My debt free story and progress!

Evilyn_Waugh

I'm a long time lurker around these boards but this is my first post.

Having read a number of inspiring stories, I want to share my own story and also hopefully continue to write down my progress with the aim of sharing information and keeping me motivated going forward.

My debt at first LBM was around £22k. Today it stands at around £8k with definite light at the end of the tunnel.

Much of my debt came from my student days - I took a degree and then a masters degree. I didn't have any help from my parents, and didn't really work that much. However, as I had a good credit history before university (shocking in itself at 20 years old), I stuck with a normal account at HSBC and found them very willing to give me credit despite lack of earnings.

My overdraft ticked up to 3k+ over the course of the time at University, and I also had a credit card with a limit that went through the roof to something like 7k - a platinum card no less whilst I had no earnings! Towards the end of my degree they then let me consolodiate it all into a loan, but didn't take the card or overdraft away. Familiar story around here - I ran it all up and consolidated again and continued to have a relatively carefree existance.

At the point of graduating I think this added up to around £17k which was in the one loan over 5 years. With a few other assorted bits, I was starting my working life at 24 over £22k in debt. Seeing this number, coupled with some early rejection for further credit gave me the first light bulb moment when I realised that I needed to change my ways.

I actually don't think I lived a carefree and exuberant life at University. £20k isn't an awful amount of money to live on over 4 years of studying, and it enabled me to double my earlier salary, so I probably recognised it as a good investment net at that point.

Regardless, since graduating probably 3 or 4 years ago, I've been ploughing through the loans and paying month after month without really complaining or missing the £600 a month payments. It's just something I accept for now, without really considering how much BETTER my life would be if I didn't have to pay out so much money.

I guess in part I am fortunate to have been able to do this without struggling. It's because I've worked my !!! off and also had a bit of luck in that my salary has gone up each year since I graduated - 30k, 40k, 50k, and now approx 55k.

However, the depressing thing is that despite these salary increases, I STILL don't feel like I have any money spare! In fact, there were some months recently where I would end the month without a penny to my name. I appreciate that with my salary this must sound almost offensive compared to what some people struggle by on, but I'm just baffled where it has all gone considering I live a relatively frugal life - no smoking, limited drinking, no designer clothes and I no longer drive. (I have taken some good holidays though!)

I've recently been looking at my statements and if I had to generalise where it was wasted:

- FOOD! I have historically rarely cooked a meal, and as a result, have spent a ridiculous amount of money on food. Cooked breakfasts, expensive sandwiches at lunch, ready meals, meals out, starbucks, snacks during the day and drinks. Since the start of my degree I have used the excuse of treating myself to 'something nice' for a meal and overspending for this. This luxury must have added up to an average of more than £10 a day. That doesn't sound so bad at first glance, but thats £18,000 there over the 5 years of debt acquisition!

- BANK CHARGES! I have a huge amount of needless bank charges. In almost all instances I had the money to pay for something, but could never be bothered or organised enough to move it into the right account such that things didn't bounce etc. Then, during the one genuinelly bad period I had recently, HSBC hammered me with legitimate charges. I have begun totting these up and may try to claim them back, but it's looking to be around £2,000 from various companies - primarily HSBC.

- GAMBLING! Dirty word I know. I don't consider myself to have a problem by any stretch, but consider it a pasttime to play online poker or visit the bookies. The problem is, I probably do this 3 times a week if I'm bored, spending probably £20 a time, which easily adds up to thousands of pounds thrown away during my years of debt acquisition. I do have the occasional win, but then it's just an excuse to treat myself to a nice meal

- HOUSE! A year ago we bought a house despite my better judgements. Considering my debts, we overcommitted ourselves and bought an expensive house with a high mortgage that needed a ton of work. To be fair, I have curbed the worst of my spending described above in favour of dumping thousands of pounds into mortgage payments and DIY.

So that's my confession if you like. I have wasted so much money it's awful, especially when people around here are working absolute miracles on much less.

Things are however now looking positive for the first time in a long while. I have a few lump sums coming my way in the next few months which will put me net positive for the first time in years! I'm not sure how much I will use these to pay off debts as I only have 9 months till my DFD via the normal route. Will consult with the board over some real figures however!

More importantly, I have learnt some real and lasting lessons. I budget better, reduce 90% of the wastage, and have sold much of the crap that I've acquired. I'm not perfect but I'm hoping to move towards that point over the next 9 months such that I start my debt free life with the best chance to avoid credit and debt for ever!

OliveOyl_2

Welcome Evilyn -I think I've read some of your Aunt's books?;)

Well done for posting, and as you've hung around for a while you'll know that we'll want to routle through your SOA and work out an earlier DFD for you.

Good luck though.