What made you realise you needed to do something about your debt?

dib-dab

I find it amazing that my husband and I have such debt and it is only in the past few months that we have realised how bad it is. So I am just interested to know whether other people got into a bad situation before they realised or whether they knew that things were bad but carried on spending?
For us - we always had our own finances other than a joit account for house expenses. We had some idea of each others credit card debts. But it was only after we got married and moved abroad and I made a spreadsheet with all of our debt on that we realised how bad things were - almost £30k on credit cards after the expenses of getting set up in our new country!!
I had absolutely no idea things were anywhere near this bad.
I am not too worried about it as our income is decent so it will get paid off but it is going to take a long time and in the meantime we have to say no to loads of fun things that all our friends are doing. I am just annoyed that we have lived beyond our means for so long and now are suffering for it - completely our own fault for being so stupid but I just wish we had been more careful years ago. A lot of the debt is due to our wedding and honeymoon too.
But I am excited about the prospect of getting everything paid off. And our motto now is that if we can't pay for something within the month's income then we don't do it. I actually feel really good about myself by saying no to things and thinking how much money it is saving us. Although sometimes it is horrible - we have said no to a holiday with our friends that we have been looking forward to for ages. We are desperate to go and will be fed up when they are there and afterwards when they are talking about. But that is the price we have to pay.
And it is great to be able to talk about it on here as usually debt is such an 'embarrassing' topic. We say to people that we can't afford to do things but not that we are in debt - I would be horrified to tell anyone how much debt we have.
Anyway, that's enough of my rambling, am looking forward to being debt free whenever it may be!
:beer:

firestronaut

I have no idea what spurred me on to take control of my debts...
I just had the classic lightbulb moment, and I personally find it exciting and fun to watch my debt amount go down everyday.

andy40

For myself, and I think a lot of people, it is the affordability of the minimum monthly repayments that catches the eye and not the size of the total debt.
For a long time I never really knew how much I owed, when I did sit down and work it out, it was big but managable. My plan to reduce it was based around maintaining my lifestyle first and seeing what was left over for repayments second, which was the wrong way to go about it.
Having a large debt for a long time becomes 'natural', its quite remarkable how used we become to such 'shocking' things.
Having everyone around me talking about spending money and NOT talking about saving, investing or debt reduction does not create an atmosphere of fiscal responsibility.
Many of my friends seem to be spending as freely as ever although I have noticed a few more people bringing their lunch into work. I would be really interested to know which of them are financially sound and can afford all their holidays and new kitchens, and who is living on debt the way I was.

brokemedic

My lightbulb moment arrived when I had several months of panic last year of not being able to meet my monthly payments and running around like crazy trying to get bits of money to make sure there was enough to meet my rent, mortgage etc. I am doing a degree which causes me enough stress without the added stress of dealing with my finances, so I knew something had to change. What reinforced it was when I sat down and figured out that I was paying about £100 a month in interest payments alone - it's now down to £47 a month.

And the 2-3 months that I took charge of my finances rather than the other way round was brilliant - not worrying about money and knowing that I had enough to pay all my bills - great feeling. My standard of living dropped quite a bit - no Waitrose, clothes shopping or going out whenever I fancied but it was a great feeling nonetheless - knowing that I was paying off my debts. Unfortunately I had a bit of a lapse but I am back on board again and am determined to pay it all off this year.

This site has been brilliant in terms of the non-judgmental and supportive advice I have been given. If and when I do pay off all my debt, a large part of it will be due to this website - so thank-you.:o

MessyMare

Mine was when I began to get scared that the ATM wouldn't give me any money, and my card started getting declined. My mum would open post if it was a bank charge letter and put money in my account to cover it....and I was so ashamed. Then in January 2009 I decided I didn't want the problem to get any worse, and started selling loads of stuff to clear my overdraft. Since then I've not touched my authorised (and interest free) overdraft for more than a day.

hypno06

I think our situation is a little different because we always knew what we owed - I did the figures every month, and knew exactly what was in the bank, what the shortfall was going to be etc.......we just spent several years "treading water" ie making sure that everything was paid, but never managing to make any inroads to reducing the debt. At that time, our debt was over £100k on top of the mortgage.....the lightbulb flickered all through those years, but I reckon we had a bit of a dodgy switch.......

It was 3 years ago when one of our credit cards decided to reduce our limit, when I had been relying on the remaining available credit to see us through Christmas.......

all of a sudden, instead of treading water, we realised that we had to do something far more focused, and so the lightbulb came on fully and has been shining brightly ever since.

When the limit was reduced, I instantly thought "oh, great, we're f**ked" and thought the world was about to end.......started looking at IVAs, DMPs, and even bankruptcy, I felt that everything was closing in.

However, MSE soon made me realise that there is a whole library of advice, ideas, and support available, and I was very glad to become part of that.......the debt is now just under £20k, and the end is in sight - we have no credit cards, and are actually able to live on our income without a monthly budget deficit. I sleep better at night now, certainly not having nightmares about bailiffs, and am very glad that MBNA reduced our credit limit when they did because it gave me the kick up the bum that I needed to do things properly!

MessyMare

Hypno, all your posts make me want to give you the most massive hug...I'm totally in awe of you and your family!

slscarborough

My lightbulb moment was 3 years ago when I went on Maternity Leave with my DS2. It wasnt until I was on Maternity Pay that I even realised how much debt we had. When my income went from £1200 a month to approx £500 a month we soon noticed!! When I sat an worked it out we were £20,000 in debt!!

I am now very proud to say that we are only £4000 in debt despite being a one income family. We aim to be completely debt free by March 2011.

hypno06

ColleenPamela wrote: »

Hypno, all your posts make me want to give you the most massive hug...I'm totally in awe of you and your family!

Thanks! But remember all our successes are only due to the support we are getting from here.......without this site, I would still be treading water, and believing that there was no way out of it.

So, it is not me you should be in awe of, but MSE and DFW in particular!! They are the real heroes!!

:money:

ms_london

Ultimately I had no choice to deal with my debts when my bank, credit card, store card, etc etc - stopped letting me use them and would not increase my credit limits etc. I probably would have carried on had this not happened, but I am happy I did wake up and smell the coffee at £19,000 and not any higher.

My bank wouldn't even trust me with a cash card for a while, so every time I wanted money out I would have to go into a branch. That was fun! Not!

xx

hypno06

ms_london wrote: »

so every time I wanted money out I would have to go into a branch. That was fun! Not!

xx

That was one of the first things I did - have my wages paid into a savings account which could only be accessed by going into the branch - I ensured that it was an account that would accept the direct debits for the bills, but if I wanted any money for anything else, I had to go into the branch for it.

It was our choice, not the banks, but it certainly made sure I wasn't spending money unnecessarily!

Sadly, I then needed to switch to using a current account again as the bank decided not to allow Direct debits on the savings account, but it was good while it lasted!