Woman £53,000 in debt with 17 credit cards – she shares tips on how she became debt free | Personal Finance | Finance
One woman has shared her journey from being £53,000 in debt to being debt free as she tackles rising prices. For millions, bills and other costs have increased and for many, the pressure has become unbearable.
Katie found herself in debt after several traumatic and unexpected events.
She said: “Within about six months my father died, I was made redundant when I was pregnant and my husband’s job was downsized.
“We already had a lot of manageable debt. We had a mortgage and we had loans that we used to repair various parts of the house, but very soon they became unmanageable. Very quickly we did not have enough income to pay the bills.
“I had 17 different creditors and about 11 different credit cards. I vacillated between paying one and paying the other until my debt got up to £53,000.”
Katie created a budget and had to think of ways to make practical savings. After cutting back on essentials, she followed three principles for every new purchase:
One, “Do I need it? Could I borrow it? Could I get it somewhere else cheaper?”
Second, she shops around and uses items they already love.
She said: “I bought Christmas presents on a budget as a game for my kids – we had a budget of £200 for the 5 of us and they wanted a games console & bike!
“So we told them we asked Santa and he said we could buy the items ‘pre-loved’ and get more for our money. Delighted, my children agreed, and we went around with for online articles.
In order to curb her debt, she had to implement various money saving measures as a means of cutting back. UK debt and budgeting charity Christians Against Poverty (CAP) is revealing that millions of people feel stuck in their current financial situation.
The CAP’s latest YouGov poll shows that over half (54 per cent) of UK adults have faced barriers that make it challenging to budget effectively. Around two in five people do not know how to budget or struggle to stick to a budget and 3.7 million lack the confidence to budget effectively.
Katie continued: “I went from a 21 year debt repayment plan and we got it down to 11 years by applying the principles of money coaching. We are now debt free after 11 years of repayments!
“What’s great is that what I learned on the CAP cash training meant we could significantly extend our payback time. It has just revolutionized our finances. The simple principles we still use.”
“My children waited patiently for Christmas to come and they both got the games console and a bike for less than £60 for each child!
In addition, Katie had to make sure that she only bought food at a reduced price and that she only bought what she needed.
Katie continued: “We go 30 minutes before closing and buy bread and meat in bulk and freeze it. I’m very lucky with my food shopping: I go through my cupboard and freezer every week and write a list of what I have.
“I then make seven meals with what I have and only shop for the ingredients or extras I need. I only buy what I need to feed a family of five. I set a food budget and we stick to it . I use it too. anything left over for another meal.”
She started saving for the things she knew happened every year such as birthdays, Car MOT & service, children’s school uniforms, Christmas and white goods.
All of these things can be expensive, so she puts money away for them months in advance. This helped her avoid going into more debt.
CAP money coaching expert Peter Snell said: “Millions of people across the UK are currently feeling the pressure of trying to manage their money through this constant hurdle of rising costs.
“It’s completely understandable that many people are feeling down about their finances right now but there are simple actions that people can explore that could lead to a huge improvement in their situation.”
“Our aim at Christians Against Poverty is to help people across the UK get out of debt and poverty and into a brighter future. Our free money coaching is a simple way to give them the tools they need to give anyone to increase their confidence in managing their money and start their journey towards improving their financial situation.”
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