages are not rising in line with property prices.  I’m not sure anything else is rising in line with those ridiculous figures!  Anyway, the point is that at 42, I’m yet to climb that ladder either.  It just made me realise that saving for the car next year, means 2020 is dedicated to building an emergency fund on 6 months outgoing, then I can’t start saving for a deposit until mid-2021.  By the time I can feasibly buy a property I’ll be nearing 48!  Fuck.  The cost of property is so much I’ll need between £10K & £20K, and that will take a while to save.

Thus, back to the drawing board.  I pay a monthly fee for my car now which I’ll continue to do next year so that’s fine.  I’ve decided to save an extra £200 per month next year and will do the same in 2020, so that I have the final down payment ready to go on the car when the payment term is up.  So I won’t pay it off early.  You know what, it is debt, but it’s not crushing me, so I’m not including it as the debt I feel I still owe.  I know that’s semantics, but if I save money next year and up to April 2020, I can have my 6 month emergency fund, plus also I’ll have paid for my next 5 university courses to get my MSc, and i’ll also be able to cashflow my holidays next year AND I should have a little spare each month for anything that crops up (or going out for dinner more, woo hooo).  That makes much more sense to me, and means I can think about starting to save for a deposit a year early.  Having a good emergency fund behind me, in case anything happens to my job etc. is much more important I think.  At the end of the day, if the shit really hit the fan I can give the car back and walk away more easily than owning a car outright but having zero savings for ANOTHER year.

So, that’s that. It feels good to work out what I’m going to be doing, and actually having some extra cash next year is going to feel soooo good 🙂

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