I still remember the moment it really hit me that I was close to £30,000 in debt. Not just a little overdraft or a cheeky credit card splurge. This was full-blown, soul-sucking, anxiety-inducing debt. And while I briefly considered selling all my furniture (and maybe my dignity), I decided instead to do something radical: fix my finances without losing myself along the way.
I won’t pretend I devised this five-step plan in advance of clearing the debt. Rather I took it step by step and the later identified the most important steps on that journey. Here’s how I did it – and how you can too.
Step 1: Face the financial [spread]sheet music
Before I could fix anything, I had to know what I was dealing with. I sat down with a strong coffee, a spreadsheet, and a mild sense of dread. I listed:
- Every debt, including credit cards, loans, and overdrafts
- Interest rates, minimum payments, and forecasted completion dates
- Regular income
- Essential expenses, such as bills, fuel, and groceries
- Non-essential spend, including subscriptions, fast food, and luxuries
That last bullet point was the hardest and most shocking. But this wasn’t about shame; it was about clarity. Peter Drucker famously said “you can’t improve what you don’t measure”. Similarly:
You can’t change what you won’t confront.
My affinity for spreadsheets and data certainly came in handy here. While it’s certainly possible to get a good understanding of your finances without a good spreadsheet, or even just on pen and paper, it will certainly take you much longer and potentially be less accurate.
If you have any problems with this step, do give me a shout and I’ll happy support with a helpful spreadsheet to aid your analysis. I’ll look to make a downloadable resource for this step in due course!
Step 2: Build a debt repayment plan that doesn’t suck
I knew it wasn’t enough to just “cut back” on non-essentials. Not only was sitting on a massive pile of debt, I had uncovered that I was still spending more than I was earning. That debt wasn’t just standing still; it was growing.
I needed a strong plan that I could be confident in. One with which I could forecast a clear journey. I needed to know exactly what I could do and how long it would take. However, I didn’t want a plan that felt like punishment. I wanted something sustainable, empowering, and, most of all, motivating.
So I created a Debt Demolition Plan:
- Prioritised high-interest debts first (the avalanche method)
- Set realistic but meaningful monthly repayment goals
- Created a “no-judgement” budget that allowed for fun
I also made a rule: any money saved from cutting back went straight to debt, not into the “oops I spent it” abyss.
Step 3: Automate, allocate, and avoid temptation
I automated debt payments the same way I automate my morning routine: consistently and without emotion.
- Direct debits for minimums
- Manual transfers for extra payments to the exact amount of savings and cutbacks
- Separate accounts for bills and debt (so I couldn’t “accidentally” spend)
I treated debt repayment like a non-negotiable expense, because that’s exactly what it was.
Step 4: Track progress… and celebrate it
Every month, I updated my spreadsheet and watched the numbers shrink. It was a little like watching paint dry, but with more emotional reward. I even took up bullet journaling at this stage of the process. This included a “debt ladder” where I coloured in a new rung for ever £500 I cleared, visualising myself climbing out of debt.
I would set myself spend targets throughout the week and allocated a small amount of budget to a weekend treat whenever I stuck to it.
I also celebrated the bigger milestones:
- First £1k paid off? New journal and pens
- Halfway there? A meal out with a bottle of fizz
- £20k down? Booked a short overnight hotel escape
Rewards kept me going – not guilt.
Step 5: Hold yourself to account, and allow others to support you
I started with my spreadsheets and journals and found that documenting my journey helped me stay on track. It was a key part in holding myself to account and motivating me to keep going.
However, I learned I was able to double that motivation when I wasn’t just depending on myself and my own processes. Those worked great on good days, but on weaker days, more stressful days, it was much more difficult to always make the right choices.
The best decision I made was in sharing my journey with close friends and family. I was fully transparent about the scale of the debt and the time it would take to fix. I put shame and embarrassment on the shelf. In sharing the scale of the problem with loved ones, I was also able to share the celebrations when I’d made progress. This made progress even more rewarding, and became a cycle of positivity – do good, feel good.
Still, I wasn’t perfect and I did make mistakes. It was important that I also forgave myself for slip-ups. Progress isn’t always linear, and perfection is a myth invented by social media.
Final Thoughts: You don’t have to sacrifice your soul to get out of debt
Paying off £30k of debt wasn’t easy. It took time, discipline, and a lot of self-reflection. But I did it without selling my sofa, my joy, or my identity.
If you’re staring down your own debt mountain, know this: you’re not alone. You’re not broken. And you’re absolutely capable of climbing out – with your soul (and furniture) intact.
So that’s my financial recovery story in a nutshell. I could probably write a book on the detail though!
If you have any top tips to share on overcoming debt, let me know in the comments!