1,000,001 Tips To Reduce Your Debts!

Hundreds of people share their experiences on our Dealing With Debt discussion board. In the opinion of this Fool, it's the greatest personal finance resource on the Internet.

Hmmm. It's was the fortieth anniversary of credit cards in the UK last week and we as a nation have over £1 trillion of debt. Let me think about this...Wait! Maybe there's a connection? Duh!

What can we say about debt? Simply: it's a nasty, nasty thing. Most people end up regretting their non-mortgage debts, whether it's just a few thousand pounds or tens of thousands of pounds. 'How did it happen?' we ask. 'Did spending that money really make me happier?' The answer, all too often, is an emphatic no.

Debt causes an overwhelming amount of stress, misery and anxiety. There is a large group of people who know more about this than any other: the users of our Dealing with Debt (DWD) discussion board.

I'm not a major discussion board user, but that place is amazing! Not only does it have great advice, but it provides tremendous encouragement and emotional support to people with severe stress because of debt. I can feel the compassion in many of the posts, and sense the relief in people who are glad to have others to talk to who are, or previously were, in the same situation.

If you are concerned about your debts, I can't recommend strongly enough how useful this board is. Let me share just some of the experiences and inspiring words that many extraordinary Fools post there. (Complete with an insight into the unique language used on the boards.)

Debt Free Day

Board users are familiar with 'Debt Free Day', or DFD. This is the day that a debtor clears all of his or her debts, except the mortgage. When someone posts a -- typically ecstatic -- message about clearing all the debts, it's referred to as a 'Happy Dance' post. (Come on! Get with the lingo!)

Take mr1970's Happy Dance post called 'DFD!!!!!!!', which received an astounding 307 recommendations from other board users. (You can 'rec' a post you enjoy or find useful.) Here are some highlights from his emotional and inspiring post about an awesome recovery from £79,000 of debts:

.That's it. All over. I'm free. No credit card balances, no overdraft, no loans, no collection agencies, no bailiffs, no more knocks on the door, no more fending calls at work, nothing. Being the financial equivalent of a nuclear blast site also means I don't have a mortgage.All I need to do now is wait a year till all my defaults and 3 CCJs tick down and then they'll be gone too - I'll be 36 and have an entirely blank credit report. That'll confuse the buggers :-)

Not entirely sure whether to cry, get drunk or what. I do know that one thing I need to do is to thank everyone here who's helped me out.I couldn't have done this without the support and advice of the people here so thank you all very much indeed. Probably best to stop now before I turn into Hilary Swank...(which would be bad news as I'm a bloke)

My new life starts now.

Incidentally, if you're new to the board, stick around - it can change your life.

Mini dance

manzanilla says that, in board slang, a 'mini dance' happens when a poster reaches a major milestone, like clearing a large debt. Winningthebattle posted an emotional and inspiring message 'What a difference a year makes...' Here are some of the highlights:

I can't believe that a year has gone by since I posted my first desperate, confused and panic-stricken plea for helphere.

This time last year were in a terrible mess financially. We owed over £32,000.After a few weeks floundering about.I was directed to the Fool and it was like a breath of fresh air. To find that there were other people in the same position, who were paying off their debts and becoming debt free was a huge relief. To read about people who had been there, done that and got the DFD t-shirt was amazing. We could do this too!!

This month are debt situation has reduced down to (wait for it... drum-roll......) £19,818.81!!!!!!! We are so proud of ourselves!!!!!

Another thing we have noticed this year is the improvement in our family life and general quality of life. We know we are doing the right thing by our 2 wonderful kids.

I would say to anyone who is starting on the DWD path - you will never have a greater sense of achievement or a bigger buzz than ridding yourself of debt.DWDandLBYM[the Living Below Your Means board] has not just sorted out our finances, it has transformed the way we live our lives and our future.

Thank you to all the wonderful, kind souls here (too numerous to mention) who have over the last year given advise, support and made me feel part of a truly wonderful community. My husband and I are so so so grateful to you all.

How to deal with debt

The posts aren't just inspiring and wonderful to read, but filled with an incredible wealth of knowledge built from first-hand experiences. hidesmith posted the message Never give up!, in which he shares his bold plan to reduce debt:

In 1992 I was made redundant from my job.In total I was in over £30,000 worth of debt (plus the mortgage). Like many people I initially ignored the letters.

When I decided to deal with this I adopted a high risk strategy. I wrote to all the lenders and basically said I could pay 0.5% of the debt each month (minimum £10) on the condition that all interest payments and charges were frozen and as long as they all agreed. I also added that as I was in negative equity if they didn't accept I would declare bankruptcy (which I was prepared to do). Most accepted, three didn't and tried to get heavy with me. I wrote to those that didn't and said that all the others had agreed (obviously not true!) and that as I had agreement from over 75% (by amount) I would go to court to get an IVA which would 'force' them to accept my offer. They all backed down and agreed to my payment plan!

Good luck - Don't let the B***ards grind you down!

He finished with ten tips to getting out of debt. Check them out.

Give it a go!

My advice is to 'lurk' for a bit on the boards. Get comfortable with them, take in the million and one tips that are buried there, read other people's stories and then post an SOA yourself. (You'll learn what this is when you get there!)

If you want somewhere specific to start, see this fantastic post by manzanilla and Freda, summarising The Best of 2004. Finally, with all Gostevie does to help people on this board, I want to include at least one of his great posts.

I look forward to reading about your DFD!