As the dark nights begin to draw in and the temperature continues...
My Debt Story – Emma Drew
A guest post from money-blogger Emma Drew about how she dealt with thousands of pounds worth of credit card debt.
My husband and I found ourselves in £15,000 worth of credit card debt, and we were able to pay it off in just a few years despite me only earning above minimum wage and my husband being unemployed for six months.
I want to share how we got into debt and some of the strategies we used to pay off our debt while earning a very low wage.
I studied Christian Youth Work at university which is extremely niche. At the end of university, I graduated into the recession and I couldn’t get any job at all. Not just within this field, but any job at all.
I was fortunate enough to be able to move back home, but a lot of my day-to-day spend had to go on credit cards. Then over the years, some other life circumstances came up. I met my now husband, I got a job that earned me a few pence above minimum wage, my then-boyfriend and I moved in together and then he faced 6 months of unemployment.
Before I knew it, we were in £15,000 worth of credit card debt. At the time we were still able to keep up with the minimum payments, but there was a lot of money shuffling going on. We also had to live on an extremely tight budget and there was no money left over after paying the minimum payments. If I didn’t take action soon then we would be in persistent debt.
Our Lightbulb moment
I came across an online calculator that told you how long it would take to pay off your credit cards if you just kept up with just the minimum payments. It actually would have taken us over twenty-four years to pay off the credit cards if we just continued making the minimum payments. Considering most people get a mortgage for 25 years, this really gave me a wake up call. I also worked out that we would pay over £20,000 in interest alone, which was more than the debt itself.
Our plan for getting out of debt
We knew that it would take a few years for us to get out of debt, but we knew that we would have to challenge ourselves. With my low wages and my husband being unemployed for six months, things were tight.
We had to start by getting an overall picture of how our money was doing. This involved getting hold of all of our outstanding balances, interest rates and minimum repayment amount, and building a budget.
Using this information we were able to work out a debt snowball, which meant paying off the highest interest credit cards first. It doesn’t matter how you tackle this – some people like to tackle the smallest debts first for the sense of accomplishment.
We also looked to reduce our expenses and increase our income. We were already on a very small budget so there weren’t too many cutbacks to be made, but we still managed to switch our energy supplier, go through our Direct Debits to see if anything could be cancelled and started meal planning to keep our grocery spend down.
We increased our income in a variety of ways because I love . We tried everything from delivering BT phone books to online surveys and selling stuff on eBay. We did whatever we could to make extra money.
We also switched to 0% balance transfer offers where we could. This meant, during that promotional period we weren’t paying interest on those debts. This meant that any money we were paying off went to the debt and not the interest.
How long it took to pay off our credit cards
It took six years from graduating university for us to repay our credit cards. We tracked our payments and balances using a notebook because I spent all day on a computer for work and wanted to write down the credit card payments. I truly believe that this helped me to take more ownership of the repayments.
We were fortunate to be able to keep up with our minimum debt repayments during this time, and wouldn’t have hesitated to get debt advice if we weren’t.
The single most important thing that worked for us was finding out where we stood financially. We needed to know exactly what our debts were and exactly what we were earning. In our case, what we were earning wasn’t covering our outgoings. Facing up to this dark reality was not easy but if we hadn’t, we would still be paying off our debts into our fifties.
Emma runs EmmaDrew.info – her website offers real people real advice about how to really supercharge their earnings and make extra money. If you are looking to make extra money online, find ways to save money and connect with like minded people then you are in the right place.
04 Jul 2019
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