Finally debt free after 2 and half years!

[jd14234]

I finally paid off all consumer debt this morning - £31,375.18 in 31 months.

We used the Dave Ramsey Baby Steps method.

It almost seems unreal. Being debt free seemed so far away in Jan of 2020 when we decided to knuckle down and get it paid.

Just wanted to share.

Edit to add a massive thank you to those who are giving me gifts.

 

[christianseamstress]

@jd14234 Well done!

Try and keep going until you have 6 month’s emergency fund before taking your foot off the gas.

 

[lastattempt]

@jd14234 Congratulations! You must feel so proud of yourselves. Nobody understands the shame of debt. Most people get into it through stupid mistakes, and not having a "good" reason for it makes the shame all the worse.

The truth is I think more people are in trouble than they are willing to admit. Me? I come from a family that has always had savings, owned property, etc., so for me, the shame was intense. They still don't know, but I'm sure they're confused as to why my good job never yielded results. I am a year into my debt-clearing journey, and even that is a relief. I have about another 75% left.

Short story: GOOD FOR YOU!

 

[kalulabelle]

@lastattempt Amazing!! Keep it up, and don't worry about the family knowing/not knowing, just doing what you are doing makes you a winner!!

 

[lastattempt]

@kalulabelle Thank you.

 

[jd14234]

@lastattempt Thanks.

 

[falerinn]

@lastattempt Same here...my father keeps saying "you need to save, I keep telling you to save" and I keep thinking...Dude, I have to pay off my debt first lol I have no money to save

 

[ansres]

@jd14234 Well done! Great accomplishment and great timing with interest rates rising too.

 

[jd14234]

@ansres Strangely, the thought of the interest rates didn’t cross my mind. Ultimately, I guess it’d just of taken longer to pay stuff off. We’ve been in a mindset of just pay, pay, pay and forgetting about the stuff out of our control. I think it’d been different if we were at the starting this journey now (2 car loans, £3k negative equity from refinancing the old cars, and 2 credit cards).

 

[mlange88]

@jd14234 This is the bit I don't understand. If the first step is to have a grand in the emergency fund? How is that better than paying off a credit card that garners interest. Why is that above paying a grand off your card lowering the monthly interest. Then if you have the emergency then you use the card.

 

[jd14234]

@mlange88 Because you need to break the cycle of using debt to pay for emergencies as the cycle will be never ending.

 

[muddpuddle]

@mlange88 It conditions you
A. To save money not spend it
B. Having money in an emergency account also stops your spending on credit it draws a line under it the first part of paying off debt is to stop spending money you don’t have

 

[mlange88]

@muddpuddle Interesting. I think above all I need to condition myself into not spending money on stuff I want rather than actually need as the emergency fund always end up getting dipped into.

 

[muddpuddle]

@mlange88 It conditions you

A. To save money not spend it

B. Having money in an emergency account also stops your spending on credit it draws a line under it the first part of paying off debt is to stop spending money you don’t have

 

[jredshaw]

@jd14234 Well done it's a great feeling, I did this around 20/2017. I had debt that had following me around for 15 or so years. One day just decided enough is enough. Got a card that had like 32 months interest free, transferred everything over expect a loan that I had from a previous attempt to consolidate. Worked out how much I needed to pay off each month to be free after 32 months.

Then made life style changes, learning to cook might have been the biggest one, that first month I came in under £300 in set budget. Now I don't by anything I can't pay from money I have, if I use a credit card or gets paid off in full the following month.

 

[jd14234]

@jredshaw We’re pretty much exactly the same as you - got sick and tired of being sick and tired.

I’d say that the 0% credit card was a god send.

 

[tinglee0021]

@jredshaw Yeah this is the big thing about the David Ramsey baby steps. It's a US centric system. I'm not a financial advisor but I would say a better UK process, if available to you, is save your £ 1000 emergency fund, then save 6 months of expenses, Then start to really tackle the debt.

Reason being is if you're paying zero interest then the cash on the hip is better than paying off debt. If you suddenly need to pay the debt, you've got the cash. There's no savings in giving it to the bank any faster than you need to (other than peace of mind).

 

[holyaspirations]

@tinglee0021

There's no savings in giving it to the bank any faster than you need to (other than peace of mind).

True although that only applies if you have a 0% interest card otherwise you will rack up interest.

 

[tinglee0021]

@holyaspirations Yeah of course. I mean specifically in this situation as I don't believe America has such a thing.

 

[holyaspirations]

@tinglee0021 The US do have 0% interest cards I believe.