My lightbulb moment was June 2019

Cheesephetamine

This is my diary and accountability. I will basically just copy and paste the entries from my external blog if that's ok, I have one week of back log and then I'll just update both as I go

-The who and the why-

Change is painful. Few people have the courage to seek out change. Most people won’t change until the pain of where they are exceeds the pain of change.

— Dave Ramsey.

Hello. My name is Freya and I am an addict.

I am 38 years old, I am newly married (since December 2018) to a wonderfully patient and loving man. We do not have children (but we have cats!). We don’t own a house, we rent and for the most part we are your average medium class Joes, working people, paying off our bills and trying to enjoy life as much as we can.

However, and this is the surprise here, I have mental problems and I am an addict to over spending (or over shopping as others call it). I also have an eating disorder (but that is another story, my friend, albeit very much linked to this current issue…)

I make a fairly good income for the average in the UK (£38.000). I am not rich but I am not in the lower end of the income umbrella.

Well… I am still broke. I have a total debt right now of £36.000,45 which is a little under a whole year salary. Some would say that is not that bad. For me it’s horrendous. It is affecting my self esteem, my confidence, my happiness and my physical health. And I don´t even have a mortage to blame!

This debt comes from the following sources:

2 personal loans
5 credit cards
3 current accounts in overdraft
2 shopping lines of credit (or buy now pay later accounts)
Money my husband has kindly lend me (I count it as credit even though he charges me no interest. Bless him)
Two days ago I was feeling so restrained I could barely breath. The anxiety was so bad I sat down, I had a good cry and I came to the conclusion that enough is enough. This needs to stop. I need help. I want to stop over spending. I want to get free of debt. I want to feel financially secure and I want to be HAPPY. After a couple of google searches I found the website / app “you need a budget” (YNAB) and the concept of paying debt with the snowball effect. I also found the ideas of a “no -buy *insert amount of time*” and a couple of free programes on addiction support. Add to the mix the YouTube accounts and websites of “Mapped out money” by Nick True and YouTube and podcasts by Dave Ramsey and I feel motivated to start shorting myself and my life out.

I hope you come along in my journey with me. This is going to be a tough one!

Cheesephetamine

-Set yourself for success-

Good morning!

Yesterday was hard! Coming out on this blog before you all about my addictions and the state of my finances was not easy. And then my lovely computer decided to call it a night and became absolutely slow as I was trying to make my blog beautiful, so I had to give up before I actually smash it against the wall.

So, today I wanted to make a list of things I have done this week to set myself for success in overcoming my addiction and getting out of debt. This are the things I have done so far:

• Open a YNAB account (I am starting university again on September so I got a full free year subscription!)
• Set up my accounts in YNAB and realize the extent of my debt!
• I have taken all my credit cards and debit card aside from my main current account and my joint account out of my purse and I left them in a drawer at home. I plan on going plastic free from July in and only carry cash with me.
• I have deleted every.single.app from my iPhone that had to do with shopping BUT I have kept my finances app (banks, credit cards etc) and I look at them every day (It’s like looking at the disaster in the eye daily and saying: I will get over this).
• I have unsubscribed for all mailing lists, emails, youtube channels, instagram accounts and facebook groups that were triggering me: buying sites, make up accounts, buy/sell groups… The mailing lists is a work in progress as they keep on coming daily!
• I have wiped out my apple wallet from all my cards.
• I have opened a free account at my local library to rent books instead of buying them.

Things I am still working on!

• I need to get the grasps of YNAB completely and I need to set budgets there for every single £ I have (which are not many…)
• I need to stop bringing cards with me and only brink my ID and cash.
• I need to delete my credit and debit cards data from all website and chrome.

That is all for now, I think this simple steps will help me. Do you have any other ones you would have done?

Next post will be about my next project: a no-buy year.

Cheesephetamine

-My No-Buy year (with a twist)-

Yes, yes, I know… It’s literally the middle of 2019. But a year is made of 12 months, so it doesn´t really matter if you start a yearly project the 1st of January or the 1st of any month, as long as you do it for a year.

So, I have decided to do a no-buy year from 1st July 2019 to 1st July 2020. I am not saying I will try to do a no-buy year. I am stating that I AM GOING TO do a no-buy year. I am not setting myself for failure!

There is going to be a couple of tweaks to it though. No-buy will not meant absolutely not expending any £. Let me list my rules, and you will see what I mean:

• Every month, after payday, I will make sure I put my £1.000 in the joint account I share with my husband. All house bills are paid from there. Also rent, grocery money, pet expenses (food and veterinary) and car related things like petrol and insurance comes from that account. We each put the same amount and we 99% of the time stick to the budget. So all the basic living expenses for both of us will be covered there.
• After that, I will pay all my monthly minimums towards my debt repayments: credit cards, loans etc. The minimums. And then I will chose a set number to add to the debt I am going to pay off first (for example, £50 extra): this is the snowball effect (more about this will come in another post).

After that. No more spending. At all. Nil. Nada. And this are my personal rules:

MY NO-BUY RULES

• My husband is not included in this deal. If he wants to spend his money, he is free to do it. It is HIS money and HIS finances. I am only talking about MY money and MY debts here (as he has none).
• I can buy clothes for my new job. I have always worked in scrubs so all my current clothing is too casual or sporty. So I MUST buy clothes. All new clothes I will buy have to be staples that can be used time and time again and that can be combined in many ways as to make it look like I have more clothes that I actually have. Then I will have to 1st try to buy them from a charity shop and if unable then try to buy them from the cheapest high street store possible.
• I will NOT buy any complement, bags or shoes that I do not need for work. So I am probably not going to buy any at all! (Maybe shoes).
• I will NOT buy any cosmetics / makeup until I finish what I have at home. If I finish something, I have to make sure I don´t have another alternative at home. For example, at present I have loads of body creams. All have to go and use them all before I buy a new one. I have loads of makeup. All foundations have to go before I buy a new one. Essentially, hit pan, empty the bottle, check you haven´t got another one and then, replace with a new one. This includes using all the free samples I have!
• I will NOT buy books/music/series or films: I will use my public library, read all the books I have at home, use my kindle unlimited (we have amazon premium at home and we plan to keep it), listen to music from the internet and watch series in Netflix (shared subscriptions with my husband are staying: amazon and Netflix).
• I will not eat out or drink out unless my husband or family member insist to invite me. No coffee on the way to work (I´ll bring a tumbler from home) and my office food will be home made and re-heated at work.

Exceptions to these rules are:

• I will set a budget for presents for my husband´s birthday, our anniversary and christmas. A maximum of two presents for each occasion and nothing too expensive.
• We are going to Egypt for our honeymoon in September. This is already paid for and we have money in a savings account for expenses. We will be buying nice things. It´s our honeymoon, we saved for it and we deserve it 🙂
• If I have to travel for my job (which I most probably will in the next year) I can eat out and have coffees as long as all is covered by my company expenses: not going over the available money they give us (£5 for lunch, £30 for dinner).

All the money that is left monthly (I expect it will be little considering how much debt I have and the bills to pay etc) is going to go into three saving funds:

An emergency fund.
A college fund (I start uni again in September…)
A debt repayment fund.
As you can see, on the right hand side of the blog I have put a count down to my debt-free me. This is the date that my biggest loan will be repaid. This is the longest I will let myself be in debt. If I can save money with the no-buy method and start making the snowball roll I am hoping I will clear that debt at least 3 years sooner.

I am actually excited, this should help me tackle my shopping addiction AND my debts!

Cheesephetamine

-The power of honesty-

Two days ago I sat down and confessed to my husband that I have a lot of debt and that I am struggling.

I know what you are thinking… No, he did not know. He knew I was an over spender but he did not know I actually had a lot of debt. Yes, I should have told him earlier. But it’s better later than ever, I guess.

I started with explaining to him how I feel out of control with my shopping and how I had planned a no-buy year for myself. I explained my rules for the no-buy. From then on I went to say that I actually have debt I am paying monthly and those are the two reasons I never have any money left. I told him that I am not behind in any of my payments and I am not using any of our joined money to pay for it. Our finances will not change and they should actually improve now that I have realized how big my problem is and I will change my relationship with money.

I told him I completely would understand if he wanted to divorce me, if he felt disgusted and wanted to leave me.

He stayed. He is obviously worried and not very happy that I kept this a secret from him. But he is still by my side. What a wonderful understanding man I have as a husband. I do not deserve him.

I still feel burdened by my debts but now I feel like a huge weight has been lift off my shoulder.

If any of you is in debt and also is keeping it from your loved ones I would suggest you open to them. It is probably the hardest thing you will ever do. You might even lose them. But now I can focus on working on getting debt free, get over my addiction and best of all I can share my feelings and thoughts with the person I love most.

Cheesephetamine

-Week 1: withdrawal symptoms-

“Every form of addiction is bad, no matter whether the narcotic be alcohol, morphine or idealism.”

― Carl Gustav Jung

Tomorrow it will be my 1st week into my complete financial meltdown and one week in which I have only made two purchases:

• One water bottle. I had to wait for a whole hour in a train station and I was really thirsty (since then I am carrying a reusable bottle in my bag. Better for the environment and better for my budget)
• One bus ticket. I take the train to and from work and I have a season ticket but I had to take a bus today.

I have spent total of £3.70. I don´t think I have spent so little in a week ever. And both spendings were necessities and not something I was craving or some mindless shopping.

I am having a really hard time if I’m honest. I have been in a really bad mood all week and very snappy. I have also cried on and off. I have had very dark thoughts. I have hated myself with and intensity that made me taste the bile in my mouth. I have had moments of rage when I though I was going to punch a wall or slap myself (I decided against that and just cried), and Sunday afternoon instead of watching a film with my husband I decided to lock myself in the room, play some classical music and sleep. It hasn´t been a very fun weekend.

On the other hand, today the last parcel of my old online orders has arrived at home and I feel like I can finally make a clean start.

And, I kind of feel proud of myself for this 1st week. Even if I´m feeling like poo at the moment. In the future, when I am debt free, I will look back at this dark times and be glad I made the decision to quit spending, pay off my debt and save. Or so I hope.

Londonlassie

Good luck!!! Once you are start saving and seeing that debt balance going down you won’t want to spend anything x

Cheesephetamine

-My debt management plan-

As you all know by now, my debt has gotten out of hand I have been researching options over the last week to see how I could pay off my debt in full as soon as possible. The are a bunch of options available in the UK to deal with debts.

I was not happy about the ideas of setting up an IVA and bankruptcy is off the table for as long as I can avoid it (which I hope will be forever). It is my honest intention to honor my debts and pay them off in full. At the end of the day, I did sign a contract with my creditors when I got the money from them and it’s not like my life has taken a turn for the worse and I´ve lost my job or become ill. I am actually in a better position to pay them off than two months ago as my income has been increased significantly. However, I have gotten myself into a deep enough hole that I can´t keep up with the payments as they are at the moment. I am an addict, but I have to learn, detox and grow as a person.

At the begining I was considering using the “snowball method” to pay off my debt, but this assumes that after paying for your essentials each month (rent, bills, food, etc) you have money left to pay all minimum payments AND a little bit extra to get the ball rolling. Well, it turns out I don´t. It´s no wonder that I had to carry on taking on more credit, between not being able to honor my payments and spending like a crazy person on the side… I had NO IDEA how bad my finances were looking… And this is why we all need budgets!

I considered for a very brief moment getting a consolidation debt, but this is more of the same issue really. Pay a lot of interest to someone who is not interested in helping you, just in getting your cash, and take longer to pay off. No thank you. (And I would probably be denied it, anyway).

So, in the end, I found the debt charity StepChange and used their tools to figure out what the best option was for me. I did a budget in their site and it turns out I need £900+ a month to pay the MINIMUM on my debts. And I have around £600 left after I budget for my fixed expenses and my survival expenses. Not doable at all. Unless I take a second job (which I can´t at the moment). They suggested getting a DMP and I have decided I would try and do this.

So, basically, what a DMP is:

A Debt Management Plan (DMP) allows you to pay off your debts at a rate you can afford.

It’s suitable if you have non-priority debts like credit or store cards, overdrafts and personal loans.

Your DMP provider will help you work out an affordable payment and talk to your creditors.

You make one monthly payment to the DMP provider who then pays your creditors for you.

StepChange has worked with me to create a budget that lets me pay my basics, eat, survive and still put £532 towards paying off my debs to all my creditors fairly. But all other luxuries are done. As Dave Ramsey says: “you are not going into a restaurant unless you are working there, you are BROKE”.

It’s not ideal. I wish I could manage to pay them all more than the minimum but the fact is that I can´t and I want to show goodwill in paying them little by little while I work on my addiction and on improving my financial situation.

So, the steps I have taken so far are:

• I have created a budget with StepChange and I have agreed to the plan by sending them the plan signed and the information about my creditors and income (still waiting a response on the activation of the plan. Just did this yesterday though!)
• I have sent a letter to all of my creditors explaining that I am setting up a plan with the debt charity and asking them to give me a month of breathing space and to freeze my interests and charges while I come back to them (they don´t have to agree by the way, but I´ve heard that most of them are willing to do so, at least for a while). I will copy the basic letter I have sent down below!
• I have cancelled all my direct debits to my creditors (this felt awful as I have never missed a payment yet!)
• I have opened a basic current account with a debit card and a basic savings account in a bank with whom I have no credit.
• I have changed my bills to the new account as well as letting my HR department know that I need my income paid in there.
• I have created a budget accordingly to the plan in YNAB.
• I have put all my other credit cards, debit cards (from accounts I have in overdraft), store cards etc in the back of my underwear drawer. Now I only carry my debit card and £20 in cash. And my YNAB app. Anything I need to buy has to be accounted for from either the cash in my pocket or the cash available in my account at that moment (double checking in not under budgeting any of my basics!).

Now I just need to sit back, relax and wait to StepChange to speak to all my creditors themselves. They will start taking a single monthly payment off my account and redistribute that money fairly between all my creditors. Apparently, once a year the “sit down” with you to have a look at the state of your finances and modify the DMP as needed to pay more if you can.

I am half relieved, half scared. And I will keep you posted on how this goes!

This is the letter I have sent to all my creditors via Royal Mail: (please be mindful that I created this template myself and that English is not my mother language. It might contain spelling or grammatical mistakes)

My creditors address (on the left)

My address (on the right)

Date.

Dear Sir/Madam

Account number:

I regretfully am writing to inform you that I have come to financial difficulties and I am getting advice and help from StepChange on how to solve this as soon as possible.

Because of this, I would appreciate it if you could hold action on the above account for a period of at least 30 days to give me the breathing space I need to do a budget sheet and work out the best way to deal with my debts.

Also, if you are adding interest or other charges to the account, I would be grateful if you would freeze these during this period so that my debt does not get any bigger.

It is my priority and desire to come to a solution that is beneficial to both of us and I am willing to do my best to repay my full debt as soon as possible and with the least amount of disturbance to any of the parties involved.

I or the people who are advising me on how to deal with my debts (StepChange) and current financial difficulties, will contact you again as soon as possible with further details of my financial situation and my proposals for repaying my creditors.

I will only accept correspondence from you regarding this account and it’s situation by Royal Mail at my name. I do not consent to telephone calls and I clearly state that communication by phone or any other means would be considered harassment and I would take action against it.

I look forward to hearing from you as soon as possible.

Yours faithfully

Signature

Full legal name

Cheesephetamine

-Plastic disaster-

This is a real picture of my plastic. There is actually one credit card “missing” and two debit cards that are not on that picture.

Left: store and loyalty cards

Right: credit and debit cards (identity protected by my old Starbucks card and my parkrun ID).

Don’t you feel disgusted? Because I do.

Cheesephetamine

- No-Buy year. Week 1 accountability -

My first week of my no-buy year I think has been a success. Things I have bought:

1 bottle of water: £1.70
2 bus tickets: £5
Total: £6.70

I could have avoided all this items. Ways to avoid in spending in this areas from now on:

I now carry a refillable steel bottle
I have walked 3km from the train station to my home today. This saves me money and I exercise a bit which will be good for my health and my budget.
Even though this was all avoidable it is still a very good effort considering where I’m coming from.

enthusiasticsaver

Good luck with getting to grips with this. As you say you could have avoided the bus and water by carrying a refillable bottle and allowing extra time to walk but small changes will make a difference.

Cheesephetamine

-small wins are big wins-

Pay day is here. I've budgeted in YNAB and all my expenses are covered and I even have money left for my emergency fund!
StepChange got my paperwork already and they just need a couple of details more and my DMP will be setup a!n working.
My small win today is that I managed to clear one shop credit line (Klarna) and my PayPal overdraft.
I'm one step closer to being debt free.