I’m still feeling under the weather, courtesy of my vaccination on Friday. I very rarely get ill, so I always feel as though I’ve been hit by a truck when it happens! Runny nose, aching muscles and joints, thick head and a general lack of drive to do anything. In short, not fun.

But, one advantage is I have not done all that much the last couple of days. I have spent most of today in fact thinking about what I am going to do when I am finally debt free in the next month or so.

A few years ago I would have splurged on all kinds of ‘toys’, new gadgets, a big expensive holiday and so forth. The last 10 months has disconnected me almost entirely from the consumerism that got me here in the first place.

So what will I do when I am debt free?

I will treat myself to Burger King

As silly as this sounds, I have not eaten out for myself at all this year. I have been frugal in my food shopping, dining and cooking experiences, and just once I would like to say “to hell with it” and go have some fun in a culinary sense. I can be fairly certain to walk away pretty full and not spend more than £10 for the privilege.

It’s hardly haute cuisine, but it has been something I have been dreaming about for the best part of a year and it will be a major expense for me: Ordinarily £10 will feed me for a week!

I will pad out my Emergency Fund

I have never had one, and I know I need one. Especially now that the Grim Reaper has been trying the doors at work. I think a reasonable starting point would be £1,000 – and work upwards towards 12 months of expenses from there. Currently my emergency fund is £70, and that is a bit of a cruel joke in every sense.

I will take my parents out to dinner

My mum and step-dad have been my rock so many times over the years, but they saved me this year. They put me up – at great inconvenience to themselves – rent free, to help me get out of the dark place that a falling-apart marriage creates. Living rent-free has enabled my “Get Out of Debt In A Year” goal to be a real possibility and not some pipe-dream. Thank you, guys.

It won’t be cheap. While my step-dad will eat just about anything (with the exception of carrots), Mum is allergic to a lot of foods. I need to do some research to find a good setting that can cater for this.

I will open my 2009/2010 Cash ISA

I’ve been singing the praises of ISA‘s on this blog quite a lot. When I am out of debt, it’ll be time to heed my own advice and go and get one!

I will take a short frugal holiday

I need a holiday. I totted up that I have worked an entire extra month in just 9 months so far at work in my ‘debt payoff’ journey, and it has left me feeling old. A short holiday will be nice, just 4 or 5 days will be fine. Somewhere relaxing, somewhere I can just sit back and unwind. Somewhere I can soak up a bit of culture and a bit of alcohol. I will pay in cash, of course!

Should I expand this list somehow? Have I missed a blindingly obvious “when debt free” todo?

• Cash ISAs vs. Regular Savings Accounts
• My Financial Meltdown: Part 4
• Credit Card Analysis: From Hell to Heaven
• A Fundamental Question
• Dig Yourself Out of Debt: Spend Less Than You Earn

Today is a feel good day. The last remaining credit card I have with a balance has been set to “pay in full” as of next month.

Come the 9th November I will be credit card debt free!

The little checkbox on my online account will never again move from the “pay in full” position it is now sitting at.

I vow, here and now, to myself and the millions upon millions of people who have Internet access, I will never ever ever pay another penny in credit card interest.

Ever.

Thank you Barclaycard for the balance transfer you gave me in January, and I am sorry I didn’t fall for more than one of your entrapment methods along the way. When I took out the card in January I was duped into purchasing Card Protection that basically covers fraud, loss, holiday cash advances if you get stuck and so on. Live and learn.

I didn’t fall for your 0% interest on purchases that only lasted for the first 3 months. I didn’t fall for your balance transfer cheques you sent me (twice!). I didn’t fall for the 0% ‘deal’ you offered me at month 6 for 0% on just one month of purchases (that would have cost me a fortune unless I had paid off the entire balance afterward – nuking the 0% transfer in the process).

Nice try, but you will have to be content with the £8 of interest you have earned from me. It is the only interest you will ever earn from me, so do not spend it all at once. Can I suggest you put it into a savings account?

Compound interest is your friend!

• Dig Yourself Out of Debt: Avalanches and Snowflakes
• Dig Yourself Out of Debt: Know What You Owe
• My Financial Meltdown: Part 3
• Personal Recessions
• 10 Economic Predictions for 2010

A few days ago I wrote that for every two steps I take forward, I appear to suffer being pushed back three. I could not see any way out of the situation I was facing, and it started to eat me up from the inside.

I am a naturally pessimistic person and automatically assume the worst of any given situation or list of potential outcomes. When the second “we don’t have any money” email came out from the Big Boss at work, I concluded that redundancy was only a paycheck or two away. It may well be, but I don’t know that. It could conceivably be a year or two away. Equally I may escape redundancy altogether. It’s entirely an unknown quantity right now.

I saw my goal of debt freedom within my grasp. After freeing myself from consumer debt, I had planned to speed-save my way to paying for my divorce when the bill finally comes in and then starting to save for my future. Everything was going to plan until those darn emails. Debt-freedom suddenly vanished.

If I paid my debt off in November when the spreadsheet said I could – but then get made redundant – I won’t be able to pay my solicitor. Net result: Still in debt.

If I carry my consumer debt but set aside a proportion of my savings  I have to pay my solicitor when the time comes – but then get made redundant – I won’t have enough to pay the settlement fee on my loan. Net result: Still in debt.

Whichever way I regurgitated those scenarios, I came out with the same result. This virtually demolished all the emotional building up I’d given myself over the past year in short order. I felt (and still do to a degree) like I was back in December 2008 again: Out of time, out of options, and despite all my hard work, still out of money.

Then I read an article over at The Simple Dollar while randomly surfing. I don’t remember which and didn’t have the presence of mind at the time to bookmark it, so I am sorry I cannot share the origin of my epiphany with you. But it provided an amazing idea to me.

If I carry my consumer debt but set aside a proportion of my savings to pay my solicitor – and then get made redundant – I can claim on my Payment Protection Insurance! I am uncertain if the cover lasts for 12 months of payments or “until employed again” (I need to read the small print), but either way, it’s a winner. If they will cover 12 months of payments then my end-insurance settlement will be somewhere around the £4,000 mark. I will have that in savings even after paying off the solicitor, with any luck.

My perception shifted.

My goal is now to become notionally debt free, even if I don’t make it happen the moment it becomes theoretically  possible. When (if?) I get comfortably beyond a positive net worth, then I will consider actually making the settlement payment. Until then, I will keep my final piece of consumer debt. The insurance on it may perversely provide a lifeline allowing the payment of another, future debt.

So thank you Trent for indirectly providing me with the idea of how to dig myself out of a hole that has not been dug yet except in my head. But having the rope and tie-off point prepared should it happen is very comforting.

The take-away lesson from this is, I guess, however bad things seem – with enough effort and help from your friends, there is always a way out to be found.

• Could You Live on Half Your Income?
• Dig Yourself Out of Debt: Spend Less Than You Earn
• Cash ISA Allowance Increased for Over 50's
• A Warm Welcome to BBC Radio Listeners
• Dig Yourself Out of Debt: Avalanches and Snowflakes