meta name="p:domain_verify" content="fe1fa8c212a437fce0 The Frugal Trial

Saturday, 18 October 2014

The Debt Trap


As I have mentioned previously my current role is only fixed term so I now need to start looking for a new job. I had an interview yesterday. I thought it went really well but I didn't get the role. In hindsight it was probably for the best. The role was perhaps a little beyond my experience and I think would have been very stressful. 

I am a solicitor and I find it is a very stressful career. I don't want to be a solicitor anymore, and I haven't for a while. Yesterday after receiving the rejection, my mind became rather preoccupied in what I am going to do in the future and how things need to change. 

The problem is though is that my debt traps me. I am trapped to my debt and trapped to my desk. 

There is a particular field I would like to go into. I would be self-employed and I would certainly need to take a pay cut. On the face of it a pay cut is fine - long term I could cope earning less than I do now. The problem I have now though is that because of my debt I need to find at least £180 a month to pay my minimum repayments on my credit cards plus rent and food etc. 

If I had been sensible with my money I would not have any debt and I would have savings. Savings that I could use to live on while I retrain and build up a business. Instead my debt traps me in a career that I do not love. 

Yesterday evening I was seriously contemplating adding the fees for a course I want to do on my credit card, all £1,500 of it. I sat their weighing up the pros and cons. The sensible side of me knows that I should stay in the career I have because of the earning potential and realistically, on my current salary, I should be able to clear my debt in less than 2 years. However, the other side of me is thinking - I can't be a solicitor for another 2 years!!!!

Quite honestly, at this stage, I don't know what I am going to do. Part of me thinks adding £1,500 to my debt would make me happier but I know it is a crazy thing to do as this idea of mine could go spectacularly wrong and besides I really can't stand being in debt and increasing my debt would make me equally miserable. 

For now, I need to spend the next few weeks researching new opportunities for work whether as a solicitor or otherwise and continue paying down my debt. 

Do you feel trapped by your debt? How do you plan to become 
free?

This is part of Financially Savvy Saturdays - remember to check it out!

brokeGIRLrich
*Image courtesy of www.freedigitalphotos.net 

Tuesday, 7 October 2014

TEN QUICK STEPS TO PAY OFF DEBT


These are my 10 top steps to pay off debt 

STOP USING CREDIT 

If you keep accruing debt it will be incredibly difficult to pay it off! Go cold turkey and stop using credit. 

MINIMUM REPAYMENTS 

If you have credit card debt aim to pay more than the minimum repayment. Minimum repayments are designed to keep you in debt for longer. Pay something over the minimum repayment - even if it is only £5, anything is better than nothing and eventually those little sums will add up. 

0% BALANCE TRANSFER 

Also if you have credit card debt consider whether a 0% balance transfer is a possibility and whether it is worthwhile. 0% interest is awesome and it is certainly helping expedite my debt repayments but remember there may be a fee and that the 0% period will end eventually. 

LUNCH 

Get organised! Make lunch the night before and stop buying lunch on a daily basis. 

THE LATTE FACTOR

Buy a thermos, coffee grinder and some beans. It is much cheaper than paying £2.75 a day for a coffee. 

CHICKEN

Buy a whole chicken next time you do your food shopping. A whole chicken is circa £5. My partner and I usually get 2 dinners and 2 lunches out of a whole chicken - sometimes a fifth meal and you can boil up the carcass to make chicken stock/soup. 

SELL YOUR STUFF

Ebay, carboot, vintage fair, facebook - choose your poison. Time consuming, yes, but if your debt is from frivolous spending you should make some money back from the crap you bought on credit which can be thrown at your debt. 

BUDGET 

Boring, but budgeting prevents debt and pays it off. 

GET A SECOND JOB 

Or as Americans like to say 'side hustle'

KEEP FOCUSED

We all slip up but get back on the debt free wagon!

Image courtesy of www.freedigitalphotos.net 


Sunday, 5 October 2014

Keeping up with the Joneses



The Daily Mail does make me laugh. This article about the 'squeezed' middle classes had 'Are they serious?!' comments written all over it. Reading through the article it is certainly hard to feel sorry for someone who is spending £15k on school fees because they do not think state schools push children into sport or for a couple earning £108k a year who have no savings and cannot save for a mortgage because of having a fondness for gadgets. 

This isn't an article about the middle classes being financially squeezed because food and energy prices have increased, that article may have accrued a bit more sympathy - it is an article about people not having savings, having debt and (excuse me while I cry) having to 'vacay' in the UK because they have been trying to keep up with the Joneses. Actually, it is a rather unlikely Daily Mail article given the wry sarcasm in the article.

Keeping up with the Joneses is an easy trap. I am guilty of it. Despite my desperation to clear my debt only the other day I was looking at buying some sandals online after seeking an instagram 'friend' showing of her (beautiful) shoes before coming to my senses and remembering my goal of paying off debt. But if you don't have a financial goal, being lured into keeping up with friends is easy.

Reading through this article also makes me suspect that lifestyle inflation is a factor. This is certainly something that has resulted in my debt. At times I think I was financially better off just after I left university. I was only earning £10k a year but only owed about £1k on my credit card (and £13k student loan). As my salary has increased so has my debt. I have bought more expensive clothes, more expensive holidays and gadgets because I thought I should be able to afford them since I was a lawyer earning a decent salary. Here I am now at 32 with no savings, a tiny pension and just under £10k of credit card debt.  I was always living beyond my means.

I had my awakening and am now trying to do something about it. I am not perfect and I am still wasting money but I am trying. Sadly, those in the article seem to either have their heads buried in the sand or are completely ignorant of what it is really like to be squeezed (I grew up with unemployed parents on benefits missing meals - that is squeezed). I hope the comments on the article will wake them up and make them realise that they need to change. 

Are you sympathetic for these people? What do you think they should do?

* photo courtesy of www.freedigitalphotos.net