Month: December 2017

This guest post is written by a blogger under the alias Erin Reki, here is her story:

How I got into debt

Back in 2006, when I first went to university I had store cards and credit cards thrown at me like confetti.  My bank was also more than happy to provide me with a ridiculously large overdraft.  I’d never seen this amount of cash before.  Coupled with student loans and bursaries I felt like I’d just won the lottery!  And I know I’m not alone.

Many other people I know had the same experience.  We were young, influential and wanted to be cool.  We spent ridiculous amounts on club nights and clothes, not to mention books and trips.  Tattoos and macbooks.  Lattes and student housing.  The list goes on.

Some of us were frugal, some were sensible having been taught a little about money.  I had been taught very little about money.  I moved out when I was 16 years old and struggled with what little money I had to pay rent.  I’ll be honest and say I never really considered university an option, I wanted to travel the world.  But when a college tutor encouraged me to apply, I ended up going.

When I got handed my “free money” and credit cards my wanderlust had not waivered.  I used it to go on my first solo trip to the Canary Islands.  Then another holiday (also to the Canary islands) and then another.  You get the idea.

Would I recommend it?  No.  Not at all.

Do I regret it?  Not really, no.

I did have a fantastic time and in the end I learnt a few valuable lessons.

When I realised enough was enough

After a couple of years of spending money I didn’t have, I realised I was at my limits.  The bank wouldn’t lend me anymore.  I already owed them £6,000 on two overdrafts.  My credit card debt was scattered everywhere.  I cannot remember how many cards I had, but I had more than four.  All maxed out.  With a few thousands here and there.  I couldn’t tell you how much I owed at my worst.  I think I’ve erased that memory, it was that bad.

I was in ridiculous debt and still suffering from the travel bug.  I finally did what people should do when faced with debt.  Got my head out of the sand and faced it head on.

Instead of pushing my bank letters and statement summaries under the rug, I made the difficult phone calls and arranged manageable repayments.  I wanted to go traveling again but this time on my own money.

The repayments were less than minimum and it looked like I’d be in debt forever, but in reality it gave me a chance to improve my situation and increase my income with a better paying job or buy selling a few things off.  Minimalism is where its at!

The next step in my travel with my debt plan

I strongly recommend asking for financial help, even if you’re just asking google.  Read and apply what you learn.  I did whatever I could to increase my income and limit my spending and outgoing.  I even stopped drinking for a short while and I can’t remember the last time I went to the cinema.  It’s all about priorities.

I understand that for some people they may want to travel but have other financial obligations.  Like if they are carers for other people.  That is their priority and is obviously going to be more important.  For me though I have nobody relying on me.  It was time for my escape.

I saved up some cash from limiting my spending and taking on an extra part time job.  Instead of giving it all to the credit cards though, what I did was work out how many months it would cover my minimum payments for.  For example £1,000 of savings covered four months of minimum payments of £200 a month with £200 left over to live on.

I had been looking at STA Travel brochures for quite a while and needed out.  If you can’t find a three month holiday for under £200, do what I did.  Volunteer or apply for a job!  I applied for a few things and eventually got accepted into a three month government funded programme to Nepal!  My accommodation and food was payed for and my £200 lasted me the full three months!  Yes, I had to work but I met some amazing people (my partner!).  Also I had some amazing experiences and met lifelong friends.  All whilst my debts were still ticking over in the background.

Round two

When I got back to the UK it was back to work and I did the same again.  Saved up enough to cover a certain amount of minimum payments and some more to go on the next adventure!

After a year in South East Asia, I thought my wanderlust would be quenched.  Nope.  My debt wasn’t going down as considerably or as quickly as one would like.  But when your partying with loads of lovely people on a beach island off of Cambodia you don’t seem to care as much.

Back to the UK again and playing the same game.  This time round I’d finished university and was in full time work with another part time job on the side.  Don’t be afraid of hard work and remember no job is beneath anyone.  We stayed away from the travel plans for a while – two years this time!  I got out of most of my debt.  Then we decided to run away to Australia.  I saved up enough to cover some minimum repayments again and some money to travel with and we were off!

Third times a charm

Only this time we went on a Working Holiday Visa.  We were worried we wouldn’t find work, spend all our cash and have to come home to the UK, but after three days we found farm work.  After three months we had earnt so much I payed off the remainder of my debt.  DEBT FREE FINALLY!!  This was December 2015.  Since then we’ve been working in Australian farms and will do this until December 2017, when we move to New Zealand (again on a Working Holiday Visa).  We’ve both managed to save up more than the average UK mortgage deposit for a house.  Not that we want one.

We’re in a better financial situation now than we’ve ever been.  We had a three month holiday last year, two months traveling Australia and one in Bali.  Then we had a three month holiday this year, where we visited friends and family in England, Northern Ireland, Spain, Italy and the Netherlands!

The Australian Dollar is superior to the Great British Pound.  So is the minimum wage.  If you’re willing to put yourself out there, rewards are waiting!

Our next plans are to move to New Zealand and then Canada.  Whilst we’ll both be working traditional jobs whilst we’re there, I’ll be working on creating an online income (also known as digital nomadism).  Just because apparently I can’t sit still!  Even when I’m in debt!  Itchy feet don’t care what your bank account says.

So do debt and travel go together in the same sentence?

I guess it depends if your head and your heart can work together to get what you really want.

My approach is just one of many and I wouldn’t say any one way is the right or wrong way.  There are many approaches to debt and travel.  Each one requires different tactics.

All I know is that when my heart lead the way, my finances suffered in a way that affected me in the future.  Whenever my head leads the way my savings go up, but I suddenly realise I’m miserable and incredibly bored and restless.  When they are working together I feel like I have control of my finances and my wanderlust is being satisfied!

Could you come up with a plan to travel and pay off your debt at the same time?

Loved this guest post and want to read more?  Check out https://erinreki.com