Becoming poor: Lesson 4 Changing attitude to debt

Homes aren’t made of money, but they may as well be!

Don’t get me wrong, I’ve often been in debt to someone in my life: my parents, car loan, credit card, or overdraft. However prior to being sectioned, this had always been attainable debt as monthly repayments were achievable and I expected to pay it off on time. As a result of being in hospital, I did not work for around six months due to the time out and not feeling capable to work normally on emerging. Then just around the time I started my own consultancy, the Coronavirus hit and I found work was slow to come in. As it happened, I also enjoyed being a stay-at-home mum for the first time and so probably did not seek new gigs as proactively as I would have normally. For the first time, I had time. A revelation since I have worked full-time since my daughter was 18 months old. Now a young teenager, I’ve found parenting is less about the practical and more about emotional support so in a way more mentally taxing. I’ve appreciated being able to help with homework, support her with friendship shifts, and discuss the wider world – we’ve even watched Prime Minister’s Questions together!

The downside; debts mounted while I was enjoying the time off and I started being chased for payment. I was also less able to negotiate concessions as I had used the prescribed payment holiday time up.

What I found during this time was that my attitude to having debt completely shifted. Rather than seeing it as a guilty secret, knowing my personal money management was a bit rubbish, I started to accept the rising creditor pile. The only way to cope mentally with financial issues is to adjust your attitude and plan according to what is actually coming in. A friend had told me a long-time ago to “pay yourself first”, and this really helped me prioritise what had to be paid for like food. Then every other debt became ‘semi-optional’. Of course they weren’t optional at all, but how else could I have approached the mounting pile of red letters?

I am lucky, I had a property I could sell and subsequently am up to date with everything. I didn’t sell at first since the property market was flat 2020 to 2021; it simply would not sell. I’m relieved I have now sold it and am financially buoyant once more. Not everyone has this option, so here’s a few things I learned along the way to help with debts.

The Benefits System: It’s only as good as your knowledge of it. I was able to claim a few things and did. However, I only knew about some of these due to the advisors provided by the hospital otherwise would not have known to claim them. I have a whole blog’s worth on the benefits system later, so please read that as and when as it was an awful experience. Mortgage relief only kicks in after 39 weeks, and that was a shock! Housing benefit does not apply if you have a mortgage. What to do, what to do. What I found out is in the subsequent blog, along with my suggestions to any government officials…

Calling your Creditors: While in the initial stages calling creditors was helpful, as I could review my monthly outgoings and make appropriate arrangements which enable me to pay at least something. They were kind, however there is a limit to the concessions they can make. The Stepchange website is helpful, particularly the budget planning tool and their advisory service is apparently good. It didn’t help me because I had rental income and that removes you from qualifying for their help. After the concession phase it becomes more difficult, particularly if your income decreases which mine did as some benefits were declared inaccessible for me and my circumstances. My tenant also moved out, so for two months I lived on £300 per month. Very challenging! I reached the point of ignoring calls and only looking at the worst of the debts… not advised, but I did put my head in the sand for a while there and I get it when people reach beyond the point of coping. It’s really at this point that I had to look clinically at my position and (without my property sale) my life circumstances would have had to massively change. I would have become dependant on family or the council house system, as rents locally are the same as my monthly mortgage payments. Fortunately I avoided this reality check, but many do not and homelessness becomes a stark possibility.

How to Live While in Strapped Circumstances: Let’s look at a £300 a month budget and what that means for a family of two. Essentially, you distil down to only exactly what you need and what you want is just crossed out! For me, this meant meal planning meticulously for the week and asking my daughter to have school meals for free every day. It meant seeing holes appear in clothes and shoes and not being able to replace them. I mended, I selected clothes simply by what was left, and ‘borrowed’ some of my daughter’s shoes as we’re the same size. It meant asking the school for help when she lost her PE shorts, and having to explain that we had no internet so she would not be doing homework until it was back on. It meant not taking up the offer of homework club, as I had no money for a bus or petrol to collect her after normal school finishing hours. It meant asking her father for a little extra maintenance money earlier than he would normally contribute. It meant that when I broke down with a puncture that I stopped a passing car to dial out on a mobile as mine was only receiving calls due to arrears> I also ask my very kind parents to arrange and pay for the recovery vehicle from Dorset as we were in Oxfordshire. It meant not buying any birthday cards or posting anything else that month. It meant only drinking water, as we ran out of coffee and fruit squash; fizzy drinks were long out of reach by then! It meant not going out socially at all. It meant cycling to the doctor’s to collect a prescription and going to the bank using pedal power too. It meant not mowing the lawn and measuring out oats for the morning porridge (wartime style rationing was kicking in by this point). It meant not paying any bills at all and dealing with creditors accordingly. It meant having to explain to friends that I could not return calls quickly or at all, unless on WhatsApp from Starbucks or the local pub Wifi (some felt offended which I found kind of strange given my situation). It really bought home how social standing and expectation is often dependant on earnings and lifestyle. Finally, and the thing that most pained me, was the need to ‘borrow‘ from my daughter for the really essential essentials. That was my lowest point in terms of self-respect and I hope never to have to borrow again.

I’m not moaning. I’m happy I’ve now moved on and that was always a possibility for me. It has made me think harder about the benefits system, tax structure, and how to create understanding between rich and poor. I hope this blog will go some way to developing that understanding at the very least, and to positively influence those with the power to create income equality. Poverty is not as simple as it seems. Becoming poor and regaining financial control is complex, tiring, and mentally devastating.

Love to all those struggling right now, Ruth x

Header photo by Kostiantyn Li on Unsplash

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