21 year old's battle with debt

Savedotmoney

Hello all, I'm not sure how many 21 year old's have been in my position but I'd like to write everything up, get it off my chest and update you on my progress. Please follow my journey to clear my debt and save for my future. I understand that my debt is not going to be anywhere near some MSE users but for someone that has no mortgage yet, the prospect of messing things up so early has been enough to scare me into sorting it out.

My mother and father have a very poor financial background, they have a large amount of debt and I feel that I am also tackling the stress that I feel from seeing them suffer. My mother seems on top of this now but I still feel that they spend far too much. I take so much from this forum and share it with my family, thank you for creating the odd forum post that has inspired me or cheered me up. It has helped me tackle the most darkest of days. Now you may read all of this post below and think why didn't they help their own son? The reason that is that I didn't tell them, I bottled it up, it has affected my family life for years and I became a reserved person that was suffering with stress as a result of my actions to follow. Sometimes my mum would ask what the problem is, I would not acknowledge my problems but I would go on dealing the attitude out to my mother when she asked what was wrong. I had it all inside of me and it just wanted to escape. For those that keep their debt problems to themselves, even the little bits, share it with your parents, they understand. I didn't want to live off of my parents, they have brought me up, provided me everything I wanted and I have probably created half of their financial problems through their generosity to me.

I'm going to start by saying I've made huge mistakes already, at my age I have dived into debt head first. Here's a little bit about me. I studied and finished school with decent A Levels, I went to attend university but I spent two weeks there and absolutely hated every minute of it. I believe I wanted to get out of education and find my own feet, feeling that I could afford everything if I worked. How wrong was I?

I started my first job when I was studying in sixth form and this brought home a little over £350 a month. Working 16 hours per week with extra overtime where I could. The only debt I had at this stage would have been my Orange phone bill which I think was £20 a month. How I look back on that now and imagine my financial situation if I had not done anything else but pay a single phone bill for four years.

I passed my driving test at 17 years old and any money I had was blown on driving lessons and what I had failed to do was save money for an insurance payment or any other vehicle costs. I was so on a hype that I could drive a car that I had abandoned the need to think about money for the future. I bought an old S reg Peugeot 206 and everything went wrong with it. I spent over £500 on repairing a car that cost £1,000... and guess who with, Peugeot! I was young and reckless in spending my money. I paid for the repairs and I was paying for insurance. I had not paid off all the insurance, I was paying monthly. I remind you at this point I was on around £360, maybe more with overtime that I could rarely get. I was paying over £200 a month to insure my car and with my wages, I was leaving myself with £160 to tax, run and live off of. Let's remember we still have the phone bill here to so that's evening more money being sapped.

Here came the first biggie that I regret. I was complaining so much about my car, the thing was a nightmare. My kind aunt who was financially capable to help me at the time, leant me £6,000 to buy a used Ford Fiesta. I tell you now, I have not paid a penny back to her, through my own fault, I created a financial situation that had taken all of my morals away from me. She has never asked for it back but I agreed to pay her a set £100 a month to start with. I remind you again... I was on a £360 a month wage, I was paying insurance and I had agreed to pay my aunt and let's me honest, that was never going to happen. I honestly thought I could afford it at the time through increasing my overtime, I was determined to work hard. That's one thing I have learnt, I am not afraid to work, it makes the world go around.

When I started university, I was like any student, I loved the fact that I had money and the loan was effectively free money until I got a job, that seemed so far away. I got a loan and grant and as you can see from above I left after two weeks without repaying this loan. What I had done is I had gone bought a new laptop, gone out drinking and genuinely wasted it. When I left, I didn't realise that this money would need to be returned immediately due to the fact I had only been there such a short period of time. What a naive young man I was, I had just started a massive downward spiral of debt that would last until my point that I am at now.

Now that I was out of university and sitting on roughly £2,000 of "official" debt, I didn't think it was a problem as I had set up a direct debit to pay this off (this was such a small amount I thought...). Money that belonged to other people was not on my highest priority of payments and I stupidly set up a direct debit to pay them the minimum payment back, I thought, why should I give them their money back? I assure you now, any students thinking of doing that, don't.

I now needed to start looking for a permanent job, or just one that wasn't working in a supermarket. I found one at Jessops, great I thought a job that I am interested in doing, selling cameras and learning about photography. I quickly learnt more about myself when I turned 18 and the year that followed. I know that I suffer from OCD (anyone else a massive clean freak? ), although I haven't seen anyone professionally about it, it has created such a big problem in my life so far that I owe it to some debt, I'll explain why. I earned slightly more money when I working at the supermarket and I would say I was earning closer to £500. I needed to insure my nice used car and that was more than the Peugeot. I was being swiped under my nose by the car insurance company but I don't think I even cared at the time. Even earning £500 a month at a maximum I was struggling to have any money left over after spending it on pointless things, I was young, cheap alcohol is the norm and I wanted everything.

This seemed to become my consistent problem. I wanted too much. I was spending my money on iPhones, laptops, clothes and not accounting for any essential payments like insurance etc. I forgot to mention that I had opened a student overdraft with Barclays when I was at university and that was -£700. Great, more money for me that belonged to someone else, but did I care? No. I dipped in and out of that to get along on a daily basis, wages went in, still I was in the red. I didn't care though as it was interest free. I was in debt at 18 and I was spending more than what I was getting in. I began to think this was the norm but it didn't feel the norm for me. I began to get stressed out at having very little money. I saw my family suffering and I was adding to that silently by creating this debt for myself, what an idiot I became. It didn't stop here though.

I changed my job shortly after joining Jessops and began to work for Apple. I was happy in my role, selling products, repairing the odd thing or two. I increase my wages at this point and I think I was on around £700 and the overtime there was quite limited. Being in that environment made me want to buy, I got an iPad, but you guessed it, on finance because I could not afford to buy it outright. It was a 6 months interest free offer. A top of the range iPad for 6 months, oh well I thought, that's only £100 a month more on top of my existing debt, I'm earning more money. I was beginning to up my wages but I was matching it with my expenditure, any money I could get my hands on was squandered on pointless gadgets and I didn't even own them outright.

I developed a buy and sell problem where I would leave myself short one month and when I did this I sold the iPad and paid the finance off. I then got an iPad on finance again and the vicious cycle happened a couple of times before I finally sold my iPad, sighting that I didn't need it anymore. I loved my iPad and I was learnt that I was in denial about most things in my life at the time. The only thing that was keeping me strong was my girlfriend of five years who is no longer but that's another story :rotfl:. It's important to note that other direct debits had been set up at this point for gyms, subscriptions etc. I also ran a lot of websites and I was pumping money into creating them, when I simply didn't have the funds.

I had that problem of buying and returning things right... well that doesn't work so well with mobile phone contracts. I bought one, thought I could afford another to get a new phone and I ended up with two contracts which I continued paying. I also bought a new iPad on a contract (as the iPad was free) so I ended up with three Orange contracts, bet Orange loved me. I felt my life was beginning to be want want want. I felt like I needed to complete my life with something. My OCD told me that if I get this, this and that, I won't need anything else to help me. I had a spending problem and it caused me to be paranoid about my spending. This was all whilst I was earning minimal wages to a high payout.

I got to a point where I didn't feel I needed my car anymore and I sold my £6,000 car to raise funds for a good bike. I also treated myself to some new golf clubs and whatever else I could spend it on. It was like a disease that I could not get rid of, I only think those who have suffered with it will know the consequences of such a feeling. I haven't returned these funds to my Aunt at this point, what a selfish person I had become. I took money for granted and it was taking over my life.

I didn't want to stay in retail in the end and I decided to look for a job that was related to a possible career I could enter. I loved building websites so I decided to search for web designer positions. I found one which paid £18,000 a year before tax and I was able to prove to them that I could do the job without a degree. I had turned over a new leaf I felt. I settled in and £18,000 to me was a large amount of money because I had never had a full time job before doing something that I enjoyed. I started in December 2010 and worked in central London, everything looked great for the new year.

I didn't stop there. I had more money now, I was rich I thought. I was getting approximately £1,200 a month and I needed to spend it on something. I decided to change my car. I bought a £7,000 car second hand on a ridiculous Black Horse finance deal. I would end up paying £14,000 with interest on top. I look back now and ask myself endlessly why I did this but I think my age and my inability to control my money at a young age had taken over me. I had a faster car and this meant I needed to pump more insurance money into it, including road tax and petrol. I was now pumping hundreds more into this car a month but all I cared about was having the end product. I carried on with this car for a month before it decided to go wrong at 70mph on the motorway. The power steering went and it turned out the car had countless faults with it and they had not serviced it properly. I was stressing over the fact that I had a car that did not work properly. OCD was telling me that everything needed to be alright, but all it was, was the fact I had spent far too much money and I knew it.

I had ignored every figure I had been taking from my bank balance and just kept spending because I wanted or needed. I had placed a £500 deposit on this car and that had cleared me out, I entered my overdraft again just to survive for a month. Yes, I was living on a student overdraft without being a student, I was an idiot and I want to highlight this. The dealer now agreed that he would try and get me a car, I didn't think about an exact replacement or a cheaper car, I saw something and wanted it. I got another newer Ford Fiesta and the payments increased so I could get it. I can't believe I signed the papers, got talked into the agreement, this was another one that would total £16,000 in total over the four years! Was I mad? I kept this car for approximately four months. I had accumulated some money that was left over from my direct debits, here we go again, I decided to blow it just because it was there.

I wanted the same car I had before so I looked for another car and traded in my old one. As I had finance remaining on the car I had bought previously I carried over negative equity from the finance to the new agreement. I thought nothing of it because all I cared about was the fact I was getting a new car. My expenditure had increased again because of the negative equity and a total of £8000 had turned into nearly £15,000. This car was an 08 plate and I can't believe I am prepared to pay the interest. I didn't even care about the overall cost, I was concentrating on what was in front of me now. This was my problem from the beginning, I was working with what I had now and not planning for the future. Having everything was not enough and not appreciating what you have was selfish.

I continued to work for a year until it finally dawned on me what I was doing to myself. I was creating a bubble of stress that was holding me and it had been there for years. I began to question myself as to why I had done this but I had no direct answers for it, I had been stupid. I had followed in my parent's footsteps, I had watched them do the same and maybe out of comfort I have done the same to and they didn't even know. I think it was late November 2011 that I broke down to my mother to explain to her what had happened. As well as my car expenses, mobile phone contracts and other small direct debits I had added further finance from other random impulse buys. That's all I can describe them as because I don't know exactly why I bought them, they just happened and my head was filled with regret afterwards. My mother then helped me with outlining where my payments were going and when I was in my £1,200 a month job, my payments each month totalled over £1000. I was paying my mum £200 rent a month on this job and she did not know why I was upset at the fact that I was struggling to pay her. I could never previously bring myself to explain anything. I had a good relationship with my mum, we talked about everything else, except my problem with money and my OCD.

I had an application available for my dream career in October 2011 and this proved to be life changing for me, it was a long process but I now have a £32k salary which has significantly sorted out my financial situation. I started in late December 2011. I have recognised my faults and I have cleared £7,000 worth of debt just today from selling my car. I have cleared a computer worth £1,200 and I feel more relaxed, especially now that my finances are in the open with my parents. I have just bought a new car that is more economical, very little road tax and it is a diesel. The old car finances are gone, my repayments have decreased and I have managed to keep my credit history spotless and hopefully improved due to the amount of finances that have been added and settled!

I hope I have pointed out some of my pitfalls and the consequences that have happened as a result of my mothball of errors. At a young age, I hope it isn't too hard to nip things in the bud before they accelerate and go beyond your control. It's easy to want and forget about the money, but it always comes back to bite you.

I'll update with figures on my remaining finance soon, I hope to clear it all within 2012! :beer:

Tilly_MFW_in_6_YRS

Hi, I couldn't read and run. Well done for posting - it takes immense courage to do that and to face the demons head on. Good luck with your journey and well done for getting your new job.

Don't forget to start the repayments to your Aunt, as that will really help your confidence.

Best wishes Tilly