2 questions....

worriedDan

Good evening everyone,

2 questions that I would welcome some advice on...

1. How long does the feeling of anxiety last for after your LBM? At the moment it is all consuming. I have that feeling that you get when you are queuing up for a scary roller coaster, only the feeling never subsides. It feels like I have black cloud hovering over me. I know it's irrational, especially as the debt is repayable


2.Is it acceptable to theoretically cancel out debts with savings that you have? My wife has almost 13K in an investment ISA. Almost all of our debt is now at 0%. When I think about our debt total, is it ok to 'knock off' the 13K as in theory we could pay this tomorrow. This would make our debt 'on paper' 42K. I know that we still owe the 13K and that it doesn't just disappear but I am thinking in terms of assets minus liabilities.

3.5K of our debt is linked to my wife's new car. The car is worth about 7K so I also feel a little but better about this proportion of debt, as we could, in theory sell the car and clear it.

Thanks for tolerating my ramblings everyone

Bobarella

Dan I'm guessing that is going to be different for everyone. From what I read here many people begin to feel better once they have a solid repayment plan in place. It sounds like you do from your diary and other posts so hopefully it is just a matter of time. If you feel especially bad could you possibly discuss it with your GP? They might be able to suggest things you haven't already tried.

In terms of whether it's theoretically ok to say you are £13k less in debt than you are, I think what you can say is £13k of your debt is neutral. It is still there but as you say you could pay it off overnight should you wish.
The only tiny thing I'd add on that is the value of stocks and shares can change as I'm sure you know. So whilst that could mean you end up with £14k next year instead of £13k, you could also end up with £12k. And how do you feel about that?
Whereas if you paid the debt down now, it's gone and that's a definite situation.

I would try and give it some time for the dust to settle if you can. Once your debt starts to come down from repayments you may feel you'd like to keep your savings safe. Or you may feel inspired to reach freedom sooner.

Only you can decide what's best.

Hope you do feel less worried soon.

Bob

worriedDan

Thanks Bobarella,

I get paid next Tuesday and this will also be the day that our new budget kicks in. I really hope that I will feel better when we get started. March is a good month to start with it being exactly a 4 week month. This means that in 4 weeks I will have paid off 3k

Bobarella

One of the things I can recommend is writing everything down a few times a day. Write down the things in your head. Make lists if necessary of things bothering you and write what you are going to do about them. Sometimes it helps just to dump everything out of your head onto a page. I keep a day book and into it goes everything. I love it! I feel so much more in control when I'm able to check back on it all as well.

worriedDan

Bobarella wrote: »

One of the things I can recommend is writing everything down a few times a day. Write down the things in your head. Make lists if necessary of things bothering you and write what you are going to do about them. Sometimes it helps just to dump everything out of your head onto a page. I keep a day book and into it goes everything. I love it! I feel so much more in control when I'm able to check back on it all as well.

This strategy works for me too! If I don't write things down that worry me, I then worry that I will forget something that I should be worrying about...........

Happyharry78

I think it's ok to deduct the savings from the debt as, like you said, you could pay it off tomorrow. Most people on here tend to have little or no savings so it's good that you do! I've got lots of debt at 0% but I budget to pay it off before the promotional rate ends. I also have a chunk of savings which, like you, I theoretically deduct from what I owe. I would agree that you net debt is 42k... does that make you feel better? ��

triple_choc_chip

It's good to have an emergency fund, some people start with £500 saved in case the cooker or freezer needs replacing, for instance. Others aim for 3 or 6 months net pay in case of redundancy. Martin advises using savings to pay debt when the debt has higher interest rates but since yours is 0% I think you can leave the savings to grow for a while until you're further down the line, when you may decide otherwise.
When I first joined I worked my way across the tabs on the main home page and this helped me to score a few big hits e.g. I appealed my council tax which earned me a refund as well as an ingoing reduction. I claimed PPI that I'd been unaware I'd paid to Egg (barstewards :mad:). I gathered up broken gold and silver chains, single earrings etc and sent it to Hatton Garden Jewellers for the best rate available. I sold unwanted stuff on ebay (must do that again). All these extras were thrown at my debt which helped me feel I was now in control and this replaced the anxiety. Good luck with your journey.
TTC.

Pixie5740

How much is the ISA making? Is it beating the interest being paid out on your debts?

tori.k

I was thinking the same is it worth keeping the ISA and not using some of it to pay some of the debts that you are still paying interest on. kind of take a loan out on yourselves, you could even set up a monthly repayment to repay the money back to yourselves if your worry about breaking into your nest egg.

DesignNotDefault

Hi worriedDan,

You're definitely not on your own, I get like this at least every other day. I feel like this is going to be my life, but it isn't. I try to imagine myself years from now when this will be gone and it seems to help. I know it can get frustrating at times, but try to take a step back from your thoughts and take a breather.

In response to your questions:

1) this depends on the individual; even after the LBM some obsess daily, whereas some set a plan to address the debt and 'forget' about it, knowing it is taken care of. I can only speak for myself to say that my thoughts fall somewhere in the middle. I find that certain things trigger a negative thought pattern in relation to my debt; my house needs expensive (but fortunately not urgent) work doing to it, but I want to clear debt and become mortgage-free sooner so I can stop shift work, so I often find striking a balance frustrating. I look at some of parts of my house and it is like salt in a wound. Other days I look at it and am past caring!

The same goes for trying to build an emergency fund, and to live some sort of social life/have some sort of a holiday. It gets me down sometimes, and yesterday and today were two of those days. I find it useful to recognise the emotional triggers that send my thoughts down this road, and deal with them as they arise - as mentioned in my first post on this site, a lot if not all of my spending was due to emotional issues (apologies I don't know how to link to this).

When I am down/anxious, I distract myself as much as possible knowing that my payments are taken care of, that I am doing all I possibly can at the moment, and also to stop being so hard on myself. I also try to refrain from making any financial snap decisions/non essential purchases when I'm in this state of mind (my credit card balance tells this story itself!). I also find that reading/replying to posts on the forum helps; makes me feel supportive and supported.

2) depends on what you and your wife have agreed, again this depends on the individuals concerned and their plan. I personally would keep the £13k in savings if all of the debt is 0%, and will be 0% for the period in which you intend to clear it. Of course, if some of that debt was to revert back to standard APR or whatever the case may be, and it can't be shifted to 0% again, then I would review and potentially release some of the savings to tackle it as it is not 'neutral' debt. I personally wouldn't go 'all or nothing' though, try to avoid the temptation with this as you may need the savings at some point. I would also consider moving the 13k from the investment account to a standard savings account with the best rate of interest if this is possible; apologies I'm not savvy on the terms and conditions of investment accounts, have never used them as I'm not keen on the risk element.

3) think long term and the potential need for the car in years to come; it is good to know that this is can be sold, but will you need the car in the long run? It wouldn't be practical to sell and find that your wife needs another car a year or two later. However, if you are almost very certain that your wife won't need it, maybe you could consider selling and making another dent in the debt. I'd have another word with your wife and see what she thinks.

Chin up and keep us posted :-)