Life after debt – our journey to becoming debt free….

I don’t think there’s been a time in my adult life that I’ve not had some sort of debt in my name – be it a credit card, car loan or a consolidation loan.  This month though, the last of our debt was paid off and aside from our mortgage, we are now officially debt free.

I got my first credit card when I was 18 and over the next few years, I added to that one with a couple of store cards and several more credit cards.  They were all paid off with a consolidation loan that I then took out but rather than closing them, I promised myself that I’d only use them for emergencies but you can guess what came next can’t you?

Yep, we ended up running the balance up again and having both that and the loan to pay off at that point.  Then we bought a house literally on the spur of the moment when my Mam and Dad were about to accept a ridiculous offer for their house so they didn’t miss out on their dream bungalow.  We said that if they were going to sell it for that price then we’d buy it, only as a joke at first but then it kind of snow-balled and about a month later we were owners of a house with a reasonably small mortgage but a large amount of debt.

We tried to chip away at the debt but we struggled as new house-owners with bills to pay so rather than the amounts we owed reducing, they actually increased month on month.

We just settled into home ownership and got used to paying the bills with enough left over to pay more than the minimum repayments each month when we had the kids and everything changed again.  We weren’t very sensible back then and we did struggle with the cost of childcare on top of everything else so again, we found ourselves with even more debt to pay back.

Don’t get me wrong, we never missed a payment and luckily we were in a position where we could pay our monthly repayments without too much of a struggle but there’s no denying that the debt hung over us a little bit and we were always aware of it during that time.

I’ve pretty much talked about our ‘lightbulb moment’ hundreds of times on here over the years – it was just after my Mam died when I realised how short life was and how much I wanted to spend time with the kids instead of working all hours.  That was the moment we knew that our life and spending habits needed to change.

And change they did.

We changed just about everything about the way we managed our money that day and although we’ve been far from perfect since then, we’ve tried hard to be better with our money and over the years, we’ve gradually reduced the amounts we owe.

It’s not all been plain sailing though and we’ve had a few slip-ups where we’ve had to use our credit cards as fallbacks for the odd emergency or unexpected bill because we still weren’t sensible enough to have set up an emergency fund but as frustrating as that felt at the time, we kept at it, paying as much as we could off each month while still balancing a happy family life.

And finally, this week, we’ve made the last payment on the last credit card we still owed money and which means that, other than our mortgage, we are now debt free.

And I can tell you something, it feels good!

It’s been a great feeling being able to tick each of the outstanding debts off our list as we’ve paid them off but as we’ve used the snowball method we haven’t actually seen that much more money spare in our budget each month.

This final payment means that we now have a nice little chunk of extra money in our monthly budget which is something I’ve been looking forward to since we started our journey to being debt free.

Before we get used to that extra money though, we’ve set up a standing order to overpay our mortgage by a more significant amount than we were overpaying before and also set up a regular transfer to our Emergency Fund which is now a huge priority for us. We don’t want to have to rely on credit cards if something goes wrong so building up that Emergency Fund is essential.

We’ve closed down all but one credit card each and significantly reduced the credit limits on those because we’ll still be using them to buy things where we want to make sure we have the S75 CCA protection on goods.  We’ve also amended the Direct Debits on these two accounts to take the full amount each month so if we do use them, then they’re automatically paid in full.

This day seemed like a very long way away when we first started out on our journey but now it’s here and we really are debt free, it’s been worth every minute!

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