Managing the Debt Free Date?

tallfriar

Hi Guys, this is my first posting and I apologise in advance for any mistakes I make!

Firstly, a bit of background! I was referred to the website by my girlfriend about 9 months ago when I finally admitted to her how much debt I was in and that I was spending more each month than I had coming in. Since then I've been managing my debt down from about £33k by either reducing my outgoings or increasing my income (ebaying useless gadgets etc!). In 9 months i'm now standing at £18k of debt and have a debt free date of January 2009.

My girlfriend has been amazing in two ways, one because she was very understanding and helpful when I revealed my level of debt and two because she is also managing her money very strictly to achieve her own debt free date.

I have already massively reduced my unnecessary spending on junk food, takeaways etc to get my weekly outgoings down to an affordable level, but I haven't cut out those sorts of things completely. I have a great spreadsheet that records my spending against budget and predicts my debt free date. I am happy that if I follow my budget I will hit my debt free date.

The reason I am posting is because I would like to know what people think about managing the "debt free date". The question is, should I be happy with the date I have decided on or should I try and beat it? If I keep it as it is then I can still go out occasionally and have a holiday. If I want to beat it I would have to cut all of these out and could probably be debt free within 12 months.

I guess what I'm asking is that now that I've finally stopped spending more than I have coming in, should I stop spending any money on "extravagances" until I have no debt or can I still spend some money on other things?

Thanks, Rob.

lemma1968

Spreadsheet that looks towards your debt free date? How did you create that please? I'm sooooooo not computer literate. Thanks:rotfl:

southernscouser

Mate, first things first, thats is some bloody going in 9 months! :beer:

It depends on what you want fella. Whats more important to you? Being debt free as soon as possible so that all your income is yours to do what you want with like get a mortgage.

Or

Are you in no real rush for anything? What difference would being debt free a year earlier bring? Would you rather have the odd holiday (saved up for of course ) and a more active social life?

Perhaps write down the pros and cons of both.

tallfriar

My job means that I spend a lot of time looking at spreadsheets so to relieve the boredom I created my own budget and debt calculator. The quickest way to get a date is to use Snowball, enter the debts, APRs etc and it will give you a debt free date. I've seen a lot of others in this forum recommend the site.

The address is http://www.whatsthecost.com/snowball.aspx?country=uk

lemma1968

Oh thank you. I will try it once I have had a stiff drink cos I may not like the end date.....something tells me I may be reaching retirement first!!:p

betti911

I can only speak for myself but I do treat myself from time to time. Like a night out with my friends from time to time or a weekend away with my boyfriend. I make a point to get the best deal in whatever treat I give myself though and to build this into my budget.

tallfriar

Thanks SouthernScouser, I've just sold my car which was a big part of it (8k). Have definitely saved for those planned annual costs.

I'd love to buy a house but can't afford it at the moment, also with my credit rating I don't think I'd get a great deal (although it has improved since my LBM!). I just don't think I have the discipline to cut out all "unnecessary" spending, I would crack under the pressure after a while. The flip side of that is I feel a bit guilty about spending any unnecessary money even though it is allowed in my budget.

It's so difficult to find the right balance between still living a life, and not spending any money! Some of the tips on MSE are great, I loved getting £50 from Alliance and Leicester just for opening an account, the 0% overdraft is also a million times better than the 15.9% barclays one!

Lemma, I'm not in a great position to give advice, but never put off finding out the answers to a difficult question! If you do that you'll never do it! One of the main reasons I got into this mess was because I took so long to ask myself where my money was coming from!

betti911

I did the same Lemma. I could have tackled my probs ages ago but I was too scared. When I found out how much I owed I felt sick. It was worse explaining it to my IFA, who works in my law firm, and my parents as they had to act as guarantors of my mortgage when I was earning an okay wage.

Karmacat

tallfriar wrote: »

Thanks SouthernScouser, I've just sold my car which was a big part of it (8k). Have definitely saved for those planned annual costs.

I'd love to buy a house but can't afford it at the moment, also with my credit rating I don't think I'd get a great deal (although it has improved since my LBM!). I just don't think I have the discipline to cut out all "unnecessary" spending, I would crack under the pressure after a while. The flip side of that is I feel a bit guilty about spending any unnecessary money even though it is allowed in my budget.

It's so difficult to find the right balance between still living a life, and not spending any money! Some of the tips on MSE are great, I loved getting £50 from Alliance and Leicester just for opening an account, the 0% overdraft is also a million times better than the 15.9% barclays one!

Lemma, I'm not in a great position to give advice, but never put off finding out the answers to a difficult question! If you do that you'll never do it! One of the main reasons I got into this mess was because I took so long to ask myself where my money was coming from!

Hey there tallfriar, congratulations coming from here too! I think you've answered the question in your first post in the post I've quoted above: "I just don't think I have the discipline to cut out all <unnecessary> spending, I would crack under the pressure after a while". I know you go on to talk about feeling guilty, so what about a compromise? What kind of leeway is there in your budget? What about an extra £10 a month thrown at the debt? Or what about establishing a change jar and chucking everything less than 50ps in there? It doesn't have to be all or nothing, thats the point. Good for you whatever you decide to do - just *don't* push too hard, that will undo a lot of what you've accomplished.

mcardinalblue

hi Tallfriar

You have done so well so far, I think you have really got it.

Balancing, debt payment with a "me" budget is a difficult one. I (shh don't let other DFW's hear) still have sky and allocate £150 per month for going out (pub, meals etc), but I have a very small budget for clothes, I'm very frugal with housekeeping about £150-£200 per month for three adults and two dogs. In doing this I have increased my DFD by about 4 months, but I felt that allocating a budget and not going over this very important for my sanity, and it increases my chances of long term success. Others on the board just don't feel comfortable spending any money when in debt its really how you feel about it. Anyway what ever you decide keep up the good work good luck in the future.

MCB

tallfriar

Thanks for the advice guys, I think that I will try and better the date, but not beat myself up too much if I don't. As long as I achieve the original date!

I have started some of the things, like a change jar - finally finding a use for the Scooby Doo money box my sister gave me last Christmas! It fills up pretty quickly!