Hello Dear Reader,
As an avid reader of Elaine’s Mortgage Free in Three; her post today asked people to set a date when they would stop using credit. I too would ask anyone to do that as I wasn’t in the position to choose to get out of debt but forced to as the bank refused my mortgage. I had to get rid of my debt and you may be in the position right now where you need to get rid of debt too.
If you want to get a mortgage. Banks and Building societies are really fussy. They will want a 25% - 45% deposit if you want a decent mortgage rate. The current 5% deals with government loans (stupidly sub-prime in my opinion - if you can’t afford the full deposit then you really can’t afford the full loan) don’t offer the low mortgage rates. Also, if you have any other debts, you are unlikely to get a mortgage! The before you save for a mortgage deposit, then you need to clear the debt you have first so you can secure the very best deal.
If you want the freedom to move to a different rented property, as agencies will run credit checks, you will also want to get rid of debt. If you want to move on and get your first home, rented or otherwise, you will need to get rid of debt too or you will carry it for years to come.
Just like Elaine, I’m going to ask you to set a deadline. Elaine asked when it would be that you stopped using credit. I’m going to ask a similar question and ask by what date do you want to be debt free? Say, write it down, blog it, Facebook it but make a public declaration and stick to it. We set the date of being debt free by the London 2012 Olympics and actually managed to be debt free a year earlier. We made that happen as both of us took on extra work and sacrificed every penny beyond mere survival to do it. We are now frugal but we used to be deeply deeply frugal and didn’t let up for one second until all our debts were gone.
Give yourself a swift kick in the butt and make that promise right now! It’s going to be difficult but never as difficult as never starting at all!
I’m on Radio Cornwall tomorrow talking about managing and getting rid of debt. If you would like to share how you are managing your debt or how you got rid of yours then email [email protected] and we’ll share your stories on air. If you would like some confidential advice (we’ll not mention any names or locations if you ask us not to) the the Truro Branch manager of Christians Against Poverty will be in the studio with us to answer any calls or give advice on debt management. You can also call on 01872 22 22 22 between 11 - 12.
You can make a pledge right here! When do you aim to be debt free by? Who is debt free and is able to say how long it took them to be so?
Until tomorrow,
Love Froogs xxxxxxxxx
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We are debt free for the first time in, well if we include credit cards, N**t Directory, personal loans etc, 20 plus years. We have a small mortgage left which we are throwing massive overpayments at, and I pledge NEVER TO GET INTO DEBT AGAIN. We got into debt because, no matter how we dress it up, we were spending far more than we were earning and had no savings in place to deal with emergencies or needing to replace things. We borrowed to go on holiday, we borrowed to replace the washing machine etc etc. Not so long ago, as I said on Elaine's blog, debt was seen as wrong and if you didn't have it, then you did without until you'd saved up for it. Now, many people think they should have things right now, that somehow they deserve things, that they shoud have the same as the neighbours along the road who are earning twice as much. They don't regard credit cards, store cards etc as debt. It's seen as normal these days to use the credit card. I know that some people get into debt because they genuinely don't have enough to get by on, but many people, ourselves included, get into debt because they buy stuff they want immediately and don't have the savings to pay for it.
Being debt free is brilliant. We set ourselves approximately 4 and a half years to clear our £25,000 of debt (and I was only working part time and OH wasn't earning very much). We achieved that almost 18 months early. Changing our habits wasn't easy at first and we did without an awful lot, but it was absolutely worth it and I would recommend it to anyone. We set ourselves targets; keep out of the overdraft permanently (we were overdrawn every month!), clear the store card and credit cards, then clear loan 1, then loans 2 and 3. Reading frugal blogs daily really kept us going because you can feel very isolated while clearing debt and it's good to have the support of others.
Good luck everyone and don't give up. It's definitely worth it x
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Making that decision and having a deadline certainly works to pushing you towards reaching your goal. I refuse to have any consumer debt by the age of 40, so my 40th birthday is my deadline (and of course, I want to reach it sooner!)
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Setting a date to be debt free is all about making a commitment to yourself that you deserve more: more security and a life without major everyday money worries. The day you make that commitment to yourself is the one when you will start to feel liberated. It will be an uphill struggle to get there but oh so worth it in the end.
Debt free roughly 10 years ~ Pru
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Like sue , and a lot of other people we lived the life of posh cars , anything in the house we wanted ,maybe not needed , living on credit , extending the mortgage which we could afford the payments and loans and credit cards , we were fine until my husband became ill and could not work , we struggled by when i was working full time and he was covered by mortgage protection for two years , then i was suffering with ill health and could not do the lifting in my job as a charity shop manager ,health and safety said i could not do the job any more after six moths of sick , we had to sell the house and rent it back as benefits would not pay the mortgage but they would pay the rent , we have now moved to a smaller house we rent which we love,and i have started to be self employed part time , we have got rid of our biggest debt with the mortgage and can afford the rent , we now have to tackle the debt , in January we made a pledge to have no more debt , if we cant afford it we dont have it , writing my frugal blog and reading others keep my from straying and i intend to be debt free by 2018 but would love it to be sooner if income allows.
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We're already debt-free apart from our mortgage, but I have set a date of 21st June 2017 to pay off the remaining £25000 (actually we owe around £24800 as I already reached the goal of being under £25000 by the end of December 2013). 21st June 2017 will be my 60th birthday and will mean we'll have knocked around 7 years off the term of the mortgage by overpaying while interest rates have been so low.
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October this year. The only debt I really have is on a credit card, it is a big debt, but I have switched to zero percent interest for thirteen months, and my debt repayment is super, super aggressive, oh the joy and peace. Thanks for a thought provocation Froogs.
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I love that. We do deserve more.
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what a great reminder!
can I ask how you do an emergency fund if you don't use credit? ours is in redraw against the mortgage but I know some suggest keeping in separate…?
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Whilst I was paying back debt, each month, I set aside £100 a month, that I created by making draconian savings else where, and that went into a savings account. That was seperarte from any other budget and not saving for car costs
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However, I didn't buy any thing with that money and worked towards having three months joint salary in the bank, I now save much much more than that a month. I still don't buy any more than I need. I could afford the Caribbean for a holiday this year but instead I'm renting a caravan in France for two weeks - I still live well below my means. I can feel another post from that statement
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Thanks!
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I read your posts everyday and find them an inspiration. I have been trying to decide what to do about something and wondered if you would have an idea? I am working on replacing our flimsy curtains with line (homemade) substantial curtains to help keep the heat in and draughts out. The problem is too may of our windows have radiators directly beneath them. So annoying. Short curtains? Lined roman blinds (less fabric needed)? I am probably overthinking this but I wondered what you had done. I
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We have had no credit cards since 2006 and another debt was paid off in December, just six more to go!
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Credit card Got cut up and burnt. Boy Oh Boy it was satisfying. Overdraft is gone. Credit card is going to 0% interest and should have it cleared by April . The loan then gets its butt kicked and then The mortgage. I am doing a lot of extra shifts any extra work gets paid off sent.
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Last lap - another 3 payments to be debt free by the end of March (inc Mortgage).
Have to get it done as we'll lose a third of our income then - proud of being able to get 'my ducks in a row' - just wondering what the feck I was spending it on before… well done to everyone else who is kicking their own butt 🙂 You're doing a GREAT job! xx
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We are debt free except for the mortgage and it's wonderful to be saying that. For so many years in my first marriage I was up to my eyeballs in debt it was only by starting again alone and chucking everything I had at clearing my half of the debts (which were virtually the only thing I took when I left) that I felt able to breathe freely again.
We have credit cards, two in fact a Tesco and an M&S card both of which give points which convert to vouchers off future shopping in the stores. They are used wisely purely to give us the vouchers and always paid off in full at the end of the month. In fact I have just bought a car on one of them I can't wait for the vouchers from THAT purchase, of course the car money was really sat in our bank account, all saved in advance as we knew it was a purchase we had to make. 🙂
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