LIFE AFTER DEBT
Talking about money with anyone can be pretty difficult right? But, talking about money with your partner can be even more awkward. I’ve spoke briefly about my own struggles with personal debt on the blog before, how I opened up to Mr T fairly early on into our relationship about my troubles but I’ve never really gone into too much detail about how much I actually owed, or even how I got myself into debt in the first place. That’s because in all truthfulness, I wasn’t ready to be honest, not so much with you guys but with myself.
I’d always prided myself on that fact that, apart from my student loan (which is paid back based on your earnings and doesn’t affect your credit score) I never accrued any other debt whilst I was at university. I never had any student overdrafts, no bank loans, credit cards, nothing. I’d worked full time whilst I was there, until I was made redundant from my job just a few months before I was due to graduate but even then I found a part job to suffice and I made it through without a penny of debt.
As I’ve said before, I’ve never been great with money, so although I had no debt, I certainly didn’t have any savings. Once I’d paid rent and bills, the money I had left over (which wasn’t usually a lot) went on clothes, nights out, fast food – you get the picture. I worked hard and felt that I deserved to do whatever I wanted with the money I had left, so what?
Well, fast forward a year on and it would be this way of thinking that would soon land me in £10K worth of debt. I still had a part time job when I graduated and as Bespoke Bride was a startup, I decided to make my business the main focus,thinking the pennies would soon start rolling in. Oh, how wrong was I? Trust me, if you’re thinking of quitting your job to start a blog to make money, DON’T! Earning an income from a blog is a long and arduous process, it took us years to earn full time wages and as you’ll read later, being self employed can often mean living with a very irregular income.
Anyway, I digress, lots happened in the first year of Bespoke Bride. First, I had to move back home with my parents and then my car broke down and was in desperate need of repair. On top of that, although Bespoke Bride was in its infancy myself and Jess were keen to start another businesses venture but it was a big project and would need some investment to get it going. So when the bank called and offered me a graduate account with a £2K overdraft and the offer of a £2K loan, it couldn’t have come at a better time. This meant I could put a down the advance payment on a rental I had my eye on, I could get my car repaired and invest in Bespoke Brides newest venture. I took up their offer, relieved I was getting back on my feet but not surprisingly within just a few months all the money had been spent and I was beginning to panic about how I was going to keep up with the rent and household bills.
I knew I was going to have to find a housemate and a full time job otherwise I stood to lose my home again. Luckily a housemate wasn’t hard to find and she moved in a couple of weeks later. On top of that I found a full time job in a call center, earning more money than I’d ever earned before but once again fell back into old habits. After paying bills I spent all the money I had left over on whatever I wanted, new stuff for my new house, new clothes for my new job etc. Naively, I thought I would be in that job forever, or at least until Bespoke Bride started earning some dollar and a couple of weeks later, I decided to treat myself to a holiday. Of course, I hadn’t been in the job long enough to save for it, so I decided to pay for it on a credit card because now I had a job I could afford it right? WRONG!
Right before the holiday my endometriosis started to get worse, which gave me anxiety at work, resulting in me being signed off with depression and eventually I decided to quit. You can read more about how living with Endometriosis affected me at work here. So, just like that, I was back to square one. No money, no income and even worse, I was now £5.5k in debt. Looking back on it, I can’t believe I was so stupid, I want to scream at 26 year old me and slap some sense into her but she wouldn’t have listened. She always thought she had it under control.
I went back to being totally focused on building Bespoke Bride and thankfully I got my old part time job back but it wasn’t enough to live off, let alone pay off any debts. It was around this time Mr T moved in with my housemate and I. I’d like to say it was because we felt 100% ready to live together and although we totally did, there was the practical, helping out with the household bills element to it which wasn’t so romantic.
It was at this time I’d also received a letter from the bank to say my graduate overdraft would start owing interest. Up until this point all debt I had incurred was interest free. Never once did I think to myself there was going to come a time when all this debt was going to start owing interest, I honestly thought I’d have paid it all off by then but on the wages I was earning I was only ever repaying the bare minimum.
My struggle with money continued in this way for another year, my house mate moved out which meant the cost of rent and bills went up, I was also now in rent arrears and struggling to make bill payments, so the only way I could pay was to put most of it on my credit card. I was able to pay off my overdraft in that time but 2016 turned out to be the worst year yet, particularly for Bespoke Bride which suffered quite a big a loss in sponsorship compared to previous years, which resulted in my income decreasing with it. Once again I found myself delving deeper and deeper into my overdraft.
As soon as I would reach my limit it wouldn’t be long until I received a letter to say it had been increased. Before I knew it, I had an overdraft of £2K yet again and as you can imagine I was paying a huge amount of interest. Of course each time I received a letter from the bank announcing an increase it just made me feel better about the debt I had. I convinced myself the only way, they would allow me to have such a large amount was because I was so good at making the minimum repayments on time. Of course what they really thought was, how good I was at getting into debt and how much money they were going to make back from me in interest. By now, I had near enough maxed out one credit card and owed £1K on another, just making minimum repayments each month, meant I was only just paying off the interest.
It’s important to note, apart from the holiday I wouldn’t have classed myself as a big spender. I didn’t have a huge shopping habit, I bought clothes now and then but I never really enjoyed going shopping. I didn’t spend a ton of money on nights out as I’ve never been a big drinker, I didn’t go out for lavish 3 course dinners every night of the week just the odd celebratory meal for someones birthday or Christmas, I didn’t own a big expensive car, in fact I drove a ten year old Peugeot 206 and I certainly didn’t live in a mansion, instead I had a house share with two other people. I paid for the things any average person would, what I forgot was, I didn’t earn the same money that the average person earned.
Over the course of 4 years I’d accrued £4K in credit card debts, a £4K overdraft (of which I’d already repayed £2K) and was paying off a £2K bank loan which although I’d been paying off in installments over the years had an outstanding balance of £769.
By the end of 2016, I still owed £6K and I was totally spent, my mental health was suffering, I wasn’t sleeping at night and I desperately needed to make some changes. Mr T has always been aware of my financial situation and has always been 100% supportive of me. There were so many times I expected him to run for the hills but he stayed firmly put at all times, even asking me to marry him. For all the support he had given me over the years I owed it to him to not go into married life with debt.
I had no idea what I was going to do. Getting another job seemed like a logical step but the idea made me so unhappy, I already felt like I worked all the hours and certainly didn’t want to leave Bespoke Bride. Then I discovered The Minimalists.
I’ve shared how practicing minimalism helped me with decluttering both with physically and mentally before, but it did so much more than that. It was thanks to this new found way of life that I took control of my finances and was finally able to get myself out of debt. First things first I needed to declutter, I needed to get rid of anything that didn’t serve a purpose, it helped me to think more clearly and to focus. To date I have sold or donated about 70% of our stuff and we were able to make some money from this, which went towards paying off my debt and was just what I need to getting the ball rolling.
After decluttering I noticed a massive change in my mindset, I no longer wanted to own anything that didn’t serve my goal of getting out of debt. I started looking at things as hours of my time instead of the price tag. For example if I bought a new top for £30 that would equate to a days work. I would ask myself. do you really want to work a whole day for a top you don’t need, when you could use the money towards gaining financial freedom? More often or not the answer was always “HELL NO!”
For weeks I scoured other minimalist websites including Be More With Less, No Sidebar, Becoming Minimalist and Slow Your Home where I learnt not just about personal finance but the importance of mindful living. I also discovered Cait Flanders and her podcast with Carrie of Careful Cents, called Honest Money Conversations, both of whom both spoke about their own struggles with debt and how they tackled it.
Armed with all this knowledge, I sat down with Mr T and explained that I didn’t want to get married with the weight of my debt looming over us. I had set myself a goal to become debt free in 13 months, by March 2018. As always he was supportive but the next part of the conversation, made me a little nervous as I told him all about a post I had read by Joshua Becker on becoming a one-income family. Up until now, we had always tried to pay things 50/50 and so I realised that I was about to ask him to do was going to be a risk. I explained how I wanted us to try and live off just his income whilst we used all my income to pay off my debt and eventually use it as our savings. Not surprisingly I saw a look of utter disbelief on his face, he didn’t think we could do it?
I totally understand that there will many of you reading this, who will be shocked that I had the nerve to ask my Fiance to pay for me to live whilst I pay off my own debt but the way I looked at it, if we were ever to get married, buy a house, adopt a family or even just live our lives, I needed to get out of debt. We had already been through so much together, I no longer looked at our lives as his and mine, I looked it as ours.
After I said my piece he agreed to trial the new arrangement for a month to see if what I was suggesting was actually doable. We sat together and for the first time wrote out a budget. We listed every single out going each of us had and every single debt I owed. We scrutinized all our outgoings deciding if it was an ‘essential’ and researched bills to check whether or not we could get things cheaper such as electric and gas bills. As a result, we both decided not to upgrade our phones that year, deciding we were fine with the ones we had and would prefer a cheaper tariff anyway. I also transferred my credit card debt to a interest free account and we both got rid of our gym memberships, deciding we didn’t ‘need’ them right now.
After writing out the budget, we discovered becoming a one-income family was doable but keen to ensure we weren’t going to be confined to our house for the next 13 months whilst I paid off debts, we needed to make some modifications to the rules. I would still have to pay some bills, like my mobile phone and medical expenses, I also paid our electricity and water bills but this now felt much more manageable. We felt that if were to make this our lifestyle it needed to be easily achievable and that meant we were allowed the odd trip to the cinema or a takeaway as a treat as long as it was budgeted in at the start of the month. We agreed we might even be able to have a holiday at the end of the year, if it looked like we could afford it?
Like all new habits It took a few months to get the momentum up, I couldn’t work as much at my part time job in February and July as I had surgeries and May was a pretty big month for hen parties, weddings and birthdays but in August I was able to pay an early repayment to close my loan which really gave me the incentive I needed to keep going.
Here is a glance at what my repayments looked like:
£ 2566 Credit Card 1
£ 1037 Credit Card 2
£ 1822 Over Draft
£ 769 Bank Loan
Total Debt = £ 6194
Jan £ 245
Feb £ 172
March £ 340
April £ 350
May £ 85
June £ 435
July £ 85
August £ 934
September £ 423
October £ 870
November £ 341
December £ 25
Jan £ 1000
Feb £ 491
Other Income £ 398 (from household items sold)
Total Repaid = £6194
You will see that I actually paid my last debt repayment this month, which meant I completed my goal one month early. We are proof that it is possible to live on one income and it was because of our new found frugal way of living that I was able to pay back £6k in 12 months. We even allowed ourselves to take the trip of a life time to Sri Lanka which you’ll be glad to know was was paid for with savings and not put on my credit card like before. In fact all credit cards have been removed from our household never to be used again.
I realize finances can be a very personal topic but as one who likes to break down the taboos around certain subjects, I offered my story as a reminder that if you have debt you are not alone and I understand the stress that comes with it. As a member of many online wedding forums I see lots of people worrying about how they are going to pay for their big day and so many are expecting to use credit cards. I understand not everyone is going to be as irresponsible as I was with my credit cards but I do encourage everyone to look at the figures before using this as a way to fund their wedding. Look at your finances, how much can you afford to pay off each month and how quickly? Make a budget to ensure you stick to your repayment plan and make sure you have a plan of action, if for some reason you are unable to repay the debt.
I’m not a financial expert in any way and I understand this might not be the budgeting solution for everyone but it worked so well for us, we’ve now made the decision to make sure we save all the money we need for our wedding upfront to avoid any debt. There were so many other benefits to be discovered from living off just one income but this post has already been the longest one I’ve ever written, so for now I’ll leave our story there but I would like to thank you for reading and if you have any questions please feel free to leave you comment below or reach out on Instagram or Facebook.