Its possible to get out of debt. (Debt Help in General)

Member Name: Claribella

Product:	Debt Help in General
Date:	11/11/08 (113 review reads)
Rating:

Advantages: You will never do it again

Disadvantages: Everything:(

Before I start this review I just want to say that nothing in here is fact. It is all my personal opinions and my partner and I's journey to become debt free. I'm not saying that what we have done is the way everyone should do but it has worked for us so far. So basically what I am saying is take what you like and leave what you don't but don't be offended in anyway because that is not my intent.

I think in todays society everyone has got into the mindset of 'I work hard so I deserve a treat'. Its so easy to get that 'treat' when credit cards and loans are being rammed in your face left, right and centre and its not surprising that almost everyone I know has some sort of debt. Even if people don't have credit cards most have a mortgage of some sort that they are paying off each month. I don't think I know anyone who is living to their means which is mindblowing. My dad always tells me how they didn't get what they couldn't afford and if they needed something they had to save up for it or just live without it or even get it (dare I say it?) secondhand. He also warned me time and time again never to get loans or credit cards but since when does anyone listen to their parents?

Now is probably a good time to share the 'rise and fall and rise' of our slippery slope into debt and how we have dealt with it so far.
My husband and I were both students and were offered our loans which we gratefully accepted but instead of being careful we thought we were rich and blew the lot on mindless junk. We also got married so of course we had to have a big white wedding even though we couldn't afford it. We did lots of eating out and in and just generally spent a few years acting like celebrities.

We had our 'moment of sanity' a year a go when we realized that we just couldn't carry on living like we were or we were going to end up in big trouble. We also had a newborn baby which made us really assess our lives.
So we decided to work out exactly how much debt we owed, not before buying a brand new plasma TV though. At the time we were maxed out on our students accounts and current account and we had numerous credit cards on the go. The final amount came to just over £9000. This may seem like a small amount to some people because I know a lot of couples are dealing with a much larger number than that. I just feel greatful that our 'lightbulb' moment came before we went any deeper.
I am a stay at home mum so we'd have to do this on the one and only wage my husband was earning because I didn't want to go back to work and leave Noah in a nursery.

After coming to terms with the wreckless way we had lived our lives we knew we needed to make a realistic plan to start chipping away at our debt, 'realistic' being the word here. We knew that if we cut out loads of things we enjoyed straight away then we were more likely to fail because it would have been too big of a mountain to climb. Here are some of the things we did straight away:
1) We cut our food bill in half by writing a cheap menu for the coming months and buying exactly what we needed, nothing more and nothing less.
2) We set a limit of £5 for Christmas and birthday presents and where we could we would make biscuits. I would also get Noah to make birthday cards.
3) We cancelled our membership to the gym.
4) We started keeping a monthly plan of every single penny we spent.

We also tried to consolidate all of our credit card and loans to a 0% interest credit card (we were paying tones in interest at the time) but we ran into a huge problem. Basically every time my husband applied for a credit card he was getting declined so we eventually did a credit check online. We found that the bank had black listed his name which we were not informed of this. After chatting to the manager of the bank he explained that the terms and conditions of both Andrew's student account and current account were that he had to pay his wages into them. Obviously this is an impossibility and thankfully they agreed it was their fault for agreeing to give him both the accounts in the first place. They said they would withdraw the black mark against his name and we were back on track again, or so we thought. Cutting a long story short, it took a few more letters and meetings with the bank manager before the mark was removed and we were eventually accepted for a 0% interest credit card.

As the months went by we tightened up our budget even more by moving closer to my husband place of work and getting rid of the car. This was a huge step for us as we were so reliant on it but it was just draining our cash flow because it was always breaking and the petrol prices were ridiculous. Now we walk everywhere and I love it. Not only does it keep me fit and healthy but I find I'm a happier person because of the endorphins that are released during exercise. I also feel that somehow we are cheating the system.

After 16months of hard graft and watching every penny we are all set to be debt free in just 2 months time! I just can't wait and I think we deserve a meal out, just the one though!
There have been 'blips' along the way and there have been months where we have forgotten our end goal and spent more than we should have but there have also been months where our cash flow has increased. My husband had a promotion, he marked the SATS papers and got paid for an extra day he worked over a recent holiday. We have also put a lot of our possessions that we just don't use, on Ebay which has made us a whopping £700! We have had another baby boy recently and although he hasn't cost us much, there have been a few things we have needed to pick up for him. Obviously the mark against our name set us back and we also went back into 'celebrity' mode one month and blew £1000 on meals out and junk.

One thing that really encouraged me along the way was picking an account or credit card and focusing on paying that one off. It was great watching the outstanding balance fall each month and when the last penny was paid the card would be chopped up.
Another thing I would say is to give yourself rewards along the way. That really helped me. We gave ourselves a budget of £2.50 a week to spend on whatever we wanted. Some weeks I would have to save up to get something but it gave me a goal and made me really think about whether I wanted it or not.

Over all I think we have definitely learnt by our mistake and its something that we know we will never ever do again. It has been a rollercoaster but I do believe if you are determined enough and set realistic goals for yourself then you can do it

Summary: A look at how we have worked towards clearing our debt.