Living within My Means – Being Debt Free and Happy

"Annual income twenty pounds, annual expenditure nineteen six, result happiness.

Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery."

Mr. Micawber – David Copperfield – Charles Dickens

Never a truer statement made I feel!

Think on this for a minute, if you have £20 a week to live on, but you spent £21, you will have to borrow £1 to pay for the shortfall – ok not a big deal you may say!
But the following week, you have £20 but you have to pay back the £1 from the previous week, so you pay it back and are debt free – great! You now have £19 to live on for the week, but you still spend £21, only now you are £2 short and have to borrow again (all this borrowing by the way is ignoring any interest that would need to be paid). The following week you pay back the £2 but are left with £18 to cover spending of £21, so you borrow £3, then £4, then £5 and so on, and by about week 20 you would need to pay back £20 borrowed from the previous week so you would be skint before you start, all this just by overspending by £1 per week!

The answer? Simply don’t spend more that £20 (or however much you have available).

When I was threatened with redundancy five or so years ago I did have quite a few debts and the prospect of losing my job scared me, I worried that I wouldn’t be able to pay them off, would my house be repossessed? And would we face being homeless? All these questions whirled round my head for weeks.

Fortunately, my job was saved and I breathed a huge sigh of relief, but I had had such a scare that I never wanted to be in that position again. So I vowed to be debt free as soon as possible so that if, or when, the next round of redundancies came around I would have no need to worry as much.

Sure enough they did, last year in fact, and this time I wasn’t so lucky, my job disappeared and after 20 years with the same company I was out, just like that!

Fortunately, due to the previous scare I was, and still am, debt free, I have no consumer debt, and all had been achieved by simple adjustment to my lifestyle and to ‘live within my means’ over the previous years and gradually I made it and paid off all the debts, it wasn't always easy, but I kept focused on the end goal.

Until next time: What would it mean to you to be debt free?