Debt-free at last!

kizzykizzywizzy

:T well done

Andy_Edinburgh

As requested, here are my thoughts/tips/experiences that have enabled me to clear all my personal and mortgage debt (in bullet-point format for brevity). These are entirely my own opinions and you're free to follow them or ignore them as you see fit.




Understand your attitude to money:
I've found Alvin Hall's books very useful in this respect; AH's views and experiences are particularly poignant because he himself comes from rural poverty. [There's some good-natured “rivalry” between Martin Lewis and Alvin Hall however their respective messages are entirely complementary and consistent – AH tends to focus on your personal/emotional attitude to money, and ML shows you how to get the best deal for it; since you can only read one at once, I'd start with AH first].


Keep a spending diary – that means every single penny that you spend.
If you think this is too much trouble, stop reading now... Most office stationery cupboards will have a few 2007 diaries left over – go and pick one up now, it'll only go in the bin otherwise. When you actually track every single penny, you'll be amazed at where it goes.


Understand your attitude to financial risk, security and accessibility:
This comes from your emotional attitude to money in general, and will depend on your circumstances with respect to debt, job satisfaction/opportunities, family, health issues, etc. Again, AH's books (“Money for Life”, “Your Money or Your Life”, etc.) can help with this.


Budget!
You simply MUST have a proper personal/household budget, not just an idea of how much you like to think you spend... Start with a Statement of Affairs (SOA – see sticky thread) as a template and develop from there. Ideally I think a budget should be one screen's worth on a spreadsheet – much more and it's in danger of becoming too complex and unwieldy, much less and it's probably too simplistic to track your real-world spending (by the way, don't go out and buy some spreadsheet software – the free one from http://www.openoffice.org is just as good as Excel if not better).
I base my budget on monthly spending but break down into the amounts I actually spend at a time, rather than a month's worth in one go. For example, I spend about £100 per month on petrol so that's shown in the budget as four lots of £25, one per week, and the same with shopping. The transactions are listed in date order so at a glance I can see where I am, and how much money I need to get to the end of the month. Also include “carry-forward” items such as money set aside for car repairs, quarterly bills, home repairs, etc.
If (e.g.) your essential monthly expenditure is £1,000, then you must mentally allocate this money as “not yours to spend”. It's money that HAS to go to the supermarket, petrol station, etc. in order to keep the household running. Keep it completely separate (on your spreadsheet and in your mind) from the money you allocate to debt repayments, savings, holidays, luxuries etc.




Be consistent
Keep cross-checking between your spending diary, your budget and your own personal priorities and values to ensure they're still consistent with one another. This will help to track your successes and progress and so keep you “on the wagon”.


Dealing with others:
Maintain whatever level of openness or privacy you deem appropriate or comfortable; e.g., if you can't afford to join in with something then just say so clearly in one sentence and then pointedly change the subject to something more appropriate. If you start being shifty or evasive then people are unlikely to be supportive or understanding of your goals. If a friend/relative/colleague told me straight they had financial issues I'd be very positive and constructive, and more than happy to help.




Lifestyle choices:
“You can't have the penny and the bun”, as the saying goes. Make a conscious decision to either keep going the way you're going without complaining, or take the bull by the horns and change.
I have my own strong views on family planning as it relates to financial planning (which I won't presume to lecture you on), but choices have to be made between career, work, children, housebuying etc. and that's just the way the world is.


Insist that all communication with creditors etc. is IN WRITING:
I can't stress this one highly enough; expect creditors (particularly the nasty ones familiar to Forum regulars) to have highly selective memories when it comes to what has previously been said or agreed. If the worst comes to the worst and you end up in court you'll need to be able to show evidence that you've acted responsibly and reasonably, and the ONLY way you can do that is to keep written copies of every communication and transaction. There are plenty of template letters on here, and many regulars who will be more than happy to help you draft letters if need be.


Be pragmatic...
I'm typing this on an old, low-spec PC I got free from an IT scrap giveaway at work, and I'm sitting on an old (but very comfortable) leather chair given to me by a friend. This means I own both of them outright as well as the house they're in.



Pet Hate #1:
“It's the Bank's fault for lending me all this money in the first place!”. I absolutely HATE reading this! Even if you think it is their fault (and I don't agree...), it's completely irrelevant. Spend the time and energy planning and working towards your own goals, not railing pointlessly at the Banks, because they don't care.


Pet Hate #2:
“My partner's SOA....”, etc. If you're posting it for them, they haven't had their Lightbulb Moment yet.


Pet Hate #3:
Any adverts from Ocean Finance, Norton Finance, FirstPlus, Picture Loans, etc. etc. etc. ZZZzzz...


I hope this helps, if you have any thoughts, questions or comments please share them. Thanks once again for all the kind words and congratulations. It's been a long road, uphill most of the way, but the view from the top is great :-)


Best wishes,


Andy

doodledo_2

Congratulations thats fantastic news you should be very proud of yourself :beer: