Journey from the depths of debt
It's all well and good for us to shout about what we can do, but why not hear first hand from some of the people we've helped?
Ms Sunshine was one of our very first MoneyNoters. She came to us after spending years struggling with debt. Here is her story.
£15,000! I finally had to come clean to my mum about my debt and as expected I could hear the disappointment in her voice as she repeated the numbers. On the other hand I finally felt like I was taking a long awaited sigh of relief. For weeks and months I had been singlehandedly carrying the weight of my debt and the stress has been getting to me. After many sleepless night and panicked moments I finally felt a little lighter.
"But you live here with me. You have a good job and earn good money. How have you done this?" A fair question by my mum and one I had also been asking myself for a while. Truthfully I had done this because I didn’t really understand my finances or how to handle them.
For several years, offers of loans and credit cards had seemed to constantly trickle through the letterbox. I gobbled them up without restraints. After all they were a way for me to live the life I dreamed of. I travelled the world, which was fantastic, bought new clothes and new shoes, tried all sorts of expensive diets and exercise programmes. In a time when my sole goal (to buy a place of my own) seemed so far out of my reach, I convinced myself that the best way forward was to live for the now, throw caution to the wind and splurge.
My understanding of the loans and debt I racked up was minimal. I never thought to ask about interest rates and the consequences of missing payments. All I focused on was my ability to meet the minimum repayment amount. However, the loans were beginning to affect my credit rating,and subsequent loans were costing me more and I watched in horror as I went further and further into the red.
Finally coming clean was a game changer. It was difficult to admit to myself and others how much my debt had spiralled, but it also gave me the push I needed to seek help which led me straight to MoneyNotes - Not only did I need to get a handle on my debt, more importantly I wanted to educate myself to make sure I never found myself in this sort of situation again! So with a deep and cautious breath I reached out and scheduled my first Moneychat.
Light at the end of the debt tunnel
The first thing MoneyNotes did was reassure me - They made me realise that there was light at the end of the debt tunnel I was stuck in. Then I was asked to set out all of my debt. This was hugely helpful as for the first time I had to do a warts and all dissection of the debt setting out everything:
Outstanding amount still to repay for each loan
The interest rate on each debt
Monthly minimum repayement
Actual payments I had been making
Early repayment charges and more
Next we focused on budgeting, weighing up my income and expenses and looking at areas where I needed to cut back. Within a short time of taking on the budgeting exercise, I found myself with a lot more of my disposable income left at the end of the month. Energised and excited, I was ready to throw all of this at my debt. However, the next part of the package talked about the importance of building an emergency fund to deal with any unexpected money shocks. Lack of an emergency fund can inevitably lead to more debt, as if any financial emergencies popped up I would undoubtedly be forced to take on yet another loan. So as well as paying down the debt, I also began to put some money aside for emergency savings.
The sun will always shine again
At the time of writing, twenty four months have passed and I'm in a much better place thanks to MoneyNotes. I have set out my money journey below:
My debt is now down from £15,000 to £1,720 and will be completely cleared by the end of this year
I now have an emergency fund with £2,500 which I feel really happy about as I feel more confident that I can deal with unexpected expenses
MoneyNotes even made me start an investment fund, they gave me the tools and education to start small and I now have about £2,000 invested and I continue to invest on a monthly basis
I still have a few things to sort out like investing more into my pension and continuing to reaffirm that I can save enough to get on the property ladder and finally move away from home. I feel so grateful to my mum and MoneyNotes as what was a financial mess I got myself into quickly turned to a stressful situation which was also affecting my health. All I can say to you is that you have to believe there is a way out, be kind to yourself and things will fall into place.
Books that helped me on my journey from the depths of debt