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How to raise the cash for an unexpected bill and my own debt story

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I was never any good with money.  Perhaps you’ve already read my story of how I ended up in £17500 of debt by age 19.  Luckily, for me, that was a huge eye opener and a lesson well learnt.

I’d never had any experience of cash and growing up in a single parent family, cash was always tight.  In fact I just remember money worries being rife, always being skint and budgeting everything to the very last penny.  So when I turned 18 and could suddenly get a store card and overdraft, I did.  I really did.  The taste of being able to buy whatever I liked was just too tempting. 

I’d never experienced anything like it before and I was hooked. 

Before I knew it I had store cards for all my favourite shops, two loans, several credit cards and a maxed out overdraft.  I went out socialising every evening, always bought rounds of drinks for everyone, always had a new outfit every day, went to the pub for lunch every day I worked, ate out in the evening at restaurants, rented a flat, had a car and a £100+ mobile phone bill every month.  At the time I only earnt £150 per week in my full time shop assistant role.  I was living WAY above my means.

I hit debt crisis pretty quickly.  It spiralled out of control and the minimum payments were more than I could afford after my rent and bills.  I was stuck in a circle of paying debt off with debt and never actually paying anything off.  Luckily I sought help from the Citizen’s Advice Bureau and went on a debt management plan for over 5 years and paid every last penny back.

You can read my whole debt story in my debt category.

It was a tough lesson learned.  The debt management plan basically left me with £30 per week for food and personal care, and that was it.  No more expenditure money whatsoever.

Fast forward 12 years...

Fast forward 12 years and I like to think I’m much better with money.  OK, so I have a huge mortgage, but I see it as an investment and surely it’s better than paying off someone else’s mortgage by renting, right?  In three years we’ve already made £40,000 on the value of our property, plus we’ve just increased our mortgage repayments, by only £100 pound per month, but it’s knocked £23000 off our overall interest.  We went for the longest mortgage of 35 years whilst the children are little and my work was unpredictable, but we plan to overpay and reduce the term as the children grow and our earnings increase.

We also have two loans.  We bought a property that needed renovating from top to bottom and we’re still going three years in.  We were quite naïve as it was the first time we did this and only saved £7500 to do the work.  Well that was swallowed up in around 4 weeks and we had no idea of the enormity of replacing everything and the costs involved.  We took out a home improvement loan so we could get a bulk of work done in one go and not have to spend the next ten years relying on bits of money each  month from our wages.  We’re at that stage now of course, but the bulk of work has been done so we’re fine with that.

I also have a credit card again.  But guess what?  It has a whopping £5400 limit, even though I’m self-employed which I think is crazy, but my balance?  £0.  Well that’s a lie, it’s actually -£2 as I’m in credit on my credit card!

It’s purely there for emergencies or to make big purchases as it’s a Tesco credit card so sometimes it’s worth buying large items to get all the clubcard points and then paying it back right away.

The best thing nowadays is I feel in control.  The credit is there but I no longer have the temptation or addiction to go and spend it all.  I learned my lesson and I budget our income every month.  Yes, we have two loans, but we only took them out after a lot of serious consideration and knowing that we can absolutely afford them and still have plenty of disposable cash at the end of each month.  It meant we could get on with renovating our home and not have to wait years on end.  It certainly wasn’t a decision we made lightly, or on a whim, and we also shopped around for the best deals and lowest interest rates.

What to do if you need cash unexpectedly...

My advice to my younger self would be to save save save.  Like Monica’s parents in Friends – put away at LEAST 10% of your wages every single month, as soon as you start working.  This is what I’m going to teach my children and I hope they listen.  That way, you’ll never have to borrow cash or pay any interest.  You don’t even want to know the interest I had to pay back on all my personal debt all those years ago. 

But, sometimes you still need cash in an emergency for an unexpected bill.  It happens.

Even as a now responsible adult, we come across things that we need huge lumps of cash for.  Even more so since we bought our first property and I expect many people are in the same boat.  When you buy your first home it often swallows ALL your savings and then some.  It might be a few years to get back on track and start saving again.  For us it took around 2.5 years before we started up our savings account again.  There’s so much to buy when you buy your first home and if you buy an old home, like we did, lots of unexpected things might go wrong.

For us, the first thing we weren’t expecting was the horrific water pressure!  It wasn’t something we had thought of testing when we viewed the property, but as soon as we moved in and turned a tap on we were shocked!  It was a dribble!  To run a shallow bath for Bella took the best part of one hour.  To wash my hair was impossible.  We couldn’t go on like this and straight away, within a few weeks of moving in, we had to fork out almost £2000 to have a new high pressure water tank installed.

Next, just a few days before Christmas as these things like to happen, we had water pouring through our living room ceiling!  An old pipe had rusted away and water was just coming out.  Luckily we managed to find a plumber after a lot of calling around and it cost nearly £500 to repair.

More recently Ben has taken his car for a service and come home with a £800 bill.  They needed to do some repairs as there was something quite vital on the verge of breaking.  Needless to say I wasn’t impressed with this bill.

So in all walks of life something unexpected might happen.  I remember Ben’s brother running up a HUGE phone bill, into the thousands, because he had no idea it cost to stream YouTube videos when abroad and there was no block on the phone.  An innocent mistake I bet a lot of people make nowadays.

Where to source the cash for an unexpected bill...

  • Bank of Mum and Dad

If you’re lucky enough to have a mum and dad with some savings, and you feel comfortable asking them to borrow money, then perhaps this should be your first port of call.  I’m sure most parents would love to help out their children in times of an unexpected emergency.  Just take it as a lesson learned to start saving money asap.

  • Borrow money

If you have a good credit rating and depending on how quickly you need the funds, you may be able to apply for a credit card.  Many have zero interest options for so many months, so you could even borrow without paying any interest.  Just be sure to pay it back as soon as you can so you don’t have to pay any interest.  If your credit rating is not so great there are still options, but you’ll have to pay interest on what you borrow.  

  • Sell something

Got something you can sell to raise the cash?  This is a great option.  Maybe take a look through your attic and list a bunch of stuff on eBay or in local Facebook selling groups.  This is also a great way to make some extra cash to pop into an emergency savings fund every month.  Plus it keeps your home decluttered.

  • Call the company

If it’s a utility bill, call the company.  If you just need to wait until payday or need to set up a repayment plan, they are often more than happy to help so long as you stick to the repayments.  I’m sure they’d rather you called and tried to sort it out, than left it until the red letters started coming.  Many have dedicated helplines for this sort of thing.

  • Earn some extra cash

If you only need a small amount of cash you could try earning it yourself.  There are several money making apps available nowadays and if there are enough tasks in your area you can make a nice sum.  I made £50 in three hours one morning by completing several mystery shopping tasks in a row.

  • Ask your employer

Years ago, a company I worked for offered ‘subs’.  Not a six foot sandwich, but you could request some of your wages before payday and then they’d deduct what you’d had out of the official pay check.  If you’re enrolled in a pension scheme, you may even be able to reduce or halt your payments for a few months.  We were able to do this for three months at my husband’s work when I was on maternity leave and money was really tight.  I think my husband went to payroll and jokingly said ‘I need more money, what can you do?’ and this was the best short term solution. 

Final word

To avoid all of this, the best option is to save your own money.  We now put away so much per month so we have a lump sum that should hopefully cover any emergency.  Plus a backup 0% credit card if we still don’t have enough.