I was £100,000 in debt and I couldn’t see a way out, now I owe nothing, here’s how I got out of it and you can too
A DAD who was in over £100,000 of debt has revealed how he was able to get out of it and now owes nothing to lenders.
Jay Stansfield, 43, was drowning in bills back in 2009 and has since spent the following decade paying it off.
Jay says taking steps such as switching to an interest-only mortgage, taking payment holidays while he looked for better-paid work and speaking to creditors to arrange repayment plans all helped him on the road to becoming debt-free.
He told money-saving community LatestDeals.co.uk: “It’s easy to stick your head in the sand and avoid thinking about your debt, but you’ll feel so much better if you just pick up the phone and talk to creditors.
“They’re not monsters, they’re people and there to help at the end of the day.
“They want to keep you as their customer, so they’ll bend over backwards to help you as much as possible and they deal with this stuff on a daily basis.
“I used to be scared of brown letters arriving in the post, but now I’m in control of my finances.”
Jay says that the first step to gaining control was working out exactly what he was spending and when.
He explains: “The main change I made which helped me to understand my expenditure was setting up a spreadsheet.
“You don’t need any kind of fancy app or software to get the job done. There are loads of templates online you can use, but honestly I just find it’s best to keep it simple.
“If you want to draw up your own financial spreadsheet, I recommend setting up columns indicating what bills you have, when they come out, the amount of the bill and whether it’s been paid or not.
“This is your Outgoing money. Then add a section for Incoming money. Add in the money you receive from your salary, benefits or anything else each week or month, and also add in a cell with how much you have in your bank right now.
“Add up the totals of your Outgoing and Incoming columns to check if the numbers add up. If they don’t, see where you can make some cutbacks.
“Check in regularly over the course of the month to see how your spending is going and if your budget is on track. If unexpected costs have come up, plan accordingly.
“If you don’t have an overview of the money which is entering and leaving your account, there’s no way you’ll be able to get control of your money.
“They say knowledge is power, so check through your bank statements, make sure you know what’s going on and cancel any direct debits you aren’t using anymore.”
As well as eradicating his debt, Jay also worked on building up his savings.
“To get started with savings, treat this portion of your finances as a bill. Add it in, next to your rent, water, electricity and grocery bills,” he says.
“Savings are just as important as your monthly and weekly bills, as you want to have funds available in case of emergencies. You never know when your car might break down or the roof might start leaking.
“If you treat savings as a bill, then what you’re doing psychologically is disciplining yourself to add it into your budget. I save a minimum of £50 a month for emergencies.”
When it comes to repaying debt, Jay recommends working in order of your priorities.
“If you’ve got a lot of debt to various creditors, it’s important to prioritise the ones which are most important first,” he says.
“As a general rule of thumb, make sure you can pay for your home, utilities and food first.
“Then tackle the high-interest credit cards, any loans and council tax. Set up payment plans with all of these companies so they know what you’re doing to tackle the arrears.
“If you need any assistance with managing a number of creditors, you don’t know which to tackle first or how much of your budget to allocate to various debtors, talking to organisations such as Citizens Advice and StepChange can help greatly.”
Jay recommends three steps people can take right now to begin taking control of their finances.
Speak out. Speak to friends and family and most importantly, people you trust.
Don’t hide it. Be open and honest about it and the most important step is to realise it’s all solvable.
Speak to the companies you owe money to. Ask them for solutions. You’ll be glad you picked up the phone and took the first step towards banishing your financial worries.’