So close to debt freedom... preparing for what's next
Strether2020
Forumite 38 Posts
I've been reading these boards for several years, and finally have taken the plunge to write. I've so appreciated reading people's stories, and seeing the mutual support, especially when I've felt most lonely and down. So thank you; I'm sorry that I'm only now speaking up.
I've struggled with debt since I was eighteen and got my first overdraft and credit card. I'm now in my early forties, and have not been out of debt since then. At various points I've faced crises, but until early 2019 I'd not seriously tackled it - or thought about what it was that pushed me into debt in the first place.
In early 2019, I hit my rock bottom, having thought I'd reached that point many times previously. I was facing a hugely stressful time at work - I was in charge of a division of a company that was losing money, and senior management were planning redundancies. My daughter, who by then was five, had suffered various health issues. As a family we'd suffered three bereavements in the previous three years. And I was heavily in debt: my two credit card companies were chasing me because I was behind on monthly payments; I had a personal loan (which I'd taken out years before, to consolidate out-of-hand credit card debts) and had missed two months of payment; I had an arranged overdraft of £1500, but was already £300 over that limit. I spent my days hiding from the debt - not opening letters; ignoring phone calls and text messages from credit cards; not looking at balances - and my nights lying awake worrying. I kept it all secret from my partner, and my friends, and really from myself.
One morning, in February 2019, I drove to work, parked, and suddenly realised that I couldn't get out of the car. I just couldn't face walking in to a difficult day at work, when I was emotionally wrung out, worrying about the debt, and emotionally exhausted from everything. I called in sick - something I'd never done before - and sat in the car and decided to face up to reality, and work out a plan. Actually, what I did was to phone my mum. I told her how miserable I was, and that I'd got into some debt again. She said she was proud of me, and that phone call changed everything.
I sat in the car and phoned up my two credit card providers. I had an HSBC credit card balance of £8,700, and a Barclaycard balance of £4,000. My overdraft was £1,800. I managed to find details buried in my emails of my personal loan, and called them; I had just under £4,000 outstanding on my personal loan. A grand total of £18,500.
This is turning into a monster post - sorry! I want to fast-forward to now. As of this morning, my bank balance is positive; my overdraft has been cleared. I've cleared and closed my Barclaycard, and have £589 left on my HSBC credit card. And I have £300 left to pay on my personal loan. I'm hoping to have everything paid off by March or April 2022, and to celebrate debt freedom. When I write all that down, it seems unreal! And maybe that's why I'm starting a diary here now: I'm worried all that progress will evaporate when the debts are paid off; that I'll slip back into the habits that got me into the deep hole of debt I found myself in. So I want to share the last steps of my journey to being debt-free, to think back on how I got to this point, and get your thoughts on what I think I've learned along the way, just in case any of it chimes - and to learn from your reflections to.
Thanks for reading this epic first post!
Debt at LBM: £18,500
Debt now: £889
Aiming to be debt-free in April 2022
I've struggled with debt since I was eighteen and got my first overdraft and credit card. I'm now in my early forties, and have not been out of debt since then. At various points I've faced crises, but until early 2019 I'd not seriously tackled it - or thought about what it was that pushed me into debt in the first place.
In early 2019, I hit my rock bottom, having thought I'd reached that point many times previously. I was facing a hugely stressful time at work - I was in charge of a division of a company that was losing money, and senior management were planning redundancies. My daughter, who by then was five, had suffered various health issues. As a family we'd suffered three bereavements in the previous three years. And I was heavily in debt: my two credit card companies were chasing me because I was behind on monthly payments; I had a personal loan (which I'd taken out years before, to consolidate out-of-hand credit card debts) and had missed two months of payment; I had an arranged overdraft of £1500, but was already £300 over that limit. I spent my days hiding from the debt - not opening letters; ignoring phone calls and text messages from credit cards; not looking at balances - and my nights lying awake worrying. I kept it all secret from my partner, and my friends, and really from myself.
One morning, in February 2019, I drove to work, parked, and suddenly realised that I couldn't get out of the car. I just couldn't face walking in to a difficult day at work, when I was emotionally wrung out, worrying about the debt, and emotionally exhausted from everything. I called in sick - something I'd never done before - and sat in the car and decided to face up to reality, and work out a plan. Actually, what I did was to phone my mum. I told her how miserable I was, and that I'd got into some debt again. She said she was proud of me, and that phone call changed everything.
I sat in the car and phoned up my two credit card providers. I had an HSBC credit card balance of £8,700, and a Barclaycard balance of £4,000. My overdraft was £1,800. I managed to find details buried in my emails of my personal loan, and called them; I had just under £4,000 outstanding on my personal loan. A grand total of £18,500.
This is turning into a monster post - sorry! I want to fast-forward to now. As of this morning, my bank balance is positive; my overdraft has been cleared. I've cleared and closed my Barclaycard, and have £589 left on my HSBC credit card. And I have £300 left to pay on my personal loan. I'm hoping to have everything paid off by March or April 2022, and to celebrate debt freedom. When I write all that down, it seems unreal! And maybe that's why I'm starting a diary here now: I'm worried all that progress will evaporate when the debts are paid off; that I'll slip back into the habits that got me into the deep hole of debt I found myself in. So I want to share the last steps of my journey to being debt-free, to think back on how I got to this point, and get your thoughts on what I think I've learned along the way, just in case any of it chimes - and to learn from your reflections to.
Thanks for reading this epic first post!
Debt at LBM: £18,500
Debt now: £889
Aiming to be debt-free in April 2022
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That process of learning took me a long time, and it's still going on. But the first thing I learned was a big part of the issue, for me, was not talking about it - keeping it secret; not having people that I could open up with about it. I'd be ashamed of the debt; I'd not talk about it; and therefore I'd hide from it, and the more I hid from it the worse it got.
After my light-bulb moment in February 2019, I worked out how much I owed and started to think about how I could pay it back, I spoke to my partner. This was incredibly hard - indescribably so - because we'd been here before. But she was understanding beyond belief, and way, way more than I felt I deserved. And it was the most important step I took.
I spoke to my mum on that first day, and she told me she was proud of me for facing up to this.
And I spoke to a friend at work, who I knew had had massive debt problems in the past. We talked for an hour about how it happened, how it felt, how he'd got out of his crisis. He immediately understood what I was saying: he knew what it was like to be so scared of bills and bank balances, that you tear them up rather than face up to them. He understood what it feels like, when you're in a hole and you just keep digging. And he also knew - because he'd been there - that I needed to learn how to stop doing all the things that got me deeper into debt. But just having that person who understood was hugely important. I guess that's the role of these boards, too. I spent ages, in the days after my light-bulb moment, reading people's diaries on here, admiring their strength, appreciating the support, but not feeling worthy to join them. I was too ashamed of myself.
So this was my first lesson, I think - secrecy and shame were feeding my terrible debt habits.
You won't slip now and this is a great time to post so you can remind yourself of how far you have come and where you don't wish to return.
Best wishes.
I'm glad that you are at this stage of your life and may you continue to share your journey ahead.
Good luck!
Debt-Busting Progress: 2020: £13,200 | 2020: £9,200 | 2021: £4,900
2022: ongoing
Credit Card 2 - £13,481.47 £12,985
Total debt - £19,731.46 £17,885
Emergency fund £930
Many years ago, I was up to my eyes in debt and solely responsible for a large mortgage. I remember the weight that was on my shoulders and the constant worry of something going wrong and being screwed.
Sorting out the debt and having savings gave me such peace of mind.
This forum also provided me with a huge amount of inspiration and support and inspired to graduate to the MFW board and get DH on board. I hope that now you have started posting, you continue to post. This keeps me on the straight and narrow whatever my financial aim has been.
Mortgage Free - done
Building up the pension pot
I also started thinking this morning about the strange rhythms I'd come to learn, as I sank deeper into debt. There were moments of the day, and of the month, that I knew I had to be alert to. Like a miserable mental calendar that was always there:
- Every morning: whenever my overdraft was over its limit, the bank would send a text at 7.43 am. Because I wasn't looking at my statements, every day I'd be ready - either to delete the message, or, if it didn't arrive, to breathe a little sigh of relief.
- Every afternoon: wondering if the post had been delivered, and if it contained a letter from the bank or a statement or a bill - and if so, if I could get to it before my partner saw.
- On the 8th of every month: if I was behind on my Barclaycard minimum payment, I'd get a text from them, with friendly wording, reminding me about the bill; and then after that the phone calls started to my mobile. I'd get used to ignoring the calls and deleting the texts!
- Around the 16th of every month: if I'd missed my HSBC credit card payment, I'd get a phone call, to my mobile and my landline. For a while, every time the landline rang I'd panic - rush to get to it before my partner did. When I went out, I'd press the "do not disturb" button on the landline.
Now that I'm close to clearing all my debts, I really need to remember just what this was like; how my days and months were punctuated by these dismal markers of debt. I hated myself - the secrecy; the fear. I wonder how many people are living with this now. The people I see in the street; the people I work with... when I see people looking at their phones, how many of them are in fear of those text messages or alerts? I'd love to be able to say, "I understand; it's so hard; you're not alone."But I'm also struck by how small this miserable calendar was - how it reduced everything to getting through the day, the month... no wonder I couldn't handle thinking about the long-term consequences of debt. You go into a survival mode, which leaves no room for planning, and where the long-term perspective simply stresses you out. You feel powerless. I hope that - even as I move towards freedom from all this - I can remember what that felt like, and give empathy and support to others who find themselves in that dark place.
Second working day of the month I log on to check to see if I have won anything on the Premium Bonds, pay day I log on and move money to various pots and 22nd when my pension payment goes in, I log on to check it.
Hopefully you will have learnt a lot from this experience and you won’t be getting any of the nasty texts or worries about money ever again.
Mortgage Free - done
Building up the pension pot
One thing that I do remember was a shift in mentality. I realised that the debt wouldn't go away quickly, and I was in a state of mind where I just couldn't think long-term, so I had to focus on the idea that I could make progress - so that every month I could aim to be making progress, turning things in the right direction. For such a long time I'd been digging myself deeper into the hole (for instance, I'd take cash out on one credit card, to meet the minimum payment on the other; or else I'd be missing payments, and getting charges added to my balance because of that...). I also knew that just meeting all my minimum payments would be progress compared with where I was.
That was incredibly helpful in the early days, because when I thought about the full scale of the journey ahead, I panicked and it felt hopeless; but I could cope with the thought of meeting all my payments in any given month, then doing what I could on top of that.
In those first weeks, I remember implementing all those small but powerful tricks that the wise people on these boards suggested. I sent off minimum payments to credit cards the day I got paid. I set myself a budget for a trip to the supermarket, planned meals, and made use of the various tokens and special offers that I could get hold of; the money left over from the underspend went straight off the credit cards. It was only a few quid each time - a drop in the £18,500 ocean, but quite a nice amount over the minimum payment. I needed new jeans, because my only decent pair had a hole in them - and discovered a repair shop that sorted them out for £7, so I sent an arbitrary sum of £13 to the credit card to make up for the money saved (this made sense in my head - doesn't really make sense now I write it down!). The amazing thing was just how often I was able to make these savings. Not quite every day, but on many days of those early months, I was able to make some progress. A few quid here, a few pence there.
Oh - and, obviously, I cut up the credit cards, and took a long hard look at what I'd been spending on. Now that I was on a roll, things I'd previously felt I couldn't do without started to look very easy to sacrifice. And I started to get into new habits - instead of taking an Uber, I'd take a bus, and on the bus journey I'd make a credit card payment for the saving. Or on a really good day, I'd just walk the whole way, and send the whole lot to the credit card. I was still deep in debt, but it felt so good, like I'd taken things in hand. My credit card statements were (and still are) quite nice to look at: loads, and loads of tiny payments, sometimes just a few pence, but I knew that each one was a little sign of hope.
I started listening to a song, as well... like my anthem for my debt journey. From A Star is Born, "Maybe it's time". "Maybe it's time to let the old ways die/ maybe it's time to let the old ways die./ Takes a lot to change a man, /Hell, it takes a lot to try/ Maybe it's time to let the old ways die... I ain't going back to where I came from." Is that corny? Probably is, but I still listen to it. The day I started listening to it, I was walking to meet a friend, and I had the pieces of my cut-up Barclaycard in my pocket. Every time I walked past a rubbish bin, I put a piece of the card in it. That's definitely corny, but on that half hour work I heard the song about eight times, and I did feel like a different person because of it.
Another monster post! Sorry!