Blogger Q&A: How I got out of debt

By Emma Lunn

Getting out of debt can be an uphill battle. Some give up altogether. Others continue the fight until they are victorious. And a few share their success stories with the world to teach those who are still struggling.

At FivePencePiece.com, blogger Lee Smallbone, 28, writes about how his failed marriage left him with £15,000 in debt -- and how he paid it all off in a year. UK.CreditCards.com asked him about his downfall and his comeback.

Uk.creditcards.com: How did you get into debt trouble?debt-free

Lee Smallbone: Essentially it was living beyond our means and gambling. I did neither, but my now ex-wife was a compulsive gambler and still liked to live the high life even when losing. Eventually, loans and credit cards were used by her to top up her lifestyle. When we split, I got left with a share of the debt.

Uk.creditcards.com: What made you realise you had a problem?

Smallbone:  When you have a really well-paid job, and even work overtime, yet still can't seem to make the bank balance come back up to £0, you know you have a problem.

Uk.creditcards.com: When was the lightbulb moment that made you realize you had to turn things around?

Smallbone: I had my head stuck in the sand throughout that relationship. When we split, I looked at my own financial situation for the first time in several years and realised that it wasn't me spending too much. It was her. Totalling up the £15,000 of debt I was left with was my lightbulb moment.

Uk.creditcards.com: What was your plan to get out of debt?

Smallbone: I set a goal date. I said to myself, "I want to be debt free by January 2010." It gave me just shy of 11 months to reach my target of paying off £15,000 of debt. It was hard. But with a goal to reach, the human psyche strives to reach it.

Uk.creditcards.com: What did and didn't work?

Smallbone: My plan involved no unnecessary spending whatsoever. In hindsight, that was totally the wrong way to go about it. I was working five times as hard as I was before, and yet not seeing any material benefit apart from the declining debt balance. You need to strike harmony between your need to reduce debt [and not going] a little mad in the process.

I still allowed myself a holiday. It was paid for in cash and didn't add to my debt balance sheet. This one decision probably saved me from being sectioned and locked away somewhere. Don't torture yourself for your debt. The debt IS your torture. Everyone needs to let their hair down occasionally. Just don't let it sabotage your overall goal. Keep it frugal.

Uk.creditcards.com: Did your experience teach you anything about using credit wisely?

Smallbone:  Definitely. It was as a result of that journey FivePencePiece.com was born. My hope was, and still is, that if I can save one person from going through what I went through, then it will all have been worth it. There's little I now don't know about personal finance, and I'm more than happy to share it.

Uk.creditcards.com: Have you ever had any relapses or setbacks?

Smallbone:  Never. I have never, since that day, carried more debt than I have had the cash reserves to pay off in full if necessary, there and then. I've made some silly decisions, sure. For example, on a whim I went out and spent £2,000 on a new MacBook Pro. I didn't need it, but it had been on my 'want' list for 30 days, so I indulged myself. I paid on my credit card for added peace of mind, and paid it off in full when the statement came through.

Uk.creditcards.com: Did you have to give up anything that you miss?

Smallbone: I gave up almost everything of note during my debt freedom journey, but now not so much. The frugal bug continues on in me, yet I also do not think anything of spending £100 on a nice meal out for two on occasion. Life is for living -- just make sure you're living it within your means.

Uk.creditcards.com: What advice would you give to people struggling with debt?

Smallbone:  Essentially everything contained in my "Dig yourself out of debt" series of posts.

But basically know what (and who) you owe, spend less than you earn, make a plan to pay off your debt and stick to it, make sure your credit report is sound, and don't be afraid to talk to your friends about your problems -- a problem shared is a problem halved.

See related: Personal finance bloggers confess their biggest money mistakes, Debt payoff strategy: Selling your stuff

Published: 16 April 2012