PH Debt-free wannabe thread!
Discussion
I doubt I'll get much response to this, but is there anyone on PH who is currently in debt, and trying to get out of it?
I am.
Long story short:-
I've been in debt most of my life. Last year, I was made redundant but got a job straight away and was (with some help) able to clear all but one debt with my redundancy pay out, a credit card with about £2K on it. I even had the money to pay it off..... but I didn't have a car.
So doing what many PHers do I decided I would buy a car. A Clio 172 which subsequently cost me £2K in 3 months and I got rid of thinking the pain was never going to end.
So, I was now in £4K of debt, so I thought (depression was very much clouding my judgement at this point) if I was going to be in debt, I should have a much nicer car, got a 350Z (which I paid well over the odds for) and for a little while, I was happy...
But it was short lived, and eventually I felt very uncomfortable with the circa £10K+ debt I now found myself in, and I couldn't enjoy the car as much because I always felt like I was just 1 big bill away from catastrophe.
I am also contracting, it keeps being extended but it could end at any time, which was also an uncomfortable feeling.
So, I've made a start, I bought a Ford Puma for £1400. It costs £250 a year to insure, £35 for a tyre (instead of £200+), nearly 40 MPG instead of 20, and the road tax has halved. It seems fairly unlikely that it could throw any enormous bills my way, but if it does, it'll get scrapped! I've insured and taxed it for a year, and it is hopefully 9 months away from needing anything done at all.
This weekend, I've sold the 350Z for £4500. With this I've paid off a credit card and its left me with some money in the bank.
So I now have £7250 debt left on my loan. I have been told that my contract should take me up till September but maybe longer (I've already out-stayed what I thought I would), I take home about £1850 a month, but only pay £200 rent, £12 for my mobile, and apart from that the rest is food, beer and petrol money.
My plan at the moment is to let the money build up in my account, and wait and see what the situation is come September. If I get extended again, its possible I may be able to clear it by the years end, but of course it'll be nice to have something to fall back on in case I lose my job.
So that's my plan, anyone else embarking on a plan to become debt-free?
I am.
Long story short:-
I've been in debt most of my life. Last year, I was made redundant but got a job straight away and was (with some help) able to clear all but one debt with my redundancy pay out, a credit card with about £2K on it. I even had the money to pay it off..... but I didn't have a car.
So doing what many PHers do I decided I would buy a car. A Clio 172 which subsequently cost me £2K in 3 months and I got rid of thinking the pain was never going to end.
So, I was now in £4K of debt, so I thought (depression was very much clouding my judgement at this point) if I was going to be in debt, I should have a much nicer car, got a 350Z (which I paid well over the odds for) and for a little while, I was happy...
But it was short lived, and eventually I felt very uncomfortable with the circa £10K+ debt I now found myself in, and I couldn't enjoy the car as much because I always felt like I was just 1 big bill away from catastrophe.
I am also contracting, it keeps being extended but it could end at any time, which was also an uncomfortable feeling.
So, I've made a start, I bought a Ford Puma for £1400. It costs £250 a year to insure, £35 for a tyre (instead of £200+), nearly 40 MPG instead of 20, and the road tax has halved. It seems fairly unlikely that it could throw any enormous bills my way, but if it does, it'll get scrapped! I've insured and taxed it for a year, and it is hopefully 9 months away from needing anything done at all.
This weekend, I've sold the 350Z for £4500. With this I've paid off a credit card and its left me with some money in the bank.
So I now have £7250 debt left on my loan. I have been told that my contract should take me up till September but maybe longer (I've already out-stayed what I thought I would), I take home about £1850 a month, but only pay £200 rent, £12 for my mobile, and apart from that the rest is food, beer and petrol money.
My plan at the moment is to let the money build up in my account, and wait and see what the situation is come September. If I get extended again, its possible I may be able to clear it by the years end, but of course it'll be nice to have something to fall back on in case I lose my job.
So that's my plan, anyone else embarking on a plan to become debt-free?
Great stuff!
I was so close to being out of it that it's almost unforgivable I am back in it again, but there's no point in dwelling on it, this time I'm determined to be free of it and once I am, I will never get a loan or credit card to buy stuff again (well maybe a CC just for the protection it affords).
I was so close to being out of it that it's almost unforgivable I am back in it again, but there's no point in dwelling on it, this time I'm determined to be free of it and once I am, I will never get a loan or credit card to buy stuff again (well maybe a CC just for the protection it affords).
I have about £2590 on a credit card, and around £950 on a small personal loan. Aside from that, nothing. The credit card was used to fund a higher education course and gets a good chunk taken out of it each month. It's also 0% for the next few months. The loan I got about 2 years ago for a car when I found myself car-less.
The loan will be gone this year (hopefully by summer) and the credit card will be down to hopefully ~£1k by Christmas. I've got enough to pay them both off in one hit, but we have certain commitments coming up and it's doing no damage at the moment sat there..
Jim
The loan will be gone this year (hopefully by summer) and the credit card will be down to hopefully ~£1k by Christmas. I've got enough to pay them both off in one hit, but we have certain commitments coming up and it's doing no damage at the moment sat there..
Jim
TameRacingDriver said:
I will never get a loan or credit card to buy stuff again (well maybe a CC just for the protection it affords).
Nail on head. Learn to save up for things. I know there are many advocates of Finance on here but they use Finance for a reason i.e. not to pay for shiny things that they can't afford!Nice one Jim - keep us posted - I will do the same!
Fido - I've learned in the hardest way possible after many years of not listening to people. I really wished I listened to people a lot sooner, and my life would have been better for it. My parents are very frugal with their money, so I'm not sure where I got my careless attitude from, but I've definitely learned my lesson this time. I think for me, its not liking the lost freedom that debt creates, it really is like an invisible ball and chain, and I've become deeply uncomfortable with it.
Fido - I've learned in the hardest way possible after many years of not listening to people. I really wished I listened to people a lot sooner, and my life would have been better for it. My parents are very frugal with their money, so I'm not sure where I got my careless attitude from, but I've definitely learned my lesson this time. I think for me, its not liking the lost freedom that debt creates, it really is like an invisible ball and chain, and I've become deeply uncomfortable with it.
Good luck with clearing your debts - I can imagine that it's a real psychological weight to bear. When I first moved to London aged 23 I essentially lived for 3 and a half years earning just about enough to cover my rent and living expenses. I'm sure that I ended up close to depression just working to afford to live.
Conversely, now that I've actually got no debts and have savings, I'm finding it hard to prevent myself from committing to more debts to buy shiny metal. Bizarre.
See if you can take a course of drastic action to reduce your debt by paying off £1k per month. You'd still have c. £650 to live off after rent which is doable. Just think, by November you'll have virtually no debt left. That's gotta be a good incentive. It'll just get more difficult to clear the older you get and the more committments you have.
Conversely, now that I've actually got no debts and have savings, I'm finding it hard to prevent myself from committing to more debts to buy shiny metal. Bizarre.
See if you can take a course of drastic action to reduce your debt by paying off £1k per month. You'd still have c. £650 to live off after rent which is doable. Just think, by November you'll have virtually no debt left. That's gotta be a good incentive. It'll just get more difficult to clear the older you get and the more committments you have.
Edited by JuanGandini on Thursday 23 May 12:33
Good luck with clearing the debts down, it will happen if you keep focused. When I was young (19/20) I built up a bit of credit card debt (only £4k, but I wasn't earning much back then) and took ages to get out of. Never buy anything to cheer yourself up in this situation, as you've already noticed you just resent it in the longer term.
It's amazing how saving the odd few pounds here and there can make a big difference over time, e.g. my wife and I had iphones on 35/mth contracts each. At the end of the contract instead of renewing and "upgrading" I switched the contracts to a £10/mth version and stuck with our existing iphones. I would have been bored of an iphone5 by now anyway and I've saved my self some money.
Look at all of your monthly direct debits - what can you give up and what can you renegotiate. I rang up Virgin Media and said I'm leaving for Sky and saved my self £15/mth.
Weekly food shopping - I switched to doing the weekly food shop online, although I pay delivery I have a set budget and stick to it. I always overspent walking around the supermarket.
What junk can you sell on Ebay? it's a bit of an effort but if you sell something each week it's not so bad. I must take note of my own advice, I've got stuff to sell but haven't got around to it.
But remember, clearing the the debt down is half the battle. You've got to remain focused once you're there, don't just build it back up again but get into the habit of saving a little bit every month and then buying things (but don't clear out your entire savings pot!!).
This last phase can take quite a while but you'll feel a lot better at turning the want - credit - purchase around to want - use savings - buy cycle
It's amazing how saving the odd few pounds here and there can make a big difference over time, e.g. my wife and I had iphones on 35/mth contracts each. At the end of the contract instead of renewing and "upgrading" I switched the contracts to a £10/mth version and stuck with our existing iphones. I would have been bored of an iphone5 by now anyway and I've saved my self some money.
Look at all of your monthly direct debits - what can you give up and what can you renegotiate. I rang up Virgin Media and said I'm leaving for Sky and saved my self £15/mth.
Weekly food shopping - I switched to doing the weekly food shop online, although I pay delivery I have a set budget and stick to it. I always overspent walking around the supermarket.
What junk can you sell on Ebay? it's a bit of an effort but if you sell something each week it's not so bad. I must take note of my own advice, I've got stuff to sell but haven't got around to it.
But remember, clearing the the debt down is half the battle. You've got to remain focused once you're there, don't just build it back up again but get into the habit of saving a little bit every month and then buying things (but don't clear out your entire savings pot!!).
This last phase can take quite a while but you'll feel a lot better at turning the want - credit - purchase around to want - use savings - buy cycle
Interesting thread.
3 weeks ago I got a quote to get my (restored) car resprayed. Gone to the best so top money.
Realised I needed to get the money together and was already at just £20 left in the bank account at this point. Put some bits and bobs (mainly car parts and clothes) on Ebay and along with halting spending on anything but petrol, food and one night out I've got over £500 already, which should be doubled in two weeks time.
3 weeks ago I got a quote to get my (restored) car resprayed. Gone to the best so top money.
Realised I needed to get the money together and was already at just £20 left in the bank account at this point. Put some bits and bobs (mainly car parts and clothes) on Ebay and along with halting spending on anything but petrol, food and one night out I've got over £500 already, which should be doubled in two weeks time.
Cheers for the comments I'm quite clear in my head at what I've got to do. Hopefully I can chuck circa £1K at the debt, but rather than do that, I'm going to try and keep back about £800 a month saved, while continuing with the £212 monthly payment, the money will come in handy if I find myself out of a job.
I am actually quite confident though if it came to it that I could live on the JSA in the short term, maintaining my savings, because my GF has said she will not ask for the rent while I am out of work.
We do like to have fun, but we have no kids and she has a small mortgage, and her car is paid for. My car is also mine, I just have the debt.
I do have quite a bit of stuff that will find its way to "the bay".
Good ideas there too, there are a lot of things we can change, but our expenses thankfully are not large.
I'll blog my progress on here from time to time (probably whenever I make any progress). Feel like I'm on a mission, and surprisingly, I'm not missing the 350Z at all, its like a weight has been lifted and already I feel happier.
I'm quite clear in my head at what I've got to do. Hopefully I can chuck circa £1K at the debt, but rather than do that, I'm going to try and keep back about £800 a month saved, while continuing with the £212 monthly payment, the money will come in handy if I find myself out of a job.I am actually quite confident though if it came to it that I could live on the JSA in the short term, maintaining my savings, because my GF has said she will not ask for the rent while I am out of work.
We do like to have fun, but we have no kids and she has a small mortgage, and her car is paid for. My car is also mine, I just have the debt.
I do have quite a bit of stuff that will find its way to "the bay".
Good ideas there too, there are a lot of things we can change, but our expenses thankfully are not large.
I'll blog my progress on here from time to time (probably whenever I make any progress). Feel like I'm on a mission, and surprisingly, I'm not missing the 350Z at all, its like a weight has been lifted and already I feel happier.
Hi tameracindriver,
You will have seen my thread about my 350 and know what I have said in there.
However I have made a plan to reduce existing debt out with the car loan.
The main thing I did was pay off a chunk of my card debt with eBay sales (I am quite good at painting warhammer stuff and it usually nets me about £350- £600 a month over last 3 months. This has helped massively and once card debt is cleared this sort of thing goes into mortgage fund.
All my debt has been put onto one 0% card and have direct debit into it so the cash is gone at start of month, I also purposefully don't know my pins for the card so cannot use it.
I have cleared £3.5k this week which was ace, however I realise monthly payments and total value affordability are 2 very different things but that is my issue.
The plan is to have about £9k in 2 years with saving, old car sale and eBay sales and selling my bike in 2 years, yes I realise this is cash I don't yet have etc, however I would rather be saving something than nothing at all.
The GF and I are not going on any foreign hols for 2 years, just trips with her or my family (her folks live in Formby so it's great to see them) and these are camping or house sharing so very cheap, apart from car n bike loan I have low outgoings, pretty much £25 phone, £250 rent/bill money, dentist and broadband. So I have the cash to put away in savings as well as card debt. I put away about £2100 a month but get 2 bonuses a year but this is obviously not guaranteed, but if I get them it goes straight into debt which will mean I am card debt free by July not December.
I realise this is nt in any way shape or form PH logic, but it's what I am doing and for the most part have done well in clearing my existing debt which was frightening!
You will have seen my thread about my 350 and know what I have said in there.
However I have made a plan to reduce existing debt out with the car loan.
The main thing I did was pay off a chunk of my card debt with eBay sales (I am quite good at painting warhammer stuff and it usually nets me about £350- £600 a month over last 3 months. This has helped massively and once card debt is cleared this sort of thing goes into mortgage fund.
All my debt has been put onto one 0% card and have direct debit into it so the cash is gone at start of month, I also purposefully don't know my pins for the card so cannot use it.
I have cleared £3.5k this week which was ace, however I realise monthly payments and total value affordability are 2 very different things but that is my issue.
The plan is to have about £9k in 2 years with saving, old car sale and eBay sales and selling my bike in 2 years, yes I realise this is cash I don't yet have etc, however I would rather be saving something than nothing at all.
The GF and I are not going on any foreign hols for 2 years, just trips with her or my family (her folks live in Formby so it's great to see them) and these are camping or house sharing so very cheap, apart from car n bike loan I have low outgoings, pretty much £25 phone, £250 rent/bill money, dentist and broadband. So I have the cash to put away in savings as well as card debt. I put away about £2100 a month but get 2 bonuses a year but this is obviously not guaranteed, but if I get them it goes straight into debt which will mean I am card debt free by July not December.
I realise this is nt in any way shape or form PH logic, but it's what I am doing and for the most part have done well in clearing my existing debt which was frightening!
Good on you. It's not easy, but it is worth it.
I've not had any debt (bar the mortgage) for about 4 years, but every time I went into debt (for a car) I always wanted rid of the debt quickly. The benefit to that though was, whilst the cars were depreciating, it was in a way forcing me to save.
Due to threat of redundancy a while ago, I sold my Z4 Coupe, and have since learnt how to use my money a bit better. We now lease a car from my partner's work (Audi), which works out cheaper for us (money is better in the mortgage). That isn't to say the Z4 was a mistake or anything - I paid for that outright at the time (£18k when I was 24); just that I wanted to be careful.
We're now in the position that we don't owe very much on the mortgage, with maybe a year or so left to clear it if we wanted to (clear by the time I'm 30).
It is worth it, and actually, I don't feel I've missed all that much.
I've not had any debt (bar the mortgage) for about 4 years, but every time I went into debt (for a car) I always wanted rid of the debt quickly. The benefit to that though was, whilst the cars were depreciating, it was in a way forcing me to save.
Due to threat of redundancy a while ago, I sold my Z4 Coupe, and have since learnt how to use my money a bit better. We now lease a car from my partner's work (Audi), which works out cheaper for us (money is better in the mortgage). That isn't to say the Z4 was a mistake or anything - I paid for that outright at the time (£18k when I was 24); just that I wanted to be careful.
We're now in the position that we don't owe very much on the mortgage, with maybe a year or so left to clear it if we wanted to (clear by the time I'm 30).
It is worth it, and actually, I don't feel I've missed all that much.
TameRacingDriver said:
Cheers for the comments I'm quite clear in my head at what I've got to do. Hopefully I can chuck circa £1K at the debt, but rather than do that, I'm going to try and keep back about £800 a month saved, while continuing with the £212 monthly payment, the money will come in handy if I find myself out of a job.
I am actually quite confident though if it came to it that I could live on the JSA in the short term, maintaining my savings, because my GF has said she will not ask for the rent while I am out of work.
We do like to have fun, but we have no kids and she has a small mortgage, and her car is paid for. My car is also mine, I just have the debt.
I do have quite a bit of stuff that will find its way to "the bay".
Good ideas there too, there are a lot of things we can change, but our expenses thankfully are not large.
I'll blog my progress on here from time to time (probably whenever I make any progress). Feel like I'm on a mission, and surprisingly, I'm not missing the 350Z at all, its like a weight has been lifted and already I feel happier.
I think you are right to build up a rainy day fund as you never know what is round the corner, selling unwanted stuff is a great way to raise some cash and decluttering is quite healthy too I always think. If you can maintain the discipline of paying off your credit card every month then there are some cash back cards which can help save you some money but it is essential to pay them off every month. I'm quite clear in my head at what I've got to do. Hopefully I can chuck circa £1K at the debt, but rather than do that, I'm going to try and keep back about £800 a month saved, while continuing with the £212 monthly payment, the money will come in handy if I find myself out of a job.I am actually quite confident though if it came to it that I could live on the JSA in the short term, maintaining my savings, because my GF has said she will not ask for the rent while I am out of work.
We do like to have fun, but we have no kids and she has a small mortgage, and her car is paid for. My car is also mine, I just have the debt.
I do have quite a bit of stuff that will find its way to "the bay".
Good ideas there too, there are a lot of things we can change, but our expenses thankfully are not large.
I'll blog my progress on here from time to time (probably whenever I make any progress). Feel like I'm on a mission, and surprisingly, I'm not missing the 350Z at all, its like a weight has been lifted and already I feel happier.
Good luck with paying off your debt.
Edited by greygoose on Tuesday 30th April 05:44
My Wife and I are working towards it, we owe about £10k I think. £8k on a cheap graduate loan and £2k on a 0% CC deal.
It should be half that by now, but I got laid off in Jan, it's a long story but it was a total hatchet job, they stole my bonus at the same time, I got another job in 5 days but the whole saga still cost me £3k or so, so when we got married last month instead of using our own money the CC had to take £2k of it, we switched it to a 0% deal the day the bill arrived.
We're both working and have decent income now so it's not a massive drain, but if much prefer the £350 a month it costs us to fund it all going into savings, I'd guess it'll take us 6-8 months to clear the card and maybe a year to clear the loan. Mortgage aside I won't borrow again - too easy to spend, too hard to give back.
It should be half that by now, but I got laid off in Jan, it's a long story but it was a total hatchet job, they stole my bonus at the same time, I got another job in 5 days but the whole saga still cost me £3k or so, so when we got married last month instead of using our own money the CC had to take £2k of it, we switched it to a 0% deal the day the bill arrived.
We're both working and have decent income now so it's not a massive drain, but if much prefer the £350 a month it costs us to fund it all going into savings, I'd guess it'll take us 6-8 months to clear the card and maybe a year to clear the loan. Mortgage aside I won't borrow again - too easy to spend, too hard to give back.
Like others I failed to listen to older and wiser people, got a credit card early on and as a result I have been in debt all of my adult life, credit cards have come down a bit then circumstances mean they go up again.
Moving to NZ and coming back cost a pretty penny too, so made a decision 18 months ago to sort it all out.
Consolidated all my debts on a single 0% credit card and have been chucking all my spare cash that I can. What was £20k 18 months ago is now £10.5k, with a view that this will be £0 in less than a years time all being well.
Moving to NZ and coming back cost a pretty penny too, so made a decision 18 months ago to sort it all out.
Consolidated all my debts on a single 0% credit card and have been chucking all my spare cash that I can. What was £20k 18 months ago is now £10.5k, with a view that this will be £0 in less than a years time all being well.
Dakkon said:
Consolidated all my debts on a single 0% credit card and have been chucking all my spare cash that I can. What was £20k 18 months ago is now £10.5k, with a view that this will be £0 in less than a years time all being well.
Crikey Moses. £20k on a credit card - what did you buy?
Know what you mean, at my worst I've been £15K in debt, totally careless, didn't give a s
t attitude, and I've been like it all my life. Only now do I appreciate having been made redundant how stty that will end up if I hit hard times.
Mine was spent on cars, hifi equipment, gadgets and partying.
t attitude, and I've been like it all my life. Only now do I appreciate having been made redundant how stty that will end up if I hit hard times.Mine was spent on cars, hifi equipment, gadgets and partying.
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