This post contains affiliate/referral links
Before we even kick off, I just want to say that I’m not a financial advisor AT ALL – I’m just sharing my personal experience and what helped me. If you want formal advice, try the charity Step Change.
Debt is still such a dirty word, isn’t it? One that people really struggle to utter.
Often though, speaking about debt freely helps to lessen the shame you can often feel for having the proverbial monkey on your back.
I’ve been in debt since I was 18, only extricating myself at 33 (student loans don’t count, k?).
And I’ve had every debt going – payday loan, credit card, overdraft, store card, car on finance – any way I could get money or an object of desire that I didn’t have, I applied for.
Debt had been a burden but keeping it secret had been the hardest cross to bear. So here’s my debt story – how it happened and how I turned it around…
I needed everything, now
I got my first credit card at 18. My friend and I had wanted to go to New York for New Years because we thought it would be a really fun thing to do – except I didn’t have a job or any way to pay for my trip.
So I applied for an ‘Egg’ credit card account and was accepted for £1500 instantly and moments later, I strolled into a travel agent and paid for the holiday, thinking to myself that I’d get a job and pay it off eventually.
This was followed by getting a car on finance a year or so later and a further credit card 6 months later when I was struggling to pay off the car.
I was getting into debt to help pay for debt.
When I went to uni at 23, I was excited to learn I could get an interest free overdraft and asked Barclays to give me the most they possibly could.
Suddenly I owed somewhere near £7,000.
The worst part was how irresponsible I was with paying it back.
Every time I earned money from work, one part of my brain told me to pay my debts back and the other part told me YOLO and to spend it on things I know now to be unnecessary – clothes, holidays, drinking, takeaways.
I genuinely never thought it would catch up with me.
Until it did.
The lowest point
It’s a tough one between having to answer the door to a debt collector after defaulting on my repayment plan from a credit card that had already been sent to a debt agency or getting a job at a debt collection agency and realising I was phoning myself to discuss an overdue gym payment.
Part of the severe depression I was suffering from my late teens to mid twenties was how self destructive I became when it came to getting myself in financial trouble.
I believed that spending was my release from the hurt I was feeling. That I could spend my way to happiness – I know now, obviously, that’s not the case.
The turning point
I had a big wake up call from not bothering to chip away at what I owed and the belief that I’d sort it out by some sort of miracle.
As a teacher, I began earning more comfortably. Rather than obliterate debts where possible though, I just chipped away as and when but it wasn’t really getting anywhere.
When I was deciding whether to leave teaching and try to ‘make it’ as a full time blogger, the debts I had remaining (2 credit cards and an overdraft) were what held me back – I knew I couldn’t default again.
I also had met Ben and began to heal my mental health – with this came a view into the future. One where I wanted us to be comfortable and not held back by my debt.
At this point I realised that if I was to go full time with blogging and enter into a marriage with the least amount of baggage as possible, I’d have to work out a way out of debt.
How I got myself out
The first thing I did, which I had avoided for over 10 years was to face up to it.
Part of the reason my debt had escalated was because I just refused to address it. Ignoring it had made it worse.
I’d often go to bed and force myself to dream of a way I’d win £5k – the lottery, bingo with my Mum, a lucky trip to Vegas – all because it was weighing on me but I wasn’t willing to properly address it.
So I looked at my credit cards and overdraft and wrote down how much each had outstanding.
I then signed up to ClearScore – an app that details how your overall credit is looking – what you are doing well and what you are doing poorly.
When I saw that I only had 4 ‘bad’ marks and 5 ‘good’, I was immediately bolstered.
Genuinely feeling like the biggest failure in the world, when it came to money, made me continually tell myself that I was a lost cause and because there was no hope, there was no point in trying.
Seeing that it wasn’t as bad as I had imagined, I realised that I had been blowing my debt up in my head to be insurmountable and impossible – this app gave me hope.
The app also ‘coaches’ you with what to do. Things like avoiding late payments and not going over limits were the easiest things to improve.
I was on a roll.
I decided to go through every single payment I had going out and either cancel it or change the date to payday – all of these direct debits going out at random times had been so chaotic and hard to keep track of. Just becoming aware of exactly what was going out and when helped me face it.
I also decided that rather than use my next blogging invoice towards a holiday, ASOS order or Tuesday night Deliveroo, to put a chunk of it towards all of my accounts to stop me from going over the limit.
Going freelance helped, oddly, too. I was worried that I’d be living invoice to invoice and struggling compared to the steady teaching pay check I had but actually, getting paid in dribs and drabs suited me better.
Previously, I’d get paid my salary, pay all my bills and think, ‘I’ve only got £400 left, I’d much rather go out or buy something than take a chunk out of my debt.’
I also saw it as getting paid for doing hard work means the money needs to go to treating myself. But treating myself had gotten me into the mess!
Getting paid irregularly was one of the things that improved my relationship with money – it was money I suddenly enjoyed making and saw as totally precious – not to be frittered away.
Another huge help was meeting Chloe Slade from Vibe + Flow and learning about money mindset from her. My whole attitude towards money – the flow, abundance and the value was revolutionised.
Then, I read Profit First (affiliate link) – a book about paying yourself when you run a business/are freelance. It was a system that made sense to me and aligned with the flow of money I had begun to experience.
When implementing the Profit First system, I worked out how much all of my life and business expenses were, how much I’d need to save for tax, how much I’d pay myself to live on and not feel restricted and how much I could safely put towards my debt without it affecting my new positive mindset.
Rather than pressure myself to get out of debt in a day, I told myself that I’d lived with a variety of debt since 18, I could take it in my own time. So I set myself the target of paying off one debt – credit card or overdraft – per quarter.
Taking the pressure off, whilst being fully aware of my finances was the best thing I could have done for myself.
Suddenly and for the first time, I was actually excited to pay off debt rather than see it as money I’d rather spend elsewhere.
Slowly but surely each account was paid in full and settled and here we are today!
I do still pay a student loan but when I decided to go to uni as a young adult I decided to see it as an ‘education tax’ – a tax I’d pay forever for the privilege of getting a uni place – rather than as a ‘loan’ that had to be repaid instantly or feared.
Today, I have one default left on my credit report from a few years ago but once that has disappeared, I’ll have good credit for the first time in my life.
I can safely say that being in debt and getting myself out has been a huge struggle that I’d rather not have – but seeing the positive side, I’m glad I now understand money and am being responsible, even if it took me to my early thirties!
If you’re struggling with debt, my top tips are;
- Face up to it – work out what you owe
- Get your finances in order – payments on dates that you’ll recognise, cancel any pointless direct debits that you don’t need
- Cut back on unnecessary spending for a while
- Get ClearScore or Experian to keep track of what’s happening with each debt
- Don’t pressure yourself to pay it off immediately – set realistic goals for getting rid of it
- Switch to a bank like Starling (referral) or Monzo where your spending is itemised and you can have ‘pots’ for savings so you can round up your spending or move money into a ‘Debt’ pot more easily
I hope by reading this you’ll realise you’re not alone if you’re struggling with your finances and I do wish that this will show you you’re not a lost cause and it is surmountable.
I think we should all be a lot more open when discussing finances because often the shame of debt is what compounds it.
My comments are off for now but if you’d like to carry on this conversation, I’d be happy to chat over on Instagram!