I remember when I started racking up debt. I was living the British student dream – a champagne lifestyle on lemonade money – and I spent the shit out of my student loan. I bought everything: clothes, takeaways, alcohol, sweets, more alcohol, takeaway, sweets and presents.
Having grown up poor, I wanted, needed and deserved to enjoy myself, right? But several years and nine grand later, I was drowning in overdraft and credit card debt.
Growing up, I moved between rented accommodation as part of a family of five, in Hackney, Tottenham, Wood Green and then Essex. Moving around so much wasn’t great. We had the same problem in most of the homes: the boiler didn’t work and we didn’t have the money to fix it, so we’d boil the kettle and put the water in a bucket to wash ourselves. Afterwards, we’d use sunflower oil with lemon juice to moisturise our bodies – lemon juice to mask the scent of the cooking oil so we didn’t smell of fried food.
Back then, it was common behaviour to go to school and persuade four or five people to give me anything from 10 to 50p to go toward lunch: three wings and chips for one pound, and a packet of crisps and a chocolate bar when I needed a late afternoon snack.
So when I landed at university, with the promise of a thrice yearly student loan instalment, you can understand how I ended up spending like a madman – it was the first time I’d had loads of money in my account, and I wanted to feel free. As a child of first generation Nigerian immigrants, I was sending money back into the family too.
Pretty soon, I signed up to a student overdraft (£2,000) and a student credit card (£500). Those are relatively small figures when it comes to credit, but they didn’t seem that small when I maxed them out. I wasn’t phased, though. I just wanted to live like other people my age. At the time, this meant downing pints at pubs, banging strawpedos in the clubs and buying what I thought were nice clothes (I was really into Abercrombie & Fitch, so I bought an Abercrombie & Fitch gilet that I wore all the time. I know; I’m disgusted with myself).
When I graduated and began working a full-time job I said yes to everything – regardless of whether I could afford it – because I wanted to experience the life I felt I was entitled to. The years of hardship growing up meant I deserved it.
Not long after, I was doing dinners, going on dates to fancy cocktail bars and paying for £60 taxis from central London to Essex at least two times a week, just to keep up with what everyone else was doing. With each credit card bill I knew I was spiralling into the abyss, but I wanted to match the middle class media lifestyle of my peers. I felt like the kind of prick who grew up in Chelsea – and that shit felt good. I was living lavish, like the top 10 percent. I loved it all.
But with the addition of several holidays a year, I quickly ran out of money again. It was all good, though – I could just apply for more credit. It’s free, right? I was quickly approved for a £5,000 overdraft and a £3,000 credit card. Flash forward a couple of months and I’d spent £3,500 of that overdraft and £2,700 on the credit card. Combined with the debt I had from keeping up with everyone at university, shit started to get very real. I was 26 years old and in almost £9,000 of debt.
The weird thing is, it felt like everyone around me was immune to the financial problems I had been having. Most of my pals were able to go out every weekend, go on holidays and still save. How was this even possible? Why couldn’t I keep any cash?
When they say we’re all in this together, we really aren’t. I thought my peers and I were all the same – broke, but happy. Then, one night, I found out a few of my friends were secretly loaded, and this was how they afforded every dinner and drink while I struggled to keep up.
As we got older, those friends started buying homes. Meanwhile, every time I got paid my account was still in the red (it is the most painful, yet humbling, feeling, watching your monthly wage disappear into negatives, never really being yours). I knew something had to change. I needed to climb out from under the debt.
So, how did I do it?
First, I bit the bullet and worked out how much debt I was in. Writing down the amount I owed to the various overdrafts and credit cards helped me implement what financial guru Dave Ramsey calls the debt snowball – where you pay off debt in order of smallest to largest. Doing it this way helps motivate you to stay on your debt clearing goal. I started with my £500 student credit card, then the £2,000 student overdraft, and so on.
Next, I ranked my monthly expenses in order of highest to lowest. This helped me see exactly where my money was going each month. Then I figured out which expenses were essential and nonessential. Essential expenses are: mortgage/rent, water, electricity, food, heating, council tax, travel, etc. Meanwhile, things like Netflix, Audible and the gym can be cancelled or paused until you clear your debt – though hobbies can also make dealing with the often restrictive lifestyle change that comes with clearing your debt more enjoyable.
Once my basic monthly essentials were sorted, I worked out how much money I had left each month – 75 percent went toward my debt, the other 25 percent I could do whatever I wanted with. I set up three bank accounts for different pots of money: a Cash Account, where I kept the 25 percent. A Direct Debit Account, where my salary was paid into and bills got paid out from, helping me separate disposable income from money meant for bills. And Savings, which I started doing once my debt got to a manageable amount. Every bill payment was automated; that way I knew my bills were covered and what I had left to spend.
Ultimately, though, I knew I needed to change my spending habits. I picked up some extra freelance work to clear my debt quicker – some of which I also put aside as a cash buffer for irregular costs like birthdays.
I began selling clothes, cleaning gardens and doing car boot sales, too – I would do anything for the extra cash. Every penny counted. Honestly, don’t turn your nose up at it. The aim is to pay off the debt as quickly as humanly possible so you can start building up your financial cushions. At one point, I was dashing around £500 to £700 every month. Seeing my debt decrease at such a high rate really helped me to start feeling more positive about getting out of this situation.
After a year and six months, I’d pretty much paid everything back. It was one of the most exhausting periods of my life – yet also one of the most fulfilling. I was debt free. When the numbers hit zero, I drank a bottle of Hennessy to celebrate. I was proud I’d paid everything off – I felt free from the burden.
I know some of you lot are thinking, ‘Fucking impossible – who the fuck can pay off £9,000 that quickly’ Well, I did, and I ain’t rich – I just worked every hour under the sun, said no to 90 percent of all the fun stuff I really wanted to do and stashed money away, while at the same time paying off debt. That’s it.
I just made the decision that I didn't want to be broke anymore. I told myself building a financial foundation is better than living in misery and under a false sense of security. I wanted to live to have fun and not worry about money – but it's honestly so painful being broke.
I’m still not where I want to be – and I still worry about money – but I’m in a much better place than I’ve ever been. It feels good.