PH Debt-free wannabe thread!
Discussion
I used to live well beyond my means, and with a decent wage coming in as well.
At one point I had a lot of money on credit cards and a £15k personal loan, living the high life when I should have got a mortgage and knuckled down and led a sensible lifestyle.
I don't have any debt now, but the upshot is I'll almost certainly never own my own house without some massive good fortune coming my way, which is unlikely.
Having said that, I have a job I enjoy and a couple of nice (if cheap) cars as toys, and I'm happier in many ways than I was 12 years ago, even though I don't earn anything like as much.
No matter how much you earn, your lifestyle can expand to accommodate it!
At one point I had a lot of money on credit cards and a £15k personal loan, living the high life when I should have got a mortgage and knuckled down and led a sensible lifestyle.
I don't have any debt now, but the upshot is I'll almost certainly never own my own house without some massive good fortune coming my way, which is unlikely.
Having said that, I have a job I enjoy and a couple of nice (if cheap) cars as toys, and I'm happier in many ways than I was 12 years ago, even though I don't earn anything like as much.
No matter how much you earn, your lifestyle can expand to accommodate it!
I'm debt free (other than a mortgage) but the 'Mrs to be' is deeply in debt, to the tune of about £15k on relatively high interest credit cards. I've agreed to help her pay this off as it's really holding us back, so will be soon taking out a large loan to not only pay off her debt, but also pay for our wedding, house improvements and whatever else. Hopefully in 3 years or so it's all paid off and we're both debt free, but feeling slightly uncomfortable about it at the moment.
Its been many years now,but I got up to my eyes in debt when I was in my early twenties for no good reason except easy credit on a good salary. I ended up with about a year's net salary on credit cards and consumer debt. My then future ( and now ex-) wife was a financially sensible woman.
Each month we budgeted every penny. It took two years of no holidays, no meals out, cheap rent and so on and it worked. Congrats to OP - you are doing the right thing, and the sense of freedom when you get that first paycheck and realize that you owe nothing is huge.
After that I took a small car loan once,paid off quickly, and only one mortgage, also paid off ASAP. Even now,decades later,I look back on those old times and recall the nights I awoke in a sweat,wondering how I could get out of a self-created nightmare. I never did it again.
Each month we budgeted every penny. It took two years of no holidays, no meals out, cheap rent and so on and it worked. Congrats to OP - you are doing the right thing, and the sense of freedom when you get that first paycheck and realize that you owe nothing is huge.
After that I took a small car loan once,paid off quickly, and only one mortgage, also paid off ASAP. Even now,decades later,I look back on those old times and recall the nights I awoke in a sweat,wondering how I could get out of a self-created nightmare. I never did it again.
Plenty of stories to keep my mind focused on the task. 
I am really lucky in a way that I'll be able to save a lot and still have something resembling a life, due to no kids or mortgage. I've scaled back on my car and although I'll still go to the pub on a Friday, I lead a relatively modest life. It's really just going to be a case of how long my present employer keeps me on for - I'm contracted and have until September but it may be extended... Thing is I know I wont be able to pay it off by September, but another 3 - 6 months will definitely see me safe. Fingers crossed on that one.
I am really lucky in a way that I'll be able to save a lot and still have something resembling a life, due to no kids or mortgage. I've scaled back on my car and although I'll still go to the pub on a Friday, I lead a relatively modest life. It's really just going to be a case of how long my present employer keeps me on for - I'm contracted and have until September but it may be extended... Thing is I know I wont be able to pay it off by September, but another 3 - 6 months will definitely see me safe. Fingers crossed on that one.
I used to be terrible with money, I wouldn't be able to tell you to the nearest thousand how much was in my bank account, or more likely how much I was overdrawn by!!
I'm now the opposite and it helped me get my spending under control, first thing was to create a spreadsheet, current bank balance at the top, and everything that has to go out each month listed beneath with a projected monthly end balance, everything gets removed as it's paid and the current balance updated. This stops you thinking you've got more money that you have, and lets you make an educated decision about what you are planning on purchasing.
I also have a budget per week for food and going out. I take this out in cash, and when it's gone it's gone. I find spending in cash means you are less likely to fritter money away. Spend it in the pub on Wednesday, then I'm not going out on Friday!!
I've also started putting money away into a separate account to cover irregular bills, such as car tax, insurance, home insurance, maintenance charges etc. That way when these bills come they don't mess you up for that month and it smoothes everything out over the year.
I'm now the opposite and it helped me get my spending under control, first thing was to create a spreadsheet, current bank balance at the top, and everything that has to go out each month listed beneath with a projected monthly end balance, everything gets removed as it's paid and the current balance updated. This stops you thinking you've got more money that you have, and lets you make an educated decision about what you are planning on purchasing.
I also have a budget per week for food and going out. I take this out in cash, and when it's gone it's gone. I find spending in cash means you are less likely to fritter money away. Spend it in the pub on Wednesday, then I'm not going out on Friday!!
I've also started putting money away into a separate account to cover irregular bills, such as car tax, insurance, home insurance, maintenance charges etc. That way when these bills come they don't mess you up for that month and it smoothes everything out over the year.
OP - Good for you on taking a serious stand; best of luck with it.
There's an approach to do for a few months that can be helpful to make the mental re-adjustments on spending. Work out what your disposable weekly budget is, and take that out in cash on a Monday (note - not a Friday or Saturday...). Then pay cash for everything. If your wallet's empty, you can't have it. Simple. You'll run out by Thursday a couple of times, but it helps get the message home.
If you buy something online you must take out the money from your wallet and make it part of the following Monday's topup.
For it to work you must of course cut up all but one credit card, make sure that has a very low limit on it, and leave that either at home or in the car; anywhere but in your wallet really. It's just for emergencies.
There's an approach to do for a few months that can be helpful to make the mental re-adjustments on spending. Work out what your disposable weekly budget is, and take that out in cash on a Monday (note - not a Friday or Saturday...). Then pay cash for everything. If your wallet's empty, you can't have it. Simple. You'll run out by Thursday a couple of times, but it helps get the message home.
If you buy something online you must take out the money from your wallet and make it part of the following Monday's topup.
For it to work you must of course cut up all but one credit card, make sure that has a very low limit on it, and leave that either at home or in the car; anywhere but in your wallet really. It's just for emergencies.
Bluequay said:
I used to be terrible with money, I wouldn't be able to tell you to the nearest thousand how much was in my bank account, or more likely how much I was overdrawn by!!
I'm now the opposite and it helped me get my spending under control, first thing was to create a spreadsheet, current bank balance at the top, and everything that has to go out each month listed beneath with a projected monthly end balance, everything gets removed as it's paid and the current balance updated. This stops you thinking you've got more money that you have, and lets you make an educated decision about what you are planning on purchasing.
I do the spreadsheet thing aswell and usually forecast 4-6 months ahead. As a result, I've never been over-drawn and the credit card is always sub £1000. I'm now the opposite and it helped me get my spending under control, first thing was to create a spreadsheet, current bank balance at the top, and everything that has to go out each month listed beneath with a projected monthly end balance, everything gets removed as it's paid and the current balance updated. This stops you thinking you've got more money that you have, and lets you make an educated decision about what you are planning on purchasing.
The problem is, I know exactly how much money I have all the time and tend to constantly plan ways of spending this to achieve maximum enjoyment/minor debt re-payment, so that there is never anything left for savings!
I've got into a habit of paying something by the credit card now and budgeting to pay it off over the following couple of months.....and repeat. Rarely have actual cash available for spur of the moment things like weekends away and the like.
RDMcG said:
Its been many years now,but I got up to my eyes in debt when I was in my early twenties for no good reason except easy credit on a good salary. I ended up with about a year's net salary on credit cards and consumer debt. My then future ( and now ex-) wife was a financially sensible woman.
Each month we budgeted every penny. It took two years of no holidays, no meals out, cheap rent and so on and it worked. Congrats to OP - you are doing the right thing, and the sense of freedom when you get that first paycheck and realize that you owe nothing is huge.
After that I took a small car loan once,paid off quickly, and only one mortgage, also paid off ASAP. Even now,decades later,I look back on those old times and recall the nights I awoke in a sweat,wondering how I could get out of a self-created nightmare. I never did it again.
Well, you're obviously doing something right Ronan! Each month we budgeted every penny. It took two years of no holidays, no meals out, cheap rent and so on and it worked. Congrats to OP - you are doing the right thing, and the sense of freedom when you get that first paycheck and realize that you owe nothing is huge.
After that I took a small car loan once,paid off quickly, and only one mortgage, also paid off ASAP. Even now,decades later,I look back on those old times and recall the nights I awoke in a sweat,wondering how I could get out of a self-created nightmare. I never did it again.
Debt free here too, after selling my main home and bolthole. When we started renting it actually felt like a weight off my shoulders, the freedom (if I wanted it) was great...I didn't even have a 0% DFS loan to pay off
While its nice having money in the bank, I'm in a tiny rented bungalow and cash is doing nothing sat there in the bank...so it'll soon go into another place, and I'll be up to my eyeballs in debt one again, albeit in a nicer house. And I cant wait!
While its nice having money in the bank, I'm in a tiny rented bungalow and cash is doing nothing sat there in the bank...so it'll soon go into another place, and I'll be up to my eyeballs in debt one again, albeit in a nicer house. And I cant wait!
the feeling you'll get when you clear it all is well worth it, keep going.
only skim read thread but have you transferred debt to 0% cards to repay yet? if you haven't i'd advise the moneysavingexpert website, he's brilliant for this sort of stuff. i went from a performance car to an old citroen zxtd that i stuck usd cooking oil in when i decided to do this. getting clear is an immeasurably satisfying feeling.
best of luck to you.turn this into a blog if it helps.
only skim read thread but have you transferred debt to 0% cards to repay yet? if you haven't i'd advise the moneysavingexpert website, he's brilliant for this sort of stuff. i went from a performance car to an old citroen zxtd that i stuck usd cooking oil in when i decided to do this. getting clear is an immeasurably satisfying feeling.
best of luck to you.turn this into a blog if it helps.
mnkiboy said:
I'm debt free (other than a mortgage) but the 'Mrs to be' is deeply in debt, to the tune of about £15k on relatively high interest credit cards. I've agreed to help her pay this off as it's really holding us back, so will be soon taking out a large loan to not only pay off her debt, but also pay for our wedding, house improvements and whatever else. Hopefully in 3 years or so it's all paid off and we're both debt free, but feeling slightly uncomfortable about it at the moment.
Don't do it, honestly don't. I just got married, and I'm very happy to be married, but there will never be a time in your life when wasting money sounds like a good idea "you only do it once!" "it's out special day" "oh we HAVE to have X". Even with the most pragmatic bride in the world many thousands of pounds will be spend for zero return and hundreds will be spent on details that few will notice and none will remember.
Getting Married is great fun, even putting aside the nerves and worry, but ultimately it's just a day, there's no lasting legacy from it, no return on investment- just a massive hang-over and some nice photos.
By all means refinance existing debt to make it cheaper to repay, but don't borrow money to pay for a Wedding, if you really want to be married - have a wedding you can afford now - you can get married for about £400 if you want, if you simply MUST have a more lavish affair save up for it. We ended up £2k in debt after ours because I lost my job 2 months before the day and my bonus with it and it annoys me every day.
Honestly I LOVE being married, but you'll be pretty pissed off at £xxx going to the loan people every month LOOOOONG after the buzz of call your other half Mrs. Mnkboy has worn off.
Good topic.
I know exactly the feeling the OP is going through. I had around £20k in debt at the end of 2011. £17k ish in cars, the rest on 2 credit cards. I only had one Car but had £10k on the 330d i used to have until earlier this year (£300 per month HP) and around £7k on my previous car (£266.5 on my earlier 320d - which i PX'ed but didn't pay off the loan using the cash the dealer gave me, as I lost my job before I could pay it off, when I was out of work for 3 months, I had around £700 monthly out goings - mostly cars-, on the JSA income.. do the maths. it wasn't pretty).
2012 was a hard slog, but earlier this year I VT'd my 330d, paid the £900 to BMW, didn't pay any extra charges due to damage to the car (there were plenty of paint scratches etc). Paid off the loan using a CC balance transfer - so 'just' have circa £3.8k debt left on CC's.
Like you said, getting rid of the 330 was massively liberating! No more monthly payments (loans that is, like you, I plan to attack the credit card debt down to zero, by the end of the year). Take home pay is less, at £1500 (less £300 fuel bills to get to and from work), but I pay less rent as I still live at home.
I'm also contracting, it runs till the end of August, but a good chance of becoming perm in June(ish). Even so, I also plan to be able to get by on JSA in the worst-case scenario if i become jobless in September.
However, the idea is that by paying down everything, I'll then save and be in a position to move out if I do get a perm opportunity in Cambs.
Good luck with your debt clearing, and also your job situation in Sept!
Mo
I know exactly the feeling the OP is going through. I had around £20k in debt at the end of 2011. £17k ish in cars, the rest on 2 credit cards. I only had one Car but had £10k on the 330d i used to have until earlier this year (£300 per month HP) and around £7k on my previous car (£266.5 on my earlier 320d - which i PX'ed but didn't pay off the loan using the cash the dealer gave me, as I lost my job before I could pay it off, when I was out of work for 3 months, I had around £700 monthly out goings - mostly cars-, on the JSA income.. do the maths. it wasn't pretty).
2012 was a hard slog, but earlier this year I VT'd my 330d, paid the £900 to BMW, didn't pay any extra charges due to damage to the car (there were plenty of paint scratches etc). Paid off the loan using a CC balance transfer - so 'just' have circa £3.8k debt left on CC's.
Like you said, getting rid of the 330 was massively liberating! No more monthly payments (loans that is, like you, I plan to attack the credit card debt down to zero, by the end of the year). Take home pay is less, at £1500 (less £300 fuel bills to get to and from work), but I pay less rent as I still live at home.
I'm also contracting, it runs till the end of August, but a good chance of becoming perm in June(ish). Even so, I also plan to be able to get by on JSA in the worst-case scenario if i become jobless in September.
However, the idea is that by paying down everything, I'll then save and be in a position to move out if I do get a perm opportunity in Cambs.
Good luck with your debt clearing, and also your job situation in Sept!
Mo
VinceFox said:
the feeling you'll get when you clear it all is well worth it, keep going.
only skim read thread but have you transferred debt to 0% cards to repay yet? if you haven't i'd advise the moneysavingexpert website, he's brilliant for this sort of stuff. i went from a performance car to an old citroen zxtd that i stuck usd cooking oil in when i decided to do this. getting clear is an immeasurably satisfying feeling.
best of luck to you.turn this into a blog if it helps.
Yes I look forward to that feeling, it's frustrating to think that this time last year I was unbelievably close to being out of debt, only for bad decisions compounded with depression taking me deep into the mire again only skim read thread but have you transferred debt to 0% cards to repay yet? if you haven't i'd advise the moneysavingexpert website, he's brilliant for this sort of stuff. i went from a performance car to an old citroen zxtd that i stuck usd cooking oil in when i decided to do this. getting clear is an immeasurably satisfying feeling.
best of luck to you.turn this into a blog if it helps.
I've thought about the cards, but I don't have any now, just the loan and I doubt I'd find a 0% card with enough on it to transfer the balance, and I was turned down for one 4 months ago.
I will be turning this into a blog
Mo D said:
Interesting story
Interesting read, cheers, good luck to you too, keep us posted...I managed to pay off circa 20k last year on credit cards and loans (and still have some to go)...
Before I get (almost rightly) jumped-on for amassing what I and probably most consider a huge amount - the spend was mainly on buying out partner from a house, rather than boozing etc - and all my cards are 0% (well 3% for transfers), plus a couple of low-interest loans, which I've since paid off (for a house deposit).
I my defence I created a pretty decent spreadsheet tracking loans, cards end-dates of special offers etc and it even projects the time I will be debt free (less mortgage) - currently showing Feb next year all things remaining equal, so I've never been hit with a 22% apr nightmare.
Whilst I probably could have tickled along paying minimum amounts on 0%, I just found having debt incredibly stressful, and I have to say its very liberating paying off a card, and having the 'extra' money each month to pay off additonal amounts off my remaining cards. In fact its like effectively winning a few hundred pounds a month : )
Before I get (almost rightly) jumped-on for amassing what I and probably most consider a huge amount - the spend was mainly on buying out partner from a house, rather than boozing etc - and all my cards are 0% (well 3% for transfers), plus a couple of low-interest loans, which I've since paid off (for a house deposit).
I my defence I created a pretty decent spreadsheet tracking loans, cards end-dates of special offers etc and it even projects the time I will be debt free (less mortgage) - currently showing Feb next year all things remaining equal, so I've never been hit with a 22% apr nightmare.
Whilst I probably could have tickled along paying minimum amounts on 0%, I just found having debt incredibly stressful, and I have to say its very liberating paying off a card, and having the 'extra' money each month to pay off additonal amounts off my remaining cards. In fact its like effectively winning a few hundred pounds a month : )
I'm currently in about £6k in debt. However around £4k is on my bike, paying back £125 a month, 0% interest for the three years (can pay back early if need be).
£1k to my brother for the deposit for the bike (paying back £200 a month), and £1k on my credit card (0% interest until August next year).
I'm lucky (in a way) to be living with parents still, so pay £150 a month in rent, phone bill could be less (around £40 a month), and the gym is £20 a month.
I used to really struggle with my money, it didn't help having a car that liked to drink (528i, spending £300 a month on fuel). My bike costs me £70 a month, so even with the repayments, I'm better off.
I should be debt free from my brother in around five months, then I can continue to pay off the credit card at £100 a month.
I used to have an overdraft as well, it started of at £50, but within months it was at £550, plus having to pay £30 a month in fees. But sold some shares to pay that off and now only have a £50 overdraft on my spare account (which I only have due to my phone contact coming out of it).
I'm unsure about what to do with the bike repayments though, part of me thinks that its interest free, so might as well keep it going for the three years, but part of me wants to get it paid off ASAP.
One thing I was very surprised at was how easily I got my credit card. I have very little credit history, but was offered £2,000 straight away (wanted the credit card to pay for my bike license and gear, to save money in the long run).
So hopefully in 10 months time, I'll be debt free. My target is before the end of 2013 (apart from the bike).
£1k to my brother for the deposit for the bike (paying back £200 a month), and £1k on my credit card (0% interest until August next year).
I'm lucky (in a way) to be living with parents still, so pay £150 a month in rent, phone bill could be less (around £40 a month), and the gym is £20 a month.
I used to really struggle with my money, it didn't help having a car that liked to drink (528i, spending £300 a month on fuel). My bike costs me £70 a month, so even with the repayments, I'm better off.
I should be debt free from my brother in around five months, then I can continue to pay off the credit card at £100 a month.
I used to have an overdraft as well, it started of at £50, but within months it was at £550, plus having to pay £30 a month in fees. But sold some shares to pay that off and now only have a £50 overdraft on my spare account (which I only have due to my phone contact coming out of it).
I'm unsure about what to do with the bike repayments though, part of me thinks that its interest free, so might as well keep it going for the three years, but part of me wants to get it paid off ASAP.
One thing I was very surprised at was how easily I got my credit card. I have very little credit history, but was offered £2,000 straight away (wanted the credit card to pay for my bike license and gear, to save money in the long run).
So hopefully in 10 months time, I'll be debt free. My target is before the end of 2013 (apart from the bike).
Yep I second this. I make around £60 a month in interest and its a great feeling
I am however contemplating buying a new (to me) car which will involve probably around £10k of finance over 3 years at £300 a month
I want to keep the savings for a rainy day
(This thread is making me think maybe I don't need that new car though!)
I am however contemplating buying a new (to me) car which will involve probably around £10k of finance over 3 years at £300 a month
I want to keep the savings for a rainy day
(This thread is making me think maybe I don't need that new car though!)
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