How to start getting rid of debt?

Hello Dear Reader,

I've received emails asking me how you face the initial daunting prospect of getting rid of debt. I was asked how I started and then how did I keep going. Here it is.

I started by acknowledging that I would never get out of debt if I kept spending so the first thing I did was stop spending. I cut our credit cards into the tiniest shards and then burnt them! I told myself then and I tell myself now, if I can't pay cash for it then I can't afford it. We then sat down and worked out a penny by penny budget where household expenses came first and next was debts. There was nothing left when we worked out that budget. To begin with, that was enough. 

We then started to snowball our debts. We took all of the debts except one and made the minimum payment and then we paid all the money we had onto one debts. We cleared our first debts which were overdrafts really quickly and then the bug bit us! We felt that we were in control and started to get more and more frugal so we had more money to pay off debts. We changed our energy providers, we gave notice to Sky TV and our mobile phone contracts. Within no time at all, we had an extra £60 a month (£720 a year!) which meant we could pay off a further £60 a month to debts. We tackled our debts by getting rid of the smallest first.

As we improved our credit rating, we were able to switch borrowings to 0% credit cards and would be ready to move money as the 0% rate was coming to an end. Our last 'small' debt was our car loan and we moved the £4500 outstanding balance onto two 0% credit cards and paid that off really quickly too. In the end, we were left with a low interest home loan which we overpaid every month. By now, we were feeling euphoric as we could see the end in sight. We set the target of paying off debts by the 2012 Olympics and managed it a year early.

I changed my shopping habits to seek out every ingredient at the lowest price and set a weekly budget, weekly menu and stuck to it. We didn't buy newspapers and magazines (and still don't). I stopped having my hair cut and coloured and coloured it myself and just let it grow. We didn't buy any gifts but made them, we didn't go any where and had no holidays or weekends away for two years. We turned down all invitations as we were struggling for every last penny and a wedding was a frippery in comparison to eating that week.

We used public transport instead of the car as fuel prices rose before train fares did, although they've caught up now. We switched to a water meter and sold our big American washer and separate dryer and with the money bought a AAA+ rated washing machine. We used a half the water and energy. We bought three clothes racks (I still have them) and dried all our washing in the garden or inside. We started sniffing clothes and looking for marks, if they didn't look or smell dirty then we put them back in the wardrobe to wear again. 

We became intensely interested in our energy consumption. Even a cup full spare of hot water was saved, even if I just added it to the washing up water. We learnt to ration water by timing our showers and spending less time in there. We found that a quick wash programme got our clothes just as clean.

I learnt and still practise home beauty treatments. I have mastered home waxing, pedicures, facials, deep cleansing and moisturising and I haven't set foot in a hairdressers or beauticians in years. We learnt a lot in the early stages and became good at spotting good clothes, bedding, curtains at charity shops, jumble sales and car boot sales (I still do this). If we needed to buy anything new, such as our washing machine, we scoured the internet and then bought locally by getting them to price match. We've learnt to buy insurance at the right price, then buy it through Quidco, with our cash back debit card and get some money back after two months. We always buy our diesel from Tesco(poly!!) to get points which we save through out the year. Even though we are totally debt free, our frugal habits still continue as we pay off £18000 of mortgage capital a year. Next year will be the first year where we pay in excess of 10% of the balance and we'll soon start to see the debt reduce.

It is hard to keep going. We have lost touch with people and we can't attend social events. We simply don't have the type of clothes to wear to a posh do and to be honest, I don't miss the needless worry about social niceties and the silly expense. I don't miss eating out and most take away food is bad for us so we don't miss that either. We don't miss the pub as we rarely went any way. We didn't miss holidays and as I've had two this year, I won't be having one next year. We enjoy a week off work at home as it's an opportunity to get our teeth into a project at home that we've usually put off for a whole year. 

To answer another question, yes it's incredibly hard to stay on track, but so is dieting, giving up anaddictive behaviour, living mindfully and consciously but it's certainly not impossible. Did I ever get fed up or depressed, yes I did and I did before I was frugal. Some of us are like that. I soon learnt that negative days were few and far between when I went back and read my blog. I saw a woman who lived in the sunshine and even if she wasn't smiling, painted a smile on her face and got on with it. 

We both rose to the challenge of making extra money. We had a lodger, we sold items we bought in auction house (vintage cameras and radios) on ebay. I would buy clothes at jumble sales and then ebay them. I marked exams, I worked in the evening tutoring. I worked in my holidays cleaning caravans. We foraged for fruit and made jams and chutneys, which we're still eating. I made soap, which we're still using. I made quilts from scrap fabric, that we're still using. 

I've certainly had a lot of blessing from getting rid of my debt. When I wanted to change jobs, I could. I wasn't tied to an income. I could move to a job I really wanted to do and to be able to follow a career path of my own choice is certainly something to be very grateful for. There are people who hate their jobs but are financially tied. I've learnt a great deal more sense over the last few years. I've learnt to really prioritise, to budget, to make do and mend, to get creative, to quilt, sew, make clothes, make bags. I'm a better cook. My gardening didn't improve but my home improvement and DIY skills certainly improved. I'm far more financially astute and now look at how I spend in a thrifty way and ask at every juncture, do I need it? If I do, can I make it? If I still need it, am I buying the best quality I can afford? Will I wear this in two or three years time? Will this mix and match with what I already have?

The process of getting rid of debt started with us both deciding that working our collective bits off to pay interest and keep fat cat bankers in offshore bonuses was something we were not going to do any more. We worked and the only people who benefited were the banks. Now we benefit!! We will have paid our mortgage off in eight years or less (or more if the interest rate shoots up). There are those who belittle our efforts (I've often told them to 'jog on' and continue to do so) telling us we could die tomorrow or pay off our mortgage and then keel over. Neither of those are likely, I know one thing, I can't spend it now and live comfortably later if it's all gone. I'll continue the frugality as it's fun. I love a challenge. I hate waste and consumerism and I want to give banks and the multi-nationals as little of our money as possible.

I hope that answers your questions. Yes it was hard, sometimes really tough but it was worth it. I am solvent!

Until tomorrow,

Love Froogs xxxxxx