Becoming debt-free and going back to 'normal' - did you?

chubsta

I have been fortunate in that I am now completely debt-free, with my final debt, the mortgage, being paid off earlier this year, I now owe absolutely nothing to anyone and am even in credit for my utilities. I was never in terrible amounts of debt anyway and always coped but I hated having money going out each month so for the last 3 or 4 years I did everything I could to pay it all off and not get any more - it worked! Particularly the mortgage, I overpaid on that and really scrimped and saved everywhere to enable myself to do so.

So, six months down the line and I am finding it really hard to go back to what I would consider 'normal' - the money I was using to pay off my debts now gets saved each month and I still live very frugally, to the point where I can easily afford to by myself nice things but still don't because I am almost scared to spend money.

Example - I have an old 16gb iPad Air 2 which runs really slowly and is a pain to use and I do use it a lot and get really annoyed with it. CEX would give me about £90 trade in for it against an 8th Gen iPad which would effectively cost me about £150 and would be massively better to use. Im not even talking about buying a new iPad here, even though I saved 3x as much as it would cost to buy one from Apple this month alone. But I still can't bring myself to do it.

It is almost like having worked so hard to get out of debt I cannot enjoy it, it may seem like a lovely position to be in to almost everyone on this board but it is genuinely causing me stress - it is lovely seeing the money in savings but I am already planning to have a sandwich for tea tonight instead of a nice take-away, of which I only allow myself one a month.

So, finally to the question - you hear a lot about people who have loads of debt, get rid of it and go back to their old over-spending patterns and back to square one, but are there others like me who not only don't do that, but go too far and end up effectively a miser, those of a certain age may remember Norbert Colon in Viz, it seems like that is my destiny at the moment...

El_Torro

I'm fortunate enough to have never had any serious debt. I had a Student Loan (paid off now) and currently have mortgages, which I don't plan to pay off any time soon (one of them is interest only). I even once bought a sofa with a 4 year repayment plan, though I only did that because it was 0% interest.

I have seen people in a similar position to yourself. Saving / investing money to achieve a certain goal, then once that goal is achieved still acting like they can't spend. Some people save for decades and cram money into their pension, then when it comes to retirement not wanting to spend any of it. 

As with many things it's all about moderation. Saving towards a goal (being debt free, or being able to retire, or whatever) is great, though if you can afford to spend money on something that will improve your quality of life but you choose not to I think that's a problem too. People talk about lifestyle inflation, though I don't think that avoiding 100% of that inflation is healthy either. 

To answer your question, no, I'm not in this situation, at least not yet. Time will tell if I continue to be as thrifty with my money when I'm financially independent. I'd like to think not, though it can be hard to change our behaviour when circumstances change. 

BlueJ94

I think, due to you being in set ways to be debt free for so long you’re going to find it hard to buy nice things for yourself. 

Maybe set yourself budgets for different spending pots? This is how I plan to go ahead in future. I hate hate hate spending money at the moment but I plan on setting myself a goal for how much to save and spend at Christmas as it feels like an achievement if that makes sense? I’m essentially tricking my brain into thinking the debts there when it’s not?

Bored

Can you start with small steps as you become more confident spending money? Give yourself permission to have the takeaway once a fortnight rather than once a month, for example, and see how that feels.

MovingForwards

It was very hard to switch from paying debt and saving, to parting with savings to buy things and so I created a 'float' for things. A savings pot I don't mind spending from, whether it's treating a mate to a nice birthday meal, buying clothes, shoes or other everyday possessions. 

I've got 'pots' for pretty much everything including emergency funds for the mortgage, another EF for bills, another EF for food; I don't touch those as they're in case of job loss so I know I'm covered for 6 months.

I also have a home emergency fund eg leaks.

Got one for my annual insurance and car repairs etc, that's pretty much the only one which does get used.

Having that separation made it easier for me to come to terms with spending money.

craftyali

I am just starting to be like you.  I cleared my final debts this week and was excited to research where to put my increased payment to savings (regular savings within my main bank account).  I want to sell my car (as realistically I don’t need my own car now).  I am pushing hubby to move to a smaller home within the next 5 years.  I think about every pound of income and expenditure.   My current iPad is slow and glitchy, and regularly think about replacing it with a newer Pro, but then I tell myself I am coping, so why spend!  I have simplified our home and wardrobes (I have had a capsule wardrobe for over 3 years), and continue to declutter/budget.  All I want to do is save, get private health set up, and pay for a funeral plan.  I am 51 and hubby is 55, so I suppose I am thinking about security for old age.

madaboutspots

If you have healthy savings why buy a funeral plan? 

You risk your money being lost forever (check out Safe Hands recent collapse) and you pay now for a contribution towards funeral costs later. It doesn’t make financial sense.

Better to have money set aside along with as much detail as you want in an expression of wishes as a guide/instructions for those left to make arrangements. 

Funeral plans are a way of finance companies getting your money now to do with as they wish. It’s also a way for funeral directors to ensure they get your custom. 

There are much cheaper alternatives these days. Do some research and think about why you’d actually want. Funeral Directors prey on peoples’ grief at a vulnerable time or their worries for their children having to arrange things.

Do you really need a hearse? Very expensive when any vehicle you fit in will do. An estate can be £100 ish versus a hearse at £500+! They’re specialised and incredibly expensive vehicles that have no other use so have to pay their existence every time they go out. Flowers can be brought from your garden at home. Family can choose to carry you instead of paying for bearers. Funeral Directors don’t want you to know any of this as it’s how they make their money and inflate their prices.

If you want a bearer they’ll charge you. If you want a limousine as well - that same bearer will be yours as a driver and then to carry with 2 separate charges. 

EssexHebridean

Congratulations on becoming debt free AND mortgage free too - that's a heck of an achievement! 

Hopefully you can already see from the responses that you are certainly not alone in the situation you are in - I think pretty much all of us who've cleared debts/mortgages etc have been there to be honest. Remember that for the past several year's you've been being super-careful with money in order to fund a better financial future for yourself - you've formed habits, and habits time time to form but also time to break, too. The key here is to think which - if any - of those habits you actually WANT to break. Things like stopping to think before you spend money on non-essentials for example is a great habit to be in as it gives you time to analyse whether in fact you actually need and want the thing, or whether it's a knee-jerk reaction which you will later regret. 

we do still save a good chunk of money each month, but we also have savings pots for holidays, for general fun stuff we do together, and our own personal spending money each month which is entirely down to our own personal choice what we spend it - or don't spend it - on. I save a little money each month against future upgrades to my camera kit or phone, for example. Having specific pots saved to spend on certain non essential categories means that when one of those purchases comes up as a possibility I don't have to deal with the potential for guilt around spending money that could be better used elsewhere - in a couple of years time when I want a new phone for example that money will be there ready, and while I'll still research and shop around to find a good deal, once I have, because that money was already earmarked for that purchase it makes it easier to commit to the purchase because it's almost as though that money was never in the "general savings" equation for a start - I don't feel I'm "robbing future me" if that makes sense? 

Also - re "normal" - remember that prior to you clearing your debts normal involved being less mindful about your spending, at a guess, and also paying people interest to borrow. The "normal" you want to strive for now looks different - and also different from the vast majority of other folks in every day life! 

chubsta

Thanks for all the wise words everyone - once again I sat there this morning poring over my financial situation, trying to work out whether I should buy myself that iPad, or even a new iMac as the one I use is a 2013 model, and I still can't bring myself to do it, as they are both still doing what I need them to do! I can almost justify the purchases on the basis the replacements would last me a very long time but what the heck, I don't 'need' them...

Still, it takes me away from doing my usual pension calculations and forecasts which I seem to be obsessing about at the moment too - I guess part of my reluctance to spend is that I have had enough of work and would love to retire early so go round and round with my calculations as to what I would need/want to be comfortable.

I guess I can count myself to be incredibly lucky in that I have 'options' in terms of my spending, retirement date etc, but life would probably be far simpler, albeit harder, if I didn't - its weird how things go...

SusieT

Why not start checking various websites for them and note the prices for the specification you want. Then wait until November, and if one does not come up in the black friday sales, you buy whichever of them you fance at that time, and call it your "well done for getting debt free, and for thinking carefully about the purchase" present?

DjangoUnchained

yes, 5 years ago was £60k + in debt.  managed to become debt free 2 yrs ago including mortgage.  when almost debt free first thing i did was to get a couple of the credit builder cards to try and build my credit score/rating. then it occurred to me it doesn't matter so i cut up the cards and vowed never to use credit again, unless absolutely necessary. i wont use credit for anything now, bought a modest newish vehicle under £10k paid cash, holidays paid cash. Not saying this to sound smug but more out of fear about going back to seeing the frightening amounts "wasted" on interest payments. Seriously, i could of paid for a new car with the amount spent on interest payments. I never earnt a high income and didnt really spend wildly but it slowly slipped into a debt spiral. almost feels normal at the time. I made a conscious decision and put a lot of effort into cutting the debt, thanks to this forum, learnt about defaulting and negotiated with the card companies.  I very rarely now buy "stuff" i try and spend more with family and nice experiences.  First time in many years i can now save (although watch it being eaten by inflation). I do have a fear of becoming in debt again which is good for me i think.  I know things may be very hard for many at the moment but dont give up hope. I found much motivation on this forum and other stuff. its a long journey but every step in the right direction helps.