Real Life Debt Story - FormerlySkint

Real Life Debt Story - FormerlySkint

Real Life Debt Story - FormerlySkint

Welcome to my series of 'Real Life Debt Stories'. The series is dependent on you sharing your stories, so if you are interested I'd love it if you'd complete this questionnaire. There are just 10 questions.

Thank you so much to Formerly Skint for sharing their Real Life Debt Story:

What was your Lightbulb moment?

After graduating from university in 2012, I found it very difficult to get a job and when I did, I was made redundant after only 6 months. I ended up digging myself into a hole of debt over the course of around 9 months (yep, that quickly!) which just added to the smaller debts I had from uni. I attempted to sort out my finances a few times, but always ended up burying my head in the sand again.

I remember once being on the phone to the Council Tax collections team, and the lady was horrible, she was belittling, and despite the fact that I told her I had just lost my job, she insisted on taking me through an income & expenditure exercise to work out how much I could afford to repay off my debt. On completion, she said in a sarcastic tone "Well your monthly outgoings are more than your incomings, how does that even work?" I have never felt more useless in my entire life.

How much did you owe at the time of your Lightbulb moment?

Around £5000

How did you feel when you had your Lightbulb moment?

It was the scariest moment of my life. I didn't know what to do, where to turn to, or how to make a start. By this stage, I was finally earning a semi-decent wage in a new job but that didn't make it any easier. I can't stress enough just how much you need emotional support when going through your debt repayment journey, it's not all about the money!

What/who were the circumstances which caused your debt?

I graduated with around £1500 in overdraft debts. I was unable to get work straight away after finishing university, and I also wasn't entitled to any benefits as you often have to wait a couple of months after graduating (varies from university to university. This time was enough for me to rinse through the rest of my overdraft, taking me to £2000 in total. By the time I was eligible date-wise for financial help I was working in a local bar (one day a week if I was lucky, sometimes they didn't need me at all over the week) so was no longer entitled to benefits anyway. The basic income I had just didn't cover my outgoings, not even close. I racked up another £3000 of debts across my Council Tax and Private Rent.

It is amazing how quickly it all can snowball. This all happened in under one year. That one year of my life totally changed the rest of it.

What were the first steps you took in taking control of your debt?

I hit my Council tax and rent arrears first, as these were expensive debts. My landlord was great, very understanding, and allowed me to set a realistic payment plan. The local council was obviously much less understanding, and I did get to the point of bailiffs with them. But by the time the bailiff got in touch, I had actually saved enough to just repay the rest of my debt to them outright.

I've written a bit about this on FormerlySkint

Where are you now in your journey to being debt free? Do you have a target ‘debt free’ date?

I am currently free of any immediate debts. I say "immediate" because I do now have a mortgage and I have a credit card with a revolving balance, but these are what I think of as "good debts" because they aren't weighing me down. While I'd LOVE to be mortgage free, for the majority of people that just isn't an option. Maybe some day!

 

Are there any debt repayment ‘methods’ that you would recommend? What has worked for you?

I wouldn't say I used a "method" as such, I just looked at my debts, broke them down sensibly and paid off the most important & expensive debts first. My overdraft was interest & fee free and was at the max balance agreed by the bank so it wasn't costing me anything each month. My rent was also not costing anything, but wasn't an agreed debt. Council Tax was the expensive one. While there was no interest on it, they would whack on a £40 or £50 fee here and there when they had to send me a letter. So I hit the rent and council tax hard. My first bit of advice would be to figure out what is costing you more money and start from there.

What advice would you give to someone who has just had their ‘lightbulb’ moment?

How do you stay motivated?

 It's really difficult to stay motivated, I know a lot of people swear by the "Snowball Method" to keep you motivated an as it happens, I did lose all motivation when I cleared my overdraft and Council Tax debts. Paying off my overdraft just wasn't as fun. I took my time with it though, and started saving a bit alongside paying this off. I think this helped, as I wasn't just watching my money fill the overdraft hole each month, I could see some building up for the holiday I planned to book as soon as I was debt free! Also setting mini goals along the way, in the beginning, I just wanted to get my overdraft below £1000. Then I wanted it below £500. Then I wanted it gone!

Please feel free to add in any more of your story here?

Thank you so much for sharing your story.  You are right - it is hard to stay motivated and setting yourself mini goals along the way really does help.  I like to set myself mini goals all the time!  If you pop over to the FormerlySkint blog, you can read more hints and tips.  

Would you like to Share Your Story?

My aim is to feature ‘Real Life Debt Stories’ from people who have experienced debt. This could be debt of any size, type or reason. Debt that has been paid off, debt you want to start paying off or debt that you are currently in the middle of paying off. I want to share failures as well as successes including the reasons why you found yourself in debt in the first place – as everyone’s story is different.

It is important to show people that they are not alone. I also want to highlight that different methods of getting debt under control work for different people and that there is not a ‘One Size Fits All’ solution.

This is where you come in. I am looking for anyone who is willing to share their story with my readers. I have developed a questionnaire for you to complete and this can be completely confidential and names will not be shared OR if are happy for your name to be used, I can use it. If you also have a blog, I am happy to link to your blog too, alongside your story.

I will then email you to let you know when your story will go live.

Why not pin this for later?

Debt Story - FormerlySkint