This year I’ve had somewhat of a wake up call regarding my spending habits and it’s caused me to really look at my finances and start to take positive action.
I’ve been ‘in debt’ since the age of 18 years old when I took out my first store card which was later followed by a credit card and then a bank loan and it's been a vicious circle ever since. It’s become a part of my life which I had sort of just come to accept. I’d been spending more than I earned for a long time on things that I thought I needed such as holidays, nice clothes and other material things or experiences that I thought would be the answer to happiness.
The truth is that none of these things can bring lasting happiness, they are purely a temporary fix to escape from reality and the reality is that I’ve been tied to my debt. Recently I’ve been finding amazing happiness in the simple things such as spending time at home in the garden, going for bike rides with my family and cooking at home with my children instead of going for meals out. I’m learning to be more grateful for the things I have and learning to live without a lot of the material things that I thought I needed to make me happy.
I started to take note of my spending habits and commit to change at the start of this year when my husband received his tax bill which was a lot more than we were expecting so we were forced to change some of our spending habits straight away by cutting back on any unnecessary spending. For a couple who are in the high earning bracket, live in an exclusive area and whose children attend private school looking at us you would think that we have made it in life but the reality is that we would be constantly arguing over who would pay for a pint of milk as we were in fact being consumed by our outgoings.
In January my business also started to grow and as the need arose to take on staff I realized I needed to learn fast how to successfully budget and manage the finances of my business but how could I do this if I couldn’t even manage my own personal finances!
Change had to happen…
At the start of this year I thought change would mean giving up everything that I knew and loved and my husband and I had even briefly considered moving back in with my parents to ‘save’ and pay off debt but actually 4 months on we are still able to maintain living in the same lovely home and sending children to private school etc which some may think is odd but for us our children’s education and our home environment are priority.
What we both did instead is cut back on other things and we stuck to a budget. In the process we have saved around £600 per month which is now going towards clearing our debt quicker. Food shopping is the main thing that we have been able to save on. For a family of 5 our weekly shopping was averaging at £150 per week. I would shop on impulse and the food that was being wasted weekly was ridiculous. I now do an online food shop every other week so I can see exactly what I am spending and in between I will shop locally and always meal plan so that we do not waste food. I’ve now managed to get our shopping bill down to around £70 per week by being savvy. We bought a cheaper car as we were paying over £700 per month for 2 brand new cars so we got rid of one of the cars and replaced it with a cheaper one. I’ve got my phone bill down to £20 per month instead of £50 by not upgrading my phone (I don’t need the latest iPhone!) and I now only buy clothes etc when needed and I look for second hand clothes for my toddler as she grows so fast anyway. I have turned to natural beauty products instead of buying expensive branded ones and have even had a go at making some of my own. I’m actually having a lot of fun with being creative on how to save the pennies.
I have worked out that if I can continue to spend wisely and maintain a positive mindset towards money then I/we will be debt free in 18 months. I can see an end to it finally after all these years and this time last year I couldn’t ever imagine being in this place. I have been working a great deal on my mindset and personal growth for the last few months and amazing things are happening because of it. I am now feeling grateful for my debt and instead of avoiding it I now check my bank account regularly and feel a great sense of achievement when I watch the amount owed go down each month.
There are so many temptations in life to spend on material things and a lot of us want to keep up with those around us even though the truth is that we probably can’t afford to do so. I have now cut up my credit card and only spend if I have earned the money in the first place. I’m very much focused on financial freedom and living a life on our terms. We can all get to that place but the first step is to acknowledge the debt and secondly to commit to making a change. We all have the power to change our mindset and live a life that is not ruled by debt.
Hannah Murphy
(Entrepreneur & mum of 3)
