October 1, 2022

Debt after Christmas left me worrying about paying my bills, but here’s how I cleared £20,000

ONCE Christmas was over, the feeling of dread set in. Laura Biggs had no idea how she was going to pay her bills.

31-year-old personal trainer and partner Andrew, 35, who works in construction, was £45,450 in debt in January 2020.


Laura Biggs figured out how to reduce her debt by starting with decluttering

The money was spread over several loans, credit cards and store accounts.

“I remember the overwhelming feeling of dread, wondering how we were going to pay the January bills,” Laura says.

The couple, who lived in East Anglia, had overspent after another Christmas by making the same mistake, trying to fund gifts and festive activities on a single paycheque.

They could no longer ignore the letters that came through the door, the emails and the phone calls from the companies they owed.

“We knew something had to change. When we sat down and calculated the total amount we owed, we were shocked to act.

Two years later they are £20,000 lighter and on course to pay off everything they owe by 2023.

Their secret? Laura boils down to decluttering their lives.

The lockdown has given them an opportunity to question impulse spending, whether they’ve missed eating out and shopping, and how much.

They realized they needed to take stock of what they already owned before buying more of the same things.

“At the start of the pandemic, we were stuck in the house, overwhelmed and stressed in a space we were supposed to call home.

“We have reduced our monthly expenses by £1,200 per month. I couldn’t tell you what we were spending before.

Lots of food, cafes, takeaways, restaurants. As for the food, I would pull out the card and tap it. Small leaks can sink a big ship.

“We gradually decluttered, one room at a time, starting by throwing out everything that was broken.”

Anything they no longer wanted or used, they sold on Facebook Marketplace.

“I wish we had kept track of how much we got rid of, it was thousands of things. The amount of stuff we had that didn’t work, sitting there collecting dust.

“It was motivating to find money by getting rid of things, but more than that, we created a beautiful space and we didn’t want to spend a lot of money cluttering it up again.”

Laura and Andrew pictured on their wedding day


Laura and Andrew pictured on their wedding day

In fact, she says she now spends less time cleaning and organizing the house, which has improved her mental health, reducing her cravings.

Laura also realized that their house was bigger than she thought. They just had a baby, which means they’ve become a family of five.

“If I had found out I was pregnant before I started paying off my debts the first thing I would have thought is right, we need a four bedroom house, we need more space .

“It would have been ‘we have to find the money, one way or another’. My thought process has now totally changed to asking ‘how can we use what we already have?’ We save money by not adding a room.

Decluttering their debts early in the repayment process was also key to feeling better on top of them, and making a plan and moving forward on repayment.

What Laura found stressful was not just the total debt owed, but the sheer number of people they owed money to.

“We knew trying to agree on a minimum payment to almost 20 companies was going to be ridiculous.

“We started by reducing it using a debt management plan (DMP) to one payment per month. We left out two loans, our biggest, because the interest was so high.

Laura was paying £300 a month, while Andrew was paying £170. Having a DMP gave them some breathing room and helped them focus on paying off the most expensive debt as quickly as possible.

Once they did, they had more money to pay off other debts.

This is the avalanche method for paying off debts, focusing on the heaviest debts first.

Once these were paid, the couple took the snowball method, listing who they still owed and focusing on paying off the smallest, taking the motivation to count down as each fell, 14, until at 13, up to 12, cutting cards, checking off one less thing to worry about.

As a personal trainer, Laura considers staying on top of her finances akin to getting in shape.

“You have to take small steps and appreciate how far you’ve come. Keep track, I write everything down in notes on my phone.

She also found it much easier to negotiate with the companies she owed money to than she thought.

“We found that companies were quite happy to freeze interest for a few months and give us a payment holiday.

“They were helpful when we tried to negotiate a reasonable minimum payment each month. Remember when you call you always offer to pay them.

Creating a “sinking fund” for guilt-free spending was also key to staying on track. “We thought about things that are important to us and kept them within our budget.

“It’s like a diet, if you take all the chocolate out, you won’t stick to it.”

Above all, a large part of the sinking fund is in cash. “I find it difficult to be impulsive online now. I have to go to the bank or the post office to deposit the money.

“Jumping a few hurdles before you buy makes you think a lot more about whether you really need it.”

Laura also uses a Monzo bank account to complete the 1p savings challenge. She is saving for next Christmas.

You set aside 1 pence on the first day of the year in a separate pot, increasing it by a penny each day, to £3.65 on the last day of the year, or nearly £670 after 12 months .

Ultimately, she believes that successfully paying off her debt is a matter of psychology and self-knowledge, looking forward, not back.

“Accept that past habits and lifestyle choices have put you in this position, but the fact is, you are doing something about it.

“Before we started getting our finances in order, we looked forward to payday, usually because we had run out of money for the last month. Now we yearn for payday so we can tackle our debts and achieve our goals.

If you’re saddled with debt in the new year, don’t keep it to yourself. There are plenty of free, non-judgmental tips that can help you plan an outing.

Sue Anderson, from the charity StepChange, says: “We can help you assess your finances and figure out the best way forward.

“We can give you the advice and provide you with the debt solutions you need to ensure you are on the road to financial recovery. »

You can find help anonymously, online at stepchange.orgor by phone on 0800 138 111. The charity National Debtline offers free advice at nationaldebtline.org or by phone on 0808 808 4000.

The Turn2Us.org website is a useful way to research available benefits or financial support that you may be eligible for at no cost.

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