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

katsu

I've had quite a few low wattage bulb moments over the years since I was a student. When you are a student, debt is inevitable unless you have significant family backing. I was then used to being in debt that would take a long time to pay off; so when I started working and sometimes could not make ends meet, using my credit card for things like a garage bill seemed like the best/only solution. Having no money after uni and the need to find a job and place to live meant the only way to get a deposit was to borrow it.

That said, I paid above minimum CC payments most of the time and focussed on the idea I would eventually clear the debt. I just did not consider how long it would take and whether I could make more sacrifices to bring forward my DFD. A 10w bulb?

I decided to return to studying last autumn (I work full time and being professionally qualified is a requirement for the job I do), and to fund this we put the fees on a 0% credit card. I wasn't really thinking then about exactly how to clear the last of our old debt and this debt but my OH helped me work out how much we could overpay on it, so we did some BTs to reduce other rates and were off. Maybe I was up to an old 40w bulb here?

A few months ago I found this site and my lightbulb really came on. I actually did a BT to my existing card of the remains of my course fees etc (around £2.5k) as the 0% had run out, started a spending diary and ebayed old things. I decided not being in debt = freedom and that I could reach that freedom

I was lucky that we could afford significant OP this year, that our debt was never very high (probably around £7-8k at highest excluding student loans) and the years of overpaying meant when I really got switched on, I did not have long to go to be DF. We have also been very loath for years to get new credit (both our current cars were purchased with saved cash, no credit). My car is easily the cheapest in the office car park. I sold it's predecessor for £600 and my boss said such cheap cars are dangerous :rolleyes:

We are looking at our joint account this month to decide if we clear our debt this month or next month, as my OH would like a 2009 DFD. This could be made possible by the "dangerous" car sale.

Sorry to ramble, hope this helps someone. Realising it was probably the early-mid 90s (pre uni) when I last had no debt is really rather sobering and makes me totally agree with Martin that students should have "good debt, bad debt" education.

skintbutsolvent

I think often there are 2 'lightbulb moments' - a 40w and then a big flashing 100w! Certainly it was for me. The 40w was where I realised I was in a lot of debt and could only just tick over. Thats when I stopped borrowing. The 100w was when I realised I was kidding myself about being able to tick over and that I just couldn't cope with my debt at all. In my case it ended in bankruptcy due in part to a job change. It was only with this 2nd moment that my whole attitude to credit changed - regardless of the fact that I cannot get credit anyway, I have no desire to ever borrow again - not even bus fare!

tiff

We had a relatively small cc debt, but it was increasing all the time so we knew something had to be done. I got another job last January and since then we have reduced our debt and actually have more savings than debt now although the debt is at 0% till June.

Also the start of the recession scared us, and clearing our overdraft was our priority as I was worried the bank would cancel our overdraft and we would be left with no money.

We have been given a very generous amount of money for Christmas and its great to know that Christmas is aready paid for and this money can be spent on the house.

natsing

For us it was a car maintenance bill, we'd just had new windows put in on finance, and seemed to not be able to go month to month without using a credit card. The £500 MOT bill did it and I realised we couldn't go on like this, checked everything out and our debt (a lot of it buying our house, just as the prices started dropping!) was about £20000, that was April this year, and we're looking at nearly £5000 paid off, hoping with some effort and the snowball calcultor to be out of debt by the end of 2011!
Good luck on your journey, MSE is the best resource on the net in my opinion.

doodledo_2

My LBM came when it was the second week of the month and I had no money and had to go to my parents to get money for food for my DD.

Not being able to provide for the most precious thing in my life really hit home.

I then came on here and read one of Hypnos posts and knew that I COULD change the situation and here I am.

I owe a lot to a few people on this site, they know who they are

lamarsi

mine came when i became ill and the lovely company i work for made it impossible for me to go back there, i got a job with no regular income, was in a rubbish relationship and couldn't manage my large debts, although i'd been on a good wage previously i'd managed to treble my £34,000 morgade, get £10k credit card debts and a £23k secured loan, then after the initial panic and not answering the phone and binning letters stage i went to the liberary got martin lewis book out and dumped my ex who wasn't helping and started reading the posts on here. I have a long way to go and i'm still living hand to mouth but there will be an end to this, in the past two years my debt has reduced by about £15k the 1st time in 14 years it's gone down rather than up! but most importantly my attitude to money has changed a harsh lesson learned

Smoggy_2

LBM arived when i realised i was buying groceries on credit cards, and no money in the bank, and the OD maxed out. After years of burying heads in the sand we were shocked/disgusted to realise we owed over £50k, despite earning areasonable wages between us. Luckily i had just changed career to something with much higher wages, so the extra money, combined with a drastic lifestyle change, no holidays, Monsoon became an absolute no-no, my expensive hobbies took a back seat, expensive gadgets for the kids, and 2 years later we are now debt free, and despite the odd luxury treat these days, living well within our means, and have money in the bank.

euronorris

My LBM happened not long after my move to NL.

Financially, it was a stupid time to move countries. Hell, financially, it was a stupid time for me to move out of the family home in Aug 08! If I had just stayed there for another 6 months, the move would've been a lot smoother and my current debt a lot smaller.

It got to the point where I could no longer keep up with the repayments, nor could I get anymore 0% transfer deals.

After a few months of struggling on, with some assistance of parents and OH, I found this site and I've never looked back.

But, I'm not sure my LBM would have really 'stuck' if it wasn't for this site. I had, of course, had several LBM's before, but never really got anywhere with it as I would either lose motivation after a few months, or I would set unrealistic goals.

At one point, I had even cut up all the CC's, cancelled the overdraft and made huge inroads into my consolidation loan. But, of course, I fell off the wagon as I hadn't really learned my lesson. I hadn't learnt to budget more effectively as the loan meant I was paying out less, thus increasing my disposable income. And I still hadn't learnt to save. I had a savings account but would end up taking all of the saved money back out again each month.

Things have changed now.....for the better

euronorris

I must admit though, to this day, I am still surprised at how much the banks lent me.

My salary was OK, but I wasn't even a home owner, and in the end my total credit was more than half my UK annual salary! I don't get it. I wouldn't have lent myself that much money!

brokemedic

Wow hypno, am I correct in thinking that you paid off £80,000 in three years??