Welcome to Debt Free Journey. This interview series has been developed in collaboration with my friend Cristian Ferrier from The Financial Alien.
We are excited to bring you a series in which we explore real-life stories on people working towards or who have already become debt-free.
Interviews will be conducted on an ongoing basis, with new interviews being published bi-weekly on Wednesdays. You can find past and future interviews in the series Main Page.
This week we have Jonathan Evans from The Money Earner.
Name: Jonathan Evans (The Money Earner)
Location: Isle of Wight, England
Links (website, social media): www.themoneyearner.co.uk, @TheMoneyEarner1 on Twitter
Debt paid amount: £20,000+
Debt source: Bank loan £10,000 for a postgraduate degree, £10,000 personal loans, and credit cards
Time to eliminate debt: 5 years
Tell us a little bit about yourself
I am now 32 years old living a very happy content life, with my amazing girlfriend and our two children, on the beautiful Isle of Wight, England. I am working in the NHS within the pharmacy of our local hospital, and I am earning not enough money. I just love spending time with the children, getting out going for walks, playing football, enjoy reading and watching sport
If people want to connect with you, where can they find you?
Find me on my website www.themoneyearner.co.uk where I share my money earning plans and similarly on Twitter @themoneyearner1
1. Introduce us to your debt. Where did it come from? How much was it?
My debt came from a few things, and guess it spiraled one after another. Initially, I took out a bank loan to undertake a post-graduate degree in law, normally this loan was done under much more agreeable terms with low interest and more time to pay back (once qualified and in work). This loan became no longer available as it was 2010, and we were reeling from the financial crisis. So a general bank loan was the answer. Then within a messy relationship, credit cards were taken out and I was living well above my means.
2. Was the total debt always the same amount, or did it grow over time? What was the interest rate?
Originally, I was always able to meet each payment easily. Then I missed a couple, then I got into the overdraft to the point where I was just paying interest. The interest rate on everything was astronomical, but I was just trying to make everything look ok. I Just assumed if I could hold it off for a couple of years it would be ok, and it just snowballed until I couldn’t make my payments for my course and got kicked off. (I came back a finished with a commendation a year later)
3. Why did you choose to get into debt? Were you fully aware of everything you were getting yourself into?
To start with, I was comfortable with the loan; it was a way of getting to where I wanted to be, and this was the way to do it; the rest came from trying to live up to something that I couldn’t, buying a car, paying more than my share of things, days out, holidays, etc. They were just there to pay for the things I wanted to do that otherwise wouldn’t have been able to.
Paying off the debt
1. Did you already eliminate the debt, or are you still working on it?
The last of the payments have been made this year. From being so far in the red, I am now a few grand in the black.
2. If already eliminated, how long did it take you? Were you ahead of the schedule set in the loan terms?
I was behind on everything, and it has completely ruined my credit score. Hopefully, this will start to improve now. I should have finished the payment plan when I was 40, so I guess yes, I finished early.
3. If ahead of schedule, what made you want to eliminate it sooner?
Debt was killing me. I was miserable. It wasn’t until I had a plan to pay it off that I started to be happy again.
4. Did you have a strategy to pay off the debt? If so, what was it?
I planned first to get my budget sorted and minimize it as much as possible, then secondly, to earn as much money elsewhere; all of the things on my website have helped me get there, and then pay off each account by one.
5. Did you take on any side hustles, overtime, etc. to eliminate the debt sooner?
Yes, all sorts of things, online work has been mega for me and is excellent earning potential, particularly when looking after children at home so not able just to get more job. But I am also taking on overtime wherever possible. Have to work around them.
1. What have your learned from all this?
I would never have taken the debt out. I would never have lived above my means, and would not have stayed with somebody who pressured me to take out more and more
2. Was the debt worth it? Did you get a return on your investment (ROI)?
3. What would you say to someone thinking of getting the same debt as you?
The sooner you tell somebody the better. It makes it real, then you can deal with it, there is great support out there, my email/dm always open for anyone wanting to talk as well.
4. What would you say to someone struggling to pay the same debt as you?
Put the financials down on paper. It can be easy to think that it is impossible to sort out but setting down what your income expenditure is makes everything clearer, and makes the impossible possible.
5. Are you still paying any other debts, or did paying this one off made you become debt-free?
I have a credit card that I am using to boost my credit. Never again will I carry debt over (other than a mortgage). Everything else will be paid as the statement comes in.
6. What are your plans for the money that was going towards the debt all this time?
Knuckle down on the savings for a house, and continuing to invest to make my money continue working for me!
7. Where do you go from here? What are your personal and financial plans for the future?
Very ambitious plans, but lots of work left to be done. First, I want to own a house, continue investing and then get to the point of having enough security to leave my 9-5 and work on my terms. (before 40th birthday) so check back in 8 years and see how we did.
Any final words?
Debt is a scary and horrifying thing to deal with; it turned me into a horrible person who hid and lied about it to my family. It is easy to slip into. The most important thing is to tell somebody what is going on; it will help you process. Then come up with a plan that is comfortable and not too ambitious to pay off.
Debt can be a helpful tool but one that should be used with great caution.
No experience is ever wasted, but I have learned a lot from this experience. In the long run, it may be the event that spurs me on to doing something else not content with working for the next 40 years, as since trying to pay it off and particularly the last 12 months, I have never been more motivated to break this cycle.
I’m Steve. I’m an English Teacher, traveler, and an avid outdoorsman. If you’d like to comment, ask a question, or simply say hi, leave me a message here, on Twitter (@thefrugalexpat1). Many of my posts have been written to help those in their journey to financial independence. I am on my journey, and as I learn more I hope to share more. And as always, thanks for reading The Frugal Expat.