I’m still feeling under the weather, courtesy of my vaccination on Friday. I very rarely get ill, so I always feel as though I’ve been hit by a truck when it happens! Runny nose, aching muscles and joints, thick head and a general lack of drive to do anything. In short, not fun.

But, one advantage is I have not done all that much the last couple of days. I have spent most of today in fact thinking about what I am going to do when I am finally debt free in the next month or so.

A few years ago I would have splurged on all kinds of ‘toys’, new gadgets, a big expensive holiday and so forth. The last 10 months has disconnected me almost entirely from the consumerism that got me here in the first place.

So what will I do when I am debt free?

I will treat myself to Burger King

As silly as this sounds, I have not eaten out for myself at all this year. I have been frugal in my food shopping, dining and cooking experiences, and just once I would like to say “to hell with it” and go have some fun in a culinary sense. I can be fairly certain to walk away pretty full and not spend more than £10 for the privilege.

It’s hardly haute cuisine, but it has been something I have been dreaming about for the best part of a year and it will be a major expense for me: Ordinarily £10 will feed me for a week!

I will pad out my Emergency Fund

I have never had one, and I know I need one. Especially now that the Grim Reaper has been trying the doors at work. I think a reasonable starting point would be £1,000 – and work upwards towards 12 months of expenses from there. Currently my emergency fund is £70, and that is a bit of a cruel joke in every sense.

I will take my parents out to dinner

My mum and step-dad have been my rock so many times over the years, but they saved me this year. They put me up – at great inconvenience to themselves – rent free, to help me get out of the dark place that a falling-apart marriage creates. Living rent-free has enabled my “Get Out of Debt In A Year” goal to be a real possibility and not some pipe-dream. Thank you, guys.

It won’t be cheap. While my step-dad will eat just about anything (with the exception of carrots), Mum is allergic to a lot of foods. I need to do some research to find a good setting that can cater for this.

I will open my 2009/2010 Cash ISA

I’ve been singing the praises of ISA’s on this blog quite a lot. When I am out of debt, it’ll be time to heed my own advice and go and get one!

I will take a short frugal holiday

I need a holiday. I totted up that I have worked an entire extra month in just 9 months so far at work in my ‘debt payoff’ journey, and it has left me feeling old. A short holiday will be nice, just 4 or 5 days will be fine. Somewhere relaxing, somewhere I can just sit back and unwind. Somewhere I can soak up a bit of culture and a bit of alcohol. I will pay in cash, of course!

Should I expand this list somehow? Have I missed a blindingly obvious “when debt free” todo?

• A Fundamental Question
• Patience is a Virtue
• My Net Worth Update - October 2009
• Cash ISAs vs. Regular Savings Accounts
• Dig Yourself Out of Debt: Spend Less Than You Earn

Christmas is fast approaching! There are, as of today, 70 days until The Big Day.

If your family celebrates Christmas, it can be a testing time for your finances. Even with a relatively small family, it is amazing how quickly the cost of gifts can mount up. Throw in buying for friends, distant relatives, distant cousins 18 times removed, and you quickly end up potentially spending hundreds upon hundreds of pounds.

If you have not begun preparing for the cost of this, it inevitably ends up being charged on your flexible friend.

It doesn’t have to be this way.

Even if you cannot get away with token presents, you do not have to spend the earth on giving to others. Some of the best presents can be the cheapest, and this Frugal Friday explores some of the options available to those of us who want to give thoughtful, meaningful gifts at Christmas without having to take out a second mortgage to achieve it.

8 Christmas Gift Ideas

… That won’t break the piggy bank.

Gift Certificates

Buying for some people can be a nightmare – take my step-father as an example. The man has everything he wants or needs in life, so what do you buy someone in that position? Find their weakness.

His weakness is model trains; the loft space of their home is entirely devoted to his railroad tracks. To save buying him something he doesn’t want or need, the best gift for him is a gift certificate from our local model railway shop. That way he can buy what he needs for his next expansion plan – and not have to exchange any money to do so.

Be careful though: Some gift certificates/cards expire if not used in a certain period. If the business you buy them from goes bust, you also have little to no comeback.

Amazon Wish Lists

A lot of people in my family have Amazon wish lists. If you want to be certain of buying them a gift they will appreciate and they live some distance away, have a browse through their wish list. You can likely find a reasonably cheap “Want” that can be fulfilled, and it’ll still be extremely meaningful to them to know it came from you. Amazon will even wrap it and ship it for you!

To get started, head on over to your local Amazon and click “Gifts & Wish Lists” or similar. You can then search for Wish Lists by name or email address. This may get you to their list without them even realising you have something off of their list in mind. Perfect!

If anyone wants to buy me something for Christmas, you can find mine here

Scented Candles

I love candles, and if you shop around, you can find some brilliant scents for very little. A few years ago I bought my wife a “Europe Candle Collection” that had scents of different European cities. They smelled divine when burned, but also looked amazing as well.

The price? £15 for 10.

Books

Almost everyone enjoys a good book, and if you cannot find anything on their Wish List, ask someone close to them for ideas. The danger is buying them a book they already have, so some collaboration is required. If you know the person really well then this becomes less of an issue – buying something they will really enjoy but that might be outside their usual own-purchase window.

Failing that, you can always fall back to a gift certificate from Amazon or their local book store.

A LoveFilm Membership

If their thing is more along the lines of good movies, then a LoveFilm (or other online DVD subscription service) is a brilliant gift. They can load it up with the movies they want, and watch them without paying a penny. This is much better value (for you and them!) than buying ‘a DVD’ or ‘a boxset’.

Home Made Cookies

If you are a whiz in the kitchen, some home-made goodies will go down a treat. For the sake of the cost of the ingredients involved, you can make someone smile from ear to ear for literally pennies.

Receiving such gifts, knowing the loving care that went into making them, makes the cost irrelevant to the receiver.

Gourmet Coffee

For the amount of coffee you usually get in these, they are hellishly expensive – but we are really talking about a whole gift for under £10 here. If the person you are buying for is rarely without a mug of coffee in their hand, this gift will be  perfect.

Expensive Undergarments

Male or female, adult, child or somewhere in between – there is always the need for socks and underpants. Ordinarily I am a ‘utility’ kind of purchaser in this department. When someone buys me some expensive stuff for Christmas, I really am thankful. They feel good, look good, and last so much longer.

You will still spend out less than £10.

Further Reading

There are loads of resources on the internet for further ideas – try searching Google for “Frugal Christmas Gifts” to end up in a sea of suggestions. You cannot escape the fact your son may want a Playstation 3 this year, but by saving money on other gifts, you might just be able to make that happen without resorting to charging your credit card or suffering in other areas of the budget.

Next year, start budgeting for Christmas gifts in January. If you already do this then fabulous! If not, budget it in. If you allow £25 in your budget for gifts, come December you will have £300 to spend on gifts for your loved ones, rather than ending up in a blind panic on December 10th wondering what to buy and how to pay for it.

Every Friday I publish “Frugal Friday!“, an open-ended series with some of the simple and best ways to really save you money both now and in the future.

• 7 Reasons My Friend is Poor
• Frugal Friday! 5 Easy Ways to Spend Less
• Frugal Friday! 7 Tips to Reduce Your Grocery Bill
• Frugal Friday! Cutting Electricity Bills
• Personal Finance: Pessimist or Frugalist?

Where I work, we use SAP for Payroll and shift planning. It’s a dog of a system, truth be told, but it does have one advantage: ready access to historical data for ‘ordinary’ people (i.e. non-SAP administrators) like myself.

I decided to pull out how many hours I have worked each month since I have been there, to see if the stages of my life could be identified easily in the hours that I had worked each financial year. It only took  about an hour to do in total, and most of that was spent inputting the data onto my own spreadsheet for graphing purposes.

What I found, shocked me.

Seven Years in a Graph

Getting Married

If you have read why this blog even exists in my Financial Meltdown series, you will be aware I am now separated from my wife. If we delve into the year I got married (2005), you can see the events as they happen in picture form.

OV is OVertime hours (i.e. staying on longer than an existing shift). OTIRD is OverTime Including Rest Days Worked. RD is Rest Days, and AL is Annual Leave taken.

In the run up to my marriage in October 2005, I was working hard to save money for the wedding, the honeymoon and the venue payments. Come October, I took a decent chunk of annual leave along with my Rest Days. When I returned to work, it was at fewer hours than before with some more annual leave used.

At the beginning of our marriage, life was good. We enjoyed each others’ company, and thus I was spending less time at work. I did the minimum required for a while just so we could be together.

The Honeymoon Period

After I got married, I virtually stopped working over my alloted hours at all. I did very little overtime at all for 2 years. I was enjoying life, enjoying being with my wife, and not realising I was running up thousands of pounds of my own debt and her as well.

It looks good, but right where that graph drops off at the end, things began to go sour. I quietly realised our money situation was dire. I chose to bury my head in the sand. For two years I ignored my debts. I never missed a payment, but I was slowly heading toward implosion. My wife added her own issues to mine.

Our relationship did much as the graph did. Rolled down hill. Rapidly.

End of the Road

I began working harder again. As much to make more money as it was to spend more time out of the house away from the woman I had married. It was the nail in the coffin for our relationship – as if one were needed at all. I still stuck my head in the sand but at least I felt better for working more.

Towards the end of that graph, crunch time came. My wife left me, I handed back my home to the landlord, and I had my financial meltdown.

And I took my head out of the sand at last.

The Future (and Now)

I (and you) will have to wait until the end of this financial year to see my recovery in pictures. Assuming I get to the end of this financial year still in gainful employment.

Does your life play out in the hours you work?

• My Financial Meltdown: Part 4
• Weekly Roundup #3
• Dig Yourself Out of Debt: Know What You Owe
• Credit Card Analysis: From Hell to Heaven
• Two Steps Forward, Three Steps Back

Several weeks ago I was invited to spend the day with my father at the Amberley Vintage Car Show. Old cars don’t really do anything for me, but it was a fantastic opportunity to spend the day with someone I love dearly, and had important bridges to start building with again. If you have read my Meltdown Series, you’ll know where I’m coming from.

The weather was not great, but it refrained from raining for most of the day. I got picked up by my father in his lovingly restored Sunbeam that he was exhibiting at the show (that’s the beast in the picture below).

When we arrived, we parked up, and spent the whole day wandering around, looking at the exhibits, taking lots of photos and paying extortionate prices for food and drink. Note for the next time: take a picnic!

Some light entertainment was provided by this car, a 1927 Austin Heavy 12/4 Windsor Saloon. It looked absolutely terrible, and the sign attached to the front just made both of us fall about laughing for about 20 minutes. Simple things.

Most importantly though, we spent the whole day together. We both had a wonderful day, and despite my earlier post about the potential for redundancy, I felt better. I updated him on my divorce, my money situation, and how I was coming along with my goals. I also discussed some potential career options should the worst happen.

He was supportive, he listened, and he offered ideas.

I was also shocked at the response my post generated from my friends around the blogosphere. Thank you to all who commented.

Wherever you are, and in whatever state, never forget the importance of support from your family and friends. They will cheer you on when you are up, and cheer you up when you are down.

• Dig Yourself Out of Debt: Spend Less Than You Earn
• Frugal Friday! 7 Tips to Reduce Your Grocery Bill
• Six of the Best! September 2009
• Patience is a Virtue
• Dig Yourself Out of Debt: Cleaning Up

I am feeling a little blue today.

It seems that life takes great pleasure in kicking you when you are down, and today has been no exception.

One Step Forward

It started off well: I should have been off work today enjoying my long weekend, but instead I had arranged to go into work for 8 hours overtime (6am to 2pm).

The day got even better when I was asked to stay until 6pm instead. 12 hours at time and a half.

Despite how facetious that may sound, my regular readers will know I am working to pay off my debt before New Years Day 2010, at the very latest. A renewed sense of urgency was provided by my employer when they sent round an email two months ago warning that we were facing a significant funding short-fall over the coming years, and salary cuts were not outside the realms of possibility. Any and all overtime is therefore extremely welcomed, and worked in earnest towards my goal.

Two Steps Forward

As I was edging closer to being one or two months away from being able to pay off my largest, final debt, I phoned my loan provider today to ask what the settlement figure would be if I paid today. I couldn’t of course, but I wanted to know precisely how far away I was, as simply calculating on the loan outstanding is only half the equation.

It’s quite a complicated affair. There is an early settlement fee of 1 months interest if settled early at all, or 2  months interest if paid before at least 50% of the loan term has passed. There is also the added complication of a scaled percentage of the loan insurance being refundable, depending on what stage the loan is at.

If I paid today, I have precisely £8,036.64 outstanding (or $12,726 USD for my readers across the pond).  That is still £2,200 more than I have, so paying today wasn’t an option. But next month could well be!

One Step Back

All sounding quite good so far isn’t it?

Except, as of next month my eligibility for a 56% loan insurance refund expires. From next month onwards until sometime late in 2010, I become eligible for only a 26% refund instead. Despite my £415 payment next month, I will actually owe more afterward than I do this month. The settlement figure for next month will be in the region of £8,400. Canceling the insurance altogether whilst tempting, is not viable due to…

Two Steps Back

I found an email from the Big Boss with an update on the 5 year forecast for our organisation. It re-iterated the problem in the last email we all received, but put it starkly that despite looking initially at non-pay budgets, there will have to be cuts.

Department heads have been asked to identify 2% savings for next year, saving as a whole £5 million for 2010/2011. If it stopped there, I would not be too concerned. A one-off saving of £5m in an organisation the size of ours would be achievable with relatively little pain and likely no compulsory redundancy whatsoever. That £5 million though is merely the tip of the iceberg.

After 2010/2011, we will need to save £7.5 million every year until at least 2015.

Compulsory redundancy across the entire organisation is a certainty. My department may be insulated from the initial round, but I do not see how we can reasonably escape the entire period unscathed. Bad, bad times are ahead and I really dislike this feeling. I have worked for the same organisation for coming close to 8 years. I enjoy my job, I am good at it. The pay enables me to plan for my future.

Without it, and in the current financial climate, I no longer have a sense of direction.

Even the best case scenario is emotionally unpleasant – 5 whole years of wondering if I will have a job month after month. The recession has thrown my 5 Year Plan (and countless others, of course) out the window. My dream of becoming a home-owner in 4 years time, faded with this evening’s sunset.

Three Steps Back

A letter from my solicitor had landed on the mat for me when I got home.

Half expecting some good news, it was instead, the third and final kick of today. My wife (who wanted the divorce in the first place) has decided to contest it and defend the matter in court.

As she is bankrupt and to my knowledge unemployed, the public purse will be paying for her defense courtesy of Legal Aid, while I continue to pay for my solicitor and subsequent court hearings out of my own pocket, if there is any money in them come the end, given Kick Two.

Closing Thoughts

I must get consumer-debt free, and soon. It is reasonably likely that employment will continue for at least another year before anything starts rumbling in my direction; yet I cannot help but worry about “What if I get made redundant tomorrow?”. All my hard work over this year would virtually have been for nothing.

All my hopes, all my dreams, all my plans, gone in a single stroke.

What will I do?

• Weekly Roundup #4: The Illness Edition
• A Fundamental Question
• 6 Mistakes That Doubled The Price of My Car
• 5 Things I Will Do When Debt Free
• My Financial Meltdown: Part 3