Debt is a scary word. It is a word that I have battled with for years. It is something I have never dealt with, that is until now.
The last month of my life has been troublesome to say the least, I started falling for a guy who then caught me off guard and ended it by text, I became very disillusioned about my career and add to that living alone whilst my mum was away travelling and a conscious decision to ignore my debt. It seemed that I felt by sticking my head in the sand, it would just go away, I can tell you now, that is not the case.
I am sure I am not the only person who struggles with debt, it’s not just a case of over spending, its a case of a lack on understanding where money goes, and not keeping a keen eye on things. The last two weeks have seen a change in tides for me, I admitted out loud to a wonderful friend about my debt pain and I visited the bank. I cannot begin to put into words the shame I felt telling the manager about my shocking money handling and admission that I need help. Then came the NO, not just a gentle no, a suitably patronising NO, a judgmental no. I left the bank in tears, I sat and suddenly realised that things had got out of hand.
So, I regrouped, and made a plan. I am here to share this plan with you, in case like me you have been doing an ostrich and have your head in the sand, trust me you can sort it.
There are 5 simple things that you can do, starting today to get yourself out of debt and back to having proper nights sleep, not nights filled with dread and worry.
This is the one I cannot shout loud enough to you, there is nothing worse than the feeling of being alone. As hard as it feels to tell someone about it, if they love you, they will understand. Yes it will be hard, yes there may be tears, but I can confirm that it is the start of things getting better.
I chose a close friend, someone I knew had been through similar, she sat and listened to me chat it through, simply hearing the words out loud gave me much clearer sense of the issues, and also helped me focus on the genuine problems. It also stopped me over analysing everything.
Other than my bank I was a little stumped as to where else I could go to get impartial advice on my debt management, however there are places you can go, depending on your situation. Firstly there is the Citizens Advice Bureau, they have a dedicated section for money and debt, which covers everything from mortgage arrears, how to save, dealing with creditors. Then there is Step Change, the offer practical guides, clear and concise plans of action and have an extensive debt counselling service that in a lot of cases helps people who feel there is no where else to turn. The last of my three recommendations is The Money Advice Trust, they supply not only fantastic debt management advice but also simple steps to avoid debt in the first place, and best practice for managing your money. All three of these services are completely free and confidential.
Of all the things that I have done in this whole process, this was the toughest initially, it is amazing when you start writing everything down that you are committed to paying monthly how quickly you realise that you really had no idea how much money was leaving your account each month. I do want to stress at this point though that as important clearing off debt is, having a life is also important, so allow yourself a small amount each month for nice things, even if it’s just £20 for coffees on the way to work, or a couple of magazines, something that will help you get through a quite time in your social calendar.
Like most other things in life, there are apps that can help you create and manage a budget, if pen and paper aren’t your thing. The one I use is PocketMoney which despite its slightly childlike logo is actually a must have, it offers a simple way to keep a track of every day spending, such as food shopping, that odd coffee or chocolate bar or leather skirt that you had to have, by getting into a habit of adding EVERY SINGLE THING you spend money on you will start to see a pattern of your spending. This pattern can help you locate the triggers you have, mine most certainly is unhappiness, coffee makes me feel better, as do books and magazines, so I splurge on them when I am having a bad day.
The other must use site is On Trees, which A Thrifty Mrs brought to my attention in her fantastic post about getting finances organised, it allows you to pull everything into one place, so no flitting from site to site, it simply describes itself as
A place to check your balances, track your spending and set up budgets and alerts to manage your money more effectively. We can also make sure you’re getting the most competitive rates on the market with our comparison tables.
You only need one login for this, so you can manage everything in one place, meaning less confusion and much more ease. The easier you can make the processes the more chance of sticking with them.
Please above anything else don’t panic, don’t worry yourself into a state that there is so much to do, take one step at a time. I wrote all of the things that I needed to sort in a long list, then I went through them and prioritised, which of the people did I need to speak with first, were there any ways that I could make immediate changes? Things like checking through bank statements to make sure that you are not paying for old Direct Debits, or that money has been taken incorrectly, I was shocked at the number of occasions I found transactions appear twice.
Once you have that list, then set yourself some realistic targets, if you are like me and need to rip it off like a plaster and call everyone in one go and get it done then do that, if you need a little time then give yourself a week to get through them. Remember that you can do it, you just need to take it slowly and be mindful that it will be tough but ultimately so worth it.
Depending on your debt, the amount and where the money is owed, it is likely to take you a minimum of 2 years to have cleared it. I know this seems like forever, but it’s amazing how time flies (people are already mentioning Christmas). Set yourself targets, such as paying off 50% of your debt in 2 years, or clearing a credit card in 12 months. Remember to reassess the whole time though, don’t get into a vicious cycle, keep checking that you are on track, if you have unexpected bits of money come your way, like tax rebates, or family money be responsible with it and use 80% to pay debt off and 20% to enjoy. That way you are getting the best of both worlds.
If needs be then tell the people close to you what you are doing, give them a heads up that birthday and Christmas presents this year will have a £10 minimum spend and you would like them to do the same for you. Make it clear that you are not a social outcast just because you have tightened the purse strings, let them know what your plans are and the things that you would still love to do, like the weekend coffee or seeing them for dinner at one of your houses.
So there you have it, I am no Martin Lewis, but I am going through it at the moment, and am more than happy to chat with anyone about anything in this post. If I could give you one final bit of advice it would be this;
Be kind to yourself, you have made a positive step by acknowledging you have a problem and you are making efforts to fix it. Go easy on yourself, don’t reprimand yourself for the mistakes you have made, simply make sure that you are not making them in the future.
I plan to be debt free by the time I turn 30 in just over two years. It will be tough and I am sure I will struggle but the end goal is so worth it.