I had £40k worth of debt and would have been repaying it for the rest of my life – these tricks got me back in black
EVERYONE has struggled with their finances but what would do if you owed the bank tens of thousands of pounds?
That’s the terrifying predicament one woman found herself in and now, she’s helping others become debt-free.
Like many students, Maddy Alexander-Grout was woeful unprepared when she started at De Montfort University in early noughties.
Having moved across the country for Media Studies degree, she threw herself into campus life and became a presenter at the university radio.
With her goals of becoming a radio presenter in touching distance, the then twenty-something had a bright future ahead of her – until her debts began to mount up.
Ironically, she hadn’t set out to get multiple credit cards but with so many banks offering money off high street shops, including New Look, it proved too tempting.
“There wasn’t really any thought process that went into it,” she recalled, adding that she signed up four credit cards and several personal loans before leaving the freshers’ fair.
“I just planned to stick them in a draw and forget about them,” She confessed.
As her maintenance loan barely cover the cost of rent though, Maddy found it increasingly hard to avoid using them.
What had started out as a necessity turned into regular takeaways, days spent shopping and coffee with friends over the next few years.
Having been diagnosed with ADHD, it felt like a necessity to spend as her brains screamed for the same rush of dopamine and keep her with her friends..
With little knowledge of how credit worked, Maddy found herself avoiding and no tackling her finances began to take a toll on her mental health.
Fearing that bailiffs would come to collect the £40,000 she owed, the content creator moved home three time whilst continuing to default on her debt.
“I naively thought they wouldn’t find me,” she admitted revealing that things came to ahead after moving in with her then-boyfriend parents.
Upon discovering how much she owed, they grew increasingly concern about how Maddy’s bad credit could affect their own home with the then-twentysomething moving back in with her family.
Whilst most young people might view this as the worst case scenario, the finance expert now says it stopped her from falling further into debt.
“My mum did the best thing a parent can do, she didn’t bail me,” she explained, recalling how her loved ones had urged her to seek support from the Citizens’ Advice Bureau.
Here she learnt about debt management methods, such as 50/30/20 rule which divides your income into chunks allocated for bills, essentials and paying off your debts.
She openly admits that if she’d stuck to this method, she would have been repaying her debt for the ‘rest of her life’.
Eager to pay off her multiple credit cards and loan, she committed to an extremely tight budget with 40 per cent of her wages going on her debt.
Though it was a challenge, she quickly adjusted with no spend days, £15 weekly food shops and browsing charity shops for clothes.
Living frugally for the next six years, the content creator slowly began to repair her relationship with money – but there was one final test for Maddy.
In 2012, a fire ripped through her block of flats late at night with Maddy escaping on the street with other residents.
Caused by a group of students leaving disposable BBQ unattended on the roof, the blaze and water damage from fire crews left her with just the nightie she’d worn.
With her once overflowing wardrobe destroyed had gone, which was a life changing experience for the content creator, who said: “I realized I wasn’t materialistic.”
In fact, the only item she still misses is her photographs of university – with Maddy only having one granny photo from social media.
Thankfully, she’d had contents insurance and the £15,000 payment helped her clear the remaining debt – leaving her with just £1000 to rebuild her life.
“There’s something funny about getting into debt as a student and then having students get you out of debt,” she joked, adding that she used charity shops to furnish her new flat.
Two decades on from her financial struggles, the now-mum-of-two is helping others get to grips with their finances.
The entrepreneur has launched the Mad About Money Tiktok channel and app – a social media platform that helps people better understand their money.
As well as resources, discounts and a marketplace, the app has been built those with ADHD, autism and other neuro-a-typical conditions truly understand their money.
Next month, she will also release a children’s book called ‘That’s My Money’, which teaches little ones the fundamentals of finances.
Speaking about projects, she said: “Its about what might seem really obvious to some, simple for someone else to understand.”
Maddy's top tips for surviving on a small budget
The super mum has got some hard and fast rules when it comes to budgeting
- 50/40/10 rule – similar to other methods, this technique helps you to clear your debts faster by devoting a large chunk of your budget. This is essential as often debt will come with high interest
- No spend days – once a week, Maddy will have a no spend day and look through her home for items the family no longer needs. Often, this quick task will help her recoup what she’s spent over the weekend.
- Always read the small print – understanding the terms and conditions is key to getting to grips with your finances. Check how much you will repay, how often and whether there are any late fees
- Using furniture charity shops – whilst you might be used to buying clothes, many charities now have furniture shops were you can find preloved items at a fraction of the cost. This helped Maddy refurnish her home on just £1000
- Snowball your debt – always start by paying off the smallest debt first, once this is paid off you can add any extra income to your next debt and repeat the process.