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going back to 2006 could be the answer
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jan875
Posts: 34 Forumite
I have been thinking about our debt and how we should approach repayment. This made me think back to 2006 when we had just moved into our house. At that point our joint take home pay was just over 2K per month. We paid the mortgage, bills and had enough for a few luxuries and a summer holiday. Fast forward 10 years and our joint take home pay is £4500 and we are in 47k worth of unsecured debt. Where did it all start to go wrong??
I have decided that we need to revert to our 2006 salaries. By that I mean that we need to live as though we are on a 30k joint income as opposed to a 75-80k one!! This would leave £2000-£2500 to pay towards debts each month. This is ambitious but I reckon that this strategy could work for us. We could be debt free within 2 years.
I definitely think that there is a link between debt levels and increases in income. We really should never have accrued this level of debt.
I have decided that we need to revert to our 2006 salaries. By that I mean that we need to live as though we are on a 30k joint income as opposed to a 75-80k one!! This would leave £2000-£2500 to pay towards debts each month. This is ambitious but I reckon that this strategy could work for us. We could be debt free within 2 years.
I definitely think that there is a link between debt levels and increases in income. We really should never have accrued this level of debt.
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I didn't want to read and run. Good luck on your debt free journey!It will all be ok in the end - if it's not ok, then it's not the end!
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I have been thinking about our debt and how we should approach repayment. This made me think back to 2006 when we had just moved into our house. At that point our joint take home pay was just over 2K per month. We paid the mortgage, bills and had enough for a few luxuries and a summer holiday. Fast forward 10 years and our joint take home pay is £4500 and we are in 47k worth of unsecured debt. Where did it all start to go wrong??
I have decided that we need to revert to our 2006 salaries. By that I mean that we need to live as though we are on a 30k joint income as opposed to a 75-80k one!! This would leave £2000-£2500 to pay towards debts each month. This is ambitious but I reckon that this strategy could work for us. We could be debt free within 2 years.
I definitely think that there is a link between debt levels and increases in income. We really should never have accrued this level of debt.
Would your partner be on board with this? If so then it's a good plan! When we were clearing out debt we went for it in an aggressive style, we cut back on EVERYTHING and then had £100 each pm for anything other than essentials. We were then able to pay off a minimum £1000 pm. We encouraged and spurred each other on. We also looked to find as much free things to do as possible so we were still doing things.
In the 2 years we have gone from having a £60k income to me losing my job and now we are a one income family with £28k (I'm about to start a p/t job which will increase our joint income to £38k) but it hasn't made too much of a difference to our lifestyle we've still been on holidays, gone to festivals. We just look to get as much value from our money as possible.
Good luck!DF as at 30/12/16
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Good luck... We are planning to do exactly the same.
I am self employed. Hubby works 200 miles away where wages are higher and he lives in a camper van through the week. My business hasbeen going downhill for a long time so each month money has been getting tighter and tighter!! I've just secured a new job starting 4th July with a 35K regular monthly income.... a luxury after the last 4 years!! We are, however going to continue to live like we have been so we can pay off as much of our debt as possible every month. We should be able to throw £1500 a month at it! We don;t have massive debt as I paid a lot off when I moved last year and used the equity from our house but there are lot's of small debts that need clearing!
Good luck :beer:0 -
Sounds like a great plan, everybody's basic needs are pretty much the same in life regardless of income it's the luxury extras that cost. we dropped 20k PA It hasn't made any major significant changes just an adjustment of the extras.0
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determined_new_ms wrote: »Would your partner be on board with this? If so then it's a good plan! When we were clearing out debt we went for it in an aggressive style, we cut back on EVERYTHING and then had £100 each pm for anything other than essentials. We were then able to pay off a minimum £1000 pm. We encouraged and spurred each other on. We also looked to find as much free things to do as possible so we were still doing things.
In the 2 years we have gone from having a £60k income to me losing my job and now we are a one income family with £28k (I'm about to start a p/t job which will increase our joint income to £38k) but it hasn't made too much of a difference to our lifestyle we've still been on holidays, gone to festivals. We just look to get as much value from our money as possible.
Good luck!
Yes partner is on board thankfully! We don't really have a choice. If we don't make some drastic changes now then we are going to end up in the bankruptcy courts!! our 48k debt is actually manageable at the moment, however I am more than aware that it would only take a redundancy, period of ill health etc to totally push us into debt crisis.0 -
Hi jan875 and thank you for this interesting post. You may be right that there is a tipping point in income terms for some households where one starts to pay less attention to one's outgoings.
I hope your attempts to live at 2006 levels are productive - you may find that a lot of the extra you've been spending in recent times is dead money and doesn't noticeably change your living standards. As for me, well, I would love to be able to pay the 2006 price of a pint, but I suspect my local's landlord would have other ideas...
Dennis
@natdebtlineWe work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps0 -
I definitely think that there is a link between debt levels and increases in income.
I'm sure you're right.
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