Before I start: this is a long post, and a story of my personal finance Debt / journey / nightmare / plan. It’s not professional advice, just things that worked for me. It’s the story of how it took me ten years to sort my life out.
For full disclosure, I also did some budget travel during this period, because it’s the one thing that makes me feel alive.
If I had stuck more rigidly to the rules maybe it would have happened faster, who knows?
Lets go back 10 Years.
I owe £20,000. I couldn’t even afford to get to work, let alone eat and pay the rent.
The advice I am giving in this blog post is for anyone who is struggling to pay all basic outgoings, e.g, mortgage, rent, energy bills and credit card minimums.
Advice for anyone who dreams of having an Adventure and not knowing how.
Anyone that’s having a shitty time and needs someone to tell them it will get better.
Here I am.
It will get better.
I have put a list of useful links at the end of the post for helpful free advice websites, which if you are struggling with any of the issues mentioned, like debt or mental health issues, I highly recommend them a first stop.
Until you know the problem, you can’t find a solution.
Just after University I split up with my boyfriend and found myself liable for all the debts accumulated over our relationship. Like many people I had lived beyond my means, in a time where banks and credit card companies just keep increasing your credit. This debt had accumulated over a few years, and felt manageable when I was working full time and living with someone else. I had even been offered a £100,000 mortgage, what the hell were they thinking, I was on the edge!
After we split up I ended up working abroad in Malaysia for about a year and when I returned to the UK my finances where in an absolute mess.
Unsurprisingly ignoring the bills had not made them go away.
I found out I owed nearly £20,000. This was a mixture of a £10,000 loan from the bank, various credit cards and outstanding bills. It may not seem a lot, but single, with every debt in my name, I was having to deal with the fallout.
Luckily I landed a job in London.
Unluckily it was a £100-a-month internship.
I ended up sleeping on a friend’s floor before finding an extremely cheap flat in Finsbury Park. Within a few months I got a full time job at my internship for around £14,000 a year.
Hardly the £40,000 a year job I imagined I would get after working all through University.
In fact, no one cared that I went to University, but that’s another blog post.
So I sat down with my pile of bills, my phone and a pen and paper and worked out how much I owed and to who. I rang every single company and had the same conversation:
Me: “Hello, its Hannah Cox, I’m ringing about my bill”
Them: ‘Yes, you owe us loads of money and it’s overdue and we need it all now”
Me: ‘Thats not possible at the moment as I don’t have a job. Could you please tell me exactly how much I owe and what the minimum payments are?”
Them: *Provides Information*
Me: ‘Thanks, can you put a note on my account that I called today and that I will be in touch when I have a plan”.
Once you know what you are dealing with its simply a number, black and white facts.
I had a list of everyone I owed money to, what the minimum payments were and what the interest was. This debt was now my bitch and I was going to win.
I made a Budget.
Doing a budget was CENTRAL for me. I could create a plan for how I was going to manage the problem.
The issue for me was that after rent, bills, transport and food I couldn’t even afford to pay the minimum payments on my cards. Some months I would have less then £100 left to cover food and also paying my debts.
I rung all my lenders and told them I had done a budget and had no ability to pay them back the amount they needed each month. Several refused to take that as an answer, insisting on minimum payments must be made and listened to me cry down the phone, before ‘accidentally’ hanging up on me.
I have YET to work out how to magic money out of thin air, so didn’t know what the hell to do.
Most, however, were ok; they took my voluntary payment of £5 towards my debt and I told them that I’d speak to them again next month.
TOP TIP. Keep talking. Ring them weekly or monthly. Make them put notes on your account that you rung. Make notes that you rung. You are in a much stronger position if people can see you are communicating and trying. My £5 payments didn’t scratch the surface but I wasn’t running away. I felt in control.
I got debt help.
No I didn’t with the lottery.
No one gave me £20,000.
My situation may be different to yours, but I had no way to pay back my debts with the expenses I had. After spending a lot of time on the Money Saving Expert blog and forum (free, and I highly recommend) I decided my best avenue was an IVA.
IVA is a Individual Voluntary Arrangement and means you can to spread payments which usually lasts five or six years. I made one payment to them each month and they distribute among my creditors.
During my IVA creditors couldn’t contact me or increase my debt. At the time every one of my debts was increasing through interest and what I could pay didn’t even covered that. This solution also allowed me to give all the information to a IVA company to deal with. If any creditor contacted me or sent me a letter I could just email my IVA guys, and send it to them to deal with.
By showing them my Rent Agreement, Bills and food expenses every month they could see exactly how much money I had left to pay back each month.
The problem for me was the minimum they would accept was £160 a month. Some months I didn’t have that.
BUT the other option was bankruptcy which I did not want. That involved courts, being unable to be a Company Director (I already knew I wanted to get control of my life by running my own business) and more.
It was also crucial for me pay back what I could. For me, it was my mess and I wanted to pay back as much as I could.
This was the only option left for me, I recommend getting advice and speaking to your lenders before having to do what I did. Also, this decision will affect my credit score forever – so be warned.
Circumstances around IVA, Bankruptcy and Debt Management change yearly, which is why I suggest visiting sites like Money Saving Expert for the most up to date help.
I didn’t stop fighting. Opportunities are Everywhere.
By the time I had sorted out an IVA it was 2009 and seemed to be going ok. But then in 2010 I ‘left’ my job and ended up on the dole. Bollocks.
This was a pretty rubbish time to be honest. There were definitely days I din’t want to get out of bed. Days I drunk too much wine. Days I spent crying.
I spoke to friends, I reached out for help again. This time it was emotional help. It worked.
I had no idea what to do, but slowly I started looking after myself and gaining the confidence to take control of the situation.
Basically I didn’t give up.
I emailed everyone I knew offering my skills and services in project management and somehow got a three month contract. So I decided to start my own business.
This is how you do it.
- Go online register a company (for £15)
- Ring up HMRC registered as self employed.
Ok, there are a few more steps, but the point is, it’s not hard to set up as self-employed and you don’t need any money. And there is TONS of free help out there.
Then I also took part time work in bars for extra money, even taking photos of clubbers in Leicester Square at the weekend. Somehow I learnt to manage my time and money. I had to keep accounts as well, so I learnt that too.
I also worked for free to learn more; interning at a Fashion PR company and also a Music Management business. I was earning just enough money to cover my bills and took every opportunity I could. But London was expensive and it wasn’t long till I was exhausted.
My hard work paid off, I got offered a job to put on a Music Festival in Manchester! Amazing! This was my opportunity to sort my shit out. Plus I could afford a HOUSE in Manchester for less then my tiny flat in London. This was what I needed!
Soon after moving up I found out my Dad, who lived in Hastings was sick. Visiting him on the other side of the country while working the most difficult role I have ever had I turned me into a stressed, sad wreck.
When my Dad died just a few months later I attended his funeral and then immediately travelled back to Manchester to put on the Music Festival. I pretty much lost my shit at that point. What should have been a career highlight was ruined by how stressed and lonely I was. Additionally, I was also fucking angry that my Dad had just died.
I had friends (some incredible ones) but there was this complete disconnect for me. I was angry. So fucking angry.
As you can imagine, I wasn’t exactly the most fun to be around and after a wine fuelled night I booked a one way ticket to Malaysia.
Get the FREE Year Goal Planning spreadsheet emailed to you!
I worked out what I wanted.
OK, the flight to Malaysia was not exactly the best way to fix my debt. I know that. At the time you could fly Air Asia for £300, so I handed in my notice on my flat and went, taking only a backpack and leaving everything else behind.
While I continued to pay my monthly IVA payments, I somehow thought I could pick up work out there. I was trying to balance my reality (paying back debts) with my dream (to travel) but I wasn’t ready or prepared.
South East Asia was the place I knew I could be happy, I had worked in Malaysia straight after University. More importantly the place where I had liked who I was.
I stayed in a Buddhist Monastery in Vietnam. I travelled through Thailand by train and cycled through Laos. Saw the sun rise over Angkor Wat in the amazing Cambodia. I even headed to Bali to help out at a music and yoga festival. I learnt how to make a rose from a melon (no – really!)
Unfortunately I also got into a bad bike crash and have had short term memory problems ever since. But thats another blog post.
Then I moved back to Manchester refreshed began working in events again. I knew I needed to take ownership of my debt situation. I re-learnt what a budget was and stuck to it.
Working as a freelancer in the event industry typically demands a higher wage then full time members of staff, due to having specific skill sets and longer working hours. So I worked as a freelancer and took on more jobs.
I wove travel into my work, working in Andorra, wildcamping in the UK and volunteering in Africa.
By 2016 I was out of debt and ready to move onto the next part of the journey – ‘How to Travel the World’
I choose myself.
Throughout this debt free journey I had to learn to prioritise myself. A huge part of this was Minimalism. It allowed me to put experiences over things.
- Manchester Library allowed me a space to work for free (the reading room is the most beautiful place to sit and work) then leave with books to take home and enjoy for free.
- Sundays were spent buying cheap, fresh fruit and vegetables by the bag to create delicious home cooked meals.
- Put on my shoes and I went for walks: it’s free. Had friends over for a movie: also free.
- Made friends a priority. I put money aside in my budget so I could to go to the pub with my mates to keep me sane!
- Bought a second hand bike and cycled everywhere. One day I even cycled to Harrogate, sleeping under the stars in a Nature Reserve to visit an old friend. That is one of my favourite Adventure memories and it was free!
As well as working in events and saving money to travel, I decided to build an online business with my best friend. I figured that meant as long as I had a laptop I could potentially work while on the road.
Kate and I started Stag & Raven, A UK Tattoo Art Brand two years ago, with no knowledge of how to run an online business, but lots of passion and excitement about how we were creating something new. In fact, while on a trip to see visit sister in Vietnam, I built the initial website in the many cafes of Hanoi.
We now have a shop in Manchester which Kate works in full time; have a business that supports over 50 different Artists; and have partnered with some amazing brands like Art Battle Manchester, Honey Pop Club and Inkluded.
We are still building, growing and having new ideas. Still all our money goes back into the business. I get up every morning before Phil and work a few hours before he gets up. Then we spend the day together ‘Adventuring’. Afternoons and evenings are often spent working on extra bits or betternotstop.
The important thing is that all this is my time, I’m choosing how I spend it. I enjoy how I spend it.
It doesn’t feel like work when you love what you do.
I love to write. I started betternotstop after my Dad told me ‘whatever you do, don’t stop’.
Through this blog I have learnt how to build WordPress sites (Free Step by Step guide here). Through Stag & Raven I learnt to build E-commerce Platforms, and built our new website on Shopify (The Telegraph even did a piece on it!).
Being in debt has also made me learn to do things myself through necessity.
When I couldn’t afford to pay other people to do my accounts, I did it.
When we needed a new website and had no money, I did it.
When we needed to do marketing and PR, I learned to do it myself.
I have a laptop (if you don’t go you can go to the library – they have free computers). I have the internet. All you need is that and you can create and do anything. (I wrote a guide on free stuff you can learn on the internet)
It’s not always going to be a straight road.
When you read the above it looks like I just left a job, started a business and sorted myself out. Do not be fooled. Over the 10 years I have had all sorts of other setbacks.
- Chest Surgery meant I had to take six weeks off work (one employer at the time still paid me, which was incredible, but it knocked my confidence and health dramatically).
- I had a Client that didn’t pay me, but I still paid my staff. This cost me about £4,000.
- Worked on a big proposal with a Client I was relying on giving me work for six months. The company didn’t get it, so neither did I.
- A Client closed down their Manchester office and offered me a different role in the business, but it wasn’t my passion so I had to turn it down.
There were more then that, as you can imagine – but the point is I got over it. New work came, new opportunity appeared.
Before I met Phil in 2016 I became very ill with Chronic pain. My back was so bad I could hardly sleep or sit, and it got to the point I was hobbling around Manchester with a walking stick. At one point I was on 30 painkillers a day and had to leave a job as I was struggling to get to the office and sit on a chair everyday.
Being self employed and with no kids I managed to work my schedule around this. Spending hundreds of pounds (maybe more) of my own money on weekly physiotherapy sessions, just so I could keep working was my only option.
I was so close to ‘sorting my life out’ but my body had other plans. I had to slow down, listen to my body and start looking after myself.
After a very long eight months I came off my medication, stopped having to use my stick so frequently and learnt to live at a slower pace.
What I learnt with all these? Trust Yourself: More exercise, more sleep and better food.
This put my ‘Travel the World’ plans back by over a year, but didn’t stop it being my plan.
It’s not about being rich and buying things.
After becoming debt free, I didn’t want to buy a house, or a car. I wanted the smallest amount of my money (and time) to tie me to the UK. I wanted to TRAVEL. (I mentioned that already right?).
I found that being relatively sensible with my money for just over a year, I had saved enough to travel and explore the world. I spent a few months creating systems and planning with Kate on how we could make it work. We set the date.
Everything I own fits into a 45l backpack and a day rucksack. When you are moving every few days you don’t want to be carrying much more. It pretty much rules out any shopping as well, I have nowhere to put it anyway.
All I need is a roof over my head, good food and a decent wifi connection.
Happiness is the only Goal.
We all want to feel that we are important. We all want to be happy.
I want to travel the world. I want to explore the world. Not just the countries but the people in them.
In March 2017 Phil and I left the UK to travel overland through eighteen countries to reach Bhutan on an Expedition we have called ‘Road To Happiness’. You can read about that adventure here.
So that is what I am doing. I don’t think you need to do the same, or even want to do the same.
I wake up every morning, working on things I like, putting my energy into projects that excite me.
I still need to pay for things, I still need to make money. I’m currently still living on savings and hustling on the side, the journey is not over.
What I want to share with you is that I have been in a dark place. I have felt hopeless, out of my depth, alone and insignificant.
But that was not forever.
You can’t rely on a job to make you happy, or money, or things. You can only get up every day, choose to be a positive influence on this place we call home and choose yourself.
As my favourite Seth Godin Says:
“How dare you settle for less when the world has made it so easy for you to be remarkable”
Mind (Mental Health Charity)
Check some stuff I have written:
Also published on Medium.