The importance of debt free living

Last year I wrote about having a small financial emergency, and how I managed to avoid taking out a payday loan. I should have written this new article a while back because I’m now 100% debt free.

At the time I should have been jumping for joy, or at least feeling a bit proud of myself, but that didn’t happen. Instead I just experienced a small wave of sadness.

Why? Lots of reasons. Acknowledging and tackling a debt can be exhausting – once you have a sensible plan in place you can’t take a day off until you’ve seen it through. It also brought back the experience of growing up in a heavily-indebted household as a kid.

I’ve seen how debts can take on a life of their own if you don’t tackle them quick smart. Compound interest’s great on savings but it’s hell on debts, especially if there are extra charges for late payments. Getting out from under a debt is so much harder than running one up in the first place. It drains you, it drags you down.

Living a debt-free life is simple, all you need is:

  • A budget
  • The discipline to make regular savings
  • A well-stocked emergency fund
  • The capacity to make major purchases from your savings instead of on credit
  • A job that pays you a living wage, or employers that at least pay you on time
  • For life events to happen to you at a rate of one a year or less

Oh, maybe it isn’t all that simple then. I’m all for personal responsibility, I really am, but sometimes circumstances can be beyond our personal control. However, that doesn’t mean you should give up and let it get worse. There’s always something you can do, such as contacting a debt charity.

Anyway, I’ve tackled the situation with gusto, stuck to my plan and made a lot of sacrifices. It wasn’t a barrel of laughs but it WAS worth the effort, and I’ve been rebuilding my emergency fund and saving up for Christmas since then. Once you aren’t servicing a debt then you can make plans for the future once more.

If this article inspires one person to get out of debt then it was worth writing it. I also hope it might inspire people to avoid debt in the first place, if that’s within their power.

The wider situation

I see from the StepChange debt charity website that 2.4 million UK children are currently living in families with problem debt. I grew up in a household like that myself, and it’s not something I’d wish on anyone. It’s brutal. You’d never guess if you’d only met me briefly, maybe I don’t look like ‘that kind of person’.

It frightens me that we’re one of the richest countries in the world and so many kids in this country are now going to bed hungry, seeing their carers have blazing rows about money, or feeling constantly afraid and stressed.

To top it all off, their parents are being bludgeoned with snide remarks about hard working families and getting classed as irresponsible. Maybe a few of them are profligate wasters (one of my close relatives certainly is so I’m allowed to say that from personal experience) but most of them aren’t, and anyway, why should the kids suffer? I feel sick when I think about the need for food banks, even though I greatly admire the people who are running them.

Maybe that’s why I’m not jumping for joy. I know exactly where toxic debt can lead and it’s a very, very dark place. A lice-infested place with no curtains, or cooker, or fridge, or carpets, if I remember rightly. It’s clear to see the disproportionate suffering of those on low incomes, while people who grew up in millionaire households with nice trust funds talk about making ‘tough’ decisions that will impact upon millions of lives (but not their own).

Okay, spending your formative years living below the poverty line is largely undesirable but it can have one or two plus points. It may well make you debt averse, and more aware of the very real dangers of credit. You might learn by osmosis how to do budgets and food plans, and you might see a parent haggling / going without / shopping around trying to get a better deal so you know you don’t have to take the first deal that comes along. You will almost certainly learn the value of work, of self-reliance, in spite of what the gutter press says.

Most of all, if you learn your life lessons well under those circumstances, you know you’ll always be able to cope when the shit hits the fan. I still don’t feel entirely great about that though, but perhaps it will change with time. So yeah, credit card paid off. Next…

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  1. We make our last payment on our debt consolidation loan this month, and then we are officially debt free. Our debt was caused by a couple of bad circumstances, a smattering of ill health (physical and mental) and more poor decisions than I’d like to admit. But now, I’m happy to say, I have a small emergency fund, we’ve made a number of large purchases in the last 6 months from saved money instead of getting more credit, and I feel like we’re in a sustainable position.

    Well done Penny, and thanks for all the sensible advice along the way!

  2. Hiya MaggieBob! So glad to hear that you’re close to being debt free, it’s such a weight off when you finally get there. Good luck with the last payment and your plans for what’s next. xx

  3. I grew up with a family heavily in debt and unable to pay the rent etc. You’d think I would have learned not to get in debt, however, instead, I saw debt as normal. I am though trying my best to get out of debt now. Other than a mortgage, I never want to be in debt again. Love the matter of factness of how to live!

  4. Hi Victoria, thanks for stopping by. Sorry to hear you’ve had a hard time, and I can see that growing up around debt tends to send you in one direction or the other, depending upon your different role models. Best of luck with tackling your debts.

  5. At the age of 42, I think I’ve been in debt all my adult life to one extent or another. I was left a pile of debt by a profligate, irresponsible ex-husband and then tried to spend my way out of depression, anxiety and cripplingly low self-esteem. Nearly 3 years ago, trapped by my debt in a job that was making me ill with stress, I came to the decision that I had to let it go. I took a much lower paid, less stressful job and contacted what used to be CCCS (now StepChange). Before my IVA could be agreed, I got another, much more highly-paid job and have been paying 40% of my take-home pay (before rent and other bills) off my debts every month. On 1 June, I’ll see what I owe drop into four figures for the first time in a very long time, and this time next year it should all be gone. I’m just starting to imagine my life debt-free and the possibilities seem endless. You’re right, Penny – it’s exhausting and worrying and a really long, hard slog. There are times when I long to hit the shops but I have no credit available to me any more, and I know I’ll never be able to again. I keep meticulous records of my incomings and outgoings so I know at all times exactly what I have until my next pay day, and funnily enough that gives me more satisfaction than spending ever did. Well done to everyone who’s living – and dealing – with it head on.

  6. Oh wow, Sam, you really have been though it. So impressed that you’re crushing those debts, I think your story will be inspiring to so many people who are having a hard time financially so thank you very much for sharing it. *big hugs*

    P x

  7. Well done for becoming 100% debt free. Amazing!
    Do you personally consider a mortgage as debt? People talk about ‘good debt’ and ‘bad debt’. I think it’s interesting to hear what other people class as debt.

    I think the point you made about discipline is the best. It’s all about discipline in my view. If you have discipline you can prepare, manage and react which.

    Miss Tulip x
    The Thrifty Magpies Nest

  8. Hi Miss Tulip – sadly not cleared the mortgage as well – that would have been one hell of a party! A mortgage is absolutely a debt, but it’s a debt that you take on in the hope of making a profit in the long term, I reckon. What’s your take on it? Some debts can be part of a longer term investment and I do think you tend to need money to make serious money (for some of us that may well mean borrowing under specific circumstances).

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