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The Credit Cruncher was conceived to help you to keep up to date with credit crunch and recession developments, it provides some helpful credit crunch advice and it addresses personal debt. The Credit Cruncher also seeks to explain how the credit crunch started and shed some light on the worldwide recession. Recently, we have begun to look at how BREXIT will affect the UK economy. Please feel free to leave comments where relevant.

31 Dec 2008

End of Year Summary

'Positive results from a Negative Economy' is the way I am going to sum up the year for me financially. Although the Western economies are in a steep decline this does not mean that individuals cannot create a positive financial environment. I am pleased to be able to report that my goal of paying off credit card debt is now within reach (and don't forget I have paid NO interest on this debt for two years)The green graph above was my debt progress about ten months go. The latest version (pinky-blue below..) shows how I have been able to continue to shrink this debt down to a manageable size.
Some major factors in this have been a small bonus from work which I have used to clear debts, the massive drop in mortgage interest which has freed up more disposable income, and some online earnings which although not used directly for debt, enable me to spend some money without touching my 'off-line' income.
The whole picture is a demonstration of how, even when things are tight, we can still make a positive impact on our finances. The major reason I have been able to achieve this is through sensible budgeting and self-denial with the ultimate aim of having sufficient disposable income in the long-run to be able to save significant amounts of money. In order to do this I had to learn that a 'treat' now could have an unwanted impact (a lot like dieting...) in the long term. I also had to learn that having money in the bank AND interest-accruing debt, was a nonsense - paying off debt is a better investment than saving. However I also learned that getting 0% financing through a credit card helps enormously, but ONLY if you NEVER use the credit card to buy more 'stuff'. In essence I had to reach the point where getting out of debt was more attractive than all the things I could have by increasing my debt (along with the inevitable consequences).
I really hope my story help others, and rest assured when the debt is finally paid off, I will be posting about it at least one more time...watch this space

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where did it all go wrong?
how to get out of debt

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