I used to think of serious debt problems as something reserved for gamblers and addicts. Yet, by age 22 I was over £100,000 in debt and unfortunately, I had no addiction to blame it on.
Debt problems aren’t something you wake up with overnight. They usually creep in slowly over time. A credit card here, a loan there. For me, my debt problems began with my first start-up.
In 2015, aged 19, I launched my company LETUSFINDIT, which was a fashion search engine – a Google for fashion if you will.
Before I knew it I was being touted by friends and family as the next Mark Zuckerberg (though with a northern accent and a set of boobs).
We launched to great fanfare and fantastic initial sales, and for the next three years we lived in a bubble of hype – as many start-ups do – with celebrity partnerships, hundreds of thousands in investment and a full team of staff.
We were gaining users the whole time but we were making hardly any money, and our first few months of success were short-lived – three months after launch, our website broke.
By this time I had already bought a brand new Range Rover on finance (as you do), moved into a penthouse flat (because why not?) and was so certain my business was going to go stratospheric I had already started mentally planning my retirement… for when I was 25.
My relationship with money had always been interesting. I never had any problems making it but I always had issues holding onto it.
It was this overconfidence in my ability to create more that fuelled a lot of my debt issues. Every time my company had a few slow months or hit a dip, I would take out personal loans and invest them in the business to plug the gap. I was confident that with the next big celebrity deal all would be recouped.
Yet when money did come in, I refused to pay the loans off, worried that investors would think I was selfish for using cash to pay off previous debts.
Instead I adopted an unhealthy hustle-and-grind mentality that I picked up from online business influencers. I had a masochistic tendency to constantly sacrifice for the business, as if my suffering and increasing personal financial pressure meant I was doing all I could to help with sales.
I dreaded time moving forward as due dates on payments just seemed to roll around quicker and quicker.
Unfortunately, it was just making things worse. For three years, I took out a variety of personal and business loans for the company. A £13,000 business loan, a £30,000 business loan, a £13,000 credit card, a £12,000 loan from a family member. In addition to things such as a debt with HMRC for £20,000 and my £45,000 car, before I knew it I was drowning in debt.
When our web development company went into liquidation, I was managing almost £4,500 in monthly loan repayments. I personally was the business’s biggest expense and things looked pretty bleak.
I dreaded time moving forward as due dates on payments just seemed to roll around quicker and quicker. I managed, but I was barely keeping afloat. By the end of 2017 I couldn’t carry on the company.
Emotionally I was wrung out and any money we were making was all getting spent on my loan repayments. I let all the staff go – firing a lot of them overnight – wound down our offices and shut down our website.
I sold everything I had and spent my nights googling to see how much I could sell my kidney for online (FYI, they’re worth £60,000 on the black market).
I was numb for a lot of my day to day life but still kept up appearances, going to social events with friends and making jokes whilst inside just trying to keep it together.
Now I’m strict about not taking on additional debt and refuse to even renew my phone contract. I’m thankful for my debt experience as it has made me a better businesswoman and a better person.
By first freelancing in marketing and sales – the two things I had done exquisitely well at LETUSFINDIT – and later setting up my current consultancy firm, I have rebuilt myself from the ground up.
Although I’m still in debt, I’ve managed to retain my sense of humour and renewed sense of optimism for life. I won’t be writing any Christmas cards to Quick Quid or Wonga loans in a hurry. But through a reduced lifestyle (goodbye Range Rover) and putting half of my income towards reducing my loan balances, I’ve almost halved my debt in under two years.
Being in debt has had its benefits. Alongside an easy excuse to get out of almost any family function (‘I want to come to your dog’s birthday party but I really don’t have the money…’) it’s taught me the value of hard earned cash, something that got lost on me when my company was burning through £15,000 a month.
I’m confident in my overall financial future and certain I’ll weather this. Hopefully, I’ll even be debt-free by next year. Who knows, maybe I’ll even throw a ‘debt-free’ party. Do they do loans for that?
Debt Month
This article is part of a month-long focus in November all about debt.
Scary word, we know, but we're hoping if we tackle this head on we'll be able to reduce the shame around money struggles and help everyone improve their understanding of their finances.
Throughout November we'll be publishing first-person accounts of debt, features, advice, and explainers. You can read everything from the month on the Debt Month tag.
If you have a story to share, a topic you want us to cover, or a question that needs answering, get in touch at MetroLifestyleTeam@Metro.co.uk.
MORE: Why we’re talking about debt this month
MORE: How do you know if you’re in a ‘debt crisis’?
MORE: How to get out of your overdraft
source https://metro.co.uk/2019/11/08/debt-diaries-my-start-up-left-me-over-100k-in-debt-at-22-11043079/
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