10 steps to get out of debt

Oct 7, 2020 | How to pay off debt, MAIN FEED

Rewind my life 14 years and it’s a very different story to the one I live today. I spent my days working hard on an art magazine in London’s Old Street, treated myself to dinner out most evenings at one of the local eateries and chatted or danced the nights away in the trendy bars of Hoxton or Shoreditch.

But it wasn’t all a bed of roses. I was drowning in debt and living way beyond my means. Who knows how much debt I would have got into if I hadn’t discovered I was pregnant and decided things needed to change.

Fast forward to today and I have my own business and my own house – despite being a single parent and with no financial help from my family or pay outs from my ex-husband. Here’s how I did it in 10 simple steps:

1. Gather your data – bills, credit reports, credit Score, etc. You’re going to need to sit down and focus on just how bad it really is. I had no idea that my ex-husband and I had 16k worth of debt between us until I sat down and sorted through all the paperwork. You might find you burst into tears but it’s the first step towards changing things…

2. Make a list of your debts and your income. Honestly, you’d be surprised just how many people think that they just don’t earn enough and that’s why they’re in debt until they complete this step. I did! How shocked was I to see in black and white that I had money left over but I was spending it on the wrong things. Here’s a great budget planner for you to use.

3. Create a budget and plan how you can pay off your debt. This is so important. I found that we could pay £500 a month off our debts which meant 16k was gone in two years by not going out and spending money on socialising. There’s no better time than now to have a few months off partying!

4. Lower your interest rates. If you’re credit score isn’t too bad you might be able to get a credit card with a 0% balance transfer fee and transfer your debt onto this. Or you might be accepted for a low cost loan. Pay off the debt with the higher interest first and if you need advice then Talking Money in Bristol is a great place to start.

5. Pay more than you have to pay. You know how shopping can be addictive – well once you start slashing your debts that can be addictive too. Don’t just pay the minimum payments but pay off as much as you can on the debt that needs clearing first (the one with the highest APR).

6. Earn more money. Easier said than done, right? Your boss might not be able to give you a pay rise but there’s nothing stopping you looking at ways to earn an extra income from the comfort of your own home.

7. Spend less money. If you want to get out of debt you are going to have to go without some things. I decided to stop spending on anything that wasn’t a necessity. Although that wasn’t easy it was certainly worth it! I swapped High St shopping for charity shops and only bought things I needed until the debt was paid off. You will need to live frugally to pay off debt but it will be worth it in the long run.

8. Do a direct debit detox. If you are serious about paying off debt do you really need that expensive TV subscription, gym membership or could you pay less on your bills? You might be able to save £100 a month which could be directed towards your debts.

9. Rent out your assets. What can you easily make money from? A spare room, car parking spot or storage space? In the past I’ve earned money from renting out a room, my parking space and my campervan. Don’t have a spare room or vehicle, how about loft or garage space which you can earn around £300 a month via Stashbee?

10. Declutter and sell. Have a look around the house to see what you are no longer using. The odd extra tenner could be put towards a cheap treat to reward yourself every now and then for paying off debt.

I know it’s not easy but take it from someone who knows, it will be worth it! Most of us have been in debt at some point, including many money bloggers like The Reverend who talks about hitting a financial rock bottom.

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More from Broke in Bristol – & beyond:

Money Talks (for teens) Ep 4. How do I retire at 30?

About me

Jackie Annett

Welcome to my website. My name is Jackie Annett and I've lived in this wonderful city for many years. I'm a single mum to fourteen-year-old Little Miss Diva and for the last 20 years, I've been working as a journalist, magazine editor and blogger.

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