It finally happened…I’m 100% debt free! It’s been a long time coming and I’ve been working so hard to get rid of this dark shadow constantly looming over me. It honestly feels like a huge weight has been lifted off my shoulders but the best part is….
EVERY PENNY THAT GOES INTO MY ACCOUNT IS NOW MINE!
Sounds good isn’t it! I’ve given up so much to settle my debts and I can’t wait to start living my life to the fullest again. Obviously, I’ll still be saving my pennies but it won’t be for other people, it’ll be for me. Maybe a holiday or a house? Who knows but it’ll be my choice what I spend my money on.
How did I end up with so much debt and how much debt did I have exactly?
Well, in my defense not all of it was my fault. Honestly. Most of my debt developed over time and only in the last few years when I was finally earning a decent wage I could finally pay it off. Obviously, most of it was but not all. Here’s a little break down:
EST. 2006. When I was a 1st year University student with no clue about money or the repercussions of debt. I think I spend most of this in my first couple of weeks of Fresher’s Week. What an idiot. Finally, paid this back nearly 10 years later.
The Bank Loan
The loan was for a new car because I crashed my last car (he hit me) so my choices, were buy a car or not be able to get to work. I paid most of that off when I finally got my compensation nearly a year later and the rest when I sold it.
Borrowed money for a house deposit
I found out I was going to be made redundant in 2015 when my office was moving locations. I was already driving a 3 hour round trip and wasn’t going to do more so I decided to find a new job. Luckily, I got accepted for an amazing job in London but I didn’t have any money to move there. A generous family member lent me the money to make the move and I picked up my stuff and left for London…with more debt.
The Dreaded Credit Card
I had a Credit Card for years but I never used it really. I just used it every now and then if I wanted something purchase something safely (which is what it’s meant for) which boosted my Credit rating. Then, I started using it to buy things to keep me occupied in London. I bought my SLR Camera so I had a hobby, train tickets back home for the weekends or holidays…lots of holidays. This was the last thing I paid off recently to clear all my debt. It feels nice to actually own everything I bought.
Debt from the Housing Scam
I’ve spoken about this a few times now but most of my debt came from this problem. I was scammed out of £2000 for a deposit, admin fee and rent on a property in London. I was pretty distraught about this obviously. It was a lot of money and I almost became homeless. I had saved up for months to move out out a house I hated and into somewhere new but lost everything. I was going to save up immediately after this to pay off the rest of my debts but this was put on hold so I could save up another £2000 for another place in London.
Work kindly lent me money to help me with my housing deposit. I’ve never borrowed money off work before or taken an advance but it was interest free and would work it off every month with my wage. I ended up paying this back by doing additional weekends. Helped me out of one sinking hole but put me into a smaller one which was easier to climb out of.
In total, I’ve been in debt since 2006 and with a grand total of approx £7-8k debt. Think of all the interest!!! I wish I knew better, made better choices but like I said not all of it was my fault. Things built up and things just happen which are completely out of your control but it’s up to you how you resolve matters like debt.
I wanted to get out of my debt as soon as possible. One of the reasons I took my new job in London was so I could concentrate on saving but things got in the way. It was time to knuckle down, make some cut backs and start saving up. Here’s what I did get get myself out of debt:
Bye Social Life
Cutting down on social events and evenings out is the easiest way to save the pennies but also the most boring. Lots of cosy nights in and staying away from those temptations outside the door. When I’m with my friends, I spend a lot of money on alcohol and food. Think of all the money you can spend on night’s out once you don’t have the bank taking money for interest.
I missed takeaways. I actually crumbled a little towards the end of my saving on a few cheeky Indians because I was too excited about having them again. As a northerner, I found it so difficult not to grab a fish n chips on a Friday night but it’s all worth it now. £10 for a pre cooked meal is pretty outrageous when you think about it. Cook your own meals and save money.
Stop borrowing money
I hate borrowing money anyone, so this was the easiest to do. They only reason I ever borrow money was if really needed it for something or my parents are just being nice so I can have a nice weekend etc. Stop borrowing money to stop the increasing amount you owe is an obvious one but can be hard for some people.
Stop going on holiday
This was the hardest one for me. I don’t just love my holidays but it’s a part of my life now. I work in travel and I’m a travel blogger. If I don’t travel, I have nothing to write about. However, I took a little break for mental health reason this year and that’s probably where I saved the most money too. Even on a free trip you have to feed yourself.
Stop buying things I want and just what I need
I’m really bad for this. I spent most of my life wanting things I couldn’t afford and now I can technically afford them, I have to try to not buy them. Nothing outrageous, things most people would take for granted like new clothes, makeup, grooming (can’t remember the last time I had a hair cut) and treats. I’ll be treating myself to lots of things next month now my debts are gone.
Going through your bank statements and actually looking at your expenses isn’t my favourite hobby but it really makes you see what you spend your money on. Direct debits for things you don’t use or need anything, cancel them. Memberships to companies like gyms or steaming services. You can even have a look at bills for utilities renewals and try and find a better offer elsewhere. Save those pennies.
Direct debits into my savings account
I made a set amount from my savings every month to go directly into my savings account. I would typically say 10-20% of your wage should go into your savings. I couldn’t touch this unless it was an emergency. This helped me save up and give me a figure for the rest of the month to work with for everything else I needed like food shopping etc.
That’s me, debt free. Now all I have to decide on now is what to save up for next and what to use my extra cash for? I feel like a lot of stress and anxiety has been taking off my shoulders in one swoop. It’s a great feeling. Looking forward to spending my cash now, in a sensible way. Lessons learn’t.
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Have you got any other money saving tips on how to become debt free? Let me know in the comments.