How will you celebrate being debt free? How do people stop from sliding back?

Vicky496

I am nearing the end of a long crawl out of debt... I joined this forum at the start of 2009 with about £12000 of debt in 2 overdrafts and 2 credit cards. I wish I had kept the note I made in the beginning to keep track of the exact amount! I had been in debt since starting university in 2003 and didn't think anything of it at the time (students are supposed to be in debt I thought to myself!)

I managed to finally get a consolidation loan in November 2011 for £8100 after my bank asked me to come in - I thought I was in big trouble (I had forgotten to tell them I'd graduated and had had a student account for about 6 months too long), but I now think they actually wanted to sell me financial products. I told the woman all about the previous 3 years and how I had managed to pay about a third of my debt off. I told her that I had been turned down for a consolidation loan as I was using too much of my available credit and had been turned down for credit cards with lower interest and then for anything at all. She helped arrange a loan which reduced my interest by more than £300 a month - I couldn't believe it! Although loans aren't for everyone I had (have?) no financial discipline and I had to struggle every month to stay focussed on paying off more than the minimum (I often failed and sometimes finished the month in slightly more debt). Having a fixed payment every month was the best thing for me mentally and gave me a debt free day of 1st December 2014. I remember crying on my boyfriend (now husband) I was so relieved!

Then I just got on with my life - but with better spending habits thanks to the things I'd learnt on the MSE forums. I got married last summer and we're expecting our first baby at the end of September! We moved house at the end of last year and dramatically reduced our rent - the month before last we broke even on the cost of moving so have just started feeling the benefits. We still keep our finances separate as I didn't want to blacken (or redden?!) his credit rating.

I realised last month that I had a bit of extra cash due to the rent reduction... looking at my loan I could see that if I made an extra payment it would take it below £2000!

I also worked out that I could do this every month now that our rent was so much cheaper... and the interest I'd save on the loan would be less than I'm charged for using my overdraft until I get paid at the end of July.

So I'm due to pay off my loan now on 1st July 2014 and I will be hopefully completely debt free on 25th July 2014!

The question is... what do people do to celebrate when they become debt free? (Somehow a big blowout expensive meal seems inappropriate!)

And how do you stop from sliding back when you've never known any other way? (I really want to be a better example for my new baby, but maternity leave is going to be a killer financially!).

SouthernGuy

Well done so far on your efforts and roll on July 25th!

I too am in the process of clearing my debts and hope to be debt free by Feb 2015 at the latest.

Funny you should ask about how to celebrate and how to stop yourself racking up more debt in the future, I was just thinking about that today and have just talked about my future plans in my debt free diary.

I plan to have a pint of beer and a curry (budgeted for of course!).

I then plan to save a £2000 - £3000 emergency fund asap (treating it as a debt in my mind) and then setup a regular saving account/ isa to save for big purchases. Other than that I will use the MSE question "Do I need it, Will I use it?" whenever deciding to spend.

Best of luck

going_nowhere_fast

I plan to celebrate by putting my house up for sale and the desperate want to move house will keep my spending habits in control. My debt is the only thing holding me back from being able to move.

GunWharf

Vicky496 wrote: »

I am nearing the end of a long crawl out of debt... I joined this forum at the start of 2009 with about £12000 of debt in 2 overdrafts and 2 credit cards. I wish I had kept the note I made in the beginning to keep track of the exact amount! I had been in debt since starting university in 2003 and didn't think anything of it at the time (students are supposed to be in debt I thought to myself!)

I managed to finally get a consolidation loan in November 2011 for £8100 after my bank asked me to come in - I thought I was in big trouble (I had forgotten to tell them I'd graduated and had had a student account for about 6 months too long), but I now think they actually wanted to sell me financial products. I told the woman all about the previous 3 years and how I had managed to pay about a third of my debt off. I told her that I had been turned down for a consolidation loan as I was using too much of my available credit and had been turned down for credit cards with lower interest and then for anything at all. She helped arrange a loan which reduced my interest by more than £300 a month - I couldn't believe it! Although loans aren't for everyone I had (have?) no financial discipline and I had to struggle every month to stay focussed on paying off more than the minimum (I often failed and sometimes finished the month in slightly more debt). Having a fixed payment every month was the best thing for me mentally and gave me a debt free day of 1st December 2014. I remember crying on my boyfriend (now husband) I was so relieved!

Then I just got on with my life - but with better spending habits thanks to the things I'd learnt on the MSE forums. I got married last summer and we're expecting our first baby at the end of September! We moved house at the end of last year and dramatically reduced our rent - the month before last we broke even on the cost of moving so have just started feeling the benefits. We still keep our finances separate as I didn't want to blacken (or redden?!) his credit rating.

I realised last month that I had a bit of extra cash due to the rent reduction... looking at my loan I could see that if I made an extra payment it would take it below £2000!

I also worked out that I could do this every month now that our rent was so much cheaper... and the interest I'd save on the loan would be less than I'm charged for using my overdraft until I get paid at the end of July.

So I'm due to pay off my loan now on 1st July 2014 and I will be hopefully completely debt free on 25th July 2014!

The question is... what do people do to celebrate when they become debt free? (Somehow a big blowout expensive meal seems inappropriate!)

And how do you stop from sliding back when you've never known any other way? (I really want to be a better example for my new baby, but maternity leave is going to be a killer financially!).

I was feeling a little down tonight but reading your lovely story has really perked me up! Thanks for sharing. In answer to your question I want to have a Pint of Cider on the Harbour and frame the first £10 that is truly mine ( I have the frame already).

All the best from the Captain on the South Coast.

Vicky496

Beer and cider both sound nice... might have to be alcohol free until the baby comes though :S

I like the idea of saving an emergency fund as though it's a debt... I think I need to work out how much less money I'll get during my maternity leave and save to cover the difference.

Any parents out there have an opinion on owning a car? I've made do with just public transport for the last 4 years, but lots of people tell me I won't manage with a child without a car. OH has some money saved that he says he'd like to put towards it as well, but it's also the on going costs I didn't really want.

Vicky496

Have been working out how much money I'll need to get through Maternity Leave.

I've just gone for working out the difference between my current salary (less the loan payments - as I'm not used to having that money) and what I'll actually get (approximately).

So my target once I'm debt free is to save: £2700.

I have pay at the end of Aug, Sept and Oct that will be more than I'm used to (after paying off the loan and before my pay drops during maternity)

At the current rate I pay off debt I can save £800 a month... so £2400. That's not too far off... I shall see if I can ratchet up the frugalness!

Vicky496

Just thought though... babies don't cost anything extra right?!

lol this might be an under-calculation!

Vicky496

Good intentions then to be more frugal... starting with a few basics and a rubber chicken.

Today...
[STRIKE]Check bank balance - current account and loan.[/STRIKE]
[STRIKE]Organise marking pile and mark schemes to start tomorrow.[/STRIKE]
[STRIKE][STRIKE]Visit a friend of mine for the afternoon - take the bus and promise not to get a taxi home.[/STRIKE][/STRIKE]
[STRIKE]Defrost chicken for slow cooked roast tomorrow.[/STRIKE]
[STRIKE]Make bread.[/STRIKE]
[STRIKE]Buy flour, milk, apples, carrots and potatoes... strictly nothing else unless it's yellow label meat and freezable.[/STRIKE] oops bought bread too though... silly.
[STRIKE]Look up Yorkshire pudding recipe (fill up on cheap stuff!).[/STRIKE] Also found some parsnips in the freezer.
[STRIKE]Sausage sandwiches for dinner or something from the freezer (will let OH decide).[/STRIKE]
[STRIKE]Baked apples stuffed with mincemeat for dessert.[/STRIKE]

Tomorrow:
[STRIKE]Check bank balance.[/STRIKE]
[STRIKE]Do two piles of marking.[/STRIKE]
[STRIKE]Put chicken in slow cooker for dinner (Just dump it in for 8 hrs on low!).[/STRIKE]
[STRIKE]Boil spuds - roast some with some carrots, mash rest for the freezer.[/STRIKE]
[STRIKE]Cut spare carrots into snack sticks/chunks for pie on Sat.[/STRIKE]
[STRIKE]Save left over chick for risotto on Friday/pie on Sat.[/STRIKE]
[STRIKE]Make chick stock in slow cooker overnight for risotto Fri/pie Sat.[/STRIKE]

Vicky496

This one doesn't seem to use too many eggs up...
http://www.deliaonline.com/recipes/cuisine/european/english/yorkshire-pudding-for-four.html

Vicky496

Just tipped into my overdraft... surprise big phone bill

However... I get charged £1 a day for using it (regardless of how much of it I use). So... have paid off my loan early:

I worked out it'll cost me £43 to use my overdraft between now and 25th July (the pay-day that gets me out of debt) - this doesn't include the 25th June-6th July when I'll momentarily not be using the overdraft

To keep the loan going it would cost me £62 - so it's marginally cheaper to do it this way.

Now there is extra incentive to make sure the 25th July really is my debt free day - otherwise I'll lose the saving!

End in sight!!!!

Vicky496

Jobs for Friday/Saturday:
[STRIKE]Complete more marking and prepare mark forms.[/STRIKE]
[STRIKE]Prepare work and claim forms for posting.[/STRIKE] Will have to do claim forms on Monday when I can use the printer at work sneakily!
[STRIKE]Go into town to the post office.[/STRIKE]
Finish stock/make risotto.