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My financial journey

Last Updated on April 29, 2022

The story of how I got into debt, and how I paid it off is an integral part of my financial journey, and what eventually lead to me deciding to share my journey with others.

In 2013, I had:

  • 2 credit cards
  • 3 loans
  • A maxed out overdraft

All of this came to around £13,000 – which also happened to be my annual salary at the time. I was still living at home with my mum, but I was desperate to move out and that just didn’t seem very likely as the combined monthly payments were a huge proportion of my monthly income. 

My lightbulb moment came when my combined payments threatened to leave me in the red. I realised I had no choice but to tackle my finances, and thus began a journey of educating myself that I’ve been on ever since.

In 2020, I finally paid off the very last of my debt, and I can’t describe the feeling when it was finally all gone.

I now have a six month emergency fund in place, investments for my future, and peace of mind like I never believed would be possible. 

I hope that by telling my story and sharing what I learned along the way I can help other people go from where I was then, to where I am now and experience financial security – because whoever said money can’t buy you happiness has obviously never experienced financial anxiety before!

How did I get into debt?

I first got into debt at the age of 18. The bank I held my current account with at the time rang me, and invited me to head to the local branch for a financial health check.

I was asked whether I had a credit card, and was advised to take one out with them as, according to them, I shouldn’t have been doing any shopping online without one because they offered greater protection than my debit card.

I dutifully went along with it, and left with my first ever line of credit.

At the time, I was on a zero hour contract at a retail job, on a low salary which fluctuated from month to month. I had no real financial education, and budgeting wasn’t something I thought about.

What I did care about, was being able to keep up with my friends and being able to join in on nights out and new clothes and makeup like everybody else.

Before I had access to credit, I had always lived within my means and made my money work for me. I’d saved up for festivals on minimum wage as a teenager, and while I didn’t have a ton of extra cash, I still lived at home so it wasn’t too much of an issue.

My credit card soon became my default payment method for my everyday costs, and without a budget, I didn’t give enough thought to how much I was spending vs how much income I was earning. 

The most alarming thing? I didn’t even know the APR, or how much interest I was being charged on a monthly basis. 

What did my spending look like?

Having access to what felt like an unlimited supply of money, my spending soon got out of control. I struggle with impulse control, and I hadn’t yet learned how to spend with intention.

I went through some difficult times in my teens and early twenties, and emotional spending was a real problem for me. Treating myself to things I wanted but didn’t necessarily need didn’t feel unusual or unnecessary at all and I loved nothing more than a mooch around town buying myself things that would temporarily make me feel good.

I wouldn’t worry about the amount I was earning, so long as my bills and the minimum payment for my credit card was able to leave my account it didn’t feel like an issue. This meant that I was spending WAY above my means. I really wish that I had learned to budget before I was given access to credit, because that would have mad a big difference to my money mindset.

By the time I was 20, I’d got a new job that paid a steady monthly salary, but I still wasn’t earning a lot. I learned to drive, which improved my job prospects but added the cost of owning a car into the mix. 

My bank had called me back in to offer me a consolidation loan for my credit card and overdraft. The same person who had originally talked me into my first credit card told me they’d even throw in an extra £500 on the loan amount as it was the start of December and didn’t I want some ‘free money’ to have a good Christmas? That flippant way of referring to unnecessary debt as ‘free money’ is something that has stuck with me ever since. It truly horrifies me that I trusted this person.

I still had no idea what the APR was or what that meant. It was on the paperwork I signed, but I had no real idea of what it really worked out as over the loan term.

When did I have my lightbulb moment?

When I was 23, I finally had a lightbulb moment where I realised that my debt had become a problem. I was on my second consolidation loan, my overdraft and credit card were both maxed out, and I never had any money despite being on a better wage. 

I’d reached the point where I was at risk of not having enough money in my account on payday to live off after my bills and debt repayments went out, and with maxed out credit cards I couldn’t spend on them either. It was looking like I would be forced to choose between eating and missing payments, something I’d never done.

Until that point, I’d pushed any niggling financial anxiety I had to the back of my mind, but suddenly it consumed me. I remember sitting there and feeling my heart racing and my body getting hot, looking at my balances and wondering how I was going to get out of that mess. I couldn’t see any way of paying it off.

Once I sat down and totalled up how much debt I was actually in, it came to £13,000. I couldn’t imagine paying off such a huge sum of money, and imagined the payments I was having to make going on forever.

I googled how to declare myself bankrupt, as I was terrified about how I was going to cope, and found a whole new world of financial information I had never known before.

I learned about all the different paths it’s possible to take to get out of debt, and spent hours and hours reading about them all to figure out what I should do. I completely hyperfocused and just absorbed all of the knowledge I’d never cared about before like a sponge.

I learned that there are charities that can help with debt and just knowing that there were people that I could ring up and speak to for free if I needed to took a huge weight off my mind, even though I never ended up turning to them myself.

My debt repayment plan

I formed a plan to pay off my debt as quickly and manageably as possible, which comprised of:

  • Refinancing debts to interest free options to pay them off quicker
  • Budgeting and practicing frugality to avoid going any further into the red
  • Earning extra money to pay my debts down quicker

From that day in 2013, I never paid a penny in interest ever again (with the exception of car finance which I will go into in a separate post). 

I was fortunate that I was in a position where, having never missed a payment before, I was attractive to lenders and able to get a couple of balance transfer cards with 0% interest offers and low fees.

With the bulk of my debt shifted, I still had a loan I hadn’t been able to move, so I focused my efforts on overpaying every single month to pay it down as quickly as possible while making minimum payments on my 0% credit card debts by direct debit.

I signed up for a bunch of different money making apps that helped me to earn extra money alongside my full time job, and each time I cashed out I would call up the bank and overpay my loan, even if it was a tiny amount.

I found ways to gameify paying down my debt so that I could get that same buzz I used to get from spending from paying it all off instead.

I still lived at home at the time, so was able to make the most of my low living costs to aggressively attack the debt. I paid off £6k within the first year, but the rest took me another 7 years because I made the decision that it was finally time for me to move out and start renting. I love my mother to the moon and back, but having my independence was so important for my mental health.

Weighing up our quality of life vs the financial impact of our decisions is something that we will all face during our financial journey, and I firmly believe we should live for today while planning for tomorrow, so it was a calculated decision that I made once my debt situation was under control and I had a plan in place that I had proved to myself I could make work.

Becoming debt free

I finally paid off the last of my debt in 2020, and it was a really exciting moment for me. I’d finally achieved what I’d set out to do all those years before, and finally, every single penny that I earned was my own (after tax of course).

During my debt repayment journey building up significant savings wasn’t something that I had been able to prioritise because I just wanted the debt gone as quickly as possible. Mathematically it would have made more sense for me to have saved an emergency fund alongside paying off the debt so that I didn’t need to take on any more, but our financial decisions are so often driven by emotion.

I worked out that due to having to borrow when emergencies did come up over those 7 years, the total amount of debt I paid off between 2013 and 2020 was £34,000. This included losing a job and having to move out of my apartment building due to refurbishment in the same week, my car dying on me dramatically, several expensive trips to the dentist, and various other things. Life gets expensive, 

But, once it was finally gone I was able to use the money I’d previously been spending on debt repayments each month to start building up some proper savings! And that’s the story of how I went from surviving to saving.

The story doesn’t end there, of course. I’m now investing for my future, thinking about whether or not I want to be a homeowner and budgeting for treats and the things in life that make me feel good. This is where I plan on sharing all the lessons I’ve learned along the way so that you can do the same thing too!

If you want to stay up to date, I’ll be launching a newsletter soon so that you can have new posts delivered straight to your inbox, so keep an eye open for that, but for now you can follow me on Instagram where I’m sharing regular updates and discussions around all things personal finance.

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