Ever since I decided to pay off my debts once and for all and ever since I began blogging about it, I have been dreaming of writing this blog post. I may be a little late writing this since I became debt free in December 2014, but I feel I owe it to this blog to look back and wave my debt one final goodbye. After all, it has been quite a journey…
Back in May 2013, upon returning from my holiday in Spain where I spent my last penny, I found myself in exactly £13,830 worth of debt! This was not my student loan debt. I was lucky enough to get free education – I did well in school and my university degree was government funded. Instead, I was looking at years of living way above my means; years of mindless spending; years of living without a budget. This was my credit card debt, and it was time to eliminate it once and for all!
I remember the day I decided I never wanted to feel so financially vulnerable again. I had a strong desire to get rid of my debts once and for all. I went online to read about ways to manage debt, and this was when I stumbled upon a few personal finance blogs. Until then, I had no idea they even existed. I began reading them and got so motivated I created my own blog, where I documented my journey towards debt freedom.
There was no turning back. For the first time in my life, I began watching my spending very closely, to the very last penny. I wrote down everything I spent. I reduced the interest rate on my debts where I could. I implemented four no spend days a week. I took a £100-a-month-challenge where I would only spend £100 on necessities each month, such as food and personal care products. I cut my food bill in half. For a few months, I stopped going out completely and enjoyed free activities around London. I cut out takeaway coffee, magazine subscriptions and gym membership. I did not buy a single item of clothing for nearly a year. I began cooking from scratch and taking lunch to work every single day. I changed telephone providers to reduce my telephone bill. I moved into a cheaper flat and my rent payments reduced dramatically. In the process of moving houses, I decluttered and sold some items I no longer needed; in the end, I got rid of 50% of my possessions.
Most importantly, I began making huge overpayments towards my debt. Back in 2013 and 2014, my salary was lower than it is today, but I would still allocate between £500-£1,500 towards my debt every single month! I did not have a side job; I was and I still am employed full time by the same company in the corporate travel industry.
THE LIGHT AT THE END OF THE TUNNEL
By the beginning of 2014, I had put just under £6,000 towards my principal debts and another £1k in interest charges. My original goal was to become debt free by December 2015, but at the rate I was going I knew there was a possibility I would become debt free much sooner than that.
I continued paying off my debt in 2014, but I did allow myself one luxury since I was doing so well in the debt repayment department – I began travelling again.
I went to Istanbul for my 30th birthday in February last year, Venice for the Venice Carnival in March, the beautiful Italian region of Tuscany in May, south of France in June, Paris in July, Riga for the New Year’s Eve, and in between all these amazing trips I made a few trips back to my hometown in Estonia.
What can I say, I love travelling! Even though I travelled quite a bit in 2014 (on a budget, I must add), I never lost sight of my most important goal at that stage – debt repayment. Yes, it is quite possible I would have reached debt freedom sooner had I not been travelling so much, but this was a sacrifice I was happy to make in the name of all these amazing memories I have created while travelling. Being able to travel motivated me even more!
By the end of July 2014, my outstanding debt was at less than £5,000, and my plan was to pay it off in just five months by the end of December 2014. I made it work. I kept chipping away at my debt every month as I normally would. Also, I was a beneficiary of my father’s estate and inherited some cash (along with an apartment in my hometown, but this is a story for another time), so I threw some of it towards my final debt repayment and became debt free in December 2014!
In the end, it took me 18 months to get rid of £13,830 worth of debt! It was a long journey but one worth taking! How does it feel to be debt free? It feels amazing, liberating and so worth it! I would encourage everyone struggling with debt to start their journey to debt freedom today. There is no better time! I wish I had started sooner, but I am thrilled I got there in the end!