DebtFree Wannabe To Debt Free: How We Paid off £16k in a Year
Debtfree wannabe no more! Yesterday we made our final debt payment and joined the debt free club, two days before target. We paid off £16k in one year.
In the beginning, I struggled to find any resources that I could relate to. Most of the information for UK debtfree wannabes relate to debt charities, bankruptcy advice or debt ads! Where do you go when you aren’t at the stage where you are about to go bust, but know you can’t sustain your lifestyle? Instagram.
On Instagram, our story of two thirty-somethings, earning average salaries with £16k worth of debt was a familiar tale. It was great to find a whole debtfree wannabe community (#DebtFreeCommunity for life!) Whether they were just starting their own debt free journey or almost debt free. And those who reached out with, ‘hey I’m struggling to sleep at night with the worry of my repayments’. The support I got from those people made a huge difference.
So now I’m debt free and my intention is to loosely follow Dave Ramsey’s Baby Step 3 to build savings. My partner and I have been fortunate enough to reduce our working hours. This allows us to focus on our health and family, two areas we’ve neglected over the years. (We were too busy thinking building a life together meant making our life look really, really fancy).
Long term, I’d like to start a family and work (at least partially) from home, so I’m going to be working on sharing our financial journey and help other debtfree wannabe readers and followers along the way. Long term, I’m hoping to invest in property because all that home renovation experience has to count for something!
Debtfree Wannabe to Debt Free: How to Do It
If you’re a debtfree wannabe, wondering how we managed to pay off £16k in a year, here’s a brief rundown of how we did it.
Debtfree Wannabe to Debt Free: Step 1
It all started with a budget– I cannot stress this enough!
Debtfree Wannabe to Debt Free: Step 2
Once we figured out our budget, we found ways to cut down on each spending area. I concentrated onone area per month and focused on how we could cut down. For example, when it came to groceries, I started meal planning and bulk prepping, using vouchers and reducing our costs. If I had tried to make too many changes at once, I would’ve become overwhelmed. Sticking to one area at a time and really focusing on it helped me a lot.
Debtfree Wannabe to Debt Free: Step 3
We upped our income by selling on eBay, matched betting, using survey apps etc. Where possible, we put this money into debt overpayments, but most of it subsidised the fun stuff like holidays and going out, allowing us to put a lot of our main income towards debt.
Debtfree Wannabe to Debt Free: Step 4
As we cleared our car debt, we used the money we gained each month to overpay our home loan. As you repay debts, use the money it frees up to snowball your remaining debts.
Debtfree Wannabe to Debt Free: Step 5
My partner’s redundancy was the very thing that triggered our debt free journey to begin with. I’d like to mention that a £2k payoff he received was put towards our debt. I’m really proud that he was able to secure another job so quickly, with a salary bump, that allowed us to continue paying off debt. He is the phrase ‘When life gives you lemons, make lemonade’ personified. And the morale of the story: sharpen your skills, keep your CV updated and know your worth.
Debtfree Wannabe to Debt Free: Step 6
Of our £3k savings that we started with, only £1k remained in our account as an emergency fund, with the other £2k transferred to debt. I mention this because there is no point in having excess savings when you have debt. You pay higher interest on debt, and receive peanuts in comparison on your savings. Clear debt with savings, get out of debt, build wealth- it’s the smartest way.
So there it is; how we paid off our £16k debt in one year. My debtfree wannabe story isn’t particularly glamorous or exciting; just a gal with a goal. But it’s a story that proves that paying off debt is possible, living a better version of your life is do-able, and change starts with you. Just think: a year from now, you will wish you’d started today!
Wanna be debt free?
My book, How to Get Out of Debt, has everything you need to become debt free. From increasing your income, reducing your expenses, building a budget and even changing your mindset with your spending habits, this book is your debt free plan.
Click here to purchase the book on Amazon, or alternatively you can get the book for free by signing up to Kindle Unlimited’s free trial if you are a new customer.
One year from now, you’ll wish you started paying off debt today, so take action now and get started 🙂