Head on is the answer! Burying your head in the sand, binning letters and ignoring phone calls will not help. The letters will still arrive, the phone will still ring, and the debt is probably increasing. I’ve been there. I got out a long time ago but that didn’t mean we still didn’t have debt. A credit card, overdraft, store card, catalogue and even pay monthly are all debts. Just because you’re managing it doesn’t mean it isn’t a debt.
For us we didn’t want to rely on anything like that, so we started small and little by little we’ve been paying things off. Some debt might be urgent at the time. E.g., your boiler has broken, and you need to get a new one but don’t have thousands of £’s spare.
Do you really need those jeans you saw on ASOS? Is Klarna your new best friend? STOP!
I’ve done it! We don’t need 7 pairs of jeans; we haven’t been able to go out for over a year so who is buying those heels and glittery tops?
How to sort your finances out:
- Write down everything. Even that £20 you’re due your best friend. If it’s a debt, then write it down. Seeing it written down was a way for us to see just what we had our selves in for. This way when you pay something off and you score it off you can see visually what you’ve achieved.
- Pay off one small debt and one large at the same time. This way you can see the impact of the little debts disappearing and the larger ones reducing.
- Know what comes out of your bank account. If you don’t need it then get rid of it. If you’re paying for Amazon Prime and don’t watch it or order anything then get rid. If you are paying for Spotify and Netflix subscriptions but your friends and family are using them to then ask them to pay towards the cost.
- Think do I need it before buying something. If it’s cheaper to make a sandwich to take to work and to take a flask of coffee, then do that rather than spend £6/7 a day buying lunch. You could save yourself almost £1500 a year by making your own lunches. That could pay off your credit card or overdraft.
- Ask creditors to freeze the interest.
- If you absolutely have to buy something, then do your research and you will almost always find a cheaper alternative.
- Gifts don’t always have to be expensive. For the gin lover in your life why don’t you make your own. If there is a book reader, then check out charity shops for good condition classic books.
- Declutter and make some money in the process to pay towards your debts. Sell those unworn clothes, the unwanted shoes, old mobile phones, books, DVD’s, CD’s, Make-up. There will be people out there that want these things.
- If you have a skill that you can utilise to make more money, then do that. Upcycling furniture, altering clothes, artwork, jewellery making, baking…There is money to be found in all of this.
- If you can afford to then try and save a little. If you’ve £100 spare a month then pay £80 towards a debt and £20 into savings. Some people prefer to just pay off debts, but I like to be able to see we’ve saved money for the future and paid off debts to help improve our credit scores and mental health.
- Cook from scratch. Meal plan and batch cook as much as possible. When you’ve had a long day at work, you’ll be thankful to come home to a nice meal.
- Can you fix something rather than replace it? Mend the clothes, paint furniture, re-heel shoes rather than replacing them.
- For entertainment do you need to buy books. Your local library allows you to borrow E-books or have a look at websites such as Netgalley who allow you to read books in exchange for a review.
- What about a yearly subscription to Netflix or Disney+ and an inexpensive projector from Amazon instead of cinema trips? We found as a family of 4 it was costing £50-60 for one cinema trip and the number of times children need to go to the bathroom during a movie is unreal! Now we’ve a Disney+ sub, bought a £40 projector and have our own movie nights where we can pause for those inevitable toilet trips.
- A night in with food and drinks. Find cheaper alternatives for your alcoholic drinks. My new favourite gin is Bloom vanilla and passionfruit. However, for less than half the price Tesco do a version for £9.99 which tastes almost identical! Get each friend to bring a dish and host a tapas night or curry night instead of you, the host being left with the cost or even going to a restaurant (when allowed again) and spending £40 per person!
It wont be easy and it is a journey but when you start seeing more money in your bank account at the end of the month, the letters stop appearing through your door and you no longer jump when the phone rings then you will realise what a burden even those small debts were on you and your mental health.
Since starting this journey we have cleared off 90% of our debt and managed to save £1000+. We no longer worry if we will manage to pay our bills and we don’t feel that we are missing out on anything either. We enjoy cooking, i’ve rediscovered some hidden gems in my wardrobe, i’ve started baking again, got a new job and we’ve made almost £1000 just from selling unwanted items we had in our house. If we can do it then you can!