Debt Free Diary – Part One

OK, back in September I had a meltdown over our finances. We were in fact £12,518 in debt. That could’ve contributed towards a house deposit. Hence the meltdown.

OK, so I’ve talked in the past about working ourselves out of debt before, back in 2016 – Going Debt Free. We never actually managed to get completely debt free. Rather frustratingly so. I don’t think we ever actually get annoyed about it enough.

What changed?

Now we’re at a point in our life where we’d like to actually buy a house, but we’re drowning in so much debt that it’s not possible, we’ve nothing for savings, it’s all going out the door on bills.

Time to get organised.

Where to start

First of all, I went through every debt I had and asked Simon to do the same. Then added it to the spreadsheet so we had a record.

Then came plans, how on earth could we pay this down? How quickly could we do it? I think me having a meltdown helped to motivate Simon too. The thought that if we wanted to have a family or buy a house when we couldn’t even manage our money? I went into a tail spin. Sometimes a meltdown is a good way to vent and let out all of the frustration.

coins spilling out of jar
Photo by Michael Longmire on Unsplash

Create a Budget

Once you’ve an idea of where your money is going and where your pain points are, you’re better able to assess your spending…and how frivolous it can be sometimes. It’s time to get on a written budget, you should know how much money you earn each month. You need to list out all of your bills – these have to get paid and should include debt repayments. List everything, from how much you intend to spend on food to your monthly wax. I follow Dave Ramsey on this front – assign every penny on your budget so you know where you stand.

Once you get it all down, you’ll notice areas that you can cut down, or cut out altogether, the priority of paying off the debts might be enough motivation to make those changes. It definitely has been for me this time!

You’re aiming to increase the money going towards the debt repayment. I cut out extra things for a few months – like my audible monthly subscription and a few other things. Small changes add up and it meant over £50 extra a month towards the debt repayment.

I do allow a small buffer room for random monthly spends – like going to the cinema with a friend. I also still keep my monthly climbing membership, my health is important and I don’t want to go insane losing all of the things I massively enjoy either. That would demotivate me entirely. I just don’t be too lenient with myself.

Our budget did include saving for our trip to San Francisco in November and Christmas, so there is always room to pay off your debt, life doesn’t have to stop.

drawn dollar sign
Photo by rawpixel on Unsplash

Make Extra Money

On top of working full time Monday – Friday, I took on any extra work that I could. So in October I worked at Scaresville 5 evenings a week. I wasn’t the only person there doing it either! In December I worked as a Christmas elf on the weekends. It’s not easy working two jobs but it is massively worth it. When I received those payments, they went straight on the debt, nothing else.

Investigate PPI

Simon did this on an old loan that was a complete nightmare. Simon had a friend recommend Resolver and although he’d had no luck in the past, Resolver actually managed to reclaim a large chunk of money!

Set an end goal

It can be hard to keep motivated, however, giving yourself a deadline can really help. We’re going to be debt free by the end of October 2019. I may have said this out loud, on the radio. You can listen to me being on Radio 5Live with Nihal about 54minutes in. Nothing like public announcing your goal and agreeing to go back on the radio at the end of October to explain how we got debt free!

Can you do something similar? Can you publicly hold yourself accountable?

Debt Update

So I mentioned we were at £12,518 in debt at the start of September. We are now down to £8777. So that’s £3741 cleared in a few months. Things might be a bit slower each month moving forward as there’s not as much seasonal work available, but I’m hoping to find ways to keep up the momentum – aiming to sell things in the next month. I’ve cleared my tax bill entirely, hoping for a nice snowball effect on the rest. Let’s see how we go!

I’d love to know any tips you can share. Have you already gone debt free? How did you do it? How do you maintain it?

Debt Free Diary Part One Pinterest

4 thoughts on “Debt Free Diary – Part One

  1. Wow! That is an amazing amount cleared in a short amount of time! You’re obviously doing all the right things.
    We are the same with money, we periodically panic and vow to get organised and then it all goes to hell in a handcart again and we are back to square one with debit piling up again. We are incredibly lucky to have been able to buy our house with a gift of a deposit from my in-laws when we first both got debt free (mine were loans for uni (not student loan) and for course fees), and then of course with a new house and work to do on it, things went on the credit card, and then, voila. Debt again. We have just been to the bank and remortgaged and sorted everything out, and this time I am determined that we will not go back to our bad ways and will finally get our finances in order. We both have a head-in-the-sand attitude towards it, so I am forcing us to do a budget and weekly checks. I hope we will be third time lucky and actually manage to become financially responsible adults finally. It’s about darn time, we already have a child!! xx

    1. It can be so hard. We’ve got the motivation, it was exhausting working two jobs but entirely worth it – that gave us a big chunk, Simon’s PPI refund was another big chunk, so those massively helped. I’ve decided now that I’d said it publically and that I have to go back on, it will hold me accountable. This month I’m trying to sell all the things as there’s no extra job. It’ll likely slow down a bit though. It’s entirely understandable that your debt is on the rise again. I’m hoping we can get our savings in order so we’ve a buffer when we get to the house, but I know from people that a house can suck up money – something you’re dealing with. You can totally do this…we can do this! We can nail this adulting thing!

  2. Hi Aine, we live debt free and on an absolute minimal budget, working towards going completely offgrid soon. What triggered me wasnt debt but just the waste of money in our disposable lifestyles! My advice is find a great consignment shop (even one a bit far away, youll only need to go once a season) and get stuck in to selling everything. In our last 2 months of working life (we quit to live in the van) we saved about 85% of our after rent wages which was huge but i was making a killing silently selling our furniture, clothes, toys and even the tv in the condsignment shop! Minimalism was a great way to learn to see value in things which made us change almost everything about our lives, we quit drinking, started exercising more as there was less to clean arpund the bare house, we brought our own popcorn to the cinema at first, then changed to having a movie night at home as we couldn’t justify the prices! I write about our vanlife budget and it always gets a great response, the trick to a budget is actually sticking to it!! Best of luck to you in your journey!!

    1. I need to investigate a consignment shop, I’ve been trying to sell some things on facebook without much luck. I’m not sure I’ll ever fit into the “minimalist” lifestyle, not in traditional terms. I do however want less clutter and fewer things. I’m also trying to reuse and recycle more. We got rid of lots when we went to Bali and we’ve managed to keep our belongings under control. It is sometimes a struggle, I’m massively looking forward to the end of the year and being able to save the money that we pay on debt each month. Having that end goal is helping to keep me moving. I just need to remind myself of it regularly. I’m always searching for inspiration, so can understand people reading articles to keep the momentum going. Thank you for the tips!!

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