My name is Hayley Constantine, and I am in debt.
That might seem like a dramatic sentence to say, but lets face it – most of us have some sort of debt. It could be your overdraft that you occasionally drift into, the credit card you have “for emergencies” (of course, an emergency varies from person to person – a new dress might be vitally important to some people) and with so many of us going to university these days, its quite likely you have a bit of a student loan.
Most of the time, debt is easy to control. OK, so you might not understand what APR means, or exactly how much you have outstanding on that credit card without checking your balance, but keeping on top of the payments is reasonably easy, right?
Well, no. The real problem is when you have various forms of debt, all due on different days, all with different rates, and suddenly it seems to be starting to build up. A payment is missed, and then you get more fees to remind you to pay next time.
This is the situation I find myself in at the moment. Before I moved to Bristol, I took out loans to help pay for things like furniture, and to cover the month or so I expected to be out of work. I expected that I would be back in work quite quickly, and could easily cover a slightly larger monthly payment.
Of course, it didn’t work out like that. I was out of work for 5 months, which as well as being incredibly boring, meant that my money soon dwindled down. I struggled to find even the lowest paid temping jobs (because of course, moving at the start of summer means that all those students are looking for work at the same time) I ended up with more credit cards, another overdraft, all getting eaten away with the cost of just being somewhere.
There are two things you can do at this point. You can sit down, figure out what your budget is, work out how to repay everything, and be happy. Or you can bury your head in the sand, and pay off debts in a “fire fighting” way – you pay the minimum payments, but don’t really begin to pay off the actual debt.
Guess which I did. I’m embarrassed to say it as a finance graduate, but I had no idea how to set my own budgets. Setting a budget for a company, yeah, I can do that. Costing up projects – let me at a spreadsheet and I’ll knock something together. Tell me to work out how much I need to be paying off my debts each week/month? Couldn’t do it. There isn’t really a class at school or uni where you’re sat down and told “Right, this is how it works, this is how to work out how much you have to spend”.
Things got to a point where I have been scared to open certain envelopes because of what I think it contains. But I had had enough of not knowing what to do, and admitted the situation to the Wife. After a bit of scolding (and if you know Louise, you know that “a bit” is not actually the right thing to say. A complete bollocking, yeah, thats closer) we had worked out exactly what I owed, and whilst its nowhere near starting to pay things off, I feel a lot more positive about the situation.
My main account at the moment is with Natwest who are currently advertising their personal finance reviews. I’d been a bit scared to go along to one, but after discussing things with Louise, I realised that it would be a good idea to see what someone who deals with this sort of thing would say. Seriously, what a help that was! We went through the figures, and was told that although its not a great situation I’m in at the moment, it could be a hell of a lot worse. (Also, did you know that as well as the usual credit ratings that all banks have, your own bank has its own judgement on you? I was surprised to find out that Natwest thought I wasn’t all bad!)
I hope that by admitting all of this to you guys that I will be able to become more financially stable in the upcoming months (by saying something publicly, I can’t really back down!) but also that some of you realise that you’re not alone. Money is not something we normally talk about openly, which can make the problem seem a lot worse than it is, but its true about the old saying – A problem shared is a problem halved.