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.
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.
Create a Budget
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.
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.
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?
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?