Okay, I’ll delurk now and tell my story (which thankfully has a happy ending – I hope it might be a slight inspiration, maybe).
From my late teens I started running up debt. It started with a few hundred here and there on credit cards, plus a couple of loans and the like, but of course it grew over time, and by the time I was in my mid-20’s, I had around £15,000 debt and (thankfully) a very bad credit rating.
I was probably about 25 when I first realized that I had a problem with my finances. At the time, I was aware that I was in debt, but so was everyone else I knew, so it didn’t seem to be a problem. The crunch for me came when banks stopped offering me finance. In retrospect that was one of the best things that happened to me. I couldn’t spend any more on the credit cards, and couldn’t get a loan to “pay off” the debt (I use quotes because as I’m sure we all know, you can’t pay off debt with debt).
I had piles of unopened post literally hidden around the flat (I wasn’t hiding them from anyone other than myself) – I couldn’t sleep and felt sick whenever the phone rang or even when the post came. I only really enjoyed Sundays because post doesn’t come on Sundays! If I’m honest, I did consider suicide, maybe not seriously, but for me, I felt it was always an option… In a funny way, I found it almost helped to have it as an option.
Anyway, of course my bank asked for my cheque guarantee card back, and my credit card companies took away the cards, so the only way I could spend money was cash. I was working for myself at the time, and had situations where I’d drive several hundred miles to visit a client, and have to pray that they’d be able to pay me in cash or I wouldn’t have enough gas for the journey home.
I honestly don’t know what my debt peeked at, but I’d guess at around £20,000. One day (actually, it took more than a day), I sat down in my flat, piled all the unopened post around me, and starting opening. I have to say that was *the* hardest thing I’ve ever done in my life. Opening letter after letter, some going back several years, and sorted them out into piles of different debtors. I think it took most of a weekend to do, and I felt so drained after finished that I took the Monday off work (I was no longer self employed at this time), it’s the only time I’ve ever pulled a “sicky”. I’ll tell you something, I can’t remember a time I’ve cried in my adult life other than that day, and even then, it was mostly with relief once I’d finished opening all the post and realized that although I owed *a lot*, and although I had several court charges against me, it wasn’t actually the end of the world. I think, for the years I spent hiding my head in the sand, most of the problem was that I didn’t know the size of the problem, and I half expected the police to come knocking at my door and locking me away (I didn’t know much about the debt world back then, and I don’t think I realized that debtors prisons had been abandoned in the UK a hundred years or so before!).
To be honest, actually paying off the debt really wasn’t that difficult. Sure, it took a long time, but you’ve got to remember that by then I was used to buying everything with cash, so in a funny way, I’d already made the required life-style adjustment. I was lucky that I managed to find some additional freelance work which vastly helped paying off some of the most urgent debt, but it still took me about 7 or 8 years to pay the lot off. During that time I still paid for everything with cash, although by then my bank were offering me a debit card again.
Then, in 1997 I think, I decided that I could finally trust myself with a debit card. *The* first thing I bought with it was a copy of MS Money for my PC, and ever since I’ve been very careful (some might say “obsessive”!) to enter every single penny I spend into it. I find it (or rather, the process) invaluable, I know exactly where my money comes from, and exactly where it goes.
The story almost ends there, but there is one more, short chapter. In 2000, for various reasons which aren’t important here, I found myself in a situation where things were started to stress me out a bit, the funny thing which happened is that I found myself slipping back into “non-post-opening” mode again. For a good 6 months I didn’t open any post. I think it started simply because I had other things to worry about, but I found I very easily got into the habit of not opening post, and the longer I left it, the worse it became. Thankfully I managed to pull myself out of this hole, and although I had a few nasty letters from companies I owed money to, there wasn’t anything too bad there (and, this is the funny thing, this time it wasn’t a financial issue, although I owed money, I had money in the bank – I simply hadn’t paid bills because I hadn’t opened post). It worried me because I could feel the old feelings of “mail fear” coming back, but hopefully now I’ve recognized that this can happen, I’ll be able to stop it happening in the future.
So the current situation is that, with the exception of my mortgage, which I overpay, I don’t owe a penny to anyone. I do use credit cards these days, but I pay the balance off in full every month. I have a separate current account for bills, which I manage to the penny (to the extent that, because I know exactly how much comes out of it every month, I make a payment into it each month, and have exactly zero in it at the end of each month). I also save money monthly into an “annual bills” saving account, which covers large bills I pay annually (insurance, car tax etc). And although I don’t have an emergency fund as such, I overpay on my flexible mortgage which means, if the worst comes to the worst, I can withdraw money from it if I *have* to.
I know what I’m like, and although I’m pretty organized with my finances these days, I *know* I have to be carefully not to slip down the debt slope again! – I know it would be all too easy for me to do.