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