Hello budgeting buddies,
Today I wanted to talk about my history in paying off debt, and how the journey has been; before I started the blog and documenting it month by month.
Debt journeys are all unique, they all have their struggles and have their triumphs. Mine is one with a heck of a lot of ups, downs, going sideways and sometimes completely off the track altogether.
When I first heard of Dave Ramsey and Rachel Cruze, it was via from a lady by the name of Lydia Senn. Who, if you are on YouTube and interested in finance, then she is a lady you should totally look up. This was about five years ago.
The reason I was looking up how to budget because I was trying to work out how to budget enough to have a deposit for a place to stay while in university – and yes I did have Student loans and other financing along with that which is what I was relying on in my “financial plan”. Stupid, I know.
So, I spent the whole Christmas break working out how to juggle money around to work out how to have money to spend on things like food and a place to stay while going to uni. At this point I would also like to state, I already had a credit card, and an overdraft. Which I was already utilising and using as cash instead of a line of credit. Which it was.
I was worried at this point, but not as bad as I should have. If only, I had gone intense with paying off debt and starting an emergency fund seriously when I barely used my credit card – which at this point I had been using less than 10% of the line of credit, and only using the overdraft for 6-month rent payment. I didn’t have a guarantor which is a requirement when you don’t have credit scores and references from other people to rent to you. So instead, I had to pay for the luxury of not having someone to be my guarantor.
In hindsight, I could have totally kicked all my debt in the ass and this blog would never been a thing. As you guys have probably guessed, I didn’t do this.
About a year after the whole trying to work out writing a budget thing, I drove myself further into more mess, when I passed my driving test. I bought a car with cash. Yay! Until you realise, I know absolutely nothing about cars and got completely swindled. *Note for others, when buying a used car, know about the basics of cars, or bring someone who does. Also, do research on that brand of car before even looking at it.
As the car was completely unsafe, we decided to get rid of it, and go for a new car. When I say unsafe, I mean there were times I was pretty sure my car would either blow up or fly into the wind after passing a truck as it was a mental tin can.
My mum felt that because of the bad experience with the first car, we would lease a new one, as I couldn’t afford a new one in cash. One the important factors in getting a new car is because they have warrantees. So, if any issues I could just go back to the dealership – what could go wrong. Famous last words.
Fast forward a few a year. (2017)
Everything is going fine. The car is perfect, and my credit card balance is slowly creeping higher and higher. The overdraft is being used when I don’t have enough cash.
I was still watching the YouTube videos, the ones that are still around and active are Lydia Senn, Budget girl, Pennies into Pearls, and One big happy. There are probably more, but my memory is terrible, and my YouTube history doesn’t go back that far. However, I believed that paying off debt was for other people.
Then my mum died. Not only was it emotionally devastating, amongst other things. My mum dying also meant that I had more responsibility, as she had a dog which I then became responsible for.
Thankfully I had a very kind landlord as I wasn’t supposed to have pets, but under the circumstances they allowed it and incredible housemates, who helped me look after him between my work schedule and grief. I will forever be grateful for their help.
After that I had to find a place to live, as my lease was running out fast. I didn’t manage to find somewhere, but incredibly grateful that my Aunt allowed me to stay with her but as I couldn’t find somewhere which allowed me to have a dog, and the fact I worked 14+ hour shifts a day at my part time job, I made the heart wrenching decision to find him a new home.
I would like to say, this was not a decision I took lightly, nor without thinking it through. In the end it was better for my dog to have a new home.
When I finally found a new place to live, as well as a full-time job, minimum wage but it was a job and I moved back out on my own. The rent was decent (£400 per month) and bills (£100 per month), the car (£200 per month; not including gas). Which all sounds fantastic right, so why couldn’t I pay off all my debt. At the time I would blame the fact that I was working minimum wage, and I didn’t have enough shifts at my second job due to scheduling clashes.
The real answer to that was, I was still not 100% on board. I was incredibly “ish” for so long. At this point, I hadn’t even bothered to write the budget every month anymore, and I was back to going month to month without a plan of action. So, my debt spiralled even more.
My overdraft was at its very generous limit. My credit card had been hovering at 99% utilisation. While I was putting money towards both the overdraft and the credit card every month, I would then use it again throughout the month.
This carried on for the next year. Despite having two jobs and working 90-100 hours a week, if not more, I was still not making any movement in my debt pay off journey.
About six months in, I decided that my credit card bill was ridiculous, and I was going to do something about it.
So, I hid the card, and began paying it off aggressively. Childish to hide the card, I know, but sometimes you must be strict with yourself and utilise methods which others may judge you for.
In these times, I remind myself I am not living for other peoples benefits and I must adjust my behaviours to fit my life and how I want to live, rather than worry about if other people are judging you.
You will be happy to hear, I succeeded. My credit card got paid off a few months later. While the results weren’t immediate, I managed to reach my goal and I was credit card debt free.
Then my motivation evaporated. Sure, I planned to work on my overdraft next, and sure, I would do a budget every month, and of course now I paid the credit card off I would stick to it. None of that happened. As I was still relying on my overdraft when I needed money or when I wanted something that my cash cheque didn’t cover.
Unfortunately, I was still ignoring all those lessons I listened to through YouTube. The people who I watched religiously at this point but still regarded as unattainable dreams.
They all had amazing tips and tricks on how to be frugal, in just about every aspect of their lives and yet I didn’t do it. As long as I wasn’t getting notices through the door telling me they were going to take everything away, I didn’t see the danger.
I would watch other people pay off their debts, and followed their journeys, and I did nothing. I sat and I thought, oh that would be nice.
Six months later, (2018) I was leaving. I was moving to a new country, with a new job and would have so much more disposable income. An incredibly opportunity for me and I went with the intention that I would be able to focus on my debts. Nothing would be holding me back.
By this time, my student loans, which I hadn’t touched had grown, and the as my car was leased I had to take out a loan to buy the car, and then try and get rid of it, and my overdraft had only gone down a few hundred pounds.
Due to my lack of planning, which to my shame is a personality trait within my personal life. I had nothing organised and left huge mess in my wake. Must give it to my Aunt and a good friend of mine who dealt with my aftermath of a mess I created. I can never thank them enough for helping me, despite me literally bring it on myself.
So, I was off the US of A to start a fresh with two suitcases and a carry on.
My debt plan didn’t come into play. Originally, I was going to be paying $400 a month to my debts back home, which is half of what I earn, but since I also have very minor things to pay monthly, I figured I could swing it.
I couldn’t. It took me nearly a year of me doing budgets and busting them for me to finally admit that I need to change my outlook.
I was using the logic that as I don’t have many bills and I don’t leave the house (a terrible habit I have gotten into) then $400 a month would work. But that also meant that I was miserable.
Now, I am very grateful for the opportunities that has led me to where I am, but with nothing to look forward to and always thinking I couldn’t do anything fun led me to go on massive spending blowouts.
The reason I have been triggered to realise what a terrible place I really am in, is the fact I will be moving again.
I am going to be going to a new country, and I am going to be facing new challenges. I will need to be in a better position before I go.
Now here I am. I have a budget in place, and I am hoping, that as I must explain to you guys when I spend money, that I finally have that accountability I really needed.
Thank you, guys!
Thank you for reading, and thank you for supporting me, and I hope I give as much as I receive in terms of support, motivation and accountability.
Please let me know what you think about my story, as always, be kind.
Let me hear your stories too, as I would love to see where you have all started and where you are now!
How did you guys begin budgeting?
Were you as stubborn as me or did you get into the swing of things quickly?
Which part of budgeting do you find the hardest?
Mostly what made you rethink your position on money and finances?
Much love, and happy budgeting!