I am NOT a financial adviser nor do I work in the finance industry
Tackling debt head on and taking back control
What I paid off in 2018 and beginning of 2019:
- Power Bill (University days)
- Work and Income Debt #1 (Money to pay overdue power bill)
- Work and Income Debt #2 (When I didn’t declare my income properly)
- Personal Loan
- Credit Card
Not bragging but man I was relieved that everything had been paid off. Despite the changes in living situation and income, I just managed to get through as I didn’t have any other streams of income nor did I get any assistance from anyone else (family and friends). I’ve also learned from this experience and have promised myself to not get into unnecessary debt ever again.
Looking back on how I got into the debt listed above, I hold full responsibility and don’t blame anyone else – I should’ve been more realistic, disciplined but most importantly got professional advice. Other factors included being overwhelmed personally and not having a reliable support system so I resorted to borrowing money to relieve the pressure at the time and trying to find solutions on my own. Debt (1.) could’ve been avoided had I put down all the flatmates names on the power account instead of just mine. I’ve flatted before so this hit hard for me the most. Debt (3.) was due to my poor judgment in knowing when my first pay day was and declaring hours accordingly and debt (4.) and (5.) were of last resort to relieve pressure home wise and personally.
What did I do to get out of it?
Took a long breath, drank a bit, slept, prayed and got myself together to confront and correct things.
I wrote down all the debt I owed and called the providers one by one negotiating and clarifying the following:
- How much is owed and is there interest charged on it
- Sorting out a payment plan and sticking to it
- Keeping them (providers) in the loop in case anything changes
Communication was key and as hard and embarrassing as it was speaking to a stranger over the phone about my finances, it was the only way to sort my shit out. A tough lesson but glad it helped me to confront myself, ego and pride well aside this helped me in my personal growth too.
I also sought financial help online on sorted.org.nz and in person – I went to Newtown Budgeting and Advocacy Services in Wellington (I self referred myself as they operate on a referral basis).
Discipline was important if I was to get through this, something I lacked in so this was definitely a testing time for me as I had to adapt to this skill pretty quickly because I didn’t want to let myself down.
Another key factor was time as things weren’t going to solve itself overnight. It was clear as day, stick to the plan and the goal would be achieved within the set time frame.
So after all the phone calls made it was time to do the work. I had set up automatic payments from my bank account and made sure I budgeted the rest of my money for living expenses. Patience was a virtue (I get anxious) and I had to remind myself of my why, the promise I made to myself and reflected on how much progress had been made. It was achievable, realistic and possible.
I held myself accountable, accepted what had happened, forgave myself and others to move on in life and get rid of my debt.
The goal was achieved and as of February 2019 I have no more outstanding debt. While paying off my debt this prompted me to check my credit report through all three providers here in New Zealand (Illion, Centrix and Equifax), sign up to www.creditsimple.co.nz to see my report and rating, as well as to educate myself on financial literacy. It has been hard but rewarding at the same time. I encourage anyone out there to seek help, call (or not avoid phone calls) to whoever you owe debt to and make those steps to financial freedom. Don’t let pride or ego get in the way! Knowledge is power!