Now debt free BUT don't know what to do with my money!

Catseyez

Hi all,

Sorry if this seems like a strange post but I'm really not sure what to spend my money on now I'm a debtfreebie! I know it's a good position to be in but it's beginning to really do my head in as I'm just not used to it.

Since I became debt-free last year, I ended up saving loads and the sum of my savings is a similar figure to that of my old debt. :eek: It's really quite strange after being in the red for the past ten years.

BUT.....after all this moneysaving and change of attitude, I've almost become afraid to spend it. I'm currently in my first year of uni (as a 'mature' student on a 3yr course) and have managed to survive without dipping into the savings. In fact, I have even been adding to it, so I continue to see the figure rise although slowly.

I have done some travelling in the past (including Australia) but there is still so much of the world that I'd like to explore. In terms of material possessions, I'd like a new car but have decided that I don't want it enough to spend all my money on. I'd like to buy a flat/house at some stage but would have to continue to save for a lot lot longer before I could get together a deposit.

My heart is telling me that I should go off travelling. I've got just over two years left at uni so I could go travelling during the summer holidays. I am also thinking that I could go when I graduate, say for 6mths/1yr. I'm single and with no children, so now would be a good time to do some more travelling. BUT...as much as I want to do all this, the DFW side of me keeps emerging and I get a little nagging voice in my head that says 'save, save, save' so that I can get my foot on the property ladder. Plus, I'm becoming addicted to seeing my savings increase and am scared about spending it all, as frivolous spening was always my downfall in the past.

What would other people do? Any other debtfreebies experienced this?

This is the only place where I can talk about this. None of my family or friends have ever been DFWs (that I know of) and so have never really understood what it's like to go through what we have!

Catseyez x

doitmyself

Catseyez wrote: »

Hi all,

Sorry if this seems like a strange post but I'm really not sure what to spend my money on now I'm a debtfreebie! I know it's a good position to be in but it's beginning to really do my head in as I'm just not used to it.

Since I became debt-free last year, I ended up saving loads and the sum of my savings is a similar figure to that of my old debt. :eek: It's really quite strange after being in the red for the past ten years.

BUT.....after all this moneysaving and change of attitude, I've almost become afraid to spend it. I'm currently in my first year of uni (as a 'mature' student on a 3yr course) and have managed to survive without dipping into the savings. In fact, I have even been adding to it, so I continue to see the figure rise although slowly.

I have done some travelling in the past (including Australia) but there is still so much of the world that I'd like to explore. In terms of material possessions, I'd like a new car but have decided that I don't want it enough to spend all my money on. I'd like to buy a flat/house at some stage but would have to continue to save for a lot lot longer before I could get together a deposit.

My heart is telling me that I should go off travelling. I've got just over two years left at uni so I could go travelling during the summer holidays. I am also thinking that I could go when I graduate, say for 6mths/1yr. I'm alsmost 29, single and with no children, so now would be a good time to do some more travelling. BUT...as much as I want to do all this, the DFW side of me keeps emerging and I get a little nagging voice in my head that says 'save, save, save' so that I can get my foot on the property ladder. Plus, I'm becoming addicted to seeing my savings increase and am scared about spending it all, as frivolous spening was always my downfall in the past.

What would other people do? Any other debtfreebies experienced this?

This is the only place where I can talk about this. None of my family or friends have ever been DFWs (that I know of) and so have never really understood what it's like to go through what we have!

Catseyez x

Hi
Absolutely briliiant post. I just replied to another guy on this thread who's in the process off killing himself right now in order to be debt free and hasn't got a clue why.
You work presumably? Go travel, buy the car, and a home that's your right and your entitlement as a consequence of the work you do. In other words have whatever you want but do it properly, don't be frivolous or reckless and don't get into unnecessrilay expensive debt. Use your head, manage it properly and you'll be fine. Money is for spending too..

roswell

albertross wrote: »

One thing to watch out for is the increase in house prices swallowing up all that savings effort. If it takes you a year to save up 5K for example, compare that to the amount the house you are after has risen in that period, say 20K.

Thats on the hope that prices keep going up,

What about taking a trip to the savings and investments board for some advice eg ISA`s / pensions etc , is there anything you really need / want a target you can aim for, Also you are allowed some luxuarys now your debt free eg day out / holidays etc. The secret is to find a balance between savings / spending

doitmyself

roswell wrote: »

Thats on the hope that prices keep going up,

What about taking a trip to the savings and investments board for some advice eg ISA`s / pensions etc , is there anything you really need / want a target you can aim for, Also you are allowed some luxuarys now your debt free eg day out / holidays etc. The secret is to find a balance between savings / spending

You're 'allowed'?? (....bla bla), says who? You do whatever the sh*t you want!
Sorry I somehow missed the mature student thing in your first post. If you really want to buy a home why are you studying and not working? If you're committed to your studies then house buying's out of the question for now but you have money obviously so having a car and travelling a bit shouldn't be out of the equation.

It's obviously good that your savings are going up not down but it's basically the same rule with everything. eating nothing but spinach is no better than eating nothing but donuts. Saving all your money is actually no better than spending it all.
Study, save, travel, spend. Good luck

roswell

doitmyself wrote: »

You're 'allowed'?? (....bla bla), says who? You do whatever the sh*t you want!

excellent, The reason i posted that is many people who budgit to the 9th degree to become debt free give up a lot in life to reach that goal, there is regualy have a feeling that they are doing something "Naughty" once they are debt free. The nature of the post wasnt to be parent like but to advise the Op that they arent doing anything wrong by treating themselves.

Toto

I too am debt free, and I know exactly what you mean. I do have a goal, we are intending to buy another house but not in this country, we will be going to Canada which is where my OH is from.

I actually find it much harder to spend money now that I did before I was debt free, every single thing I think about buying seems to be a problem. I look at the price and say to myself "that's £20 or $45 further from our dream" which makes me stop before spending, 90% of the time I don't spend, I go home and dump the £20 into my savings account. I don't intend to have a mortgage so I am actually trying to save to buy a house outright, tall order eh!

As much as some spending is fun and needed I really struggle with it. In fact most luxury spending such as the odd takeaway etc comes out of my OHs account because I just can't bring myself to do it. I guess this is it for me for life now, once the house is bought there will be savings for other future expenses such as kids going to Uni or wanting to buy a house themselves, retirement etc. I hope one day I relax a bit though and lose the fear of spending, I guess I am so scared of ever going back to the debt trap money frightens me a bit now.

Well done on your debt freedom, if you can I would try to find a balance between living for a future dream and enjoying today.

wherediditallgo

Hi, Catseyez. If you're not sure what to do, you could set up a standing order to transfer some money into a savings account each month. That way, it's somewhere safe until you decide what to do with it, isn't staring you in the face each month & you won't be tempted to fritter it away.

Travelling is a very good idea while you've got no commitments. Why not save the money for the trip in a sort of "holiday fund" account? That way you know the money's there for a specific purpose, & you won't feel so bad about spending it. It does take time to get used to having money again, but don't feel guilty for having it.

mountainofdebt

Well not being debt free at the moment, I could say give it all to me but I guess that's not what you wanted to hear, lol!

Seriously though, I think you need mentally to come to some sort of compromise about spending money. Instead of all your savings going into one pot, could you not have a house deposit pot and a travellng pot? That way you could say when the travelling pot reaches x amount, you go off travelling? You never know by the time you have saved that amount your priorities have changed and you don't want to go anymore? You will still have the money but have given it enough time to a)not go into debt travelling and b) made sure that that is what you really want to do?

The only other thing I would add is that my nan used to save for that rainy day - the sad thing was she never recognised when it had started to drizzle.

Joek_2

Is there not something you've always wanted to do, but never had the money to carry it out?

Possibly some great trip somewhere?

I'd love to go back out to New York again (been there twice, and it's the most amazing place I've ever been to)...

In short, don't do anything, give me £600 to go to N.Y and we'll all be very happy

Catseyez

Thanks for all of your replies!

albertross wrote: »

One thing to watch out for is the increase in house prices swallowing up all that savings effort. If it takes you a year to save up 5K for example, compare that to the amount the house you are after has risen in that period, say 20K.

This is a thought that keeps running through my head. But then a part of me wonders whether the rise in house prices will continue and whether or not there will be a crash.

roswell wrote:

What about taking a trip to the savings and investments board for some advice eg ISA`s / pensions etc , is there anything you really need / want a target you can aim for, Also you are allowed some luxuarys now your debt free eg day out / holidays etc. The secret is to find a balance between savings / spending

I've got the ISA covered for now. I've taken out a tuition fee loan to pay for my uni fees (£3k) but have put £3k of savings into an min-ISA. The idea is that I will continue to do this each academic year and once I graduate, I will pay the fees back in one go and will have earned a bit of interest!

I have also taken out the overdraft (0% until a year after graduation) from my student account and put it into a one-year fixed bond. I will continue to re-invest this until I need to pay it back.

Pensions is an area that I need to look into.

There isn't anything I really 'need' but there are alot of things that I 'want'. Mainly to travel to certain countries and to volunteer along the way. Money spent travelling, is something I can justify. Perhaps, I should think about setting myself targets so that I can be more structured about this.

doitmyself wrote:

Sorry I somehow missed the mature student thing in your first post. If you really want to buy a home why are you studying and not working? If you're committed to your studies then house buying's out of the question for now but you have money obviously so having a car and travelling a bit shouldn't be out of the equation.

It's obviously good that your savings are going up not down but it's basically the same rule with everything. eating nothing but spinach is no better than eating nothing but donuts. Saving all your money is actually no better than spending it all.
Study, save, travel, spend. Good luck

Yes, I'm a mature student going through a change of career. You see, whilst I was a DFW, my aim was to clear my debts before starting uni. That was some motivation. My other aim is not to get into debt whilst being at uni and that is something I am managing. I still do part-time work and I make sure that I don't spend more than I have coming in.

Yes, I'm very committed to my studies as it's in an area that I've wanted to work in for quite a long time. Buying a house is out of the question at the moment, but if I continue to save, I will be able to gather together a good deposit within the first year or two after graduating.

I already have a car and it's quite nice but I like the idea of having a different one. But it's a bit more expensive and so would take quite a lot of the savings. I'm happy to wait a bit longer for that especially as I don't have to do that much driving these days. It would only sit in the driveway.

I think you're right in what you say about all saving v no spending.

Toto wrote:

As much as some spending is fun and needed I really struggle with it. In fact most luxury spending such as the odd takeaway etc comes out of my OHs account because I just can't bring myself to do it. I guess this is it for me for life now, once the house is bought there will be savings for other future expenses such as kids going to Uni or wanting to buy a house themselves, retirement etc. I hope one day I relax a bit though and lose the fear of spending, I guess I am so scared of ever going back to the debt trap money frightens me a bit now.

Exactly Toto! This is just how I feel. Until recently, I have paid for everything on credit including my car, nice holidays etc. When I was paying for everything by credit, it seemed so much easier as I didn't really ever stop to consider what I was doing. But now it's MY money, it feels completely different and everytime I buy something I 'want' (eg, a new bag, pair of shoes - they are my weak points) I can't relax because there's always that worry that I might go back to my old ways. I know this isn't going to happen because I have changed so much and I will only pay for something that I have the funds for.

Joek wrote:

Is there not something you've always wanted to do, but never had the money to carry it out?

Possibly some great trip somewhere?

I'd love to go back out to New York again (been there twice, and it's the most amazing place I've ever been to)...

In short, don't do anything, give me £600 to go to N.Y and we'll all be very happy

Yes, I would like to spend some time travelling throughout South America. Slightly scary for a solo female traveller but I am currently learning Spanish to help me feel moe confident once over there. I spent a few months in Australia and have been to a few other places, including New York (I think it's fabulous too!). What I would really really like to do is buy a round-the-world ticket and just go exploring for a while.

That's what I'm considering doing upon graduation. It really is a toss-up between spending the money on some serious travelling or saving for a deposit. :undecided

Wherediditallgo: I like your idea about having different saving accounts.

Most of my friends are all settled and have bought houses etc and I guess I feel like I'm going to be a rolling stone for ever!

Sorry for such a long post. To anyone who is still a DFW (and still reading this post!), it really is quite incredible as to how quickly you can save once you're debt-free. All that money that once went on servicing debts soon adds up. Stick with it, it's worth it.

ZTD

albertross wrote: »

I don't hope they go up, the reality is they have done, and are still doing, so if the OP wants a house in the current climate the sooner the better. If it crashes, it crashes, but waiting and expecting it to happen could cost the OP a lot of money and price them out of the market forever.

If the OP, at 28, no kids, no debt and quite a bit of savings - in short quite an excellent financial position - is priced out of the market, then who is going to be buying houses?

The answer - as is usually the case - is a bit of everything. You save to spend - you can't take it with you. So yes:

• Travel
• Save for a deposit
• Save for retirement - and don't give me that thing about being "too early"
• Don't waste your money buying cheap crap - buy better quality things that will last. They work out cheaper overall (full lifecycle costs)