Sarah on Getting Debt Free and Debt Agreements
Can you tell me a bit about yourself, your background, what you learnt about money growing up?
I was born with a silver spoon in my mouth. My father owned multiple businesses and rental properties. When I was five my father passed away and left a lot of funds, property and other investments. My mother got poor advice and she lost everything except the house we were living in. From that time in my family it was either feast or famine.
My mother taught me to enjoy money when you had it, as it was quickly gone. I couldn’t spend it fast enough. I just remember having all the good things and then one day I wasn’t able to have those things anymore and it was difficult to understand why.
Can you tell me about what was happening in your life when you accumulated the debt?
We had a lot of fun spending the money. I was always buying what I wanted. Deep down I knew I was using credit cards to fund a life I would eventually have to pay back but I thought I had it under control.
Once I started having to use the credit cards to make every day purchases I knew things were going downhill. My partner and I were not on the same page with regard to finances. We were always at odds about money and what needed paying.
Can you talk about your debt and what it meant to you? Was there something it stopped you from doing? What was the impact?
Debt weighed on my mind every single day. You can’t do the most simple things, like buy a coffee, without thinking that it’s money you need to pay your debts. I had massive repayments every week.
I avoided supermarkets because it was the only ‘bill’ I could control. We basically could not afford to eat. We were a double income family and this was the position we were in. I felt ashamed.
I started feeling anxious when the phone rang, thinking it was a debt collector. I felt like I was juggling all these balls and if I stopped, it would all fall apart.
When did you start your journey to being debt free? What made you start?
A friend of mine had her house repossessed due to credit card debt. It really filled me with horror. This was a family who I thought had all their finances together. They lived in a house worth $500K (expensive for Hobart). Their kids went to private school and took a lot of holidays. It was all a lie. I knew I could be there also if I did not take control.
More than anything I wanted my children to learn to manage their money. I wanted to teach them how to best manage their own funds. I want my kids to become financially independent. This is extremely important to me.
I made some goals. I was going to be debt free. I was going to stop being a slave to plastic. I was going to own my own home by 50. I was going to be in a position to buy my kids some “treats”.
I did the sums – my partner and I owed approximately $60K credit card debt. At the payments I was making I was going to pay back around $180K and it would take me 23 years to get debt free. This nearly dropped me to the ground. I knew I could not do this. A Debt Agreement was the very best option for me.
Four years ago I shopped around various debt solution options. They were quite painful with masses of forms etc. I nearly didn’t go ahead with Debt Mediators however after speaking with Shannon at Debt Mediators, all the help, patience and understanding, I knew I had made the right decision.
Where there any false starts or bumps along the way?
Always, but that’s life. – Debt Mediators are soooo understanding and flexible – I would recommend them to anyone. All the staff I dealt with were amazing and sincerely wanted to help.
There will always be unforeseeable expenses that arise. AMEX or Citibank don’t care that you have to go to the dentist but Debt Mediators do and they understand. If you are open with the communication, anything can be arranged!
What’s life like now?
I feel like the weight of the world has been lifted off my shoulders. I can walk tall and know that I have sorted my finances out and learned the hard lessons. I will never ever let my finances get out of control ever again. Now I’m debt free I’m in a position to be a better – mother, wife and friend. I can have lunch with my friends and not worry about the $$$ – same with car rego, insurance. I have a fresh, improved quality of life.
My children have excellent skills managing their own money and they are both well on their way to saving for their own house and my youngest is only 19. Not one of them has a credit card. I am proud and relieved to say we have ALL learned so much from this experience. It is a blessing.
Now I’ve paid my debt agreement I am so motivated to thrash my mortgage. The thing I look forward to most is owning my own home. I’m putting all the money I was paying from the Debt Agreement into my mortgage. I have worked out that after 7 years I will own the house and that feels better than any pair of heels or handbag.
What would you like to say to someone who has debt now?
Do yourself a favour, call Debt Mediators. Your situation will not get better by merely paying the interest off the cards. You need to take control and Debt Mediators can and will help. Even if you are unsure, speak to someone who can assist you with making the decision, it will be the best decision you ever make!