In-debt to debt-free to saver - Help!

Smodlet

Absolute respect, nearlytherenow and, just so you know, sourcrates is one of the wisest people I have come across anywhere on this forum. I am in awe, no sarcasm, I mean it. Being direct while being kind and empathic is a real gift... one I am still trying to learn.

dirtycredit

how do you stay debt-free?!

The long hard slog of paying every penny you earn off your debt month after month really makes you realise that you never EVER want to do it again. You start to value every penny you earn. I feel sick now when I think about how much crap I bought. I don't waste a penny of my money now and I certainly won't when I'm debt free! That's the beauty of the journey..it's tough but it rehabilitates you.

Smodlet

Absolutely, DC.

Maybe one way to think about it is by considering how long you have to work to earn £10, £100, £1000. Is your time worth so little that you want to fritter away everything you earn? Don't you want to have something besides last week's fashion items/gadgets you used once/whatever to show for all that time and effort? Maybe you love your job so much doing overtime is your favourite hobby... in which case, I would imagine you are in a very small minority.

Next time you feel like spending £10, £100, £1000 ask yourself how badly you need whatever it is compared to how long and hard you have to work to pay for it. Is it worth it? Can you afford it? Do you need it? Will you use it? Yep, the money mantra, courtesy of our Martin who art in MSE Towers.

Nearlytherenow, you mentioned being "tempted" by banks/CC providers offering you credit... you are under no obligation whatsoever to take it! Debt is not your friend. Debt is no-one's friend except the moneylenders'. CCs/loans should only ever be used for dire emergencies you have not saved up enough to cope with, not for everyday spending.

Class dismissed.

takman

nearlytherenow wrote: »

You are absolutely right. To be honest I hadn't even thought about secured and unsecured debt as this is my first mortgage and I haven't focuses on that before.

Staying out of debt is going to be something that I will have to work on, I know that, but I'm determined to do it and live my life by spending my own money and not someone else's. And especially not someone else whose going to sack interest on top and keep tempting me further down the debt path!

Without trying to sound mean you are going to have get out of debt first before you can stay out of it!.
You haven't cleared your debts you have just moved them to your mortgage which is still a big debt!.

I think the key to managing your money well is to male sure you fully understand your finances and have a budget that you stick to. Always get the best deals on anything you pay for and do lots of reading up on anything you don't understand.

Smodlet

Absolutely, takman. A mortgage is still a debt, the worst kind as you can lose your house if you don't pay it. This can still happen with other debts but let's not go there.

The literal meaning of mortgage is death pledge, from the French: Mort = death or dead, gage = pledge or, in the more modern sense, debt. Wouldn't it be nice to be out of debt while you still have some time left to enjoy it?

bargainbetty

Got to ask a question - if this is your first mortgage, it is usually based on the value of the property, less any deposit you may have to put down against it.


How exactly are you going to convert unsecured debt into a mortgage without having the equity on the property to cover it? Unless you are buying a property significantly below market value, you might find this is more of a struggle than you think. Your lender will base your final mortgage offer on the valuation of the property, not on what you think are able to borrow on the calculator.


It's also just a bad idea to convert unsecured debt into secured debt. It really is. And if you don't know how rare it is to see everyone on agreement on something on these boards, go look around, then come back and think about the fact that literally everyone says it is not a good plan.