I have a wonderful series of debt stories from personal finance writers who have paid off debt or whom are on a debt journey. Many people are in debt, you are not alone. For this post I welcome Ruth from Money Savvy Mum UK Blog.
I have been in debt for most of my adult life, but finally realised, aged 40, that it needed to be repaid. It was not my money, it belonged to the credit card company or bank and needed to be gone. I repaid £16k in two years and was debt free by the age of 42.
Let my story, or debt stories like this inspire you to make some changes and pay off the debt. Release the stress of debt and become debt free like I did.
Over to Ruth from Money Savvy Mum UK to share his story. A familiar story of life spending getting out of control without the income to support it.
How did you get into debt?
My husband and I had never been in debt until we bought our first home. We were able to save a decent deposit to put down and we thought it would be plain sailing from there. How wrong we were! I think we both hugely underestimated just how many extra expenses you incur once you own your own home.
On the day we moved in we found out that our boiler was leaking carbon monoxide and had to be ripped out. As you know, boilers are very costly, and we didn’t have a penny to our name having thrown everything at the deposit. We had no option – it had to go on a credit card and didn’t think twice about it. We were just grateful that we were able to get the credit. The minimum payment was set up and we forgot about it.
Next came the furniture. We had furniture from our flat but we wanted new things for our first home. Again, we had no money, so it had to go on credit. We headed off to Laura Ashley and put £700 worth of lovely things on a store card. We could afford the monthly repayments so thought nothing of it.
After that we stopped being frivolous but due to circumstances our debt increased hugely. My husband worked in construction and his job became quite unreliable. He could be in work one day and off the next and my wages alone didn’t seem to stretch far enough. Then the kids came along, and it was like a car crash. We had the best time with them and loved them to pieces but financially we were a mess. It felt like we were haemorrhaging money and our wages just weren’t enough to cover everything.
We started to apply for credit cards just to do cash transfers from them into our bank accounts so that we had money to pay our basic bills. It was all totally out of control. We both knew it but never, ever spoke about it. We couldn’t sleep, we were snappy with each other and the guilt was unreal. I felt like we had failed our children. We couldn’t afford nice days out unless it went on a credit card. We couldn’t buy them clothes. And we almost lost our home twice through not being able to pay the mortgage.
What was your crisis point?
It all came to a head one day in 2018. I had to get petrol and I knew there was unlikely to be any money in the bank (by that I mean any more of my overdraft that I could use). But I went along, put £5 in the tank and prayed that my card would be accepted. It wasn’t. I felt utterly defeated and desperately sad.
That was my turning point. I knew we couldn’t go on any longer like that. It was destroying us. That day we sat down together and wrote down every penny we owed. It came to £21k. We were both gobsmacked. We literally had NO clue we owed that much. I thought we owed around £9k or £10k. My husband was so shaken that he had to sit down but I actually felt liberated. I finally knew why we didn’t ever have any money – it was all going on debt repayments. We were spending close to £1k EVERY single month on our loans and credit cards. I could see a way out of our mess. Once the debt was gone, we would have all of that money spare each month.
What help did you get?
We did some research about the best way to pay it all off and came across Dave Ramsey. He devised the ‘Baby Steps’ – list all debts lowest to highest. Pay the minimum on all but the lowest debt and chuck every spare penny you have at the lowest debt. Once that is paid off move onto the next card and do the same. So that’s what we did. At this point in time we had set up our own dog walking business and were able to take on a lot of extra work. We worked 7 days a week for months on end. In the evenings I did surveys to earn even more money. I sold things from around the home, I meal planned, and I only shopped at Aldi.
Seeing the debt coming down motivated me so much. I became totally obsessed and wanted it gone from my life. I went from never looking at my bank account to checking daily! There were charts everywhere so we could see our progress all of the time.
It took 8 months of blood, sweat and tears to clear the £21k. Even as I type it it seems so unreal. Making that last payment is a moment I’ll never forget. The debt had control over us for so many years and it was unbelievable to finally get our lives back. I am so, so angry that it is so easy to obtain credit. It’s even seen as the norm to have debt. It shouldn’t be this way. This is the main reason I started my blog Money Savvy Mum Uk. I wanted to let people know that there is another way other than the debt route. I also wanted to share my story to show people that no matter how bad things seem, there is a way out.
Since I mad that final debt repayment, we have gone on to buy a new work van with cash and save £10k for our emergency fund. I have put this aside in case we are ever unable to work. That money covers just over 6 months’ worth of our living expenses.
Tip for getting out of debt?
My biggest tip for anyone looking to get out of debt is to do a budget. List everything you have coming in and everything going out. Use what’s in-between to chuck at your debt. If you find you don’t have anything left after paying your bills you need to think about additional income. Could you do some extra hours at work? Can you find things to sell? Look at your bills – is there anywhere you can cut back? I also can’t recommend meal planning enough. It saves us an absolute fortune each month.
Finally, talk to someone. It all feels so much less scary when you talk about it. There are charities that can help too. Step Change and Christians Against Poverty come highly recommended.
Thank you to Ruth for sharing her story
If you would like to read many other finance writers debt stories here they all are
Leon Mclean from Make Save Invest Money.
Fran from Pennies to Pounds