Debt Story – How To Climb out of Debt by The Frugal Fox

HOW TO CLIMB OUT OF DEBT by TheFrugalFox

My latest debt story comes from Luci of the Frugal Fox website. I got to know Luci through Instagram first where she posts very fabulous pictures of her wearing very beautiful clothes and holding very nice handbags. She has a debt story from her best friend that she wanted to share with the world so here it is.

climb out of debt

An Introduction from Luci

Getting into debt is a long downward spiral that can seemingly have no end. One of my closest friends Mike fell deep into this spiral whilst we lived together in London. I witnessed him spend money he didn’t have, max out credit cards and borrow payday loans. But I also saw him bounce back, pay off all his loans and begin a debt-free life. Mike was kind enough to answer my questions about how he did this. We both hope it will help someone reading this.



 How did you get into debt?

It’s easy to blame “irresponsible lending” (which is still a massive problem, and was even worse at the time), but obviously it was equally down to “irresponsible borrowing” on my part. It’s easy to accept a £2,000, interest-free overdraft early on in your student life, knowing you won’t have to pay it off until a year after graduation. But £2,000 is more than most graduates can afford. And the banks know that – it isn’t long before all that free money turns into a big, scary debt looming on the horizon.

And payday loans! If you’re not earning much, and you borrow £50 to cover that unexpected bill a week before payday, it’s easy to forget you’ll be starting the next month £60 down. I ended up in a sort of spiral, where I had to borrow more every month to cover the hole left by the previous month’s loan. At my lowest point I was taking out payday loans straight after I got paid, and borrowing almost as much as I was earning.

 What was your crisis point?

I sort of always knew, right from the first debt. I often heard that voice saying, “This overdraft / credit card / loan / finance agreement might not be a great idea.” But even when the debts are piling up, it’s easy to bury your head in the sand and ignore them. As long as you’re still scraping by. Plus I felt quite ashamed of my debt. It was easier to worry in bed at night than to deal with it out in the open.




The real tipping point was when I looked at my budget and realised I literally couldn’t afford to stay in London, in my flat, for another month. I got the OK to move back in with my parents and handed in my notice at work a few hours later, and got out before things got even more serious.

How did you get out of debt? 

StepChange have been absolutely brilliant. First of all they are a charity, so you know the advice they’re giving you is independent and honest – I always felt weird about asking my banks and creditors for help, knowing their whole reason for existing is to make money out of me.

I didn’t have any income after moving back home, so StepChange set me up a Token Payment Plan, where I paid £1 per debt per month until I’d settled into a job. It’s not a long-term solution, but it’s enough to show your creditors you’re being responsible, and get them off your back. Even better, StepChange act as a middleman between you and your creditors – they fight your corner for you, and do their best to get any interest and charges frozen. Whenever I received a scary-looking letter from a collection agency, I forwarded it to StepChange, and they helped me make sense of it.




Once I’d found work, I moved onto a Debt Management Plan. StepChange helped me draw up a sensible monthly budget, figured out what I could realistically afford to pay back, and sent my offer to my creditors. I paid £152 a month for about two years – it was slow progress, but it meant I could chip away at my debts without getting overwhelmed. And those aren’t the only two solutions StepChange offer, by the way

It took about three and a half years to pay everything off. Honestly, my quality of life has been up and down – money trouble is quite a stressful, a traumatic thing to recover from (you can even have debt-related PTSD!) and it’s never easy to move away from your home and your friends. But having the creditors and the collection agencies off my back has meant, even though I’m only just starting to feel better off, I’ve been able to relax and enjoy life more, without worrying all the time.

What are your top tips for paying off the debt?

Well nowadays I don’t spend money on stuff unless I really want or need it I’ve learned to weigh up which things are most important to me, knowing that if I treat myself now, I’ll have to take something out of my budget later in the month. Do I want to go for a nice day out, or do I want the new game that’s coming out? Or if I really want both, is there a way to make one of them cheaper? I’m getting really good at shopping around!




This debt story is part of a series of posts by other bloggers, read them all here. Maria Nedeva of the Money PrincipleDebt Daddy and Vicky Eves from I beat Debt,  Jennifer from MaMaFurfur and Cat from Penny Wise, Life Rich.

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Lynn Beattie

Aka Mrs MummyPenny

Personal Finance Expert

I write about personal finance made simple, lifestyle choices that will save you time and money, as well as products and services that offer great value.

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