I....am....debt...FREE!!!!!

Iloveflapjacks

705 days since my LBM I am now debt free as of today!!

Debt at LBM: £26,325
Debt at highest: Approximately £47,000

Student Loan - cleared
Credit card - cleared
CCJ - cleared
Overdraft - back in the black

I have been floating around the forums and picking up on the wonderful advice and encouraging words from all the DFW past and present; and I have been looooooking forward to writing this post for so long.

Here is how I cleared it all:

Accuracy
Accurately know how much debt you are in - not an estimation, but down to the penny. Know how much your debt is increased by interest charges.

Know and understand where every penny is spent.
Track your fixed costs and variable costs. If you don't know where your money is going that's just crazy.

Compare your spending from month to month. What can you reduce? What can you eliminate?

Know your spending patterns - I noticed that every ten days I would fill up on petrol approximately £60 each time. Now I try and make the gaps between fill ups longer!

Spreadsheet!
Mine has over a dozen tabs. The main sheet I would update had my two year forecast of income, fixed costs and variable costs. I knew my monthly budget, starting balance and how much debt I would be paying off per month, which helped give me a target debt free date.

NSD
I aimed for 20 a month. I work Monday to Friday, whilst at work there was no need for me to spend money. Some months I did 23 days!

Cashflow
Manage the debt. Be realistic. Your spreadsheet and monthly budget should make this clear. Get to a position where your debt does not stop you from living.

I changed all my direct debits and debt payments to be on the 1st of every month. I get paid at the end of every month, knowing that my bills, direct debits and debt payments were taken care of early, I knew how much money I had left for the month.

My ex has incomes at varying dates in the month which she couldn't change, I advised her to change her debt payment dates to match her income dates - this helped avoid missed payments and further interest charges.

Overtime
Bag as much as you can while you can!

Percentages
For example, when my debt was £5000, my spreadsheet had a few cells calculating the 25%, 10% and 1% which would have been £1250, £500 and £50.

If something was to cost me £50, I would say that is 1% closer to clearing my debt. A £500 holiday is 10% of the debt. Helps as a deterrent and put the debt in perspective.

Or additional overtime would get me 3% closer to be debt free! etc etc

Or three months without Sky TV helps clear 3% of my debt.

Do not stop living
As mentioned before, make the debt manageable, but do not stop living. Keep your sanity and make sure the debt is under control and is going down!

Being in debt does not have to mean you stop enjoying yourself!

Always have something to look forward to. My spreadheet has a countdown tab to all the paydays :rotfl: birthday, key dates, even the little things.

There are things that are free!
Once you have exhausted what you can do on debts for the month, keep you mind occupied - I read my back catalogue of purchased unread books!

Skills I've learnt from this 'experience':

• Negotiation - vital, vital skill; shops/suppliers/services are competing with each other for your money!
• Shop around - be patient, use the internet, cash back sites and vouchers.
• Organisation - so much more in control of my money and that is a great feeling, rather than it being organised for me in monthly debt repayments!
• Budgeting - fantastic discipline to have.

I look at my payslip and know that every penny is now mine (after taxes and deductions!;)) And I am going to keep it that way!

Hovel_lady

That's great news :T

Make sure you put yourself on the Debtfree Roll of Honour.

May2013

Massive congratulations to you....that's a huge amount of debt to clear in a very short space of time.....well done!!!

Lots of luck in your debt free future x

Money_maker

Well done you, so organised. Sounds like your frugal ways are here to stay.

wouldbeqaulitymoneysaver

Well done mate! you have done fabulously well. I agree about the living thing. No point trying to deal with debts without LIVING!!! ( as a Self Confessed Proud Iphone 3GS owner who can provide a thousand reasons why it is so useful to have so many functions on one wee device).

dell33

well done to you, that is pretty impressive.

Boobydoo

A great achievement! You must feel so good.

yellowbear

Good for you! :T:T

CountingPennies

Congratulations!!! :beer:

Always great to hear someone with positive news! Keeps the rest of us going! :T

Good luck to you in the future :money:

Katy1011

Well done, your advice is brilliant, i will be following that closely for the next few years so i can end up debt free too!

bugslet

Well done and welcome to the savers and mortgage free boards;)