Top tips to be debt free?

ashli_2

Hello moneysavers

I am doing ok with my debt repayments, a fairly hefty wodge of our monthly income goes to repayment and everything is interest free. However, it is still going to take forever and a day to get there and I am wondering how I can speed things up a bit.

Does anyone have any tips for how to save cash/ budget better/ earn extra/ generally knock it on the head as quickly as possible?

Thanks.

lambda

What works for me is to have a separate "budget" account for spending with: food, petrol, etc. Then leave your main account to pay bills, etc. Works for me, I've reduced my debt over 1000 pounds in 4 months!

Other tips? Remember that being in debt is only finite! It's not the end of the world, you still have your health, and money really doesn't buy happiness!

KPR11

Hi Ashli,

A few things that work me are:

1. Budget for "irregular expenses"
2. Maintain a spending diary or something that will track your money
3. Put aside something as an emergency / rainy day fund
4. Don't kill yourself debt busting, I wanted to quit at one stage because my budget was too tight. I spend money on things that a lot of the folks would frown upon. Treat yourself every now and then. Wherever you can, use vouchers etc when you doing so.
5. Use this board as a guide, everyone has different ways and pace of doing things.
6. Make an effort to overpay on everything.
7. Don't underestimate the power of "every little helps". After all, pennies make a pound!
8. Make sure you are NOT "pennywise and pound foolish"
9. Set up direct debits to leave your account soon after pay day - be it to bills account, debt repayments, savings account or allowance / spending account.
10. Remember that you can do it! Believe in yourself!

Good luck

david_hellier

Plan a spending diary to prevent overspend. The encouragement of overspending by the banks is the main problem with the economy, and they will look for ways to perpetuate this, for example by the introduction of contactless cards. The complete elimination of paper money is their long term aim so we as consumers must pay hawkish attention to exactly how much is available to spend.

One of the best ways to tackle this is to use the weekly subtraction method. Firstly work out all your income. If your income is monthly then divide this by 4.33, this will give you your weekly income. Note it.

Then work out your monthly essential outgoings, but exclude food (more later). Divide this by 4.33 to give you your weekly out goings. Note it.

Take the outgoing figure from the incoming figure. This is the weekly Start amount available to spend on anything else including food.

Get any little notebook ( a spending diary) and write the Start figure in it at the start of the week. As you spend or withdraw cash deduct it as you go. Try to get to the end of the week with some left in it and carry this forward to the next week and add it to the new Start figure.

Using this method ensures you do not overspend. I suggest you include food in the Start figure because the amount we spend on it can vary widely. My personal experience shows allowing a specific amount for food is impractical, however, it's up to you.

This method also requires you to effectively ignore your bank balance, because it is meaningless on a day to day basis. What you should see is it increasing steadily.

Also remember to include any OD charges, interest or other fees in the essential outgoing list, otherwise overspending will continue.

Other top tips: stop using credit cards for further spending and make FIXED repayments, never the minimum.

I have an excel spreadsheet which can work out the Start figure if you PM me with an email address.

dreamdreamer

4. Don't kill yourself debt busting, I wanted to quit at one stage because my budget was too tight. I spend money on things that a lot of the folks would frown upon. Treat yourself every now and then. Wherever you can, use vouchers etc when you doing so.

This is fabulous advice. If a budget is too restrictive, you're far more likely to give up and go back to your old ways! I'm desperate to be debt free but there's no point in getting there if I've lost my mind along the way! (Well, more so than usual.... :whistle:).

My top tips are:

1) Make sure you have no credit available to you, cut up cards, cancel paid off overdrafts, etc etc. It's just too much temptation.

2) Have a separate debt/bill account and spending account.

3) Pay as much as you can afford off you debts at the start of the month. DON'T think "I'll pay off whatever is left at the end of the month" because there won't be anything. Sometimes you'll overcommit and be tight in the last week or two, but if it's not there you can't spend it!

wigwam

dreamdreamer wrote: »

3) Pay as much as you can afford off you debts at the start of the month. DON'T think "I'll pay off whatever is left at the end of the month" because there won't be anything. Sometimes you'll overcommit and be tight in the last week or two, but if it's not there you can't spend it!

this one works best for me! as soon as the money comes in the extra debt repayment goes out! amazing what you can make do with - after all I view it as their your money - it belongs to the cc company and we are paying them lots for the privelidge of spending it