Frugal Refresher Day Three – the tough stuff!

Hi everyone!

Thanks for stopping by, for the comments and it’s always a pleasure to have new followers as it’s so nice to know who you are. You may be reading this for the first time and may be looking for some ideas to get you through hard times, to live on a reduced income, to live on a fixed income or to get yourself out of debt. Today’s blog is all about debt repayment, how I did it, how I continue to do it. I did it the rough way, my family ‘budget deficit’ was eating up everything we had coming in and for so long that I couldn’t see the benefit anymore. I went into frugal extreme but I will have paid back my debts in just a little over two years.

Previously, in my stupid life, we used our house as a bank. We borrowed against it in a ‘rising market’. We believed that we couldn’t lose. For a while we didn’t. We had a house that was a money pit and we spent money on it to bring it up to the standard of everybody else’s expectations. I’ve learnt and I’ve changed and I won’t ever do that again. In future, if it’s good enough for me, it’s good enough!

However, I ended up with 45K of personal debt on top of a 217K mortgage. I’ve £8K of personal debt left to pay off. I’ve paid off 37K of debt since December 2009. The trigger for actually getting my life in order started when I maxed out my credit cards whilst trying to do up and sell off the house I’m presently living in. The credit crunch had landed! We sold our house but couldn’t secure a new mortgage as the underwriters agreed that we had too much personal debt and we couldn’t afford a mortgage at all. There was no option but to pay it all back. Initially, we looked at getting a lower rate consolidation loan and putting our debts in one place but after research we found that it would cost us a lot more. It was then that we took drastic action.

We stopped spending and bought nothing for a year. Not even a pair of knickers. What we had, had to last, there was NO money spare. Just by doing that, we managed to pay off nearly 20K a year.

1. MAKE A BUDGET -Look at your budget. We did the following. We needed £X to go to work every day. We needed £X for the mortgage and utility bills. We needed £X for car tax, insurance and maintenance. We needed £X for food. We needed £X for insurance. EVERY PENNY LEFT WENT TO DEBTS. We did not kid ourselves that we needed a ‘treat’ sometime. We couldn’t afford it. We didn’t kid ourselves that we needed anything more that what we had to survive on.

2. STOP SPENDING – We cancelled: a booked holiday, all subscriptions, gave notice to our mobile phone contracts, gave notice to our Sky contract, although we had to keep paying whilst we were still contracted to do so. We cancelled birthdays, Christmas, weddings, in fact we cancelled everything. Who is anyone trying to kid? If you have any personal debt, you can not afford what you bought! If you had to borrow to get it, then you couldn’t afford it. Own up! You are skint, do something about it and live differently. For those with a job, then it’ll only be temporary, for those without a job, then get real, that’s it, you can’t afford it!

3. OVERPAY DEBTS – We looked at our debts and put them in order. Most of our credit cards had balances of around £7K and we decided to pay off the one with the highest interest rate first. We paid the minimum payments on everything else and every penny we had on one of the cards first. At the end of the nine months, after the first huge debt went, it got easier. Now we Snowballed the huge payment onto the next largest interest baring account and added the two payments together. After 18 months, we restored our credit balance and gained a good credit score. Now we were able to move balances to 0% credit cards. We kept moving them and now, just by making the same over payments. We were able to speed up the end date. My end date was August 2012 but it’s now January 2012, or if I can master it, before the end of the year.

4. GET TWO OR EVEN THREE JOBS – We earnt more money. I marked exams in November and June for all the time I could. I paid every penny of that as soon as I got it into debts. It was the extra income that meant I could get rid of some debts really quickly. I worked as a private tutor in the evenings and weekends. I used that money to live off and, whilst I had extra money, I paid off debts with my main income. I took in a lodger, again, I used this money to buy my groceries and, in term time, was able to pay off an extra extra debts. In the holidays, I cleaned caravans and used that money to save up and insure my car. Dearly Beloved embraced Ebay. He sold everything we didn’t need and built up an ebay fund, we often used that to pay a big bill, such as the boiler repair or the house insurance. In short, if you don’t earn enough money, do something about it. Get another job, sell stuff, dog sit, baby sit, clean houses, get a bar job. It might look like £25 here and £18 there, but do a few calculations, work out what that is a year and what the total can pay off or pay towards.

5. USE LESS OF EVERYTHING – To begin with, we just stuck to a budget. Then, as we got used to less, we lived on less and less every month. We cut back groceries by £1 a week. In three months, we were spending £10 less a week and were able to divert that money else where. We used less energy. We used less electricity and gas. We turned the thermostat down by one degree every week. Our winter heating is now set at 16 degree Centigrade and we cope happily with that, some warm socks and a couple of jumpers. We reduced our central heating time by a hour a week, now, in the depths of winter, it comes on for two hours a day. It makes a drastic difference to the over all temperature as we’re used to the cold. We used the car less and less and now I shop on my way to and from work and don’t make any extra trips. We use less water, gas, electricity, diesel. All of my utility bills, even with constantly rising prices are hugely reduced. In 2009, my combined gas and electricity bill was £150 a month, it’s now £57. That gave me another £1000 a year to put towards debts.

We do spend money now. Things are easier. We have ways and means of getting what we need at the cost we can afford and tomorrow, I will tell you all about my frugal world of shopping and getting what I need at the fraction of the price.

Thanks to everyone who has become a follower, who has left comments, who reads every day and those who have read today for the first time. Thanks again.

Until tomorrow,

Love Froogs xxxx


31 thoughts on “Frugal Refresher Day Three – the tough stuff!

  1. I like your comment on bringing your house up to everyone elses expectations. I have had derogatory comments before that I don't have wall to wall laminated floooring. We should'nt feel pressured to conform to everyone elses ideals.


  2. Well put froogs…i love the everyones else's expectations…i did that too…then when reality hit i discovered i loved my house and the new stuff didn't i sold it and bought pre-loved bits..much nicer and more character..used the money to pay off 4 catalogues all in one go and still ahd money left that went on buying a trailer for my bike to take the tots out..we had already got rid of our car..we too snowballed our debts to the point i only owe £59.19 on my CC..hubby has one CC and a loan to pay off but when we snowballed the payments it dropped dramatically and will be done by august this year..i have to say that sitting down and doing a budget was the best thing for us..we stick to it..even though hubby is now working (part-time)its better..we still have the budget in place just have a bit more money to pay them off quicker..
    I lost friends and family over the fact i was honest and told them i couldn't afford this that and the other..however my life is far better now than it ever was..i am aware now..of how precious money is..and i only spend on what i need.
    I'm looking forward to the being debt free..and its going to stay that way.


  3. Every time I see those shows on TV when they rip everything out of a decent kitchen, I cringe. I'm so glad you said that about bringing your house up to everyone else's expectations. It's so silly because if everything is neat and clean and all appliances still work, why go into debt because someone else thinks you need everything new? I enjoy reading your blog. Are you in England? I'm in the USA.


  4. What you have listed is a crushing amount of debt, even by u.s. standards. Did you consider going ahead and selling your house, paying off your mortgage and personal debts and with a clean slate and your credit in order renting for a year and taking advantage of the drop in house prices when you next came to buy.
    It is great that you and your husband have well paying jobs – if you didnt I dont know how you would have ever got out of a hole that that.
    Sometimes the lessons we have to learn are so hard !


  5. I totally agree that 'snow balling' your debts this way is the way forward.

    This is exactly what we did. It's amazing to watch the amount owed go down so drastically on the top card and then the others as you 'snowball'. We seem to be about a year ahead of you, but we have been living in rented accommodation for a while now, and we will begin a savings plan by continuing to be super frugal for the next few years, in order to be able to buy a plalce of our own again.

    I live up to no-ones expectations but my own now….it's so liberating.

    Sue xx


  6. Hi Lizzie, I'm locked into a mortgage until 2012 with a 10K get out fee, so no, I can't sell the house. Most of my debt was acrued 'doing up a house' and on living expenses. I have also paid back what I owed. OH, by the way, where's your blog? I assume I can leave comments there?


  7. I think you have done brilliantly, none of us are perfect and as my mum used to say the crusified the only one that was. we all learn by our own mistakes at some point, it takes some of us longer. i wish i had done things differently as my life would be a lot easier now. FQ you and db have sorted your situation out yourselves through hard work and determination. I love reading your blogg maybe you should publish it and make your fortune .


  8. It all makes so much sense when you write it down.
    I too feel the pressure of bringing my house up to someonme elses standards but you have really given me food for thought.


  9. Hi, I don't have a blog but read yours every day all the way from New Zealand. We are in our late 40's and 50's respectively and have been teachers all our careers. We are desperate to have a change, live somewhere cheaply and happily and be content in another type of job. We should be able to pay our mortgage off by the end of the year but we keep getting quite large bills (boiler repair, wisdom teeth…)and I am inspired by your blog to keep digging deeper with the goal so near. We did without for many years(holidays,new car…)in an area and era that was and is about affluence. It was not always easy as a family because it was/is easy to be sucked in to treating yourself but we focused on our family times and simplicity. I do wish, like many probably, that I had been more aware and able to live frugally early in our marriage but focus instead on what I know now and am learning now. It is a much more rewarding way of living and it makes me so content and aware of the beauty and joy of the 'every day'. So thanks again for the inpiration.


  10. Great posts. All those small amounts do make such a difference. Being strong and not spending is very hard to do.

    I don't have debt except my mortgage but really want to save as I'm cutting my hours next year by 1/3, want to purchase a house and want to “retire” by 50.

    However I get distracted and loose focus of the bigger picture and spend stupidly sometimes (as I did at the casino on Monday for my birthday).

    Thanks for bringing me back to focus.

    My word verification is distrat – not far off from distracted 🙂


  11. Great post! Just wanted to add you do not have to have a great job and income to put these steps into practice! Everyone has the capability of reducing SOMETHING or adding to their income. I dug myself out of debt after my divorce and had been sued for medical and credit card bills. I was flat broke for two years but did it! Now, it feels good to NOT spend just because I can.


  12. The debt you've paid off since 2009 is staggering. Round of applause to you! I paid off about 15.5k in just under 6 years…my God I wish I'd had your drive and done it sooner but I guess we all move at our own pace.

    Lots of your advice applies to me now for staying *out* of debt and trying to put some money aside. Once you're debt free, it is such a relief but be prepared for the follow on journey which is the pressure to stay in the black and get some savings put aside though from your very apparent determination and they way you've retrained your brain financially, I am 100% sure it won't be an issue for you.

    Well done again. x


  13. Great posts~inspiring. One question? Do you do as so many financial advisors say and have an emergency fund of $1000?? Don't recall you ever mentioning one.

    My husband is of the mindset that we should not be saving when interest on debts is much higher that any interest on savings.

    What are your thoughts?? What do you do in emergencies, or have you been fortunate and not had any?


  14. i wonder how many of us have tried to live,just to impress other's,living beyond our mean's,just so other's will think how well off we are….yes i am guilty of that as well,not any more!i now live to only impress me,and i don't care what other's think! a great Post,thank you FQ,xx


  15. Hi Froogs
    Introducing such stringent savings is one thing, keeping going is another. I admire your honesty when you say you've had enough sometimes. Such a hard road but well done. Admire you immensely. You're getting yourselves out of debt, not expecting others to help.


  16. This is a note for Theresa. The $1,000 e-fund is to keep you from going into debt when the inevitable happens–the car breaks down, the furnace quits, etc. It's for when Sh** Happens. His point is valid EXCEPT that the need for the $1,000 will come and go…it's not really savings. It will save your butt more times than you will be able to count. Just for the record, my power steering is going out. I'm taking the car to the mechanic tomorrow. Get it?


  17. Hi everyone, we save 10% of our joint income a month – We have several bank accounts, some long term savings, which we put a tiny amount away in and paid for our holiday to France. We have dental insurance, we can have unlimited healthcare on the NHS, we have boiler insurance, we pay for maintenance on the heating anually and everything is budgeted for monthly on direct debits. Our savings accounts pay for the bills we like to pay in a lump sum such as: car insurance, home insurance, boiler servicing, car servicing and car tax. We budget for all of those, put a regular amount away every month and have that ready to pay. We both work close to a railway station and can get away with not owing a car if anything drastic went wrong with the car and we had to save up to get it fixed.


  18. Hi FQ, another inspiring post and you are always honest including the tough times. We are still paying off our debt and have begun to snowball on the credit cards, its great to see the amount reduce each month. I would really like to start saving, 10% of your income is a good starting point x


  19. Hi FQ, you were my inspiration when we were saving up for our deposit, we saved 12k in one year. I have lived by your ways since but with everything thats restrictive its easy to slip and when I received 'out of the blue' a letter and a fine for going into the red on day before pay day and then a dentists bill bigger then a months mortgage I knew I needed to re-teach myself. Thankfully you've started your refresher posts and I'm getting back on track

    Thank you!


  20. I just wanted to say how refreshing this post was! I completley agree with you about the everyone else's standards! I have two pre teenagers who I have to tell over and over again that they really don't need the latest gadgets in order to live. You have some very good ideas and tips and they clearly work! Well done and thanks for sharing.


  21. thanks again Froogs for more good ideas and reminders. esp not decorating to 'everyone else's expectations' – we've just moved and i see no point in doing so many things that my parents expect us to do – like re-paper the nicely painted landing, and carpet the handsome stripped floors, and buy new curtains instead of using ones inherited from a friends' mother. thankyou!


  22. That was really a little rough. Although you’re on a mission to be debt-free, don’t go to the extreme and be tightfisted with yourself. Do not always overpay your debts. Although it would shorten the payment period, there is also the emotional effect of that taking its toll on you. Maybe do it every other month. Show that you know the value of time by employing it well. Find work and pleasure at the same time. 🙂 By the way, you’re almost done with the two years. How are the stats? 😀 –>Jaden Allred


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