We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Finally debt free!!!!
Options
tallfriar
Posts: 8 Forumite
Hi everyone,
Having made my final payment to my Abbey Zero card last month I am finally debt free, woohoo! I just wanted to post a quick note to say thanks to everyone who’s posts I read when I’m lurking on the forums, it’s really been a great help. :T
Just in case it can help anyone I've written out what has happened over the last couple of years.
I only really properly looked at my debts back in June 2006. I started to keep a record of my spending and was shocked to find out I owed a total of £36,500 :eek: :eek: and was spending up to £900 a month more than my income. I was also paying about £300 a month in interest on credit cards alone. Unfortunately I kept it to myself and it took me another 3 months to face up to it and realise that I couldn’t keep getting out more loans and credit cards to fund my overspend.
Eventually I admitted the terrible state of my finances to my girlfriend who was ridiculously understanding and helpful. From then on she really helped me to work out how to organise my finances (i.e. 0% deals on credit cards etc) and get back on track.
:idea:
Initially my credit rating was so poor that I couldn’t get any new credit cards or loans so my girlfriend very kindly (and trustingly!) let me transfer £4k onto one of her credit cards at 4.9% interest for the life of the balance. This saved me about £80 per month straight away! Part of the agreement I made with her was that I would always make sure I had enough credit to transfer it back in case she ever needed it. This made sure I didn’t just spend the credit I’d freed up because I would have felt so guilty. Eventually my credit rating recovered enough for me to get a new card with a good deal and I then paid her back.
I also moved out of my two bed flat where I lived alone and rented a room in shared accommodation which reduced my outgoings on accommodation by over a half. I then set a monthly budget for food, going out, accommodation and debt repayments (over and above the minimum payments).
Initially I found that I couldn’t keep to my monthly budget because I’d spend all of my money allocated to food in the first couple of weeks then break the budget and just carry on spending. I then decided to break my budget down to give myself a weekly budget for food and going out which I could then manage much more easily. If I ran out of money in one week it wasn’t too difficult to organise my life and spending to postpone something until the next week. :beer:
One of the biggest things I was able to do to reduce my debt was sell my car (8k). I’d got talked into buying a new one two years prior to selling it and actually lost money on it in the short term. However, being able to stop the repayments freed up more cash to plough into the debt at higher interest. :T
Quite early on I set myself a “debt repayment date” which was Oct 2008. It was a realistic date based on balancing the costs of living with the level of debt repayments I wanted to make. I then allowed myself to spend the money I’d allocated, but no more. If I had tried to save every penny I could I would have been debt free a little bit earlier, but probably would have spent the last 2 years with no holidays, never seeing anyone and living off rice and peas!
Once my debts were down to about 10k I was able to actually make money off the credit cards by arranging 0% deals and then putting what I would have paid off in a high interest account at up to 8.5% (A&L). I then only paid it off the day before the deal ran out. I made sure that I never ever spent on these cards by keeping them locked up in a box at home, definitely not in the wallet. In total I have made about £200 in interest on money that was allocated for debt payments (all of that coming after June 2007).
I had some help on the way with a 4k inheritance in November 2007. Whilst it didn’t seem right to use it to pay off debts I thought that it was better to use it in this way and save it back later once I was debt free. I did use some of it to pay for something that will always remind me of my Gran though.
One of the things that was most important throughout the past two years was my girlfriend. Not only was she incredibly supportive to me, but she was also paying off a large amount of her own debts. In her case they were professional study loans, unlike mine which were just to cover reckless spending! We set our debt free dates so that they would coincide and have budgeted together for the last year (after we moved in together) to make sure we both achieved them. I am certain that I would probably be in even more debt than I was if I hadn’t opened up and talked to her all those months ago. :A
So after 2 years of wrestling with my budget spreadsheet everyday and marking where every penny has gone, I have finally managed to pay off all of my debts (including student loan). Not only that, but my girlfriend has also paid off all her debts too. It is a great feeling to be spending my own money for the first time.:T
The main point for me writing all this is to help others who might think that there is no end in sight and pass on some of the things that I think were most important in helping me and I have listed these below. A lot of these were found through either the main MSE site or reading people’s posts on the forums, many thanks for all of your help.
Thanks again, sorry for it being so long, I just got carried away writing!
Having made my final payment to my Abbey Zero card last month I am finally debt free, woohoo! I just wanted to post a quick note to say thanks to everyone who’s posts I read when I’m lurking on the forums, it’s really been a great help. :T
Just in case it can help anyone I've written out what has happened over the last couple of years.
I only really properly looked at my debts back in June 2006. I started to keep a record of my spending and was shocked to find out I owed a total of £36,500 :eek: :eek: and was spending up to £900 a month more than my income. I was also paying about £300 a month in interest on credit cards alone. Unfortunately I kept it to myself and it took me another 3 months to face up to it and realise that I couldn’t keep getting out more loans and credit cards to fund my overspend.
Eventually I admitted the terrible state of my finances to my girlfriend who was ridiculously understanding and helpful. From then on she really helped me to work out how to organise my finances (i.e. 0% deals on credit cards etc) and get back on track.
:idea:
Initially my credit rating was so poor that I couldn’t get any new credit cards or loans so my girlfriend very kindly (and trustingly!) let me transfer £4k onto one of her credit cards at 4.9% interest for the life of the balance. This saved me about £80 per month straight away! Part of the agreement I made with her was that I would always make sure I had enough credit to transfer it back in case she ever needed it. This made sure I didn’t just spend the credit I’d freed up because I would have felt so guilty. Eventually my credit rating recovered enough for me to get a new card with a good deal and I then paid her back.
I also moved out of my two bed flat where I lived alone and rented a room in shared accommodation which reduced my outgoings on accommodation by over a half. I then set a monthly budget for food, going out, accommodation and debt repayments (over and above the minimum payments).
Initially I found that I couldn’t keep to my monthly budget because I’d spend all of my money allocated to food in the first couple of weeks then break the budget and just carry on spending. I then decided to break my budget down to give myself a weekly budget for food and going out which I could then manage much more easily. If I ran out of money in one week it wasn’t too difficult to organise my life and spending to postpone something until the next week. :beer:
One of the biggest things I was able to do to reduce my debt was sell my car (8k). I’d got talked into buying a new one two years prior to selling it and actually lost money on it in the short term. However, being able to stop the repayments freed up more cash to plough into the debt at higher interest. :T
Quite early on I set myself a “debt repayment date” which was Oct 2008. It was a realistic date based on balancing the costs of living with the level of debt repayments I wanted to make. I then allowed myself to spend the money I’d allocated, but no more. If I had tried to save every penny I could I would have been debt free a little bit earlier, but probably would have spent the last 2 years with no holidays, never seeing anyone and living off rice and peas!
Once my debts were down to about 10k I was able to actually make money off the credit cards by arranging 0% deals and then putting what I would have paid off in a high interest account at up to 8.5% (A&L). I then only paid it off the day before the deal ran out. I made sure that I never ever spent on these cards by keeping them locked up in a box at home, definitely not in the wallet. In total I have made about £200 in interest on money that was allocated for debt payments (all of that coming after June 2007).
I had some help on the way with a 4k inheritance in November 2007. Whilst it didn’t seem right to use it to pay off debts I thought that it was better to use it in this way and save it back later once I was debt free. I did use some of it to pay for something that will always remind me of my Gran though.
One of the things that was most important throughout the past two years was my girlfriend. Not only was she incredibly supportive to me, but she was also paying off a large amount of her own debts. In her case they were professional study loans, unlike mine which were just to cover reckless spending! We set our debt free dates so that they would coincide and have budgeted together for the last year (after we moved in together) to make sure we both achieved them. I am certain that I would probably be in even more debt than I was if I hadn’t opened up and talked to her all those months ago. :A
So after 2 years of wrestling with my budget spreadsheet everyday and marking where every penny has gone, I have finally managed to pay off all of my debts (including student loan). Not only that, but my girlfriend has also paid off all her debts too. It is a great feeling to be spending my own money for the first time.:T
The main point for me writing all this is to help others who might think that there is no end in sight and pass on some of the things that I think were most important in helping me and I have listed these below. A lot of these were found through either the main MSE site or reading people’s posts on the forums, many thanks for all of your help.
- Don’t be afraid to talk to those around you and let them help. If they don’t know they can’t help and they might let you carry on always buying the first drink thinking you earn loads of money!
- Face up to the full amount of your debts and write it all down. It’s scary, but it’s the first step to tackling them.
- Work out a realistic debt repayment schedule and a debt free date. Work out how much you can afford to pay towards your debts each month and when that means you’ll be debt free. Stick to it. It won’t work if you don’t allocate enough to living costs so don’t beat yourself up if you do want to spend some money.
- Change your lifestyle to suit your income. I moved, sold my car and stopped drinking as much. It saved me a fortune!
- Work out the best way for you to stick to a budget. For me it was having a “weekly” budget that I monitored carefully in Excel, but for others it might be daily or monthly or something completely different. As long as it helps you to know when you can and when you can’t spend money.
- Don’t be afraid to negotiate with the credit card companies. I transferred 5k to be at 0% on Virgin for 12 months at one point and they reduced their transfer fee to 1.5% rather than 3% just because I asked for it.
Thanks again, sorry for it being so long, I just got carried away writing!
0
Comments
-
Amazing. Well done you.xxDFW #414, MoneySaver, Income Booster
It Always Seems Impossible Until It Is Done.
£2,022 in 2022 #39 - Current total £2.900 -
Wow, what an inspirational story. Well done to you and your girlfriend. I hope you have something lovely planned to celebrate your new debt-free status!Total (Aug 19):€58,567 Now:€26,947
DFD:Nov 22/June 22
Mortgage: €199,712
MFD: March 2042/July 20340 -
Thanks! Clearmydebts - We decided to both put the amount we would have spent on debts in Nov towards a weekend away together so we are going to Prague at the end of this month. We've even booked ourselves in the airport lounge on the way out!0
-
That is a great and inspirational story - well done - I am so pleased for you!0
-
Just to say well done. It is SO EASY to rack up debt. It happens so quickly too, just put this on the card, just put that on the card..... I am fortunate that when I moved jobs I had 5k of shares to pay off the cards. Lucky but lesson learned. If you have no debt just don't get into it!! I admire your scheme to pay it off and hope some people will pick some of it up.0
-
:j:TWell done, don't forget to post on the Debt free roll of honour, really pleased for you and thanks for posting your journey to debt freeness.
Hope you treat your very understanding girlfriend, sounds like she deserves it.:TDFW Nerd 267. DEBT FREE 11.06.08
Stick to It by R.B. Stanfield
It matters not if you try and fail, And fail, and try again; But it matters much if you try and fail, And fail to try again.0 -
yup, she was treated to a very nice meal at a restaurant she had always wanted to try, it was a great evening!0
-
Congratulations - Thanks for sharing your story!Achieve FIRE/Mortgage Neutrality in 2030
1) MFW Nov 21 £202K now £174.8K Equity 32.77%
2) £2.6K Net savings after CCs 6/7/25
3) Mortgage neutral by 06/30 (AVC £24.3K + Lump Sums DB £4.6K + (25% of SIPP 1.2K) = 30.1/£127.5K target 23.6% 29/7/25
4) FI Age 60 income target £16.5/30K 55.1%
5) SIPP £4.8K updated 29/7/250 -
Congratulations. Now go an add your name to the roll of honour.Find out who you are and do that on purpose (thanks to Owain Wyn Jones quoting Dolly Parton)0
-
How wonderful - that is lovely to hear. It really helps me to visualise my own journey to debt freedom when I read a story like yours. Positive mental attitude & all that!
I hope you have a lovely life with all the lovely money you now have! :beer:0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 351.1K Banking & Borrowing
- 253.2K Reduce Debt & Boost Income
- 453.6K Spending & Discounts
- 244.1K Work, Benefits & Business
- 599.1K Mortgages, Homes & Bills
- 177K Life & Family
- 257.5K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.6K Read-Only Boards