Ellen*, 32, based in Carmarthenshire, Wales, is a project coordinator who earns £33k a year.
In her late teens and early twenties, when her friends were away at university and starting new lives, Ellen felt directionless. While living at home with her mum, she took on a string of “random jobs” which were unfulfilling and didn’t pay enough to enable her to move out.
In search of direction and fun, Ellen turned to her credit card. At first, takeaways and cinema tickets were enough to look forward to. But by age 23, she was taking luxury holidays to the US, Europe, Mauritius, Turkey and more, and putting them on her card.
Eventually, Ellen was in around £18k worth of debt, spread across multiple credit cards, loans and store cards, until she decided to turn her life around just before the pandemic.
Here, Ellen shares her story of emotional spending, getting into debt and climbing her way out of it.
“Growing up, I had everything I wanted”
My mum was a single mum who always went out of her way to make sure I had what everyone else had, most of the time putting it on her credit card.
She always made sure I went on all the school trips. I was entitled to free school meals, but she didn't want me to be different so paid for my lunches. With the help of my nan and uncle, I had PlayStations, roller skates, everything I could ever want.
I think this led me to always feel like I can get whatever I want. I’ve since found out my mum was in a lot of debt.
“I got my first credit card at 18”
I remember the day I got my first credit card. I was working, but wasn't on very good money. I wanted to go to Alton Towers with my then-boyfriend and they had a deal that if you booked by a certain date, you’d get a discount.
But it was before payday, so I went to the bank and got a credit card. It was all downhill from there.
“I found the start of my adult life difficult. I had no direction and didn’t know what I wanted to do”
A lot of my friends knew what they wanted to do with their careers and had moved away to university and started new lives. I was never keen on going to university and so ended up in random jobs, like working in a call centre and then telesales.
I felt my life wasn’t going anywhere. I was earning bad money and the cost of living was crazy, so I couldn’t afford to move out from living with my mum. I spent my free time spending any money I had.
“I started by only putting ‘small’ things on my credit card, thinking they wouldn't add up”
Things like takeaways and cinema tickets. Often friends would say they couldn't afford to do something, like going to Thorpe Park or a weekend away, and I’d pay for them on my credit card.
Looking back, I couldn't afford it any more than them, but for some reason I couldn't say no.
“I was everyone’s irresponsible friend who they could always do fun stuff with”
I'd be eating out in restaurants five nights a week, but they’d only be doing it once a week and being sensible the rest of the time.
I felt like I had no direction at the time, so I wanted to do fun stuff constantly for it to seem less pointless.
Before I knew it, I was in a huge amount of debt because I was spending more than I was earning each month.
“As I got older, I started going on a lot of holidays, with the attitude of 'you only live once'”
When I was 23, my then-boyfriend had just finished university so wasn't earning any money. I wasn't on great money either, but we went on a two-week holiday to the US, spending time in New York, Orlando and Vegas. We did everything we wanted while we were there, including a helicopter trip through the Grand Canyon and staying in five star hotels.
I went on a lot of holidays during this time – weekends in Europe with friends, Mauritius, Turkey, the US twice, Croatia.
I remember people saying they wished they could go on all of the holidays I managed to go on. They must have thought I had a lot more money than I did.
“I thought there was no point working endless hours in jobs I didn’t like if I couldn’t enjoy my life”
Looking back, I wasn't enjoying my work, didn't have any idea what I wanted to do, and was desperate for it to mean something and for there to be more to life.
Had I not gone on those holidays, without anything else to work towards I’d have been miserable. I believe it’s important in life to feel like you’re moving forward, or else everything seems stagnant. Knowing I had fun stuff to look forward to made working in a boring job easier.
In some ways, my spending was a form of emotional regulation. I’ve always needed to have something to look forward to, even now it’s something I find difficult.
“In the end I was in £18k worth of debt, spread across multiple credit cards, loans and store cards”
I’d mentally block out the debt and would be quite blasé about it. When I’d tell people I was in that much debt, I’d see a look of panic cross their face, but I fooled myself into thinking it wasn’t bad as long as I could make the monthly payments.
But when I’d occasionally look at how much I owed, I’d panic seeing that I was paying out all of this money and not even making a dent in it because of the interest!
I’d have sleepless nights worrying about it, so I just tried to forget about it and get on with it. Thinking back now, it makes my stomach sink.
“I went through phases of being serious about paying it off, but they wouldn’t stick”
I’d take out loans, put together a proper plan and cut back on spending, but something would always come up and it would all get a bit boring. Or paying it all off felt so far away that it seemed pointless.
One year it came to a head. I was panicking because the balance transfers I was being offered were too small, meaning I’d spread the debt across about five credit cards which became unmanageable.
I was very upset and had to tell my mum, who was incredibly unhappy. She took a loan out in her name to consolidate it for me, and then I started paying her off.
As lovely a gesture as this was, in some ways it was too easy and too painless, so I did it all again.
“When my nan died and left me money, part of me wanted to go on an amazing holiday to ‘remember her’”
In 2018 my nan sadly died. We were incredibly close and she left me around £10k in her will, which I didn't receive until late 2019.
Part of me wanted to put the money to a happy use, go on an amazing holiday, treat myself, do something memorable to “remember her”. But my sensible boyfriend told me I needed to pay it off of my credit cards.
At the time it seemed like such a waste of so much money, the sort of money I'd never had before and will never get again.
“The debt was easy for me to ignore a lot of the time, so to lose my nan’s £10k and see all of that money leave my account was a huge wake up call”
Shortly after, lockdown happened, which was obviously terrible but for me it helped financially. I was getting paid the same, but wasn't able to go anywhere and spend any money.
I've never been one for spending on material things, it was always experiences, and in lockdown it just wasn't possible, so I actually managed to save.
I also had to dip into my Help to Buy ISA to repay the debt. I was sad about this, as you can only put £200 in it each month and I’d been saving for years.
But having paid off the debt is an amazing feeling, one I haven’t felt since before I was 18.
“I now enjoy budgeting for the month and thinking of all the activities I have to look forward to and can actually afford”
I can do things without having a sinking feeling of how I’m going to pay it off. With Monzo I can easily see what’s going out of my account each month, which lets me see how much money I have left over. Pots help with this too, because I can still try and save some, but it's there if I need it.
Being able to search for transactions helps you to identify negative spending habits. I was shocked to find out I’d spent £1,132 at the local coffee shop over the last two years, so we invested in a coffee machine instead!
I have a friend who is a few years younger than me who often jokes 'it's going on the card'. I had a fairly serious chat with her recently and told her my story, in the hope that she won't go down the same path I did.
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*We’ve changed her name.