Date: Jul 15, 2020

NB: If you’re struggling with mental health and indebtedness, you should seek help. If you need debt advice you can reach out to StepChange as recommended by Clare or, alternatively, you can consult The Money Advice Service. And if you’re struggling with mental health, don’t hesitate to visit and contact Mind or The Samaritans.

Do you feel anxious when thinking about managing your repayments? Do you avoid letters from creditors? Do you find yourself unable to create an emergency fund for those unexpected costs that might crop up?   

Being in debt can be a stressful experience. One in two people in the UK with debt suffer with mental illness and one in four people with mental illness are also in debt, highlighting the vicious cycle that accompanies the negative reinforcing relationship between debt and poor mental health, with poor mental health further hindering your ability to manage money effectively. While the shame surrounding the topic of debt may make you feel lonely and even more reluctant to open up about your financial situation, you are most certainly not alone. The average household credit card debt in the UK is £2591 and up to 8.3 million people are unable to pay off their debts or household bills.  

Clare Seal was one of the many adults who found herself in spiralling debt, spread across seven different credit cards. She set out to document her debt repayment journey through @myfrugalyear - an Instagram account that's now become a tight-knit community.

In this episode, Clare talks about how she got into and tackled her debt, the stigma attached to discussing debt and how her community helped her stay accountable. Since recording the podcast, Clare has successfully managed to clear her £2,000 overdraft and repay even more of her credit card debt. Clare currently has an outstanding balance of slightly more than £11,000 - quite a considerable feat given that she began her journey with over £25,000 of debt! 

Speaking up without shame 

There are many reasons why people get into debt and an even greater number of underlying factors that drive the accumulation of personal debt, ranging from living on a low income to transitioning through major life changes. Given the diverse number of explanations behind why a person might be in debt, it seems strange that the stigma surrounding indebtedness is so pervasive. It is for this reason that we should aspire to rid ourselves of shame, stigma and embarrassment that has historically accompanied personal debt. Instead, we must learn to speak up and seek help when it comes to troublesome debt.

It is with this sentiment that Clare started her Instagram account, ‘My Frugal Year’, which began as an outlet for how she was feeling about her worrying financial situation, with over £25,000 of debt spread across 7 credit cards and a £2000 sum in planned overdrafts at the time. For Clare, debt was a huge personal source of anxiety; she had always felt that she was bright, hardworking and responsible, and therefore ashamed to be in the predicament she found herself in. The pressure of motherhood only added to her stress. The more she kept her debt a secret from her closest friends and family, the less able she was to deal with it on her own. By speaking up on social media, Clare was able to draw on a community of women faced with the same situation, offering each other support and guidance. Moreover, by being honest about her debt, she gained a greater sense of accountability that continues to help her on her journey. 

While sharing her financial situation on Instagram was highly refreshing and, as Clare conceptualised it, poetic in the sense that keeping up appearances on social media was in part to blame for her debt, many of us are not as confident and would prefer to talk to someone we trust. There are several benefits to having a person to talk to about your debts, including:

·  Receiving emotional support

·  Sharing tips on how to save money or increase income

·  Learning how to budget effectively

·  Learning how to deal with creditors

·  Helping you keep accountable for repayments 

It might even be the case that others around you are facing their own debt problems and that, by opening up to them about your own debt, you can help them in their journeys too.

Keeping in constant communication with your bank and creditors is also crucial since it might be the case that they can lighten your debt burden. For example, the FCA has instructed banks to support customers affected by Covid-19 by changing the terms on their customer debt solutions and by offering interest-free overdrafts up to £500 for 3 months, leaving customer credit ratings – provided that they stick to the terms of their agreement – unaffected in the process.

Celebrating the small wins and the healing process

We all have different relationships with money and debt and these relationships are forged in our formative years. This can mean that, by the time you have cleared your outstanding debt, you might not have recovered your relationship with debt. It is important to celebrate your progress – no matter how small – when clearing your debt, and to forgive yourself for any mistakes you make along the way, seeking to develop better money habits in the future and to not punish yourself for the past. Emilie and Clare explore at length the process to free yourself from debt and all the anxieties that come with it, offering support and guidance to the Vestpod community.

You can listen and subscribe here:

Resources: 

Clare’s book “Real Life Money: An Honest Guide to Taking Control of Your Finances” is out now and available from Amazon - you can also pre-order The Real Life Money Journal here. If you need debt advice you can reach out to StepChange as recommended by Clare. And if you’re struggling with mental health, don’t hesitate to visit and contact Mind or The Samaritans.