Square One: The Best Place to Start

Where to start when paying off your debts. How I paid off my debts quickly.

I Paid Off £3000 Worth of Debt in 6 Months!

My Aim? Pay Off My Debts Quickly!

If you have already read my About Me, I will have already have a fair idea of how much debt I managed to rack up in in just a few short months after graduating.

I had worked out that I owed around £2000 in rent arrears, £1000 in Council Tax and had a £2000 student overdraft still maxed out, just to top it all off.

I was having a pretty hard time with my landlord and some of the arrears had actually been intentionally withheld due to failure to carry out works on the house. In order to move out, I needed to have my rent up to date, so I was in a bit of a sticky situation.

So this was my first port of call in sorting out my life. It was so scary looking at my figure of -£5000 and I very nearly just buried my head in the sand and ignored it all. I gave myself a kick up the arse, and broke it down into more manageable chunks. If I could pay £1000 off my arrears, wouldn’t I feel so much better? And imagine if I could pay £2000 off…

I had been reading generally a lot about “get out of debt strategies”, however, if there is one thing I learned from that, it is that there is no one-size-fits-all approach. Even within my own planning, I had to account for a varying wage weekly.

On top of this, people need help getting out of debt, and I’m not thinking of the financial side of things. Being able to openly talk to my close friends about my situation, and more so, getting their congratulations when I hit a milestone in paying off my debts, helped more than they will ever know. 

I began with my rent arrears, and agreed a payment plan with my landlord, paying weekly to coincide with my wages, rather than monthly, which always felt a bit overwhelming.

I was bringing home up to £400 per week, varying because of my irregular hours and overtime. My rent worked out to £75 each week. I set up a standing order to my landlord for £125 weekly, knocking £50 off my £2000 debt. Of course, I wasn’t happy with this, I would pay it off in 10 months at that rate. I started making regular transfers of smaller amounts, sometimes as little as £20 when I had it spare.

I ended up paying this off in around 5 months (HALF the time!) so paid an average of £175 (£100 off arrears) each week. This was often paid in lump sums when I had saved a bit and was happy that I wouldn’t need that money for anything else.

Paying this off actually gave me a bit of a high, I was so pleased to have knocked out one of my debts at least!

After it was cleared, I started to divert that extra cash towards my Council Tax arrears and after getting it down to around £300, I withdrew the lot from my savings and put that towards my debt. 

Secretly, I was expecting a bit of a fanfare when I made my final payment, but it was all a bit of a let down really! The final thing left for me to tackle was my student overdraft, which

Not long after getting myself up to date on rent & Council Tax, I moved in with my Other Half (OH) which cut my outgoings substantially. He was living in a small apartment (definitely not built for two people!) so rent was much cheaper than in my 3 bed house, as were utilities. I was also living closer to work so had more or less no travel outgoings as I walked everywhere. It was bloody mental living in a shoe box for a year, but we managed it and it was SO worth it for the savings we were able to gather up.

I can genuinely remember the feeling of elation when I realised I was finally up to date with my finances. It wasn’t easy, but the fact that I had basically become a workaholic recluse over those few months really helped, as did…

  • Getting paid weekly was a real bonus, it’s amazing how quickly a week whizzes past you when you’re busy! I would get paid on a Friday, but worked more or less all weekend, so wouldn’t even be considering spending a penny until Monday, making my weeks seem even shorter.
  • Every Thursday night, I would check on my bank account before getting paid on Friday, using whatever cash was in there, I would pay off all but £20 towards my arrears. As I say, it’s amazing how quickly a week can fly by, and I was usually surprised by how much I had leftover, often finding I had spent much less than £100 that week.

Obviously there would be weeks when other bills were due and this wouldn’t be possible, but it really helped me chip away at my debts. Starting afresh with my wages each week also meant I never had a large amount of cash in my current account, so I was less tempted to splurge on big purchases!

  • I wouldn’t say I necessarily deprived myself of doing things I wanted to at this time in my life, if I wanted to go out for dinner every couple of weeks, I did so, but I knew I could afford to take £30 or so from my budget. What I did do, and I was super proud of myself, was I stopped buying cr*p I didn’t need!

Moving in with OH helped, as we were living in the smallest apartment known to man, and I didn’t even have space to unpack the stuff I already owned never mind fitting new purchases in!

I think if I had been too strict on myself, not allowing a coffee here or a pizza there, I wouldn’t have done as well as I did. Like when you’re on a diet and as soon as you tell yourself you can’t eat something, you immediately eat like 6 of them.

  • I can become a bit obsessive about things when I really set my mind to them. In most cases, this is a terrible thing, however, I think I actually got a bit obsessed with saving! It was like a miracle! I also get a bit obsessive over liking things neat. So not only was I making my regular transfers to my savings (which were then used to pay off the debts in lump sums) when I got paid, but I really like my bank accounts to have a round amount of money in there…(I do realise how weird this is btw!) So if I had £116 in my current account, I would pay the £16 towards my debts and leave my balance at £100. And I would do this every few days!

I had myself cleared of my immediate debts within 6 months. Realising I could do that really spurred me on to pay off my student overdraft, so that was my next step. I’ll be looking at that in my next post, as well as publishing my first spending report in the next few days! I don’t think I’ve been too naughty…

Formerlyskint.com - How I began my Debt Repayment Journey

formerlyskint.com - How I Paid Off My Debts in Just 6 months Quickly
formerlyskint.com – How I Paid Off My Debts in Just 6 months Quickly

2 thoughts on “Square One: The Best Place to Start

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