So you’ve decided to tackle your debt, now what?

debt, debt free, debt freedom, financial freedom, debt busting

You’ve finally made the decision!  You know it is time to tackle your debt.  You are fed up with how much your debt is holding you back.

The trouble is you just don’t know where to start when it comes to beginning to tackle your debt.  That was the exact position I found myself in when I had my lightbulb moment.

Lightbulb moment

My lightbulb moment came a few years ago now.  It came around the time when we had just returned from our first holiday to America and we decided we wanted to go again.  Having gathered together all our remaining cash we could only muster up enough for one return ticket and we needed two.

The credit card was maxed out and the only option we could come up with was to apply for a second credit card, which we did.  We were accepted and, as soon as the card came in the post, we promptly booked our flights.

Minimum Payment

Prior to this we weren’t at all worried about the amount of money we owed.  After all, we were paying the minimum payments so what was the problem.

But We Deserved It

‘We deserved it’ was our favourite way of convincing ourselves that it was ok to spend.  No matter what it was.  We had bought our first property, borrowing the maximum amount that we could (as advised by our parents – they told us you could never lose out in bricks and mortar).  Yes, they were the exact words they used and they haunt me to this day.  Within 6 months the property market had crashed and we found ourselves in negative equity with no chance of selling the property even if we gave it away.  We ended up staying for 12 years.

This combined with the fact that we had problem neighbours led us down a path of spending.  I can look back now and see the exact reasons we ended up in debt.  However, it wasn’t just the debt that worried me (in total it was only a couple of thousand pounds), it was the fact that as the money came in to our accounts, it went straight out again.  We had no savings, no emergency fund and basically no back up whatsoever should anything go wrong.

Where to start?

So we knew what we wanted to do but we really didn’t know where to start.  It wasn’t going to be as simple as just throwing money at both debts and hoping they would go away.  To make a sustained effort we had to plan properly to ensure that we wouldn’t falter at the very first step.

Plan of Action

We decided upon a plan of action.  First we needed to find out the exact amount of money we owed along with the interest rates and minimum payments.  By having all this information to hand, we could really see what we needed to target.

Secondly, we needed to see exactly where our money was going.  We worked out how much money we had coming and how much we had going out.  This enabled us to see how much we could afford to put towards debt repayments.

We also needed to ensure that we didn’t continue overspending, so we had to look at what we could cut back on.  Luckily we were motivated and we took pleasure in seeing our debt reduce.

Things began falling into place

We paid off our debt quite quickly.  After all, we were both working full-time and it was just the two of us.  We were then able to switch our Endowment mortgage (all the rage at the time) to a repayment mortgage.  Eventually, property prices began to increase and we were able to sell our first home (although we still lost £4000 on what we had paid).  We were then able to get a mortgage for our second home, which we are still living in today.  The only disappointing thing was that in the 12 years we’d had our first home, and due to the negative equity, we basically had to start again.  Luckily, we had kept on the endowment policy when we had swapped to the repayment mortgage and we cashed this in early to give us the deposit we required.

Debt Busting – Get Set for Success! Ebook

I created this ebook because I wish there had been something like this available at the time we decided to begin paying off our debt.  The course shows you the exact steps that we took to get organised and create the plan of action we followed.

I am living proof that it is possible to be debt free and live within your means.  It may not be the easy path to take but it is the most stress free path to be on.  We still have our holidays but they are now saved for and paid in full at the time of booking.  We have plans for the future which we can steadily work towards.  This will allow us to live the life we want to live, rather than the life we had to live due to debt.

 

I want to share these to show that if you are in debt you are not alone. Any stories shared can either be completely confidential, or if you are a blogger, you could include a link to your blog or website. If you would like to contribute, please complete this questionnaire. I will email you to let you know when your story will go live.debt, debt free, saving, money saving, b

Debt Busting – Get Set for Success! Ebook

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