Not letting my credit card make the resolutions…


Actually MrC and I don’t have any credit cards. This is also the second year we’ll be starting absolutely debt free. It wasn’t easy though.

With that in mind I winced at our first of the month ‘post christmas’ bill realising it would wipe us out this week (MrCs pay and my CHTC and CHB) OUCH! Still as much as this plaster is going to hurt when the bank holiday is over, we’ve learnt to make contingencies for such an occasion. Its the bank of Mam.
A neat little trick we learnt while clearing our debt was to have a direct debit set up on the day I got paid straight to Mams bank account. This was so in the event of large bills (plus debts at that time) we still had £20 put aside.

We took 2 years to clear our debt of £7.5 thousand… and boringly we didn’t use any gimmicks or phenomenal trickery to do it. We used the old fashioned fool proof method of ‘living within our means’.
This meant 2 years of no alcohol, no takeaways, no holidays, not days out, no nights out, no movies, DVD rentals, parties (even for the kids), making our clothing last, no new furniture, shopping around etc etc
It may not have been pleasant for our young family, which now also included a new baby, but we managed and we are now completely debt free. Better yet… we did it on our own.

Well… when I say on our own… I mean the money/debt side of it. With out our brilliant family, we would have been allot worse off. Mams parcels of food and sweets for the kids, not to mention the kids birthday and Christmas prezzies (mainly clothing) were a godsend for a growing brood.

Quite a few people who we’ve spoken to over the last couple of years reply to us ‘i cant do with my…’ usually nights out, a couple of bottles of wine, etc etc… but each bit you spend could be paying off debts/ cards and so on.

When we got our7.5k wake up call we spent a day formulating our plan of action. (over tea and biscuits…. well that’s how us English do it :P)

  • We worked out how much we owed and who to. The number was scary, but its was the first step to freeing ourselves of this millstone.
  • We phoned/ contacted each one and sorted out a payment plan IE how much and how often. Because we we’re on a low income we could demand to fill in an earnings form. So instead of paying back the demanded £120 per week to someone it was determined (from out meagre income) that we could only pay £20 per week. (once that was settled on there was nothing they could do about it).
  • We worked out a budget for the above and outgoings (currant bills), of who we had to pay first and last for example the most important like mortgage or rent payments, council tax, and loan or credit card repayments. There were also more daily expenses like groceries, travel, clothes and toiletries. Car repairs would also be important to put some money aside for…. we however had lost our car to debt by this point.
  • Creating a budget (lost artform) forced us to review what we really needed and what was just needless expenditure. Would 2 years without lager and movies kill us??? Of course not! If anything we had to spend more time with the kids now that they we’rent goint to get the lastest game station or hand held widget…. not having 500 channels to choose from on the aptly named ‘idiot box’ was a great insentive to revert back to the good old fashion imagination.
  • While reviewing your vital outgoings you might also review (<— great word) if youre really getting value for money… are you paying too much for your utilities? Are there ways to cut down on how much you pay? We were paying £50 for gas per week in that house (3 years ago in winter), so MrC filled cracks in windows (large and small), we bought curtains and lined them not only for the windows but for the front and back door to keep the cold out in winter. We also got more sensible about wacking the central heating on at the slightest wim…. the thermostat was put at a permanent 18 degrees and we started to actually dress for the winter and not wonder around in shorts and vest tops. Far more sensible.
 “Remaining debt-free requires a shift in your entire attitude towards money and spending. The experience of debt is often enough to transform how you approach money. The key is to get back to basics and learn to live within your means. Some say the silver lining of the credit squeeze is that the reduced availability of credit will force us to manage our income more carefully, rather than simply borrowing if the funds aren’t available.

Saving up for expensive purchases was a way of life for previous generations but it has become an alien concept for many people today. It is a very useful habit we should all cultivate to avoid taking on more debt.”  Hannah Ricci from moneywise for yahoo.

We paid off our debt weekly, on time and now exist completely debt free…. and with this rationing experiment we are now at a point where we can actually save money.
Our new saving goal is a holiday in 2013 … Disneyland Paris for the kids (and us….who am i kidding i love that mouse).
After that goal we can now start saving for fun and sensible stuff… from birthday parties and a blowout christmas to putting something away for the kids when we’re gone.
Although those two years of debt clearing are most definately behind us we learnt a few valuable lessons about what we want and what we actually need. Having stuff is nice and fun… but not when you have to pay (and pay and pay and pay) for it later.
If I cant pay for it I DONT WANT IT!
Not a bad resolution to keep this year 😀

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