29 Mar 2016

Feeling a loan


Photo credit Sean MacEntee
Being nearly the grand old age of 32 years old (yes I know I look about 12!) I've come to learn some important life lessons. Perhaps not as many as some, but one I have learned is about debt and how it is easy to get into it and not so easy to get yourself out of.
It is great to have hind sight as I can see exactly where I went wrong with previous spending habits, but at the time I couldn't see how far in debt I was getting. Ignorance is bliss as they say.

I started my first job in May 2002 working as a Sales Assistant for Warehouse (the fashion store, not some random warehouse!).
This was at the age of 18 and prior to this I had little money. I would occasionally get some pocket money (even at that age!) or may be some birthday or Christmas money, so shopping for clothes (which has been a passion from a young age) was an infrequent event. 
So here I was at the age of 18, not paying rent or bills and with all this disposable income (I was on approx £4.25 when I started btw!) and suddenly the ability to shop was something I could do whenever I liked!
With not much experience with money growing up, other than how sparse it was, I could now spend till my bank account would say no.
I was and still am more of a spender where I spend small amounts, which much to my ignorance do add up. I have and as far as I can see will always be useless at saving. I'm too impatient and want everything now. I have a very limited ability to save for something of more value. I just spend and think about the consequences later.

That is why I ended up in debt. Now most people have debt of some sort, be it a mortgage, car or credit card. So I know I wasn't the only one to be in that situation. But that doesn't excuse it though.
I can't recall how the debt started, but I do believe when my bank account was groaning from the clothes and make up I had indulged it in, I fell hook, line and sinker to getting credit.
When working in Warehouse, and in the days of it being part of Arcadia, if you we're over the age of 18, were given a discount card. This basically worked like a store or credit card, where every transaction gave you 25% off in the Arcadia brands but you had to pay it off every month and if you didn't you gained interest on the remaining balance.
So what did I do? Spend on the card and then ignore the letters for the bill to be paid. I think I did start paying it off, but missing one month, lead to another missed month and soon I was owing not just the balance but default charges and interest.

Along with this, I then opened a store card in Warehouse. The temptation to spend was too much. I'm weak willed when it comes to clothes and now these days home furnishings.
Over the following years I opened I think two other credit cards and a store card for Oasis (though how I got accepted is beyond me!) and at this point was being rather flaky in paying off the balances.
Eventually I realised I need to sort this out, so I went to my bank for some advice. I came out with a loan to pay off the debt which I paid some off, but still I now had a bank loan. Eek!

In 2005 Dan had an accident on his push bike on the way to work and was knocked over by a car. And thankfully, despite attaining several breaks in his right arm, he has made an almost full recovery (he can't extend his arm fully but it could have been much worse).
This was an upsetting time, as Dan had to stay in hospital for 8 days and had about a year before his arm was almost back to normal (if you count an nerveless elbow!).
He was encouraged to pursue an compensation claim and after a year of going backwards and forwards through his (not so competent) solicitor, he had a settlement claim outside of court.
Dan ever so kindly helped me clear the majority of my debts with some of his claim (which wasn't a vast amount). Whilst I wish he had never had the accident, if it's not too morbid to say there was some silver lining.
I still wanted to pay some off myself to prove to myself I'm not totally incompetent and paid my bank loan off with monthly instalments.
Back on a more financial even keel, I then stopped opening credit and store cards (well I relapsed with one credit card in 2012). And stuck to only spending with my debit card. I would still occasionally go over drawn and get a charge (as I'm no way perfect with my money-that I have proven) but was not financially struggling as previously.
I now only have a debit card, not debt or credit cards. So I'm finally in the black. But it's taken me years and lot's of anguish and worry to get myself here. And I just want to add that there was quite a lot of stress involved. Knowing you're getting further and further into debt and thinking you'd never see a way out of it is not something I would ever like to repeat. Ignorance only's works for so long.

My conclusion would be I wish I knew more about debt and credit when I was younger. I do take responsibility for my actions and admit some ignorance, but I think a lack of education does have a part to play.

I know this isn't a light and fluffy post as normal, but if I could inspire one young person to think twice about debt then my experiences wouldn't be in complete vain.

Until next time,

Love


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