How I beat and continue beating debt
Beating debt is a huge issue in our society today. Average household consumer debt was very nearly £8000 and one person was declared insolvent or bankrupt every 5 minutes, according to The Money Charity Statistics in December 2018. This situation is predicted to get worse, so I think there has never been a more important time for us to start beating debt in our own households. Today I have a guest post from Vicky from I Beat Debt, who shares a little of her story about how she is beating debt. Over to Vicky.
First of all – I need to confess! My blog is called “I beat debt” and yet I am not debt free. How then can I justify calling it that? Well, in my opinion, you don’t need to be debt free to be beating debt. The debts I have now (my mortgage and car finance) are budgeted for and I have never missed a payment.
When I talk about “when I was in debt” that’s not me conveniently forgetting that I still have a few debts, but it is talking about a place where I was making minimum payments (if that) on my credit cards and bills. I also had no savings and had to go cap in hand to family every time there was an emergency. From month to month I had no idea if the bills would be paid and if I was going to keep afloat for another month. Hopefully you can see the difference – even though I don’t claim to be debt free!
Thankfully, I am in a much better place now. All the debts which I was struggling to clear are long gone. My car and home payments are budgeted for and I overpay where I can so I can clear them off early. My mindset has totally changed. I don’t feel bogged down or distressed by my debts or money issues, I feel that the control has switched and I am now in charge, not my money or lack there of!
It’s not an easy option
Going through the debt management process is a very invasive and personal experience. It was hard having a practical stranger go through bank statements, credit card bills, and any other financial paperwork, but it was a necessary part of the process. Whilst they didn’t judge, I felt that I was judging myself. I couldn’t believe I’d allowed myself to get in that position and I couldn’t believe how stupid I felt.
I was incredibly fortunate though. Although my initial debt statement said it would take over 20 years to clear off what I owed whilst in the financial position I was in at the time, I was actually debt free within a year. A lot of people are not that fortunate though and that’s where the idea of my blog came from. “I beat debt” because I came through the other side, cleared off things which at the time looked like they couldn’t be cleared off and I learnt a heck of a lot about money and finances on my journey. As Brits we don’t talk about money enough, and I think that’s part of why there’s so much stigma around debt, which is why I now talk about my debt to anyone who will listen – in the hope it will help change mindsets.
Learn from my mistakes
I’m not a money expert, and I don’t claim to be one, but if chatting and writing about money – and in particular the mistakes I made and what I’ve learnt from them go on to help even one other person then I’m happy with that. I think the most important things I’ve learnt, and which I use in my position to help others in beating debt are as follows:
1 Take control
Open your post and don’t bury your head in the sand! I went through a stage of not opening my post and living in denial. I therefore missed important letters about my bills and credit cards and wracked up more fees. Pretending debt isn’t happening doesn’t make it go away – it only makes it worse!
Talk about it
Don’t be ashamed to talk about debt and money! You would be surprised (I know I have been) about how many people have money worries and concerns – even if they wouldn’t say they are in debt as such. It’s nothing to be ashamed of and it happens to a lot more people than you probably realise! Don’t feel that you can talk to friends or family, you can access free money advice from a variety of different money and debt charities!
Know your numbers
Have a budget! Whether it’s a complicated spreadsheet or a notebook and pen, tracking your income and outgoings helps you understand the bigger picture of your finances. It helps you see where your money is going as you are recording even those small purchases (like a drink with your lunch) that you otherwise might forget about. By writing it down, it also makes you think about what you are spending your money on and whether actually you can actually afford it. It might take a couple of months of tracking your spending to be able to set a budget to go forward with, but it’s a very worthwhile exercise and will help in the long run!
If this post has struck a chord with you, then I suggest that you come along and join my free Motivated Money Mindset programme. You will set monthly goals, which will help you to focus and beating debt more quickly. There will also be support from me, and all the other members of the programme, which will be hugely motivating.