Paid In Full - How we paid £53k in debt within two and a half years
On this exact day, 15th April 2021, I have achieved what has been one of the most challenging feats I have done to date. Debt is like the unwanted relative that is always at your house, and you can’t seem to get them to leave. It is the one thing that can drain so much out of you and leave you feeling lifeless.
Gbese yi ti poju means “this debt is too much”- Yoruba
After a spending spree on home improvement in September 2018, the work was done, and we took stock of our finances. When taking out credit cards, loans and overdraft, you then see the total damage, £51k+. When I grasped that figure, I nearly had a nervous breakdown because that amount matched what I earned in a year, yet I saw that amount in debt.
I don’t think debt is a bad thing, but uncontrolled use can cripple the best of us. I was on the verge of a breakdown as I couldn’t quite get over the fact that I found myself in this problem.
My wife and I had lived very prudent lives, no holidays, fancy hotel stays or extravagant spending sprees. We trooped from the day we were married and have lived very simple lives ever since. This debt extended our simple living. One of my biggest regrets is putting too much pressure on my wife and me to meet our goals when we could have spent more time balancing enjoyment versus seriousness. The debt put us in a zone where we had no balance as all of our efforts were placed on clearing a mountain in debt.
The strain and the good parts
Having significant debt puts you in a zone where enjoyment is not even a factor. I was content with just working, eating, sleeping and chilling with my wife. Our lives became brighter once our daughter came.
I found that having this amount of debt humbled me to enjoy the simple things in life. Our enjoyment was going for walks and the occasional takeaway. That was it.
I remember my friend Gbenga calling me and saying he was concerned when I explained my predicament to him. This phone call is one I will never forget as it showed that a good friend will always spot when you are putting yourself under too much pressure. He was a true encourager.
Stage 1- Identified that we had a debt problem
The first critical stage was identifying that we had much debt to pay off. This is what I will call the eureka moment. How can you fix something when you cannot see that it is broken?
I knew that £53k in debt was unsustainable, and not taking it seriously will impact everything in my life. The impacts of taking on too much debt from my perspective are:
No headroom in finances.
Issues with re-mortgaging as your income may not support you being able to pay back your income.
Increased stress and never really feeling settled.
Getting ridiculous rates when needed to refinance loans.
I had an overdraft, loans and a credit card, and they were all maxed out.
Stage 2- Structure your finances and be happy with little
After identifying that there was a problem, I went into analytical mode. I produced an excel spreadsheet that showed my day to day spends over three years. I then put together a tab when showed my minimum and additional debt repayments. I needed a cash flow as the interest rates I was paying on my overdraft and credit card was crippling, and without that cash low, I would have constantly gone over my overdraft limit.
The cash flow allowed me to control my debts and have a holistic view of my finances. It showed a start and end date, which helped in making me see the finish line.
Now that my cash flow and debt repayment plan was set in motion, the concrete to fill my debt structure would be discipline. I planned to pay the debt with the highest interest rate first and then work my way down.
Step 3- Block out the noise and stay disciplined
I had to block out all distractions so that all I saw was the goal of clearing these debts. My only permissible distractions were to be a good husband, loving dad, supportive son and brother. I didn’t have any material desires, I thoroughly enjoyed my sleep, and I thanked God daily for my family. My family helped me stay grounded and not worry about what was going on around which could derail me from my plan. I had to ditch my long term dream of buying a Porsche for the long term and settled to drive my 2005 golf like Rolls Royce.
I was locked in and thought that if I got myself in this mess, I would get myself out of it one way another. I also loved the fact that this austerity period built up great character in my wife and me. We were both happy with the simple things.
I am sure friends and family questioned why we lived the way we lived, but my answer is simple, we grafted to be free from debts.
Discipline is being able to force yourself to do something, despite how you feel, over and over again until it becomes a habit. I made extra payments to clear down my debts habitually and without fail.
In 2019 our old 2005 golf broke down, and this was devastating. The car was only worth £800 but would cost £1,200 to fix. My family and friends said I deserved to buy a new car, and I even considered getting a company car. In the end, I decided to pay £1,200 to fix the car because the cost of buying a new car or getting one through finance would far outweigh the £1.2k spent on fixing my car. Discipline won during this period even though I wanted a new car. My goal was simple; PAY DEBTS FAST before anything else.
Stage 4- I’m sorry
Getting into debt and coming out makes you into an objective machine that only responds to numbers. It pains me to think about how fixed I was on the goal yet; I was not in a mental position to be more supportive to my family. My creative juices dried up, and the people that suffered the most were my wife and daughter. I didn’t want to go out, didn’t want to spend money, I blocked my mind from creating opportunities for them to enjoy themselves. It was terrible.
If you want to embark on a similar journey, please consider the cost of debt which could mean a lot more than money. The emotional detachment, the machine-like efficiency without any emotion, and the focus, to name a few. These things sound good, but the ones that suffer are those who love you the most. To my wife and child, I am sorry for putting myself into that zone. I promise that I will learn to be more balanced when pursuing goals.
Stage 5- Celebration
So, 31 months later, and on the 15th April 2021, what we thought was impossible became possible through the grace of God, discipline and focus. I was locked onto this target of being debt-free, and not once did I take my eyes off the prize. I guess if you want something, you have to make it a part of your life. Today I drink a cold non-alcoholic drink with my wife and some baby juice for my daughter to say cheers to a splendid effort.
A quote from Wade, If your ride or die (your wife) is not riding for the cause, then you got big problems. My wife is the biggest blessing as she did not put me under any pressure whatsoever, and I owe her my life for being so understanding.
Conclusion and key lessons
If things are hard, break them down into simple chunks. If the mountain is high, imagine yourself being on the other side of that mountain. I think it is better to focus on the destination, especially when the journey is painful.
If we could pay our £53k debt, with one baby girl, mortgages, and the standard costs of living, I am sure you can also.
My family would like to extend our special thanks to Jesus Christ, our Lord and Saviour, our family, our sister Titilope and our friend Gbenga for their encouragement during the soul-wrenching debt repayment process.
Finally, with willpower and an excel spreadsheet, everything is possible.
If you want my day to day cash flow, I am happy to send it to you.