Staying debt free

steveouk
steveouk Posts: 355
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edited 7 April 2015 at 4:52PM in Debt-free wannabe
There seems to be a lot of advice around about getting free from debt but not so much about how to stay free.


This time last year I was juggling a number of credit cards and also had a number of joint expenses on my credit card. So over the last six months all of the debts have been paid off which is great. I feel good having "no" debt - I say that as I have kept a Barclaycard which I have used a little. In terms of mortgage application I thought it would do good to have a card and be paying it off every month. I have not spent more than £150 on it but do feel this is too much.


I said to my wife how great it is that I cleared my debts she said yes but she will reserve the celebrations as I have done it before and ended up a few months down the line with debts piled up again.


So I suppose my question is how to keep control?


I am doing the following at the moment.
  • At the start of each month I transfer the required amount to our joint account, transfer what I can to my savings account and leave only around £50 in my current account to cover 2 direct debits.
  • I have a jar for 20p and £2 coins and throw other change in there when there is too much in my wallet - this will go into a savings account when the jar is full.
  • My savings are in the best interest account (Santander 123).
  • I am going to switch to pay as you go when my mobile contract is up.
  • All our house bills are as low as possible while we save more money towards a house deposit.
  • I do all the food shopping and where I can I buy own brand or bulk buy when offers are on etc.
I suppose for me the problem comes with little things and present buying. I am a bit of a choc addict so tend to buy too much of it and also buy lots of little presents for my other half - chocolate cake etc. For example she wants a huge £15 Thorntons Easter egg, even if she buys one for me its still £15!


I have a little app to track what I spend but am not great at using it and I suppose its not the keeping track its the stopping spending in the first place. So I guess I just need to stay away from the shops as much as possible and also say the money mantras! Will this work?!

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  • KirstyO
    KirstyO Posts: 287
    Debt-free and Proud!
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    YOU NEED A BUDGET!


    This glorious piece of software can help you plan for all of your gift spending, its easy to set up, there are lots of video and webinars and forums to help you if you get stuck and many on here swear by it.


    It works to change your way of thinking so that instead of living by your bank balance, you live by your budget. You assign all of your money to categories when you get paid, every last penny gets given a job. It makes it easy to see where you need more money and where you are spending money now that you don't need to.


    You can change the job that the money has been given as you go along, but that means you have to take it from somewhere else. In other words you are thinking about every spending decision you make, and in turn making better decisions.


    There's a free trial on the website which is good for 34 days. Give it that amount of time and see if it works for you. If it does it might cost you £20-30 to get a full copy but the long term benefits (not getting into debt again!) really can't be measured.


    I think something really structured like this will rewire your brain to not spend on credit as you're only allowed to budget money you have (not credit allowances - you can continue to use credit but you must be able to pay for it month by month).


    Once your brain has been re-educated, it should be easier and faster for you to see if your old habits are sneaking back, and how to fix them before they become problems again.


    Good luck!
    Debt free on 2nd January 2015
    Next savings goals:
    £5k emergency fund
    £4k holiday of a lifetime fund
  • steveouk
    steveouk Posts: 355
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    Hi,


    Thank you. I did actually use YNAB trial version last year and yes I think it is good but I am trying to move towards cash spending so that it hurts to spend! Also I had way to many different accounts last year and yes YNAB drew them altogether but in actual fact there was no need for many of the accounts. So I have gone from 5 credit cards to 1, and 5 current accounts to 1. Things were way too complicated!


    I think maybe I could use the principle of giving money a job by thinking in advance what my spending will be for the month and dividing up my cash spending money maybe into some envelopes?


    I just need to stay away from the credit card as much as possible though there are time when its cheaper to pay by card eg train tickets!
  • KirstyO
    KirstyO Posts: 287
    Debt-free and Proud!
    Forumite
    Essentially YNAB is just an electronic version of envelopes, so if that helps you then it's a good way to go.


    If you're really that bad with credit, maybe give it a break for a while? Just use debit? If you absolutely insist on using the old credit card put on small purchase on each month (max £20) and then don't let the card leave a safe place of your choice at home, and pay in full each month. This way you'll still be showing up as behaving on a credit file, and you will break your attachment to it.


    Or if dropping to £20 straight away is too much why not reduce your self imposed limit by £10 a month until it is manageable?
    Debt free on 2nd January 2015
    Next savings goals:
    £5k emergency fund
    £4k holiday of a lifetime fund
  • steveouk
    steveouk Posts: 355
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    ok thank you.


    any ideas on keeping spending over this weekend under control?


    Staying with family so will probably have to take some wine and also owe my aunt and uncle a meal but it just gets so expensive going out for food!
  • steveouk
    steveouk Posts: 355
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    Thank you. So I suppose you could apply what you say to clothes - I have enough. and maybe junk food - I don't need anymore than a few treats in the weekly shop. At the moment I go out and buy packs of cake etc from the shop around the corner most days - we live right next to the town centre!
    Saying that I did manage to go into Tesco and walk around and out again today!
    I suppose there is bowling tonight and I don't go out much so that will cost a bit but just no cake for a week should more than cover it!
    Also I am going to have to try hard to not buy the massive Easter egg my wife wants - maybe I will promise her one next year and save up for it I know its only £15 but spending that ten times over the course of two weeks on various things soon adds up!
  • KirstyO
    KirstyO Posts: 287
    Debt-free and Proud!
    Forumite
    youre right, it does soon add up which is why you need a mantra that you check with yourself every time you come to make a spending decision...


    Do I need it?
    Can I afford it?
    Debt free on 2nd January 2015
    Next savings goals:
    £5k emergency fund
    £4k holiday of a lifetime fund
  • On_my_way
    On_my_way Posts: 405
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    You should say to your wife that you will buy each other an Easter Egg on Tuesday once they have been reduced.

    As you say, your wife is supporting you on the staying debt free journey so should understand that spending £15 on an Easter Egg is rather excessive!
  • steveouk
    steveouk Posts: 355
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    Well yes I could have a look in the shops on Tuesday if there is nothing then cest la vie!


    I will print out money mantras. I like to go out for meals and so does she but although we can "afford it" I don't feel we can. Her definition of being able to afford is that we have the money and yes we do. But I want to say I can afford something when I have met my savings goals and my spending is under control and I have a budget for the meal.


    I suppose a compromise would be to say yes we can go for meals out but that they are scheduled for the end of the month so I can make sure we are careful with spending on petrol and food then the meal is like a reward.


    She seems to do fine with her money although if I managed the way she does it I would find it tricky. She draws cash out and spends on her card but pays it off in full every month and still manages to put a fair chunk into savings every month - she does earn about £150 more than me a month.
  • steveouk
    steveouk Posts: 355
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    It is interesting that I do feel more conscious about how much or little money I have now that I pay everything at the start of the month the morning that my pay is in my bank account!


    Its defiantly harder to take out cash and tell myself that's all I have for the month as when I used the credit cards more I had a limit of thousands not a couple of hundred! It hurts to part with cash so much!
  • Meatloaf1981
    Meatloaf1981 Posts: 339
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    That's half the reason it is so empowering being debt free, I would imagine. The cash you have is your own, not someone else's and therefore you treat it with a degree of reverence rather than the "Oh it'll be fine, I'll pay it off next month" feeling you may have had with a wedge of credit card balances behind you to fall back on. Knowing you have a little money put aside in an emergency fund is good because if bad stuff happens and you need it, then you should have access to it without using "someone else" to pay for it and then owe them going forward.

    I agree though, having all my bills go out on the 1st of the month is a scary feeling!
    Original Total: £34200.78 / Current Total: £24017.00 (July 2017) -29.88%!
    DMP started March 2014. DFD: November 2025
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