My new bag

Yesterday I bought myself a new bag. But this is no ordinary bag. This is the first significant purchase I’ve made since I became debt-free.

Getting in

Looking back now I can see how I got myself into trouble with money.

flower power (Photo credit: wader)

I completely redecorated my flat including new flooring and soft furnishings and bought myself a new digital TV. I went on a walking and camping holiday to Morocco and bought a lovely rug. I also went on a shopping spree in New York.

Not to mention wining and dining in London. When I bought myself a computer I to be a flower power iMac g3.

I paid for all of these with credit cards and loans.

Getting out

In 2004 it came to the point where I could no longer deal with my creditors. I buried my head in the sand for a while and tried to pretend it wasn’t happening but there came a point where I had to face reality.

I contacted a free debt management company and they dealt with my creditors and put me on an extremely tight budget. I’ve been on my debt management plan since then and in March 2012 I made my last payment.

A restricted life

During the debt management years I lived on an extremely tight monthly budget. I was also honest with myself and knew I wouldn’t be able to cope with the plan without treating myself once in a while. So I made the following decisions:

• I paid my rent in 11 months instead of 12. This gave me money to spend in the end of year sales. I generally used this for Christmas presents and the occasional new coat
• Only bought clothes from the sales rails
• Paid my council tax in 10 months instead of 12 and used the money saved at Bicester Village outlet shopping in April
• Turned down social invitations
• Only went out once a month. I would rather spend £50 for a good night out than £25 for 2 nights where I worried about how much I was spending
• No ‘going away’ for the holidays. All my vacations would be in London (stay-cations)

Now

So that’s why my new bag is significant. I didn’t budget for it. I didn’t move finances around to buy it. I just picked it up, thought it was a good price (it was in the sale)  and bought it (though I did feel a bit queasy when I handed over my debit card).

I’ve learnt my lesson and I’ve grown up. I want to own property, I want to go on holiday, I want to go to the theatre, dine out occasionally. But most of all, apart from a mortgage  I want to stay debt free.