What did you do before debit & credit cards?

ms_london

I am just at the end of paying off a huge chunk of debt (see my signature), and it now stands at £3,397.13. I have three more payments left, start of Sep, start of Oct and start of Nov - after November I shall be debt free. Hoorah.

It was only when I had no more credit available to me (and still dont) that I HAD to live within my means, and I have learnt so much since I have been repaying my debt, that I am pleased I got into debt, as I wouldnt have learnt half the things I know now otherwise (as well as finding this board, which has definately saved me money!!).

All of my bills come out on the 1st of each month (aside from my mobile phone bill, which is about £20), so, say on the 2nd I know how much I have left for the month. Up until last month I had a p/t job as well as my full time job, so if I knew I had a lot to pay out one month (i.e. a lot of birthdays, holiday etc) then I could up my hours. But I decided that I would give up my p/t job and enjoy life a little more (it was getting me down, and I had been doing it for 2 years, and in London, it wasnt easy!).

I go on holiday next Friday (whoo!!), it was paid for a few months ago, after having saved for it since January, and I also have the spending money saved, so no panicking about being skint this month before I go away, which is such a good feeling. Then when I get back, I have 6 weeks until I am debt free, and after my bills I will be left with about £240 a month. This is for food & socialising, "me money". I do the same as some of the other posters, and withdraw £50 on say a Tuesday, and that has to last me until the following Tuesday, and it does work. If I overspend the first week I know I will have less for the following week and so on.

I dont want to spend my money nowadays and feel I have gone from one extreme to the other, and am definately not a "material" person anymore, I definately was before Im ashamed to say.

It will be strange once I am out of debt, but I know for a fact that I still wont want to spend my spare money, and initially will be saving for going travelling, definately wont be wasting it.

Sorry to have rambled on.

Knowing where you are with your finances is such a relief & you dont have to carry this "I have no money" burden around with you. Something I always used to say. I am a lot happier now than I ever was before.

Ms_London xx

crazyhazy

Haven't read all the replies but thought I'd add my bit, while I do have some debt and am keeping on top of it, it was annoying me how I could spend so much each month on nothing. Even though i was doing the grocery challenge, pin challenge etc! I looked at my bank statements one month and had with drawn way more cash than I needed for essentials. So since then, about 4 weeks ago I have allowed myself to withdraw £60 every sunday, this allows £30 for food, £20 for travel and £10 for spending. Anything I have left on a saturday night goes into my money jar and every month I am taking the money tstraight to the bank to pay off my credit card. So far this is working really well and I am definately spending less. Give it a go, you might be surprised how much you save!

TigerAngel11

Before I had a debit card? Um, I had pocket money!

Try drawing out your expected monthly expenditure as soon as you get paid (assuming you get paid monthly) and stick to it - hide your cards! One trick I once read is to freeze your credit cards in a tub of water: the water doesn't damage it and you will have to wait at least 3 hours for it to thaw, so you won't make any rash decisions (microwaving it damages the magnetic strip, so there are no shortcuts). It could work well if you tend to spend impulsively. Try carrying around only cash - leave your cards in a wallet at home. If you're afraid of needing more for 'emergencies' just keep a spare £20 note in your cash wallet - if you have the willpower not to spend it.

Also try saving your 'odd' bits of money - I save £1 coins now and it doesn't matter whether I have several in a week or just one in a month, I plonk them in my jar. If you can't afford £1 coins, try 50p or 20p pieces. You can use the money as a way to save (if the container is sealed you can't get your money out without breaking it, so you tend not to keep dipping in) and transfer to a savings account once its full, save for something special you want or simply use it for emergencies.

ms_london

I think that life can function WITHOUT credit cards/overdrafts etc though. Everyone should be able to live within/below their means. I can appreciate it that a lot of people like having them for "emergencies", but youve got to admit that they arent always dire "emergencies" are they? It just takes a bit of planning & self control I suppose. If you havent saved the money for a holiday you shouldnt have one.

Oooh how ive changed :0)

ashmit

you don't have to wait hours for it to thaw if you stick the tin or tub in a bowl of hot water. i wish there was a way round that mine just live in my drawer and i rarely even look at them, never mind spend on them. they're for stoozing not spending.

what about me, ms_london - i spend on my ccs for the cashback and to get the interest on the money cause it's in my account for 30-40 days longer than it would have been otherwise, but i always pay off in full and always know exactly how much i have to spend. at the minute i'm actually £70 overspent this month because i had to go and visit my grandad as he had a stroke and is seriously ill (although recovering now) and i couldn't bear to wait any longer to go and visit him - the train fare was £100 so I've already clawed back £30 of my overspend and will have cleared it all by next month (unless anything unforseen happens). normally i won't go and visit anyone unless i can use the money from my travel account but this wasn't budgetted for (my parents had told me they would pay for me to go down but my dad got an unexpected puncture while we were there so most of the train fare money went on a new tire!)

I don't spend much on luxuries and rarely if ever is it unplanned if i do - do you think i would be better going back to using cash instead? I'm just curious

mah_jong

Jon_J wrote:

, I have £700/mth to spend on food, petrol, going out, clothes, holidays, etc, etc - in fact any thing else (incl. emergencies).

i was so deep in thought at remembering the old days that I forget to add ..... my monthly take home pay is around this and from this the mortgage, c/tax, leccy/phone /internet infact, everything, gets paid.

Why am I not in debt...quite frankly i could not afford it!!

Stompa

I am absolutely convinced I would not be in this position if it I never used debit and credit cards. What do you think??

I think that's complete nonsense. I've used credit and debit cards for the last 25+ years and have never accumulated any debt on them - I always pay them off in full at the end of the month.

Don't spend what you've not already got!

Stompa

calleyw

I believe the old adage is pay yourself first rather then saving what is left.

The OP says they have £700 left over to spend but what if they DD £200 a month to a cash ISA then they would have £500 a month. I bet they would not even notice a drop in the quality of there lifestyle.

Most people are like it is the bank so I can spend. So they will. But if it is put somewhere else then they will tend to forget about it.

I once had about £1k in credit card debt and seemed to be getting now where in paying it off. So cashed in a stocks and shares ISA and paid off the debt and have never run it up again. Pay off as it comes in. Don't have pin numbers for my 2 credit cards. Means I can use them on-line but I tell myself that I can't use them in the shops as I don't have the pin number. Works for me.

Last year me and my husband went on a very expensive 3 week holiday in australia. But we had the money let the credit card take the strain and paid it off when the bill came in.


And budgetting help as well. Shows you what is coming in and going out. As well as a spending diary you can see where all the money is going.

Yours

Calley

ashmit

Stompa wrote:

I am absolutely convinced I would not be in this position if it I never used debit and credit cards. What do you think??

I think that's complete nonsense. I've used credit and debit cards for the last 25+ years and have never accumulated any debt on them - I always pay them off in full at the end of the month.

Don't spend what you've not already got!

Stompa

Stompa, I think you've misunderstood what the OP was saying. S/he wasn't saying
anyone who uses credit cards will end up in debt
... rather I think s/he was saying
if I had not got a credit card I would not have ended up in debt.

I think that this is the case for me, personally. I would never have got 'a loan', so would never have been indebted. But I applied for a charity credit card and (I know, I was incredibly naive) it never really occurred to me that I had to pay off the balance. Then Natwest asked me to come in to review my account, and next minute, I had a loan to cover it... and a balance-free credit card. Could have ended in disaster if my parents hadn't stepped in and I hadn't discovered this site. Whereas if I'd just stuck with living without ccs and dcs, I would not have got into debt in the first place.

but yes, some people can have them all for years and never get into problems. I'd say that this dichotomy (which may be misspelled!) is a direct result of not teaching people how to budget realistically in schools. How can we leave it to the parents when 50% (or whatever) of them are just as bad and as indebted?

Stompa

Stompa, I think you've misunderstood what the OP was saying. S/he wasn't saying
anyone who uses credit cards will end up in debt
... rather I think s/he was saying
if I had not got a credit card I would not have ended up in debt.

OK, point taken. I'm not sure I was interpreting it as anyone who uses credit cards will end up in debt more like some people who use credit cards may end up in debt.

Stompa