How do you maintain being debt free? What are you strategies?

ryanm8655

I’m nowhere near debt free but my plan is no credit cards other than my BA Amex which I’ll pay in full every month (do that currently) just for the points.

Other than that I plan to use zero based budgeting and plough any spare cash into savings.

My longer term plan is a career change into a better paying industry (I’m a civil servant at the moment and while the pay is ok the lifestyle I want isn’t sustainable in London on the salary, even with promotions). Planning a move into commercial law.

Also never get a consolidation loan, ever.

Maintain the lessons I’ve learned, for one there is no such thing as a free lunch (0% cards). 

Maybe I’ll use 0% cards one day for home improvements etc. But I’m hoping to never be in the position where I need to. And definitely not to the extent of using them to sustain a lifestyle I can’t afford.

monetxchange

I use the idea of zero based budgeting. On payday, I calculate exactly how much I need in my main account for bill direct debits. Then I top up my monthly saving pots - saving in advance for things like car insurance, car maintenance, dentist, Christmas etc.

I then put a budgeted amount for groceries, shopping bits, travel money and petrol into a separate Monzo account for those spends. That way, there's only that money available to spend and once it's gone, it's gone. Amazing how much aware you are of your spending when you can see in real-time exactly how much you have left until the end of the month. Monzo is good because it tells you how much you've spent on a certain thing as a little reminder.

I'm debt free and have an emergency fund in place, so any surplus I have (self employed so income varies) goes straight into savings, then I add any spending surplus in there too. It all adds up.

I only use a credit card when traveling for things like hotel room service holds etc. I know from personal experience I can't trust myself to use them day to day so don't take them out of the house.

RyanHello

Budget and live within your means is the safest and most easiest advice I've followed.
There's other steps I've followed below which has also helped:

• Try to get to a £1-£2k emergency fund as fast you as you can. Then just top up a small amount each month into it like 10% of your net income
• Have a different account for each use. One for personal, one for bills and a couple for saving.
• If you can't afford to buy 4 of them, you can't afford 1 of them.
• Nothing wrong with c.cards if you pay the balance in FULL each month
• Money does not buy happiness, but it does help living a stress free life thanks to financial security. 
• Don't live your life as a hermit, enjoy yourself, but make sure you're following the budget!!

onwards&upwards

I’m not debt free, but I put my gambling debts onto my mortgage.  The main thing I always have to do is remember that they are still there and not fall into the trap of ‘feeling’ debt free when I’m not.

After that:

- I use YNAB religiously, it costs me £6.49 a month but it more than pays for itself in the money it has saved me.  I used to go a bit overdrawn every month, now I never do by even a penny 

- I use regular savers with 12 month fixed rates and penalties on the interest earned for taking money out early.  This means I’m never tempted to pick at it in drive and drabs, and they also usually have the best interest rates on the market so I can beat my mortgage interest (this is getting harder though)

- I have direct debits set up on all my credit cards to pay them off in full every month, I only use them if there is a reward like cashback or decent points for doing so (again this is getting harder) or for purchases where I need the extra protection. 

- I live frugally but not like a spartan, I work really hard, there’s nothing wrong with having a meal out or new clothes or a holiday as long as I plan and budget for it. 

onwards&upwards

RyanHello said:

• If you can't afford to buy 4 of them, you can't afford 1 of them

I feel I must ask how many houses and cars you own!

theoretica

If you can't afford it at the end of the month, could you really afford it at the beginning?  It bugs me rather how it seems to be socially acceptable to say you can't afford something because it is the end of the month but isn't to say you won't do something so you don't run out of money before the end of the month.

BabyStepper

Make a budget, stick to it and do not spend more than you earn. That will keep you solvent. 

I'd also say make a long term financial plan. Work out your goals, how to achieve them, then every financial decision you make will either help or hinder your goals and you'll know the right thing to do. 

Lumiona

I track every spend, it forms my budget. We are frugal, all DDs are set up for straight after payday, the rest goes straight into savings. I utilise credit cards for cashback and rewards but they are paid in full.
I read a lot of minimalist blogs and the desire to splurge is no longer there.

Brenster

My excel spreadsheet is my bible, i have it set up to cover everything, including my allowance for spending everymonth, when i get paid, it gets updated, when i withdraw £20 it gets updated, when a direct debit goes out it gets updated, it also forecasts 12 months into the future, based on everything i know....holidays, birthdays, christmas expenditure etc....  I find it satisfying knowing that if i stick to my spreadsheet, i could have £x amount in 12 months, and it shows a logical / realistic route how to get there.
I think this tool has been learned from getting out of debt and has benefitted in the transition from debt to savings. 

RyanHello

Another tip..

Do not live paycheck to paycheck. I did this for years, utterly miserable way of living.
Having money doesn't buy happiness. It provides security, which leads to a much less stress free life!