What's the single best tip you can give for all those in debt ?

katherinestevens · 15 March 2007 at 4:02AM

If you are aged between 18 and 30 and in debt, hand the whole lot over to your mum to sort out. She (In other words me) will negotiate with all your creditors to freeze your interest, sort out a repayment plan. Arrange for your salary to be paid to her account, from which all your repayments are taken out. Then whatever is left will be given to you to live on. If you have a really soft-touch of a mum (me) you'll even get food bought for you, and a few handouts now and again. When it's all sorted and you are solvent you will be handed the financial reins again, and in a year's time the whole process will be repeated!!!!

moanymoany · 15 March 2007 at 8:26AM

I have stopped using my credit card and only use my debit card which lets me know how much money is left in the bank.

Meal planning is really a big money saver. I now do a big delivered shop once a month and top ups for veg and milk.

DON'T GO SHOPPING - NOT EVEN CAR BOOT SALES - DON'T LOOK AT SITES WHERE YOU SPEND MONEY - then you won't be tempted. If you want to go somewhere go to the library or somewhere you can't buy stuff.

If you are feeling deprived, read through some of the frugal living threads, they are a great support and full of ideas. Bless Martin's Angels:A they make frugality fun! Well, maybe a challenge.:p

BigRich1_2 · 15 March 2007 at 10:09AM

Be realistic. Set yourself a budget - how much do you have going in vs how much coming out. Set up a different bank account for bills (fixed things - like insurance and rent etc) and overcompensate for variables such as phone bills so you will never be short. Then a different one for variable expenses, petrol etc. A third account for spending money.

Once you do this get some standing orders set up from the account your wage goes into (this could even be a fourth account) to pay out the right amount into each of the accounts. Whatever is left goes on cutting debt, and if you underspend on your pocket money either treat yourself or get rid of some debt.

Chop up all your cards for bills so that you dont get tempted to spend, and keep your card for variables (such as petrol) out of reach when you might be tempted (i.e. leave them hidden in the car or at home). Have your spending account as one of the ones where you have to draw money from a hole in the wall so you dont spend on plastic.

Have been doing this for a year and am now debt free :j have paid off £2000 debt from credit cards and overdrafts (first thing i did was switch accounts to no interest for a year accounts so that I wasn't paying interest) and have even saved an extra £1000 on top as a nice start to some savings.

Good luck:beer:

MUSTBEFUNNY_2 · 15 March 2007 at 11:02AM

Hi

Big Rich you should be on the Debt free roll of honour (see sticky at top of board):money:

nomadgirl · 15 March 2007 at 1:32PM

teecee152 wrote: »

A spending diary!!
I couldn't believe how much money i wasted on "stuff"

That is brilliant - I lost loads of weight by keeping a food diary but it had never occurred to me that I could apply the same technique for spending. A BIG THANK YOU!

justmumcookcleanertaxi · 15 March 2007 at 5:13PM

I agree with all of the above post but just to add my bit:
Young children will be just as happy playing with an empty box than as with a mega expensive toy. Kids are just as happiy on the beach with a bucket and spade and collecting water from the sea than at an expensive theme park ect. Young babies will not know that there high chair is a freeby or second hand.

onedayiwill · 15 March 2007 at 5:19PM

Great advice from everyone.

The basic equation for getting out of debt is EARN MORE and SPEND LESS.

I often went through phases of EARNING MORE by selling stuff on eBay. But I spent it ... after all... it was 'extra money' (yes....I know! I've had my LBM now!)

For me the one thing that has helped so far more than everything else is my spending diary. The very act of having to write down everything I spend and therefore make myself accountable for it has resulted in me SPENDING LESS because I have to think about it....

SunderlandBlackCat · 15 March 2007 at 5:59PM

Work out ASAP whether you're a cash person or a card person.

I'm absolutely useless with cash no matter how hard I try I can't seem to make my cash spending match my spending diary.

Since I started only going to the ATM when I actually need the cash for something I can't pay for with a card & then paying any change over £2 back into the bank I seem to have loads more money.