Becoming post-debt (by someone who’s halfway there)

Back in July, I wrote a blog post about how I got into a crapload of credit card debt and had generally failed to reach the level of financial competence expected of a proper adult. To my pleasant surprise, the post went quite far. It got covered in the Daily Mirror and I received lots of lovely comments on Twitter. Several people were nice about how honest I was to confess something so openly that people don’t really talk about. To tell you the truth, I felt compelled to do it. This because when it comes to money, there just wasn’t much out there for me to read that I could identify with.

You see: there are two extremes when it comes to reading about how to spend and manage money. There’s your typical ‘lifestyle’ media, which is ALL about buying stuff. If a Martian anthropologist tried to learn about humans by reading magazines, it would conclude that our lives are all about purchasing. Clothes, holidays, beauty treatments, restaurant meals, bootcamp classes.. Seriously; find a magazine targeted at women and count the pages that don’t have either an ad or a PR-placed plug for something to buy on them.

The other extreme can be found in media that’s specifically about money-saving and personal finance. The content of this falls into three broad categories:

  1. MORE stuff to buy, but for discounted prices.
  2. Interest rates on credit cards, savings accounts and loans
  3. Tips on how to squeeze your outgoings until they scream for mercy

Honestly: most of this stuff is about as useful as Joey Essex in a theoretical physics exam. Firstly: buying more things is never going to save you money, even if it is at 75% off. Secondly, when you’re in THOUSANDS of pounds of debt, tips on how to save a few quid here and there just won’t do the job alone. You need revolution; not evolution. Using your tea bags twice and only flushing the toilet when you poo is not going to pay off your credit card. (Yes, these are real ‘tips’ I’ve read).

What’s more, lots of the advice out there may save you a little bit of money, but cost you something priceless: your time. Yes, maybe you can get a free £20 M&S voucher by doing 56 marketing surveys, opening a new credit card and buying a banana whilst standing on your head, but is it really worth the hassle?

Other ‘money saving’ tactics are dubious at best, harmful at worst. Some have the attitude that being ‘frugal’, ‘stingy’ and ‘tight’ should be seen as positive qualities. I read one book that told readers how to get free nights out – by constantly dodging your round in the pub and making your mates pay for your drink. Is this going to really help anyone to manage their money wisely or get them out of debt? And if it does – would a debt-free life be worth living if your tight-wad ways have lost you all of your friends?

I also found precious little about how to cope with emotional side of money: the fear that I’d never be able to afford to live in a flat that wasn’t mouldy, the shame of letting my debt get out of hand, the bewilderment that came from getting nowhere fast despite trying my best. All of these emotions led me on several occasions to make even more stupid mistakes. I would bury my head in the sand and put brunch on my credit card, because I hadn’t seen my friends for weeks and I was bored of staying in all the time. And what’s £15 more on a balance of thousands anyway?

I wanted to learn how to get as much life as I could out of the money that I had; rather than how to buy happiness with products or how to save money by sacrificing my will to live. But no matter how hard I looked for help with that, for examples of people who had done it, I could not find them. Instead, I found Jamie Oliver advising me in ‘Save with Jamie’ that I needed a crinkle-cut knife in my life, or posts from bloggers who were ‘saving money’ by posting ~hauls~ that cost a few quid less than RRP.

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As Sebastian the crab says in The Little Mermaid: You want something done, you got to do it yourself. So working out how to manage my money and lower my expenses whilst raising my quality of life has been pretty much my life’s mission for the last nine months. And – for the first time in years of trying and failing – I’m actually getting somewhere. I HAVE NOW PAID OFF HALF OF MY CREDIT CARD DEBT. Which, to give you an ideal of scale, equals a sum that could buy you a luxury holiday to somewhere far away. On business class flights. After all of those years of getting nowhere, after all those times I messed up, knowing that this time it’s WORKING… OH IT’S SO GOOD. I’M SO SMUG. I’M SO SMUG I CAN ONLY WRITE IN BOLD CAPS NOW. SORRY.

So: Here are five of the things I’ve learned along the way that have actually helped me. I want to note up front: it should be clear by now that I am not a financial expert, just a normal person who is learning from experience. If you’re in debt and concerned that it’s become a problem for you, seek proper advice from a professional.

1. A good budget is a plan to use what you have to get what you want

I used to think having a budget was about going on a financial starvation diet, with the goal of spending as little as possible. I was wrong. A good budget is more like a business plan – with the company mission being to have an enjoyable life both today and tomorrow. It’s about effectively allocating the resources you have. My budget now reflects what I want out of my life – perhaps not always in the quantities I would like, or at the speed I’d like, but it means I can now pay off my debt as fast as I can, whilst still having enough to socialise, go on holiday and occasionally buy stuff for the fun of it.

2. You need to build a buffer (especially if your debt is interest-free)

I was baffled by the fact that I was paying credit card bills of £100s a month, but somehow the balance never seemed to shift in the right direction. I’ve learned now: it’s because I was so desperate to kill off my credit card ASAP that I was paying more than I realistically could afford, so I’d end up using the card again next time I ran out of cash. So to deal with this, I did three things: Firstly, I cut back as much as humanly possible for a while, including the No Spend Month. Secondly, I cut back on my credit card payments and only paid the minimum for a few months. I have an 0% interest deal on my card, which enabled this to be an option. Finally, I took what I’d saved from those two steps and put the cash in an easy-access savings account that I’d just opened. Now I have a buffer of cash I can spend if I need it. Not only has having that cash been helpful on the odd occasion, it’s provided a psychological boost to know it’s there. It feels like a tangible achievement in a way that paying off the credit card doesn’t.

3. Learn to live with your debt, as it’s not going anywhere fast

Big goals take ages to achieve. AGES. If you are in debt to the tune of thousands, as I was (and still am), you need to learn to live with the fact it’s going to take you months, if not years. I used to be so anxious about paying off my credit card ASAP that I would fixate on the fastest possible ways in which to do it, drawing up endless unrealistic plans that would be about as successful as that time when Brian Harvey ate six baked potatoes and crashed his car.

It’s taken me eight months to get this far. Unless I get an unexpected inheritance from Aunt Birgid’s Luxembourg estate, it’s going to take me that long again to pay it all off. To tackle this, I’ve learned to notice the signs of when I am spiralling into debt-based obsessive thinking. I then either work to do something productive about it (such as writing this blog), or move my attentions onto something better, like eating cheese or watching Brooklyn Nine Nine (Gina is basically my hero.)

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4. Keep experimenting to find out what works for you

Trying new things both keeps you motivated and helps you work out what’s right for you. And it has to be right for you – life is too short to put yourself through experiences that make you feel deprived, miserable or bored. One thing I tried to see if I could get cool stuff for free was ‘Comping’, which is entering competitions as a hobby. It seemed like a harmless thing to try, and has apparently been both profitable and fun for members of MoneySavingExpert’s forums. So: I entered over 100 competitions, for everything from holidays to games consoles, and won nothing but an inbox stuffed with junk mail. Oh, and it was only marginally more fun than watching Trump win the vote to become President.

But on the flip side, there are things that I have enjoyed as part of changing my lifestyles, such as working out ways to cook better food at a lower cost. Which, you know, *could* be because my standards of fun have lowered whilst I can’t afford much *actual* entertainment. But I’ll take my kicks where I can get them…

5. Stop comparing yourself to other people & question EVERYTHING you ever thought about money

As human beings, we believe that we are in complete control of our actions and decisions. The more I learn about psychology, the more I find out that this belief is a delusion. We all know that we should spend less than we earn, and that most debt should be avoided. But despite this, there is £190 billion of outstanding consumer credit in the UK. What is wrong with this picture?

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What happened to me, as I’m sure has happened to many other people, is I stopped making financial decisions based on what was actually in my bank account and started spending my money in a way that I believed someone ‘like me’ was entitled to. Without realising, I formed a picture in my head based on what my colleagues were doing, my friends were doing, what advertising targeted at ‘people like me’ suggested. I thought I deserved to have daily burritos for lunch, a yearly holiday, a flat deposit, because that’s what professional people in London GET.

The good news is: by questioning your entitlement and learning to stop comparing yourself to other people, you can start to build your life based on what YOU actually want and what YOUR means are to do it. When your decisions are purposeful and based on what you know is right for you, cutting back stops feeling like deprivation. When you stop comparing yourself to other people, you stop placing your own happiness in their hands. And I can tell you from experience: learning to do these things is far more effective for your happiness and well-being than drooling over the latest ‘lust-have item’ in a magazine (vom) or attempting to become a ‘super-scrimper’.

Here’s to cutting up the credit cards for good in 2017 (and beyond)!


 

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