How I went from 10,000 in debt to owning my own house in less than 6 years. 

Five years ago the idea of receiving keys to my own house was a distant pipe dream, something that I simply just didn’t think was possible. However, after some severe grinding over the last few years, support from others, and an amazing partner, we have turned what seemed impossible to the achieved.

Now we have picked up the keys to our own house and no longer at risk of having the family uprooted at a moments notice, or the price being increased. It is not everyones dream but it became mine!  Each month our mortgage payment takes us one step closer to owning it outright as opposed to paying off somebody else’s mortgage. 

It was 2017 and the birth of my second child, taking this beautiful baby girl into our own home. Sitting there with my 2 children whilst their mum is upstairs from an horrific ordeal where I thought I was going to lose everything. Looking around our cosy 2 bedroom house that we were renting. The kids were going to have to share their own room and I was ok with these. We would get somewhere bigger when we needed to. But something in that moment made me realise that this is not the life I wanted for these two. I wanted them to have their own bedrooms in our own house. 

I had thought of this before, but sitting in the pool of debt, I just considered that to be my life. Sure I had been a fool, I wasn’t denying that, but my family deserved better. So that was the moment where I decided I was going to turn things around, even if I had no idea how. So I looked at my 2 year old son and said in 8 years, by the time you need your own space, we will have our own house. 

This was the biggest step by far, setting a goal, a simple goal to own our own house in 8 years, by 2025. This was going to be my focus  and I was determined to make it happen. 

How I got myself into owing so much money?

I could go into a whole load of reasons as to why I got myself into debt, trying to validate it somehow. But ultimately I should have been smarter with my money. By trying to keep up with other people, or please others, I put things on credit with the anticipation I would be able to pay it off in the future. I didn’t, it got worse. I at one point had a path to getting debt free in 2 years based on my then salary and living situation. But then we had the surprise joy of being pregnant with our first in 2015.

Something I would never change at all in the world. One of the happiest days of my life finding out, and many more after. But I went into ‘man mode’ I couldn’t own up to my debt. In fact I took out more to get a car (a cheap car but still) and other things that small people need. As well as needing a bigger house, furnishing it and getting all the supplies we needed. We were frugal, buying second hand, taking hand me downs, but it was still expensive. 

For 2 years from that moment I muddled on, until the interest was becoming absurd, the number kept getting higher not lower. So I realised I had to do something about it.

I still hadn’t told a soul up to this point, nobody knew how bad my situation was. Maybe if I had told somebody I would have received sound advice. Over £10,000 in debt now and struggling to make ends meet on the repayments. I called the debtors and the kind men and women on the other end of the phone, were the first people that I told about my financial situation, making these phone calls on my lunch break in my car. 

I did the same thing four different times, going through income and expenditure, and what I could afford. It was minimal £25-50 a month for each four creditors. 

My debt would be frozen so no further interest accrued. But I would ‘default’ on these loans and credit cards. This meant that this would be reflected on my credit score, for the next 6 years. I was made aware that it would make it difficult to gain credit again. But I did not care, I could breathe. I could afford my monthly repayments, and no matter what I did things would now get better month by month, not worse. 

At this point I did not give a damn about credit. I was relieved that I wouldn’t be able to get anymore, so that in my own words. ‘I couldn’t fuck anything else up’. 

I am still not sure whether I did the right thing and by jolly this made it hard getting credit from then on. But I had owned up to it and was dealing with it.

If you are reading this and in a similar boat, before you do what I did speak to some professionals. I should have spoken to somebody like step change. 

Here is their link

The change in mindset. 

Once this initial step was taken I could deal with it, I sat down and told my partner everything. Apologised that hadn’t said earlier, she took it amazingly well and we moved on well together.

With the minimal repayments set up, we could still live comfortably, and I didn’t want that to change, I didn’t want the family to suffer, of course we would not go crazy, but we would still be able to go on holiday, live life with those small luxuries that keep you going. 

There was a few different things that I needed to do to start turning the tide. But for years I had been happy paying minimum amounts, now I was intent on paying things off as quickly as possible and then start saving as well. That evening on my own, I made a brief plan on a spreadsheet, of how long the payments would take to pay off all of the debt and shockingly it would take about 15 years. So I set a target of saving £25,000 and paying off all of this debt in 8 years so by 2025 and my eldest’s 10th birthday. So they could have their own room in their own house. 

It was this target and motivation that throughout everything I did would keep me going, there is immense power in having a goal.

Budgeting 

The first step to getting finances under control was a budget. Something as simple as working out your income and expenditure can really put things into perspective. Breaking down all the outgoings, you can see what can lower on the spending front. Following some budget rules can help you improve your financial situation just like these rules on money saving expert.

For me, I was spending a lot of money on lunches at work, subscriptions that could be cut. I really tried to trim back and narrow down the spending as much as possible. I worked out how much had as extra disposable income after all the bills were paid on my basic salary, and set aside some money for luxuries and expenses as didn’t want to scrimp too much, as doing so can really make it very difficult to maintain the budget. 

I then made sure that I planned any extra to go into my savings accounts, with the intention of storing some money up and then paying off the outstanding creditors as soon as possible. 

But after all of the bills and expenditure, this didn’t leave a whole lot extra left to be able to pay things off, so it was clear that budgeting with what I had would not be enough, I would have to earn more money. 

Hard work and grinding side hustles 

Taking a second job was not really feasible and nor did I want to miss out on the kids growing up by working every hour. So it was clear that the best way moving forward to earn some extra money was from side hustles. 

It was clear I needed to earn extra money, budgeting was not enough if I was going to hit my targets. So although I had been doing things to earn extra money online for some time. This was when I took it seriously. In any spare time I had at home, which due to myself not sleeping much at all was quite a lot. I would be grinding online to earn extra money. 

At the time it was surveys that was my biggest big grind, sitting in front of the computer doing hours upon hours of surveys, mindlessly clicking to earn as many points on a variety of different survey sites. Life Points, Swagbucks and Qmee. My main three. I was also looking at other ways of making extra money. One of the most lucrative was betting sign up offers, which could get a fair bit of cash through from signing up to them. Having a guaranteed profit, and then maybe getting lucky on the games to earn even more. But ensuring was never gambling. 

This would likely have been a good time to get into matched betting, but was something that passed me by. Having now utilised many of the opening offers already probably wouldn’t be worth it. 

I was always on the lookout for other ways of making extra money online. Even selling FIFA ultimate team coins online, a method that utilised over a thousand pounds.

The more time that went on, the more I tried to refine the process, focusing on the best value for my time. In the more recent years, focusing on free cashback and sign up offers. Also focusing on other ways to earn online on top of surveys. User Testing and Market research were good earners. 

As well as this, any time, I worked any extra weekends or overtime, any extra money would go directly to paying the debt off.

The more time that passed my wages grew, but I was able to keep the costs down to the same amount, so with each pay rise, I would have more money to be able to save, with the last couple of years. £500 from each pay check minimum would go to paying things off. This before any extra money that would be earned.  

Saving with a LISA

After a few years, I had paid off good chunks of the debt, paying in extra bitesize instalments whenever I could. But I hadn’t any savings yet. So in 2020, I started paying into a LISA (What is a LISA?), the plan to get 4,000 in for the next 2 years at the same time as paying everything off. The LISA is an excellent saving option for buying a house as the HMRC give you a bonus of 25% if you use the money for either a first house purchase or a pension. So this would be £2,000 free over the next 2 years. 

By 2022 with my 2 years of maxing out a LISA, and my partner saving up her own over 2 years to get to £4,000 saved. We had £15,000 in savings and I had paid off all of my debt. In full. 

The final push a big help from family 

The goal was then in sight, however just at this time, our landlords visited and said that our rent would be increased, this was a shame, as this would really eat into our abilities to get that last 10k. We had a dilemma, it was at this point, that my parents offered to take us in for 6 months so that we could save for the house. 

This I will be honest was something was very reluctant to do and that did to a degree damage my own pride. But it was wholly the logical thing to do and something that was so thankful for. 

It was clear with then the steep rise in inflation prices and interest rates, that it would have become an impossibility to save much more with current earnings. 

It is a shame that this has to be the way for many. But I have known many people that have bought recently and that have done similar things in order to save up in a short period of time. It just goes to show just how hard it is to save that deposit. The scary thing as well looking at the increase in prices recently of everything that it becomes increasingly more difficult. 

For this I will be eternally grateful that had this opportunity, I likely would have still met our target of 2025. In spite of increases. However the living situation at the time, was becoming more and more difficult. That renting a 3 bedroom house was becoming the likely option. Had this been done it would have made it even more difficult to buy. 

Completion and lessons for the future

April 2023 and 2 years earlier than originally planned we walked into a house that we had bought our self, with a 10% deposit. It was ours and we had made it. 

I am proud of what we achieved in this time still, however am very conscious that I made my familys journey to home ownership a more difficult one with the financial situation that I found myself in. It was a brutal lesson, but one that motivated me so greatly to put right. I think that has now been done,

I consider the journey an important one in my life, it has taught me a lot of lessons, has made me incredibly hungry and that hunger is still rife, so now I consider this  just one step further to my ultimate goals of becoming truly financially independent and leaving my 9-5 job. The target is by the age of 40 only 6 years away. Time will tell whether that is achievable.