Tips for staying debt-free

Devi

Hi all,

I am a relative newcomer to MSE and loving it - learnt so much since joining and am a complete convert.

After years of being in debt, I finally cleared my last credit card balance yesterday with only a small(ish) overdraft left to pay off.

I have been in this position before and always manage to get myself in debt again.

Does anyone have any tips as to how to stay as debt free as possible?

Thanks

Devi :A

BusPass_2

devi

Congratulations and great that you are now debt free.

N.no rocket science involved I am afraid but I'll tell you what works for me

DISCIPLINE,DISCIPLINE,DISCIPLINE.

Work out what comes in every month, work out what is going out, hopefully there is a surplus, and STICK TO IT.

No impulse buys.

All the standard methods - packed lunches, public transport, get rid of luxuries, utilise everything in the cupboards, experiment with recipes etc and USE THE BOARDS ON HERE FOR TIPS.. Do you really need Sky telly, I-Pod, gadgets etc. etc? Question every piece of expenditure.

Educate the family.

Set targets.

Reward yourself when you reach a target. It could simply be for sticking to your spending plan for the month, or saving a small amount. Start a wall chart.

Build up a cash reserve.

If you are a smoker GIVE THEM UP.

Sorry for shouting occasionally but I am sure there are other much brighter stars on here than me who will be able to provide useful advice.

And no, I don't live like a recluse.

I'm off to Spain soon for pennies, thanks to Ryanair flights and a hotel booked through Air Miles collected from my Tesco Club Card points.

Marisco

Hi Devi, welcome to the boards. My tip would be to not have any credit cards;) Pay cash (or by debit card) for everything, old fashioned I know, but after the mess of my oh's finances due to ex wife's inability to say no to cards:mad: I won't have any, although now we are in a position to pay for them!! The way I look at it (which is of course my personal view) if you have to put it on a card, then you cannot afford it;)

Devi

thank you both,

I have been trying to use cash more and it really does make me think about what I am buying and a) do I need it and b) if i do, can i get it cheaper or a cheaper alternative.

going to try and stick to this from now on and get rid of all the cards - although I am sure i will feel "naked" without them for a while!

Percy1983

I am guessing you must have budgeted to clear you debts, so why not stick to that budget and what you was paying off debts now start saving.

If you don't have a particular thing to save for it can be used for 'impulse' buys as such like a bigger TV etc.

Basically try to get a ahead of your finances rather than behind.

churchrat

HI

I think for me, a useful tip is to use cash whenever I can. Sometimes a credit card would be nice--more safety when buying etc, but we have not had credit for so long that I dont think we could get one now.

The best thing, although sometimes the hardest, is to make sure that everyone in the household agrees with the budget. Not just the need to be ON a budget, but that you all have the same priorities.

good luck

barbiedoll

You don't need to feel "naked" without your cards. Just stop looking at them as though they are ready cash and start to see them for what they really are....ready debt!!!

As you are well aware, anything you buy on a credit card is going to cost you a lot more money than if you paid for it outright. So all of the DFW advice, i.e. getting a good deal on utilities, cable and internet etc etc, is completely cancelled out by the interest you end up paying for credit. The money you used to use to pay off your credit card, you should put away in a savings account, or even in a separate current account if you want easy access. It's great to see your savings grow and if you want or need something specific, it's so great to be able to go into as shop and pay with the cash straight away. (Plus, you can always haggle for a discount )

It is hard at first, to stop spending on cards and so on, but as you know, life is so much better without debt dragging you down. I wish I'd realised this sooner, I'd be swanning off on my hols now if I did!

terakris

Percy1983 wrote: »

I am guessing you must have budgeted to clear you debts, so why not stick to that budget and what you was paying off debts now start saving.

QFT

This is exactly what I do - ok i might have increased some of the budgets to allow a bit more breathing room, but if you could live well enough on a tighter budget, you might as well carry on and save save save

Devi

My next big thing to buy is a house and I am saving for a deposit so the amount i used to pay off my credit card each month is being squirrelled away into my savings every month.

I know I will need a deposit and also to buy furniture and pay for fees etc when I do eventually buy (aiming for early 2012) and I really don't want to be using credit cards to pay for these and get myself into debt again.

Thanks for all the tips - my new mantra is going to be "debt cards" are evil.

Percy1983

Funnily enough, I am a few months off debt free and will be then saving and hoping to buy early 2012. Its all about patience from this point, just counting away the months and updating my monthly geek spreadsheet (my other half finds it funny).

It would seem you have a plan so just stick to it, it may help looking at houses, keeps me on track at least as I won't lose site of my target.

Devi

I update my "geek" spreadsheet daily - although i am sure yours is more sophisticated than mine!