Articles and advice from someone who's been in debt twice

I understand the many struggles that come with being in debt.  In my younger years I hit debt crisis.  This meant I was paying debt off with debt and never actually improving my financial situation.  I was only ever getting in more debt! 

The debt was all irresponsible and built up from the moment I turned 18 and could access credit through age 19.  I was leading a lifestyle my shop assistant wage at the time could not afford.  I went out partying several times a week, ran a car I didn’t really need and had high mobile phone bills.

I developed a shopping addiction and would buy clothes almost every day.  I had low self-esteem, was very self-conscious of my appearance, lacked confidence and suffered with depression.  I tried to fill a void within myself by buying new clothes to make myself feel better.   It made me feel great when people complimented my outfits and loved my style. 

I also had fear of missing out and wanted people to like me so I never turned down an invite to a night out or party and my colleagues at the time and friendship group was very sociable, so these were regular events!  I'd constantly buy rounds of drinks and shots on credit cards as I couldn't really afford them.  I wanted to impress people, be liked and be invited out again.  I never wanted to miss out or be missed out. 

If I had no money and wanted to do something then I'd get a loan, increase my overdraft or get a credit card.  If I wanted more clothes I'd open another store card.  I was addicted to spending and it was out of control.  I never thought about the consequences.  Although I never actually worked out all my incomings and expenses, I just stupidly assumed I would always be able to afford the minimum payments.  I never worked out what the total of these would be if I maxed out everything.

In less than two years I owed £17500.  I didn't even know the extent of my borrowing until I sat down at Citizen's Advice and we worked it all out.  I had an overdraft, three credit cards, two loans and seven store cards, if I remember correctly.  I had nothing to show for it.  I had been young and irresponsible and had no money management skills whatsoever.  I know it was my fault, but I also wonder how the banks kept lending an 18 year old so much money without question.

Suddenly I realised I was in trouble.  I couldn't afford all the payments.  There was no credit left anywhere for me to pay any of my debts.  The red letters started coming and I had no available credit left anywhere and I suddenly couldn't get any more.  Things suddenly turned very bad.  I was getting constant calls and letters demanding the payments.  I hope that in recent years people are more understanding about debt, but at the time I had some really awful phone calls from my creditors constantly harassing me and demanding money that I didn't have.

Being in so much personal debt and not seeing the light at the end of the tunnel was a horrible and very low place to be.

I was terrified of debt collectors turning up or court dates and I wanted to sort my mess out.  I thought I was going to have to go bankrupt at only age 19, but thankfully I was advised against this.  Luckily I very quickly got advice from CAB and went on a debt management plan with PayPlan in around 2004.  It took over five years, but I paid every single penny back.

It was one of the biggest lessons learned and one of the most stressful and dark times of my life.  I was even told at one point I had to make one more normal payment to a creditor before starting a DMP or else I could risk going to jail for fraud as they could say I opened one of the accounts without intending to pay it back!  I was still a teenager and this terrified me!

Even when I was on the debt management plan, it took several months for some of the creditors to stop calling me.  I was constantly harassed by companies who even found where I worked and called so much that my boss started to tell them I didn’t work there to stop the calls!  This was whilst I had a plan in place to pay it all back!  Luckily these calls eventually stopped and I paid all of my debt back whilst having to learn to really budget as PayPlan would only allow me the bare minimum to have for food each month and the rest after my rent and bills was to be divided between my creditors.

I stayed totally debt free for around five years.  Fast forward to 2014 and I decide to get into debt again, but a little more responsibly.  I have started a family now and decide to buy a house and have a mortgage, the biggest debt of my life, but also an investment.  We buy a fixer upper so I also have a home improvement loan.  After a lot of careful consideration I also take out a personal loan for a surgery and car, but both with very affordable monthly payments. 

I'm in debt again, but this time I can easily afford the monthly payments and my credit rating is good so the interest rate is low. It all feels much more responsible, but I still hate having the loan debt, so I plan on paying the loans back quicker and being free of the loans as soon as possible and only having my mortgage to pay back.

My financial situation seems better; I have emergency savings and a good monthly income. This time my debt is manageable and I don't plan on getting more!  I feel in control of my money now. 

In fact, I even have enough saved to pay back the debt if I need to, but I explain in one of the blog posts below why I've saved a large emergency fund before paying back our loans.  In short, my husband and I are both self employed so that's our emergency money should we not be able to work for a period of time and need to cover bills.

I understand the many lows of being in debt and I have experience in being on a debt management plan.  I understand being in the depths of unmanageable debt, but also being in control of my debt.

Do not suffer in silence if you are struggling with debt.  Please seek advice; there is lots out there to help you.  Check out my family finance and money saving sections too for advice in taking control of your finances.

In this section you will find my blog posts that relate to debt.  New blog posts will be added regularly to the end of this page.