I’ve been thinking back to not so long ago when we were heavily in debt, particularly about the things I know now that I wished I’d known back then.
In this post, I’ve listed 10 things I wish I’d known during the height of our debt. If you’re currently struggling with debt, I hope this post is of some help to you!
1. We weren’t alone
For a very long time, the hubby and I lived with a lot of guilt and embarrassment about the fact that we had so much debt.
There wasn’t a day that went by when I personally didn’t think about this and I remember worrying so much about what people would think of us both if they knew the state of our finances.
I looked at other people as if they were on a completely different level to me – better in some way – more knowledgeable about money related matters.
Debt gave us a low opinion of ourselves. It was only when I started this blog that I realised that lots of people have some kind of debt. It’s just that most people don’t talk about it! They might well be thinking about their debt everyday just like I did with ours, but because debt is still very much a taboo subject, we wouldn’t necessarily know.
The bottom line is – tons of people are in debt. Many people are in serious, life changing debt. It’s nothing to be embarrassed or feel guilty about because there is always of way out of debt. And that brings me onto my next point…
2. Getting out of debt would take less time than I thought
The hubby and I lived uncomfortably with our debt for 15 years before we finally became debt free. At one point, I thought we’d never be rid of it because I just couldn’t see a way out. The hubby had took a huge salary cut, my wages weren’t great because I was working part time around my daughter, and on the face of things, it didn’t look good. Our debt management company said as much. Even our own bank advised us to go bankrupt.
We paid off £41K in 22 months, after being in debt for 15 years. How? Well to cut a long story short, we worked extremely hard, raised a lot of extra cash through side jobs and PPI refunds and in addition, we stripped our spending back to the bare minimum. We wore pretty much the same clothes during that time, ate the same foods from a meal plan and managed just fine without cable TV.
3. Debt Management Plans aren’t set in stone
Our debt management plan was supposed to last 10 years at least. For the first two years, we abided by our debt management plan, making those minimum payments on it as best we could. Once we started raising more cash, we were able to pay lump sums off and even negotiate some full and final settlement offers to reduce our debt some more.
Our debt management company didn’t encourage us to do this, probably because we were paying them a fee and they wanted to earn money from us for as long as possible. We don’t have too many hard feelings about that because our debt management company was great in many other ways.
So, we realised this fact on our own – just because we were in a debt management plan, that didn’t mean we had to sit back and accept a life in debt for 10 years plus.
4. Going without would be so worth it
We made a lot of financial sacrifices during the time we were trying to get out of debt. We rarely bought new clothes – and by new, I mean secondhand – new to us. We lived with the same wardrobe during that time, replacing buttons here and there. We fixed things that broke. We still live without an expensive TV package even now we’re debt free. Those little sacrifices helped us to get out of debt faster. They were totally worth it!
5. There are tons of ways to make money other than selling on eBay
For a long time, I hunted for things to sell on eBay and at car boot sales. I’d exhausted pretty much anything worth selling. Then I discovered other ways to make money using the skills I had. You can read some of them in one of my eBooks, 101 Ways to Make Money from Home, if you’re interested. 🙂
6. Getting out of debt would only be possible if we made the effort
If we’d have known it would take 22 months to be free of £41K’s worth of debt, we’d have done it YEARS ago. If someone had told me that would be the case, I wouldn’t have believed them though. Maybe the timing wasn’t right back then, but we definitely never dreamed it would take less than two years to achieve debt freedom. I guess we had to be in the right place and in the right frame of mind in order to put in the amount of effort it took to get out of debt.
7. Our debt was our own fault
I said earlier about the fact that we felt guilty and embarrassed about our debts for such a long time. Yet even then, we questioned why this was happening to us. Why did our creditors lend us so much money over the years? It was practically handed to us on a plate!
Once we made the connection that our debt occurred because of the way we handled our finances and how we reacted to life changes, we realised that only we ourselves could get us out of debt. By life changes, one example I’m thinking of is when my hubby lost his job. We carried on living pretty much as we did when he had a great job instead of making cutbacks and getting some savings in place. We didn’t worry back then and this alone led to us really struggling later on in life.
8. A financial miracle wasn’t going to happen (for us)
I kid you not, I dreamed of winning the lottery every morning whilst driving to work. By the time I’d arrived at work, I’d already decided how to spend it in my mind. I’d buy my parents and other family members a house and then we’d get a little place of our own. The first thing we’d do is phone up our creditors and get the debts paid off. It was nothing more than a dream and the sooner I stopped waiting around hoping for a financial miracle, the sooner I would have got on with the task I needed to do.
9. Being in debt has a silver lining
I never, ever, thought anything good could come of debt. But truly, there are positives to be taken from being in debt. For me personally, I’ve learned about managing money, budgeting and self-control. In addition, our debts have given me a multitude of job opportunities which all stem from this very blog.
10. We had rights
I briefly mentioned earlier about the fact that our debts caused us to have a low opinion of ourselves. We felt lower than low many times and often lived in fear of phone calls from creditors and baliffs knocking on our door. We couldn’t bear to look at our mail in case we saw more interest charges on a credit card statement. We didn’t even check our bank account (not recommended!) because it made us feel so much worse looking at the state of our overdraft.
This fear that we were living in became much more prominent after our daughter was born. I kicked myself repeatedly for all the mistakes we’d made previously, because we’d put her quality of life at risk. That might sound extreme but it’s how I felt back then.
After I started this blog and read more and more information about debt, I realised that everyone in debt has rights, including us. There are such things as priority debts and non-priority debts and providing we weren’t falling behind on priority debts, like a mortgage or rent for example, then our home would be safe.
As for non-priority debts (these are the likes of credit cards and loans) which is what our debt consisted of, as long we communicated with our creditors to arrange a payment that we could afford, things would be ok. So even though we were getting chasing phone calls from creditors that frightened the life out of us, all we would have had to say (and prove) was that we could only afford to give them X amount per month.
Getting out of debt is absolutely possible, providing you knuckle down and do what it takes to get it paid off. That will mean making some lifestyle changes and taking a different view on money altogether.
There is a wealth of information on the internet to help you kick off your journey to debt freedom. As a starting point, check out the debt section of this blog and perhaps read a couple of great personal finance books like Dave Ramsey’s “The Total Money Makeover” and Thomas J Stanley’s “The Millionaire Next Door”.
What financial wisdom do you know now that you’d like to share with others?
*Affiliate links to books I highly recommend are contained in this post. Disease Called Debt is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com.
I love this post – so many great lessons to be learned from being in debt. I would add that being in debt has helped me realize how lucky I am. Yes, we owe a lot of my money, but we have each other and our daughter, we’re all healthy, we have a roof over our heads and everything we really need in life.
Amy @ DebtGal recently posted…A New Financial Goal
I’m so glad you like this post Amy! You’ve hit the nail on the head about what’s really important. Debts can place a heavy burden on a family but once you’re on the road to sorting it out, you’ll have more space to appreciate the good things in life.
Generally that you need to have a plan for your money, whether you use a spreadsheet, an app or software you need to know how much money is coming in and how much is going out. From there you can decided how much to save, spend, invest, etc.
Brian @ Debt Discipline recently posted…Experience over the Event
Good point Brian, having a plan is definitely needed! I didn’t have one of those before I started tackling the debt!
These are great. These are all things that I also wish I knew a long time ago. I also felt embarrassed and assumed I was the only one in debt, but I now realized that’s just not the case.
Aldo @ Million Dollar Ninja recently posted…I Am Debt FREE!!!
Thanks Aldo! And congratulations again on your recent news about becoming debt free! Yay!
Great lessons! I’m not glad that I’m in debt (obviously), but being in debt and working my way out of it is helping me realize what I’m made of and how hard I can work.
Kayla @ Shoeaholicnomore recently posted…Healthy New Habit: Blending
That’s great Kayla and I love how you summed that up – realising what you’re made of. Debt does have that effect once you start tackling it effectively. You’re doing great!
These are all great lessons, Hayley. The one I like best, oddly enough, is #9. I think one of the best things about debt is when you do find that place where you realize you have to make a change and start shifting mindsets about how you look at and use your money. For most people that shift would never happen without debt. While I would never wish debt upon someone for the sake of a learning experience, it can also changes lives for the better – if they so choose to learn from it as you have.
Shannon @ The Heavy Purse recently posted…A New Look and a New Focus
Thanks Shannon, this is the one I like best too! Being able to get something positive from our debt situation has helped me emotionally as well as giving me those practical benefits I outlined in the post.
Great article Hayley! It’s funny the things we learn along the way that might have made our journey just a little bit easier. Great to see you sharing your experiences with others – hopefully they can benefit from your discoveries 🙂
Richard recently posted…4 Actions You Should Take Today To Make Next Christmas A Breeze
Thanks Richard! I hope so too! 🙂
Biggest lesson from digging out of my hell week of motorcycle accident, laid off, $10k in debt after my college graduation was to be humble.
My pride kept me from asking for help from my family. While the lessons I learned have made me a better person, I definitely suffered more for my pride than was necessary.
Don’t be afraid to ask for help, and accept it when it is given.
Jack @ Enwealthen recently posted…Get Paid For Your Opinion In A Focus Group
This is such a good point, and along the same lines I have learned you can’t be afraid to tell friends and family “I can’t afford that.” Or, even if you can afford it, it’s ok to say “I don’t want to spend money on that right now.” One of the biggest obstacles to getting out of debt is feeling obligated to participate in activities or purchases that you can’t afford, partly because you don’t want to admit you can’t afford it. It is humbling to say those words, but people do understand. In fact, sometimes they admit they can’t afford it either. You end up leading others to be more open and courageous in talking about money realistically.
The first thing I did when I found myself in debt was I accepted the fact that I was. Then, I figured out what factors put me in such situation and what I needed to do to get myself out of the debt. Determination, commitment, and hard work are what we need, Hayley.
Jayson @ Monster Piggy Bank recently posted…My Health Is A Priority – Is Yours?
Point one is probably the best start for someone who is in debt and might feel isolated. Knowing there are others who you can relate to can make things seem less impossible and allow you to start getting back on track.
Rob recently posted…Hitting the ground running
These are great. I found out I wasn’t alone once I started my blog 🙂 Glad to find people like you! It’s been such a silver lining and I’ve learned so much from being in debt.
Melanie @ Dear Debt recently posted…Debt, Itâs Been Real
Great article Hayley.
Can I just add that people should be careful when selecting a DMP provider as many take a percentage of your monthly payment. (This percentage can vary)
There are three out there that are totally free, your can find them via the CAB website.
Of course there is a questionmark over the free providers as to whether they are impartial and do you get a better service if you pay for it, whilst I have no direct experience of either type I hear that the free providers who are industry funded provide an equally fair and impartial service.
Tony Booth recently posted…The Beginning
You were most definitely not alone! I also only started really whittling away at our massive debts (500k, ouch!) when we added it all up and realized 1. How huge it really was and 2. How long we’d be living under it if we kept going the way we were! So congrats to you and I hope to join you in a few years!
Saving Sanely recently posted…Goal Update June 2015
Thank you so much for stopping by and commenting and I wish you luck in your own debt free journey! I’m looking forward to checking out your blog! 🙂
I’ve been a debt counsellor for 9 years for a free advice service to those with high and low incomes. So many come close to losing more than they need to by not getting advice early. Some may have more options than others but nearly all can improve their situation with the knowledge of their rights and a bit of help.
Great post, thank you for sharing!
Thank you for this. We are going through our journey to get out of debt and everything you wrote is true about feeling guilty and ashamed.
Hi Candelaria, I’m glad this post helped you and hopefully made you feel better about your debt. Good luck, keep positive and it won’t be long before you see those debt numbers decreasing rapidly! 🙂
I love this article. Debt isn’t something people talk about often so it is natural to feel isolated. One thing I noticed during our mission to be debt free was that my husband and I were not on the same page initially and it can be hard to persuade your spouse to join your efforts or see your points of view. It can take a toll on marriage when having debt and when you are trying to convince your spouse that changes need to be made to better the future. I think that it is necessary to sit down as a couple to figure out a plan to get out of debt together. If you come up with a mutual plan, it makes taking each step towards financial freedom so much better.