A Thread for After Debt?

Mort

Came across some old Halifax bank statements from 2006 just before we started our DMP.
Looking over them has been sobering, the overdraft was £3000.00 :eek: I was able to see the period during which our joint income was only enough to give us a credit balance for a few days and was then insufficient to clear it and then we exceeded it:eek::eek::eek:.

Things are so much better now, and the statements are now shredded. I just wish I had an open fire to burn them on as well, damn smokeless zoning.

JulieGeorgiana

Well we are in...!

And I am now going to be a mortgage free wannabe... We are planning on our overpayments already and I have a spreadsheet (an accountant friend made) and with a little tweeking I can tell how much money I will save each time I overpay

OMG I have a mortgage!!!

Anyway, we had a washing machine malfunction which was fixed today (lucky I had cover) and I just caught up on a weeks worth of washing :S

We have unpacked the whole of the downstairs and have a lovely living space (I won't be putting my shelves in, with photo's or my curtains up until we redecorate so we are just making use of what's there already)

I am catching up on my bread making, and soup making and we are cooking real food again (I LOVE MY KITCHEN!!!)

Eliza is just LOVING the space in the front room... it's HUGE!!!

Anyway, I have to get the baby in bathed and in bed... then unpack a few more boxes...

I make our first overpayment on the 1st August... I am actually very excited as it'll be 2 weeks before I even make my first mortgage payment

Hope everyone is well x

We should be finished unpacking by saturday

JulieGeorgiana

Ps. Mort, I love looking at old things and knowing I will NEVER be there again... I never want that sick feeling again!

Blue_Elephant

Hello!

Just wanted to muse a little. When you're in debt ans the pennys dropped and you peruse MSE as though it is the font of all knowledge, you avoid spending anything you don't have to and go without loads of stuff just so you pay your debt off faster. All good.

Then you get out of debt, and you begrudge spending on yourself even if it's stuff you need, i.e new clothes because the old stuff is starting to fall apart, or nice things you can now afford like lunch somewhere nice for a friends birthday? You don't begrudge the friend as such, but the fact you're paying more than you have in a very long time for a meal?

Or is that just me? How do you achieve a happy medium?

backinbusiness

Hi Blue. I've been debt-free 18 months now, and still struggle to find a happy medium. But I think I'm getting there now.

I run 4 accounts.

1. Monthly - all credits in - all direct debits etc out
2. Weekly - a set amount to cover; groceries, sundry expenses, school dinners, fuel, eating out, etc
3. Surplus - anything left over from weekly a/c, any unexpected income plus half my monthly savings target. (This a/c is for bigger bills, ie car repairs, school trips, vet, etc and bigger treats, eg breaks away etc) and,
4. ISA - half my monthly savings target - totally untouchable.

The idea behind it is that I can use my surplus account for guilt free treats.

I also have a couple of credit cards with statement dates 2 weeks apart. Usually spend about £20 on petrol on these and settle them in full each month - all part of the master plan to improving my credit report.

Anyway - not been on for donkeys. JG - congrats on the house move. Rising you've not been on for a while either. How are things with you?

Things are looking up a bit here. School trips are all (largely) paid up. Emergency fund has been replenished to pre-car-stolen level, so I can ease off a little again.

I find myself getting bored again with how the finances are run, but no matter what little tweaks I make I always come back to the way I outlined above. It works for me I guess.

School hols are upon us and the weather is rotten, but not as rotten as down South. Just nice not to be chasing around all the time.

Off to bed to read for a bit.

Take care all.
BiB

JulieGeorgiana

After paying my debts I saved for the house... right now we are spending lots on things the house NEEDS and hate parting with every penny.

After 2 years of being debt free i still won't buy new clothes. And friends know I cannot afford meals out. I may have money in the savings, but i tell people i have no money... because if i don't save i won't have money for the big things (like washing machines, freezers, the car...)

I don't worry what people think about our money situation, so I find it easy to say 'i cant afford it'

BiB nice to hear from you, glad things are going well x

RichCH

I became debt free about 4 years ago (apart from Student Loan). Have to say my life has changed massively since. I basically had £8,000 spread over credit cards and overdraft from when I left university, and then I moved to London not earning much money.

I got a little lucky (or not if you see what I mean) in that when my Grandmother died 6 years ago I was left £2000. Now obviously that paid off a chunk of it, but it made me feel so sick that the money she had saved for years when she didn't really have anything, was paying for my stupidity that I kicked into action. I stopped spending on anything that wasn't necessary and got willpower to say I wasn't going to go out if I couldn't afford it. 2 years after that and still not earning a tremendous amount, I was out of debt.

So four years on, between me and my wife we have £27k in the bank, saving for a house (although if you read other threads by me about my wife, it got complicated recently) and my student loan has come to an end, which means I'll probably be £2,000 or more a year better off still.

It's come to my attention recently though that my wife still had debt and defaulted on it just over a year ago, which i am still furious about as I could have paid it off. But she's a classic case of that if you don't share your problems and get help, you will not find a way out of it.

I was lucky in that I did everything myself, no one helped me or gave me advice, I just tackled it with common sense, but I know not everyone can do that.

I find that with a lot of people I know they live for the moment and are in constant debt because of this, but what they don't realise is that if you're boring for a few years and get yourself in credit, then you can have fun without risk of consequences, and you aren't wasting money on interest.

JulieGeorgiana

I so agree with that last paragraph Rich, you hit a nail on the head!

Is your wife now debt free? Such a pity about the mortgage, but hopefully 18 months will fly by and you'll be first time buyers and be a mortgage free wanabe

I took over my husbands accounts for the same reason, and it works if you keep them in the loop and discuss the finances together from time to time.

JulieGeorgiana

oh, and DD is 6 months old today

She's going in her own room tomorrow! how time flies...

RichCH

JulieGeorgiana wrote: »

I so agree with that last paragraph Rich, you hit a nail on the head!

Is your wife now debt free? Such a pity about the mortgage, but hopefully 18 months will fly by and you'll be first time buyers and be a mortgage free wanabe

I took over my husbands accounts for the same reason, and it works if you keep them in the loop and discuss the finances together from time to time.

She's debt free now yes, but unfortunately with a poor credit rating. But thing is she never needed to default on it. Just about when I became debt free she told me that her loan was finishing, which she'd had for 5 years to clear old debts. So she started giving me £250 a month to put in a savings account, not telling me that she still have around £5,000 worth of debts on cards. Why would she give me money to put in a savings account when she was in debt? I know she was embarrassed and didn't want to make it my problem. At the time we've been together for two years, living together for one, so maybe she didn't want to merge our finances too much at that phase of life. But last year when she defaulted on her payment agreements, still owing around £6,000 by that point, we were engaged to be married (marrying 6 months later).

It's done now and hopefully her rating will recover. Just means now if we get a mortgage (probably will, but poor rates) we're going to have to go in there with 15% deposit at least to get a half decent rate, or that's what it's looking like at the moment.

Good to see though what you're doing. I hate it that if you're trying to conserve money people think you're boring. But to be honest I'd rather buy a decent bottle of wine at £10 and go round to a friends, than go out and easily spend £40-£50, sometimes £80 on a night out.