Lets Talk About Debt
To paraphrase the classical philosophers ;-
“Let’s talk about debt, baby
Let’s talk about you and me
Let’s talk about all the good things
And the bad things that may beLet’s talk about debt.Let’s talk about debt for now
To the people at home or in the crowd
It keeps coming up anyhow
Don’t be coy, avoid, or make void the topic
Cuz that ain’t gonna stop it
Now we talk about debt on the radio and video shows
Many will know anything goes”– Salt-N-Pepa
I’ve got a debt story which I really should share. But to get to it I need to take you back in a journey into time.
Debt Lifts You Up Where You (don’t) Belong
I grew up in the 80’s. A time of fast cars, property prices booming (the first time or the middle time but certainly not the last time). I remember when Visa and Mastercard used to advertise on TV. Credit Cards were a ‘new’-ish thing and people were borrow and spending like never before. Media was changing and the TV was becoming central to the family home. Sky (the broadcaster) was taking off and there were more and more opertunities for companies to sell you thing you don’t need.
Time for a new car!
The onslaught was there but people didn’t realise it. We were being told our lives WOULD be better if we drove the XR3 or if we had a ski-ing holiday during the Easter holidays. We should get a bigger house because WE deserve it. Next door has a 2 cars! We should have two cars! The excess was there for everyone with either a monthly repayment or we could put it on the never-never. Little did we know what would be coming during the 90’s.
I Would Do Anything For Debt (But I Wont Do That)
The 90’s came and both my parents were made redundant at the same time. We were renting our telly and VHS from Radio Rentals. 3 Holidays a year became 1 trip to a campsite in during the summer. It wasn’t a bad life but with parents going from (fairly) well paid jobs to not having those jobs, there was certainly a change in atmosphere in the house. They got new jobs but they didn’t pay what they used to get. I remember asking my dad once for £30 to go out with friends and, to his credit, he did hand it over but explained it took him almost a day to work for that money. That was one of the first times I actually put a value on cash. Until then, cash was something you spent, not something you earned.
And I Will Always Love Debt
Come the 2000’s and I have been at university, managed to have 2 student bank accounts (with two overdrafts!), then credit cards, then student loads. I had quite a ‘good’ job at university where I earned between £50-£150 for 1 night’s work. It was ace but I still managed to spend WAY more than I got in. I had an unhealthy gambling machine problem (not an addiction, as I told people) but could still put £10/£20 in a gambling machine without thinking about it.
The 2000’s also saw me get my first job. I think I was earning about £1000 a month. Rich! I was Rich! I purchased a classic car, then another classic car, then I got a beachbuggy, because why not? I’d managed to pay down my overdraft with the bank I paid my salary into. Probably more ‘luck’ than actual planning. I then decided I wanted a camper van. I spoke to my bank and they suggested I get a loan but I told them I expected to pay it off over 6 months so a loan seemed excessive. What I told them I wanted (remember when you could TELL banks what you wanted – to an actual person) was to have my overdraft increased to £3k to pay for it. I’d expect to pay it down by just not spending as much money each month. You can guess how well that worked!
Every Teardrop is a Debt
I hit the 2010’s with snowballing debts. This would actually be my 3rd decade with more debt that I could reasonably handle. During this time I was able to justify my debt levels and this was re-enforced by an old boss of mine who explained she had a lot of debt but as long as she could ‘service the debt’ (make the minimum payments) then there was no issues. Obviously this is a point to take with debt but really I just didn’t appreciate that a senior manager who was 15-20 years older than me with a 6 bedroom house probably has a life structured in a different way to me. Sure, I could ‘service my debt’ but that wouldn’t help me and I’d not be buying my own 6 bed house anytime soon!
Early in the 2010’s I had a ‘significant life event’ which put me into a bit of a downwards spiral. It culminated in my final credit card (of the many I had) being declined and I realised that the physical cash I had – £15 in notes, £3.50 in coins and whatever was down the back of the sofa) – was all the money I had in the world until payday, which was 2 weeks away. I had to make some additional ‘significant life choices’ to resolve this situation.
And Its Me You Need To Show, How Deep Is Your Debt
I sat down and worked out how much I owed across everything. It was a big number. A very big number. Then I had to work out what my plan would be to get rid of it all. An easy option would have been to go for bankruptcy (or an IVA) but I felt I could clear them without these. The sensible option would have been to talk to someone properly about this. Sara at Debt Camel has a good page on where to get debt help – https://debtcamel.co.uk/more-information/where-to-get-help/ and I do recommend you talk to someone about your debt situation.
I sold things. I returned things. I did everything I could reduce my outgoings and allow me to pay against my debts. I was also ‘lucky’ that at some point I paid of my student loans so I had extra money in my pay that I could put towards the debt. I started doing Phone Tasks and managed to get some that even paid for my dinner or a couple of drinks as part of the task! I can’t pretend this was a ‘paid off £50k of debt in 12 months’ story but about 3 years after my credit card was declined, I was completely debt free. Weirdly I don’t remember a feeling of elation or euphoria but it put me back to having no debt at all – something I’d not had since I was 18.
Debt Days Are Over
The 2010’s saw life change a bit for me. I’ve got ‘good’ debt – a mortgage. Is it actually a ‘good’ debt, I’m not so sure but it is a necessary one in this day and age. I’ve changed jobs a few times and thats seen an increase in salary. I have started various savings including Premium Bonds (yes, I do understand that I could get a ‘better’ return but I’m happy the money is in a pot somewhere and it is within reach, but requires additional effort to access), a workplace pension, and I have some shares. I also have a number of savings accounts attached to my bank account where money is moved automatically when I’m paid, but I can access it immediately.
I still have credit cards that I use for any purchase over £100 due to the additional protection that gives me. They are paid off in full when I use them. I don’t carry them around with me, in case I suddenly decide I want a new bit of tech! Temptation is always there so I make sure that my available funds aren’t!
Empire State of Debt
My spending habits had to change to get on top of my debt. I’ve continued to maintain a few of these habits and I’ve also changed my mindset. I still love my Tech and have a (unhealthy!) retro gaming obsession. I justify this to myself by trying to not pay actual cash – I convert my Nectar points into eBay credit, collect my cashback from TopCashback and Quidco as PayPal payouts and I use these funds to buy the consoles and games I’m after. It is slower than just buying them all today but it helps me control it a bit more. It might, occasionally, need a small top-up of IRL cash, but often doesn’t.
I don’t have the latest phone as I purchased an iPhone XS when it came out with the rational that I’d keep it for as long as possible to make sure it was a ‘worthwhile’ purchase. I have a 2014 MacBook Pro that is blown out of the water by the performance of the new Macbook Pros but it does what I need. I’m glad I got a MBP as I’m not sure a 7 year old Windows laptop would be performing quite as well!
The Last Great Debt Dynasty
It took a single thing to trigger my debt recovery and that was hitting a (financial) rock bottom. When it comes to debt its important that you understand both how big your debt is and where it is. When you know those two items you can look to change how you approach your debt. If you don’t know where it all is, then how can you resolve it? If you don’t know how big it is, then how can you resolve it? You may not need to ‘resolve’ your debt at all, and that is certainly a way to look at debt. Whatever you do make sure that you aren’t letting your debt affect your health (mental or physical) and that you control YOUR debt – don’t let your debt control YOU!