How to NOT get into more debt?

[albapunk]

Hi all!

Previous abusive relationship with financial abuse, left with £12k of debt that I I focussed ALL my time and money on to clear. Very little proof to take to court for fraud/abuse although police and services involved were very helpful. All this resulted in me living of lower interest credit cards/overdraft whilst I flung as much as I could into his shit (think 49.9% loans etc). I earned 17k per year and managed to pay this off in 3 years leaving just the credit card/overdraft debt. At times it felt even worse than the abusive relationship but I made it, I paid it, I did it.

I met a new partner, we have a mortgage together and I now have someone to share bills and life with. I've had a pay rise and DP earns a reasonable amount, we have no children. We are comfortable but not well off, our bills are paid but there is not a lot left for big emergencies etc. After all those years of abuse, debt and deceit, and thrashing to keep my head afloat, this life, even though it is still modest, feels like a dream.

Today I finally got approved for a loan to clear the credit cards I had lived on whilst paying ex- DPs debt. I am now £250-350 better off per month. I was struggling to not always dip into what I had paid off the credit card for bigger expenses. I have now cut them up, and frozen the cards, they cannot be used but I was advised to leave these accounts open as it shows I am not using the credit available to me and will continue to boost my credit rating.

So why am I asking this question?

Credit cards and overdrafts have been my comfort blanket for so long. They've been my fall back plan, it sounds ridiculous but despite the stress of having the debt, I felt safe knowing I had a "just in case" but then I always dipped into them because the repayments left me with nothing by the end of the month. I have kept 1 0% interest card which DP has agreed to keep for me. This is for absolute emergencies. It only has around £100 on it from having to get my car fixed. I can pay this in full now I have consolidated everything else.

I should be happy, I should be relieved, I should be grateful for what I have, but I'm terrified of tumbling down again, I'm terrified of having no will-power, of not being able to wait and save, it's so easy to get money I cannot afford from so many companies. It feels like temptation surrounds me.

Can anyone who has gotten out of debt advise on how they remained that way? How they have managed to change their ways?

Thank you.

I think the best way is to take on extra work and save an emergency fund .
The peace of mind knowing you can cover it if your washing machine breaks down or there's an unexpected bill is so worth it.
Still keep a credit card, but remember that feeling of what an uphill struggle it was to clear it.

Well bloody done!
Take all that determination and funnel it into saving an emergency fund.

I'm not sure why you felt responsible for paying off Ex's debts? It's not your job to pay off someone else's debts (unless they were in joint names).

Thank you! I have been looking into extra work but nothing suitable at the moment that fits around my current job. I do take over-time when I can!

@GreenLeavesRustling

Thank you. It was one of the toughest things I've ever ever done. I think perhaps an actual emergency fund is the way forward! I just need a way I can't access it too easily.

They were in my name but taken out under coercion, or for the vast majority, taken out in my name without my permission or knowledge. This was an extremely abusive relationship and he was very calculated and clever. There is no evidence trail hence why authorities were limited in what they could do.

@albapunk I have a very similar story to you, being coerced into debt and finding out debts have been taken out in your name. It's draining. I have paid off 3, one more to go. Well done! That is an amazing achievement and you must feel like a weight is off your shoulders

Well done you OP. You've done something really hard and you got there. You've done so well and built great skills in the process.

Channel that discipline and determination and build yourself a pot of savings as a safety net. This would work the same way as a credit card back up, but in reverse. The money would already be there. You don't wouldn't have to pay it back.

@ThatDarnCatAgain

Thank you. And well done for getting yourself into a better position too! You are almost there and I bet it feels equally good!

It is draining, and in a way it has carried on long past the effects of the physical and emotional abuse. It feels like he's still around in a weird way. I am better but yet not free if that makes sense?

I am hoping this one last thing will be IT!

I'm not sure why you felt responsible for paying off Ex's debts? It's not your job to pay off someone else's debts (unless they were in joint names).

Oh she just fancied the nightmare of paying off 12 K of debt. Just as well you're on here to point out where she went wrong.

Thank you! I am proud of wading through this in a way.

Do you have any advice on how and where is best to save? Ideally I need something I cannot access easily, I need this to be something that is REALLY for emergencies and just not my monthly fall back. I need to get used to this way of life and living without reliance on debt. I thought it would be so easy but it doesn't feel like it! I

It's not the kind of thing I'm an expert at but I'd suggest taking a look at the Saving section of Martin Lewis's Money Saving Expert.

There is a lot of info there on different accounts with the best rates and the different way they work etc There could be something on there without instant access ( which would probably then give you slightly more interest on your savings ) that would suit you.

Imagine after all this time paying interest - you will be having it paid to you. You've got this OP.

“I was advised to leave these accounts open as it shows I am not using the credit available to me and will continue to boost my credit rating.”

This isn’t actually good advice - you’d be better off closing them.

And seriously, well done!

@sunglassesonthetable

Thanks again and yes, that is a pretty awesome thought actually!

@FivePotatoesHigh

Oh! I've been told that having credit available to me, but not being used shows good management of it, although I have never missed or been late with a payment in over 3 years anyway. I may need to look into this then! I would feel better knowing they were fully closed even though I cannot use them at the moment.

I closed my accounts after paying off my debts and now have no credit at all except for an overdraft I’m not using. My credit rating is the highest it can be, so it’s not a detriment. I use the free MSE Credit Club to check my rating. And the peace of mind has definitely been helpful.

well done OP on facing such a difficult financial situation and coming through it - some options for saving (can have access to your money but not immediately) is Premium Bonds - I think you can start buying at £25 or £50 and add to this (and the very low chance of winning as well) - you can also open up an ISA account where you can save money and hopefully watch your amounts grow over time (I took one out for my children at £25 a month and build up little nest eggs over time)
good luck with whatever you choose

Massive kudos. What a mountain to climb.

I agree with others, your first priority is an emergency fund. Be your own emergency credit card.

I use separate bank accounts to keep my emergency fund separate from my day to day spending. I track it using a spreadsheet, as I have earmarked funds for different things in there (holidays, kids activities, car expenses etc). I accept the hits of inflation and low/no interest for ease of access.

I'd also recommend hanging out on UKPersonalFinance on Reddit. They have an excellent pinned post called The Flowchart which will help you organize your personal finance goals (ie pension, ISA etc). You will learn a lot from hanging out there and reading. When you have a question, people will help.

Be proud...its massive what you've done and where you've got to.

What an amazing achievement. I wasn't in as deep a situation as you but ran up a little debt and when I fully paid it off, and I was making a concerted effort not to use credit anymore it felt odd, I really had to work to focus on saving to manage my anxiety rather than having credit available.

Not sure what the answer is, but I have seen some places offer accounts that you can only instant access one time a year or so, so you can get it if you need it, but the rest of the the you have to give notice to withdraw. Might be ideal for you. Just gives a way of access in emergency but you wouldn't waste the chance if you didn't really need it.

First time in my life I have decided to save, I was always spent nearly every penny of my wages as I thought life is too short not to enjoy yourself . I have had a nightmare few months financially with unexpected bills and this has been the biggest wake up call ever !

I would really suggest that you learnt how to use bitcoin.

Its hard to access because you have to turn it back into fiat first, or learn how to use it to buy things. Dont think of it as investment, but as a micro-savings scheme.

The best advice I have for people starting out with bitcoin is to get £10, move it into a self-custodial wallet and just sit with it for a month or two, knowing that noone at all can spend that money so long as you keep the private key secure. No one can sign in your name, frogmarch you to a bank, or plead and whine until you go to an ATM. No-one needs to know that you have that bitcoin, just you.

Then in a couple of months time, turn it back into sterling (might be £2, might be £20, who knows), and see whether you felt more or less secure when you have some bitcoin than when you dont.

• not financial advice
• do your own research
• if you do not own the private key, you do not own the bitcoin.

Well done OP - an amazing achievement that you have every right to be proud of.

There are many savings apps and accounts, but I found this approach quite simple in terms of savings to get started...

Yorkshire Building Society internet saving accounts.
Good interest rates, and you can open several of the easy access type, and name them for different pots of money. Transferring money to a current account in a different bank takes a day or so, so it's not immediately accessible (but it's there if you need it).
Using their easy access accounts-
Look at all your annual expenses, such as car tax, insurance, house insurance and add it all up. Divide by 12, and set up a monthly standing order from your main account into one of the savings pots on the day of the month you receive your salary (or the day after).

Have another pot for emergency expenses such as house repairs,
A third for Christmas/birthdays. Work out how much you could contribute monthly and set up standing orders in the same way.

Notice account
Open an account needing more notice, for a rainy day fund - if you're off work or lose your job, or your income is in someway compromised. Over time, aim to save 3 - 6 months of your salary. This is your safety net.
Because the money is leaving your main account on the day, or day after, you're paid, and it's automated, it doesn't sit there in your account balance tempting you to spend it.

budget planner

Use this budget planner to work out your finances. It makes you consider all your expenses, outgoings and incomes, including less frequent bills such as car tax, Christmas etc. You can then get in the habit of putting money aside (eg. New bank Saving account) so you have money saved for these events.

congratulations on getting your debt sorted.

Thank you! This is incredibly helpful!!!