Impatience

Teacher2

Everyone is impatient but you need to hang on in there!

When my children were small and my husband and I were working full time and paying childcare fees it was difficult to see how we would ever be out of the red.

However, we kept an account book for every penny of our income and outgoings and controlled our spending.

What kept us on track was what we could put on one side and save once our financial liabilities were over. For example, when the childcare was finished we put that money into paying down our current account mortgage. I did 'forward projections' for the next five and ten years and it gave us something to look forward to and to focus on.

Two good tricks in getting from debt to credit are:-

1) Always save the payrise (or the loss of debt/credit payments). You have adjusted to your present level of expenditure so don't be tempted to treat yourselves to your extra and unexpected cash. Save it or pay off debts.

2) A Moneyfacts forumite who is paying off his mortgage early suggests making a picture of house with squares representing amounts paid off. Colour them in as you pay amounts (such as £500 or £1000) off. This way, as the coloured squares grow you can see how well you are doing. Many others adopted this clever was of recording saving and find it very encouraging. It could easily be adapted to paying off debt.

Funnily enough, the five and ten year projections did not work quite how I expected. The interest rates plummeted and my projections of how saving a lump sum could yield interest and help to accelerate paying off debts never materialised.

However, the effects of having a current account mortgage and the way it calculated interest daily combined with the discipline imposed by keeping strictly to our budget meant we paid off everything we owed years early. I was, therefore, able to retire five years early.

The effects of saving start slowly but snowball once the debt starts to diminish. If you can keep focussed and disciplined and keep everyone on board without splurging you should be able to clear debt faster than you think. It starts to happen 'on its own' as it were.