What do you wish you had known when you first started out on your debt free journey?

its_maths_not_magic

Since my light-bulb moment, its been going on 9 months and I'm really in the swing of budgeting, saving and debt paying. And I've learnt so much about money, my thoughts about spending, and have picked up some really good habits. So I thought I might put together some advice for anyone who is just starting out, or even perhaps just contemplating starting out. And I'm really interested how others have found their journey, what advice you'd want to have received when you first started. Here goes:

1. Most importantly, deal with it sooner than later. Facing my debts was scary. Facing my true financial situation was worse. Calling up debtors and organizing payment plans was also very confronting. However, once that was done, life was so much better. It wasn't until I confronted those fears that I found out how much NOT dealing with it was costing me. By dealing with money, all that low level anxiety about money vanished. Now, if something goes wrong I deal with it as soon as possible and get it sorted. I've learnt I can't ignore money, I need to respect it and give it its proper place in my life.

2. Setting up payment plans was the easiest part of it. Debtors want their debt paid, and in my experience, if you reach out to them to set up a payment plan, they will try and help you.

3. Insure everything you can. Its not sexy, in fact its very boring. But wow, there have been a few times this year that being insured has saved us thousands. A good rule of thumb is that if you can't afford insurance, you probably need it the most, because if you can't afford the insurance, you can't afford the eventual catastrophy. Oh, and when dealing with insurance stuff, make sure you're well rested, fed and comfortable. This helps avoid the "oh !!!!!! it, this one will do" because you're tired or whatnot. Being comfortable means your more likely to do the leg work to find the cheapest and best.

Also, read everything. A good example is that my pet insurance has hidden in the terms that if a procedure costs more than £2000 you have to get permission first or they may not pay. Knowing that helped immensely when my pooch tore his knee joint and needed surgery.

4. Put in place a good way to physically handle money. I use cash for all my spending, so I came up with a money flow chart so I know where the money comes from and where it goes. I know where the free atms are around me. I also take note of where every pound goes. These small changes are far more important to my change in money management than my light-bulb moment ever was.

I think that's about it. I'd love to hear from others about what they have learned.

Monkeyballs

Good question... I'd have to add;

A) If having money in the bank for a food budget is a temptation, buy a gift card and put your months food budget on it (good for those with gambling issues).

If you want to use physical money so your spending is more "real" then leave your bank card at home no need for both in your wallet.

C) Helping and advising others is rewarding and addictive (much better than gambling) so don't be shy! I'm not anymore

MB of G x

moohound

When I got my basic bank account it only came with a cash card not a debit card, so I had no choice but to do B on Monkeyballs's list, and actually parting with banknotes really makes you think about what you spend and helped me change my whole perspective on money and spending.

Puddylove

I don't have the experience to give much advice as, although I've got debt, it's always been manageable (that could change very quickly though).

My one tip is to 'make do, and mend'. I thought people would think less of me when I told them I budget, or they saw me sewing or mending things; bit the reverse is true.

And yes, I drive a 9yr old car with a huge mileage, but it's all mine, while I save for a replacement (what is it with people on here always wanting hugely expensive new cars?)

bambos

I so badly wish I had known that constantly drip feeding my overdraft and never seeing it decrease was just a total waste of time. Finally three years later I moved my whole account to a basic bank account with no overdraft (I used to see an overdraft as extra money for me to spend) and setting up a direct debit into my overdraft each month. It took me a couple of hours to manually move all my payments over to my new account but was time well spent as I could see exactly what money I had going in/out and actually see my overdraft reducing each month.

moohound

Puddylove wrote: »

I don't have the experience to give much advice as, although I've got debt, it's always been manageable (that could change very quickly though).

My one tip is to 'make do, and mend'. I thought people would think less of me when I told them I budget, or they saw me sewing or mending things; bit the reverse is true.

And yes, I drive a 9yr old car with a huge mileage, but it's all mine, while I save for a replacement (what is it with people on here always wanting hugely expensive new cars?)

The modern world, media and advertising seem to programme us into thinking we have to constantly spend to keep up, update and upgrade when the things we already have work just fine.

sourcrates

My debt solution was an IVA, however this took six long years, wasn't too bad moneywise, but with hindsight, knowing what I know now, I would have gone Bankrupt instead.


I had no worthwhile assets, and would have been done and dusted long before the IVA was.


Should of sort more impartial advice in retrospect, as I just got suckered in by the IVA company, truth be told.

Growurown

its_maths_not_magic wrote: »

I think that's about it. I'd love to hear from others about what they have learned.

I think if I could change anything than it would be to have started my DMP so much sooner.

When it became apparent that we couldn't carry on as we were I did a lot of research, came onto these forums etc. and then started a DMP with Step Change. So far it has been brilliant and really not too much of a bother. Yes you have to do some paperwork and keep on top of things but once it was all underway it hasn't taken up too much of my time.

What I really regret is struggling on for so many years with the debt creeping higher and higher. I would be debt free by now if we had bitten the bullet earlier.

National_Debtline

1. Open any unopened letters. Whatever those letters say, you'll be able to seek the right help and advice to get your situation sorted.

2. If you can, do consider communicating with your creditors in writing. It's important to keep a paper trail and also you won't be badgered by overzealous collections departments.

3. Regularly complete a financial statement, ensure that your figures are realistic. There's little point in allocating yourself very little for food if you know you need more to get through the month. You do not have to live on bread and water.

4. Don't be afraid of insolvency options such as bankruptcy, for many people these options are by far the very best route forward.

5. Seek impartial, free advice. Our very good friends Stepchange, the CAB and of course ourselves have helped millions of people over the years. I'm absolutely certain we'll be able to help you too.

Sazzie23

For me like GUO I wish I'd been able to start a DMP sooner, but in reality, would I have ever admitted defeat if I hadn't run out of money?


I agree facing up is scary, I also found/find it terribly upsetting. For me I think what I really wish I realised sooner was that I have a problem with money, I'm now in Debtors Anonymous as I look back on what I spent that I really didn't need and often didn't use. If I'd known that sooner maybe I wouldn't have got quite as badly into debt or fixed it earlier.


I am grateful to MSE for changing/saving my life so I wish I'd found MSE sooner too. The tools and attitudes of money management I have learnt on here have been and continue to be invaluable


Sazzie

foxgloves

I wish I'd known just how much happier I'd be at the end of the debt-busting Pre LBM, I always thought of myself as an ethical, quite environmentally conscious person, but with hindsight, I was only 'talking the talk' as was considerably over spending my income & buying loads of unnecessary stuff. Learning to budget & all that comes with it has resulted in a much simpler lifestyle & I love it. I meal plan, cook from scratch, so waste no food whatsoever, we grow our own veggies & fruit which also provides free fitness, instead of buying the latest silly gadget, I sew, mend, upcycle, love scouring charity shops for vintage items, make lots of things for gifts, the list is endless. Another change has been to replace over half our holidays with camping. This wouldn't have happened while we were still spending, but we both love it & have enjoyed seeing all the wildlife, etc. At the start of my debt-busting journey, I didn't see beyond doing everything the same, but on a budget, whereas the reality has been that the simpler, 'greener' lifestyle I live now, has resulted in me feeling more comfortable in my own skin. Hope this makes sense!
F x