My ten step plan to getting out of debt

Hello! It’s me! I’m back. I’m sorry for the absence – although I’m sure you’ve all been very happily going about your summer and not giving it a second’s thought…anyway, it’s been a couple of weeks since I last posted, which is the longest I’ve been since starting this project.

So what’s been happening? Well, I haven’t been following any self-help for August – but I have been helping myself by continuing to face up to the finances and doing a lot of paid work.

So an update on the finances:

In the last post I was in the midst of epic self-loathing about my two GIANT overdrafts and hefty credit card bill.

Reading that post back I realise I wasn’t actually giving you the full scale of my panic at the time. I have an overdraft on my business account which I’m not going to go into just now  (one debt at a time) – but my PERSONAL debts totalled more than £10,000 which is a pretty massive number in my book. In anyone’s book.

I wasn’t sleeping as a result and was crying pretty much all the time. I tried to reassure myself by telling myself that a) I hadn’t killed anyone, b) I don’t have a mortgage or kids that were relying on me and c) I hadn’t killed anyone…. but there was a constant knot of anxiety in my tummy.

I felt like a bad person. I felt ashamed.

Anyway, after this went on for a few weeks, I realised that all this self-flagellation (which I’m very, very good at) wasn’t helping with the actual problem. The only thing that could help was to face up to the situation and see what my options were.

So here’s what I did:

1) I called StepChange which is a debt charity to see what their advice was. A lovely woman talked me through various options including defaulting on my overdrafts and credit card payments and then letting them step in and arrange a repayment programme with the banks. Needless to say that would screw any credit rating I may have and it was only for extreme circumstances. Making that phone call was a very humbling moment but also an empowering one – I realised that I’m very lucky.  I am not sick and unable to work and pay any bills – my financial mess was of my own doing which means it could be undone too. I’ve made myself powerless around money but actually I have a load of power and options.

2) I went to the bank to see if they’d stop the 3 quid a day charge on my overdraft. I had a lovely conversation with a girl who told me that there was no way around it, it was bank policy etc. We talked about the possibility of a consolidation loan to pay off the overdrafts and the credit card and have one repayment. She did some tippy tapping into her computer and told me that they could in theory give me the loan at 25 per cent interest. ‘Is that a normal rate of interest?’ I asked her like a total idiot. ‘No,’ she said. ‘It’s the highest you can be charged…’ Oh dear. I asked her why I was being quoted this much and she said she didn’t know, it was just what the computer said. I told her I’d have to look at other options and we ended up talking about her no good boyfriend who had been bleeding her dry for months – she’d just left him. By the time I’d left she was thanking me for listening and for reassuring her that she’d done the right thing. I left with nothing expect the feeling that people in banks aren’t scary – they’re as useless as I am. (in some ways).

3) I made another phone call to another bank to see if they could offer me a loan with lower interest. The guy said that no, that was the number coming up on the computer. I didn’t get that embarrassed at the rejection – or upset. It’s not personal…although saying that, we ended up having a conversation about his father’s re-marriage and his two younger brothers who he is getting to know for the first time after years of estrangement. Again, I left with nothing except a sense that I was making major progress by even picking up the phone and having these conversations. And that I could be an agony aunt to the financial sector. Reckon there’s any money in that?

4) I spent an afternoon reading stuff on Martin Lewis’s financial site – MoneySavingExpert.com – and did not cry or vomit at the site of terms like APR and balance transfer. I signed up to a free trial on Experian and found out my credit rating, which is 70 out of a 100, totally average. Good news.

5) I applied for a zero interest credit card and had that application approved – that card will take care of my major overdraft and a chunk off my other credit card. Now I know that getting another credit card is not exactly the financial dream but it gives me wiggle room.

6) I then starting working – paid work – but I’ve been doing it in a different way to usual. Normally I fret over each article I write, I spend three days writing and re-writing something that could have been done in an afternoon. I imagine all the ways it’s rubbish and went I send it off to the editor I spend hours and days waiting for their criticism. This is all a lot of stress over what’s usually a 500 word article on mascara. So stupid. I haven’t been doing that this time. I’ve been an efficient writing machine and have not been over-thinking/criticising my work. Just do it: to quote Nike.

7) The other day I sent a big invoice for work done and instead of worrying my work wasn’t good enough to warrant the money, or that even that payment was a drop in the ocean to what I owe… instead of all those negative thoughts, I put the envelope in the post box and said “thank you’ out loud, like some sort of self-help nutter. It was the first time ever I felt a sense of pride in my ability to earn money. Isn’t that weird, age 36?

8) I have been checking my bank balances almost every day – they’re still not in a great situation but at least I’m looking. I feel like I’m taking control. The trick is to keep taking control every day as opposed to congratulating myself on making progress and celebrating by putting my head back in the sand. One day at a time.

9) I have sort of worked out a budget, with the help of a friend, but I need to sit down and go through it again. When I did it I was in extreme martyr mode vowing to live like a monk. I now realise I need a haircut.

10) I have bought ONE coffee out in the last three weeks.

So there you go…

It’s the end of summer and I have that back to school, fresh start feeling. I can’t decide what to do in September – whether you’ll all lose the will to live if I do another money book or whether to keep to my original plan which is a book called the Seven Habits of Highly Effective People by Stephen Covey. I tried reading this book several years ago but didn’t get very far – it’s like a textbook, with venn diagrams and talk of ‘paradigm shifts’  – but it’s one of those classics that a lot of people swear by. I will get back to you on that but in the meantime I’ll also be doing a couple more posts this week on random thoughts I’ve had knocking around in my head.

Goodbye for now and as ever, thank you for reading.

xx

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36 thoughts on “My ten step plan to getting out of debt

  1. Well done you! The first step is always the hardest. I’ve been avoiding dealing with my finances for years (no pension, some savings but in a current account, paying my own tax nightmare) and I think in my case it’s to do with it all seeming very grown up when I want to be a child, well teenager, forever. So I have some idea of how brave you are to tackle all your own finances and I’m very proud of you. I might even check my own bank balance today… xx

  2. Good luck with sorting out your finances Marianne.

    I got myself into a similar situation a few years ago. Try having a look at peer to peer loan companies as these are a way to get a longer term loan to cover your debts at a much lower rate than overdraft/cc. I found it made it a lot easier to plan your finances long term.

    These are explained on the MSE website and there are many companies offering them now. The one I used was Zopa and I actually cleared my debts sooner than planned, so it is achievable.

  3. I think all the practical stuff you are doing is great – well done. But from my experience if you don’t change your attitude towards money at a much deeper level this change will not last (I am saying this from someone who has been where you are many time. I have found solutions, paid off debts but only to lapse back because I never really addressed the real issue) I don’t want to be negative, but just trying to point out that you need to continue looking at the more emotional stuff alongside all the wonderful practical stuff. It is great that you are being so honest and sharing as I am sure you are helping lots of others who are too ashamed to admit do anyone they are in debt.

    • Thanks Ann. I’m very aware of the emotional stuff but more of it is coming up all the time. It’s interesting. How are you? Have you changed your attitude to money on a deeper level? Any advice on how you did it?

  4. Well done Marianne! Fantastic taking control and also great this has pushed you to be efficient in article writing so you don’t use quite so much energy and time for each one. Positive vibes for September!

  5. Good work Marianne. Inspiring! I’m making some monumental changes too and today I rehomed my beloved horse, Peter. I adore him, but I can’t afford him. This is just one small step towards financial freedom and debt free living. Crack open another book and continue to share your learning – it really helps.

    Thanks!

      • I’m going back into the workforce. I saved up and took a year off to become a “starving artist”! Planned very well, on living meagerly while I attempted to earn a small living on my writing and photography, which proceeds would go into “next year’s funding”. Had a lovely holiday, did NO work, ran through my savings and am now back in debt! I’m still glad I did it, and will dig myself out and save up to do it all again – just will actually implement the well-laid plans next time. I hope. 😉 Time will tell…

  6. Marianne…it will all work out. I spent most of my twenties and early thirties going on holidays I couldn’t afford, buying things I didn’t need and doing up a house I wouldn’t see any return on. The result was around £13,000 in personal debt (not to mention mortgage and £25k student loan). A wake-up call came around 32 and I’ve tried really hard over the last couple of years to sort stuff out – lots of help and advice from Money Saving Expert too – definitely a good source of advice. I’m now down to £6750 personal debt, all manageable on 0% credit cards – it can be done and you will do it. You’ve taken a huge step to admit the state you’re in and as you say, you haven’t killed anyone and you’re not the first person to live beyond your means – do not beat yourself up about it for one more second! Good luck, keep us posted on money progress.

  7. Hi Mirianne

    Looks like you are making some really good progress in an area of your life that you’re not so happy with. Congratulations, keep it up! I have enjoyed reading your blog over the past few months and will continue to read any future posts.

    I would recommend A New Earth by Eckhart Tolle which I have been reading and it has been very helpful.

    Good Luck on your journey 🙂

  8. Good luck with 7H. It really is easy to follow BUT a tip is that if you find it a bit hard, try the son’s book 7 Habits of Highly Effective Teens, which follows the same concepts in a less academic, easier to follow style without being condescending.

  9. Hey Marianne, I missed you!
    I thought about you the other day and wondered how you were getting on but somehow had a feeling that the reason you were quiet is that you were probably (a) doing paid work and (b) just figuring stuff out for yourself, which you were.

    Your latest update sounds really positive. Your attitude towards money appears much healthier, for example feeling worthy of the money you earnt, and having that sense of pride. Personally I don’t think you’re a nutter for saying ‘thank you’ out loud when posting your invoice (it’s the sort of stuff I do lol but then again I may well be seen as a nutter by some!) It’s great that you are also facing stuff head on, that’s SO brave (& scary) well done (that sounds patronising but it certainly isn’t meant that way).

    I’m so sorry to hear that your financial situation was causing you such stress and anxiety, that must’ve been really hard to deal with, and I can really empathise. You are being so open about it now, that I am sure it is helping loads of other people who read your blog who find themselves in exactly the same situation, but feel quite alone. Sometimes a bit of honesty is all we really need. It’s so hard to keep pretending that we have perfect lives. Once we admit to ourselves that we are only human, no matter who we are, I think that is a weight lifted in itself. I was reading something the other day which talked about being your ‘Authentic Self’ and how if you do that it becomes a lot easier, than if you keep up a front of being someone you think you should be (if that makes sense?)

    I also love the story how you lent an ear to the bank staff who confided in you about their lives, on not just one occasion, but two. It seems like you have a real talent in this area, I bet they don’t offload to just anyone. For whatever reason they probably needed someone to tell those things to, and despite not helping you out with your financial matters, you made a difference to them by the sounds of it.

    I’ve been doing lots of thinking lately about coincidences and fate (synchronicity my friend called it) and why things happen at certain times, and I can’t help but keep coming back to the fact that whilst we don’t always know why things happen to us, they all make sense at some point in life, we just can’t always recognise it at the time.

    Regarding your next book, how about trying to tune into your inner voice and do what your heart tells you. I’ve picked up ‘Seven habits’ a few times since you last blogged, and I’ve got to tell you it’s still quite a struggle! I’m only managing a few pages at a time before I have to put it down again, and I’m STILL only half way through…. why read it, if it’s that difficult? Especially if you put pressure on yourself to read it in a certain time frame (at least I can dip in and out when I want as no-one is depending on me to feedback on it.) I know it’s a book people swear by, hence trying to read it myself, but it’s just not speaking to me (or the bits that do, are few and far between!)

    Why not do another money book?

    Do what YOU want and what is right for YOU… I am sure we will all be here regardless, as the vibe I get from your commenters is that we’re all behind you.

    Keep writing, and be open to whatever happens. “Everything is as it’s meant to be…”

    Sarah xx

  10. I have to admit I thank my customers for keeping me warm and dry and fed, too (although I don’t tell them quite like that). One thing I relearned on my adventures into finance and budgeting was the value of money. A pound really is a pound (and not just a pound). It’s quite a difference, because I regard my own work and customers more highly, and appreciate the things I spend my money on more.
    Sounds like you’re doing really, really well. I’m happy for you 🙂

  11. Best of luck with reducing the overdraft but don’t get too single minded about doing that, you have to have fun. Don’t fall for these get rich schemes either, unless it’s a well off bloke :-O

  12. You’re doing great, Marianne, and we’re all pulling for you! Don’t overthink your writing–it’s a waste of time. And sometimes, it’s not your best work. So what? It’s still good enough.

    I’m a finalist for a literary award, isn’t that a scream? Me? Literary? Hilarious.

  13. Try making a spreadsheet for all your financial income and outgoings…Get a receipt for every spend and keep them for a month…..Look at your balance every day..After a couple of months you will get a ‘paradigm shift’ ( you’ll know it when it happens ) and instead of worrying about your finances you will begin to become excited..It happened to me -It will happen to you.Good Luck

  14. Agree with Bob, a spreadsheet is a great idea. Boring and annoying (and quite depressing) to start with, but it becomes habit. Even now, when I’m (more or less) back in the black, I still fill it in faithfully.

    Well done in taking control of this. Its definitely a horrible but necessary step, to bring it all kicking and screaming into the light and then start untangling it all. You’ll get there though. Watching the debt go down soon becomes addictive. I got to the stage where I was throwing all my spare cash at it – I got a bigger adrenaline rush from seeing the balance go down, than I did from spending the money on other crap! Good luck with it 🙂

  15. Hey Marianne,
    Yay! I’m glad to read an update from you, and hear that you are doing so well!! It may not seem like it, but you really are. Your ten steps are very sound and prudent so this proves that you can make good money decisions. Also, as I think others have mentioned, you have been very courageous for tackling this head on.
    I also now just read your post that was posted a couple of days after this, about airing your vulnerabilities in public, and while I totally get that it is embarrassing to have all your secrets seen so publicly (especially by people you know) I also think that is where the magic happens. Secrets that we keep that we feel so much shame around have so much power and that power is used against us to keep us numbing, avoiding, distracting, but once you bring something to the light (both into your own consciousness, but especially out into the open with others) the shame and the secrets lose a lot of their power and hold over us. I know you’re not a Bible person, and neither am I really, but I think that is what is meant by the verse which says “Confess your sins one to another that ye may be healed”. Healing really does take place in being vulnerable and open.
    Good luck! So proud of you xx

    • Michelle, such a wise comment! Thank you! This blog does feel like confession… but yes, bringing stuff out into the open does make them lose their power. Thank you so much for all the support, it means a lot. Such a lovely comment. Have a nice weekend. xx

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