Jasmine Birtles will help with soaring costs
Growing up I was never taught, either at home or school, how to look after my money properly. We lived in Sussex and I can remember my father, a customs officer, warning me never to get into debt. But he never really explained why this would be such a bad idea or gave me advice on how to budget or save.
As I entered adulthood, meanwhile, the banks were doing all they could to encourage me to spend more than I could afford. This was the late-1990s and it felt like they were throwing free money at me, offering overdrafts and credit cards.
The mindset was very much ‘buy what you want first then pay for it later’ and I never even questioned it. I just happily took the money and thought it was the normal way to operate a bank account — to have a permanent overdraft.
I did manage to get myself on the property ladder by buying a house through a housing association shared-ownership scheme. It initially gave me a 40 per cent share of its value, and after a couple of years, I got a bigger mortgage to buy the rest.
But as a freelance journalist with an erratic income, I relied on credit cards for extra cash, running up debts of thousands of pounds doing up my first home.
I was also trying my hand as a stand-up comedian, though that was something I did more for enjoyment than financial gain.
The crunch finally came when I realised I could no longer meet the minimum payments on either of my two cards. I was now in my late-20s and my borrowing had reached a level so unmanageable that worrying about it kept me awake at night.
I’d been in denial for several months, barely glancing at my statements and simply hoping for the best whenever I went to withdraw money from the cash machine.
But the day came when I was unable to pay my bills — and that was when I finally faced up to the situation. My stomach churning, I went to the cash machine and printed off the slip that would show just how deeply into my overdraft I was living.
Back home, I pulled out all the bank and credit card statements from the various drawers I’d stuffed them into and laid them out on the living room floor.
Looking at all this paperwork, noting how much interest I was paying on what I quickly discovered amounted to a good £10,000 of debt, was eye-opening.
I realised just what a killer compound interest is, the way it quickly piles up, making your debts spiral. And I could also see where my money had been going throughout the previous couple of years — frittered away on things like meals out, new clothes and soft furnishings.
In other words, nice things to do or have, but not worth losing sleep over if the only way you have to get them is on tick. Start by eating up up the store cupboard
You can start by using up the food cupboard
Try a ‘use-it-up’ month where you finish all the food you have in tins, packets and bottles in your store cupboard — and only buy perishables to go with these.
It’s a great way of cutting food bills for a few weeks and will mean you finally get to try that Thai green curry mix you bought all those months ago!
Only buy fruit and vegetables in season as these are usually cheaper. And shop in the afternoon to make the most of discounted yellow-sticker items, which the supermarkets need to get shot of by the end of the day.
It’s surprising how much you can save doing this.AdvertisementThis lightbulb moment prompted two overriding emotions. One was sheer disbelief that a bright and well-educated Cambridge University graduate like me had such a woeful understanding of basic domestic finances — and that it had led me to this point in the first place.The other was an absolute determination to get myself out of this mess as quickly as possible, because it dawned on me that the sooner I paid everything off, the less it would cost me in the end.It was with this determination to see the situation I faced as a challenge, rather than an insurmountable problem, that meant not only did I manage to pay off my debts within a year (more of how I did this later), but I also soon started building up a healthy nest egg.My success in […]
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