The mental side

SPM87

sourcrates said:

The fact is no one has an automatic right to credit, and I for one, no longer want my life choices to be decided by some banks computer, which is why its imperative to live within your means, and save an emergency fund.

Since becoming debt free about a decade ago, I no longer use credit, at all, ever.

Planning your life around "what if`s" can be very unproductive, but do plan sensibly, for example, I know if my oil boiler packs up, its just the burner that would need replacing, as the rest is just an empty space, under £300 quid.

A certain fast fit garage offer what`s known as "payment assist" if your car is in urgent need of repair, no credit checks, no interest, just an affordability check, it allows you to spread the cost if need be.

There will always be a way, you do not need a banks money just to get by, that is the hook and sinker they use to trap you into a lifetime spiral of debt, you don`t need it.

interesting post mate, think I am being a bit thick on your garage payment assist thing... I plan to live this way myself, how do you deal with the car situation.. sometimes there is genuinely good offers when it comes to this so I am just wondering how you see that side of it.

Rob5342

Payment assist is a buy now pay later scheme that some garages offer, they don't do a credit check for loans under £1000. You should be planning for services and have an emergency fund but it can be a useful fallback if it comes to it.

SPM87

Rob5342 said:

Payment assist is a buy now pay later scheme that some garages offer, they don't do a credit check for loans under £1000. You should be planning for services and have an emergency fund but it can be a useful fallback if it comes to it.

sometimes you just dont like big lumps coming out in one go... this is a nice option if you dont want to use credit

13thlegion

When trying to live without debt one of the biggest things in my own journey was expanding my horizons in the budget.

You will see the advice here that to account for annual bills or expenses (Like MOT, or Xmas) you should divide the amount by 12 and set it aside each month as a line item in your budget/SOA.

I suggest this can be taken further than 12 months. Consider things like the boiler, washing machine, car etc. We all know they have a lifespan and will need to be replaced eventually so they can be accounted for in small chunks. You may find this means your monthly budget expands because of this, but in a DMP your creditors get what they are given out of what you have spare and it is realistic to say you can't spare the lots of little saving goals. The added benefit is that the emergency fund is just that - for unforeseen emergencies and not irregular large spends.

For example I no longer have a payment on my car as I own it outright now. However each month I make a car payment to my savings pot. I'm paying myself not a creditor. This means when I do eventually replace the thing I should be able to pay cash for it. I do this with all sorts of things now, from white goods, to garden furniture.