Financial Horror Stories: Excessive Debt

We’ve asked several people to share their financial horror stories with us with the idea that we can learn from their mistakes. Today we have the opportunity to get to know Victoria, busy mom, wife, and full-time blogger from the UK. She started blogging in April 2013 and now writes four blogs. Her favorite topics include making and saving money, self-employment, healthy living, travel, and home and garden.

What’s the biggest money mistake you’ve ever made, and how did it impact your life?

The biggest mistake I ever made was getting into £17500 worth of personal and irresponsible debt aged 18-19 years old. As soon as I could get store cards and credit cards, I did, without thinking of the consequences.

Not that it's an excuse, but I had low self-confidence, low self-esteem, and was suffering from depression. I tried to fill a void in my self by going shopping and buying new things, thinking it would make me happy.

I had no money management skills and lived a lifestyle far beyond my minimum-wage shop assistant job at the time. I racked up debt on seven store cards, two credit cards, an overdraft, and two loans. I never worked out my incomings and expenses and naively thought I'd always be able to manage the minimum payments.

Things spiraled out of control as I had a serious shopping addiction, and before long, I was using one debt to pay off another. I had hit a debt crisis. Things got bad really quickly at this point, with creditors getting nasty and threats starting.

Luckily I sought some free impartial advice from a citizen's advice company, and I was able to go on a debt management plan. I repaid all the debt over five and a half years, which was a struggle, and I had to learn to seriously budget and live on very little, but something I'm proud I accomplished.

If you could go back in time, what would you do differently?

I would learn how to budget and track my income and expenses. I'd also learn to have more self-respect and realise that shopping for new things all the time is not the way to bring happiness. These are lessons I have learned from being in debt, though, so perhaps I needed to go through this rough patch in my life to learn from it.

Did anything good come out of the mistake?

Absolutely. Going on a debt management plan meant they told me what allowance I was allowed to live off, which was basically the bare minimum for food, so this meant I was forced to learn how to budget. This was a good thing, and now, 15 years later, I am obsessed with tracking our money and budgeting. It's helped me to manage money better, and I know I never want to be that irresponsible again. I taught myself a big lesson at an early age, and it will prevent me from ever making the same mistake in my later years.

What is your biggest financial fear?

My biggest fear would be myself or my husband becoming ill for an extended period and not being able to work. We do have some savings for this eventuality, but I know they would quickly disappear on bills, so I never feel like it's enough. We are both self-employed, so if one of us were to fall ill, then the other would need to look after the children and try to make all the income whilst providing care, which is not feasible. This is probably my biggest financial fear, but it also makes me save as much as possible, so we have some security, so again, there is something good that comes out of fear!

What’s one piece of financial advice you would like to share with our readers? 

Budget, budget, budget. Make sure you know your incomings and outgoings every single month. With what's leftover, set aside some into savings, even if only a small amount. The rest is for spending and make sure you spread it out over the weeks before your next payday. Make sure you check your accounts regularly, so you know where you are with your money, instead of constantly spending and losing track. A simple spreadsheet with all incomings, outgoings, spending, and bank balances is all that is needed. I keep ours updated every day or so, which means we never lose track of how much money we have left, how much we owe where and what's available for spending.

Thanks to Victoria for sharing her financial horror story with us today. It can be easy to spend a lot of money and rack up the debt quickly, but when it comes to getting out of it, the process is arduous at best. This is a great reminder not to let your feelings get in the way of making good financial choices. If you’d like to connect further with Victoria, you can do so by visiting her website, 

Other posts in our series of financial horror stories:

Financial Horror Stories: Lack of Emergency Savings Leads to Financial Nightmare

Financial Horror Stories: Credit Card Debt

Financial Horror Stories: Reckless Spending

Financial Horror Stories: Vacation Timeshare Regret

Financial Horror Stories: Investment Gone Wrong

Financial Horror Stories: Overspending to Please Others 

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