Planning ahead to keep out of debt.

mirry

Today I have paid off all my debt, it took over 2 years to do and I never want to go back there again !!!

So now I find myself thinking ahead alot, the car mot is in august, and the house insurance is at the same time. My plan is to try to forsee problems ahead, way in advance. Also what do you think would be a good amount to have in the bank to keep debts away ?
Im aiming to save £3000 over the next year to have sitting in the bank for any shocks.

Infact I think Im getting obsessed about debt so much so, its turned into a PHOBIA. I thought I would relax when my debts were paid but I cant .

mjdh1957

Congratulations! Don't forget to post on the Debt-Free Roll of Honour http://forums.moneysavingexpert.com/showthread.html?t=291326

I'm also determined never to get into debt again, and it is a bit of a worry. I'd say the best thing to do would be to carry on making your 'debt' payment but into a high-interest saving account, maybe an ISA. Have a look at the Saving & Investment area of the main site for ideas. I've got a Yorkshire Bank internet access ISA for now. A rough estimate to be secure is to have 3 months worth of income saved up for emergencies. I'm not quite there yet!

Also, I took out a cashback credit card (Morgan Stanley) so they now pay me rather than vice versa.

KatrinaC_2

Congratulations on bcoming debt free! Have you put your name on the roll of honour?

The amount you should put away depends on you and your circumstances. I was always advised to have 2 months salary spare, but to be honest I could get by on less than that as we budget for most of our expenses and all of our household maintenance is taken car of by our landlord. I'm lucky to be in a very secure job in a secure profession. On average I'd be uncomfortable with less than £500 - £1000 available, but that's not going to work for everyone.

Perhaps you should try and think of what could go wrong and how much it would cost to put it right - that way you can work out how much it would cost if your car engine blew up, your boiler broke down and your roof collapsed, all on the same day. Once you know how much you would need to pay out on the worst day of your life you can think about how much you need to put away to give yourself a comfort zone.

Kat

dinkylou

Congratulations on being debt free - thats great news!

Give yourself some time to relax and get used to your news 'DF' status.

I personally would put as much as you can afford into an ISA (or if this is full, then a high interest savings) as you never know when things can change for the worse or something unexpected comes along, good or bad.

Also, that way you are getting into the habit of saving not only for the bad things that need to be paid but also for anything which you may want to save up for to buy - much better than resorting to loans or CC.

I would put in at least the past debt payments you used to make as you are used to not having that money and any more you could afford. Once you start to see it grow, you'lll soon be happy adding more to it.

Storm

Firstly, congratulations on becoming debt-free:T

In terms of how much to have put aside, I would look at yearly outgoings that you know will come up like car tax, insurances, MOT, Xmas etc, then divide by 12 and put that amount aside each month into a savings account.

Then, whatever else you can afford can go into an ISA as your 'rainy day' fund - as others have said, 2-3 months salary in there is a good back up to have in case of redundancy, illness etc

JET34

CONGRATULATIONS

hypno06

Congratulations :j

Not jealous or anything.....:think:

lyric_grace

Well done thats great news it must be a great feeling, can't wait to get there myself!

mirry

Thats a good idea , 3 months to cover outgoings if made reduntant would be nearly £3000. I like the idea of that . Thanks everyone !!