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That’s even better than gold right? After a few months I had a leaflet through the door for a platinum card. A mini triumph, I got accepted, and with another 9 months 0% I would be able to shift the balance on my previous card when the 0% on that one ran out. I was surely doing alright for myself now?

To sum up, in less than 9 months, I’d been granted £6500 of borrowing across two credit cards.

Life has bumps in the carpet.

My parents split up and then my girlfriend left me. At this point I knew my spending was slightly out of control, I didn’t ever think about what I was spending, I’d eat out all the time, I’d buy what I wanted immediately when I wanted it. Whilst I concentrated on other areas of my life that were starting to unravel slightly, it was easy to turn a blind eye to my spending. Before too long, I had maxed out one credit card and had about £2000 on the other. So, with one card maxed out nearing the end of the 0% deal, not enough available credit on the other and no immediate way of clearing my balance there was only one logical solution. Another credit card!

Please keep reading at this point, this is a historical account. The real solution is NEVER another credit card!

More credit.

Sure enough, I was given a Gold card with £5500 limit on it! This meant I had a total borrowing capacity of £12,000, and it had only taken three small decisions. I moved the majority of the balance of the first card to my platinum card and put the remainder on my new gold card.

A few months later, I cleared the remaining balance of my first card and cut it up. Looking back at it, this was actually a red-herring and represented the false impression I had created for myself which said “I’m in control of my spending and I’m sensible enough to have this level of borrowing.”

Total outstanding at this point about £4,000 - available credit £5,000.

What follows is a brief time-line of how I got to my situation today and, perhaps more importantly, my thinking and logic at the time.

All the figures are approximate. I apologise for this because one of the important things I’ve learnt is to be exact, but this is historical, and after all, if I’d written it down I wouldn’t be in this mess!

And so it begins:

At the end of 2001, whilst in a well paid job, I saved £4200 to buy a new car. Not quite being able to afford the one I wanted, rather than continue saving, I got my first credit card and put the remaining £2300 on it. Much like today, it was at a time when there were plenty of of 0% offers around. So I thought, “Well, if I save the money before the 0% offer runs out, I’ve not lost anything right? I even get £30 of a popular store’s point!”… the start of a very slippery slope, the first time I justified my spending actions to myself in a way that made it seem acceptable.

I enjoyed the buzz of driving around in a nice new car and, to my surprise, I quite enjoyed appearing well off to my friends. It makes me feel ashamed when I say it, but it’s the frightening reality of who I was at the time, “I quite enjoyed appearing well off to my friends”. That sounds horrible doesn’t it? I was getting pleasure from thinking that other people might want what I had. I now had my formula for racking up debt:

New toy + Appearance of doing well + Low cost borrowing = Green light to spend!

Over the past twelve months, new research by Halifax has shown that there has been an increase in the number of people carrying out home improvements to update and modernise their properties.

The research shows that more than half of the population has undertaken some form of home improvements over the past 12 months. This proves to be an increase of 12% on last year’s figures.

Those who are carrying out the home improvements have also changed according to the research. Younger generations, those aged 18-24 and 25-34, are the most active when it comes to improving their homes. Compared to last year, the most active group was the 35-44 year olds with 58%.

Reasons why a possible increase has been noticed according to the research could be that more people are looking to add value to their properties to improve saleability. A quarter of people cited this as a reason for undertaking home improvements compared with just 7% last year. There has also been an increase in people carrying out home improvement to better their chances of selling, 16% compared with 2% last year.

Phil Jenks, head of mortgages at Halifax, said:

“Home improvements are becoming more popular with people looking to add value to their home and improve saleability. Whilst DIYers continue to favour the more simple home improvements, such as redecorating, there are also signs that people are beginning to view their gardens as an extension of their home and are investing more time and money in improving the outdoors as well as the indoors. It’s good to see more people citing reasons such as reducing fuel bills and increasing energy efficiency for undertaking home improvements as it shows that climate change is moving up people’s agenda.”

Home improvers are looking to add £5,000 to the value of their properties through a number of DIY tasks. While redecorating remains a popular home improvement with two thirds of home owners choosing to liven up their properties with a lick of paint, other home owners are focusing outdoors. With forecasts of sunny days and warm evenings 41% of people have chosen to improve their gardens in the past 12 months.

The room people would most like to change according to the research conducted by Halifax is the kitchen. Although it is regularly highlighted as an area people would most like to improve, it rarely appears in the top three most commonly conducted home improvements.

One of the many options available for homeowners looking to modernise their properties is a secured loan. A secured home improvement loan could provide homeowners with the extra finances to carry out a number of options. Whether homeowners are looking to update rooms with a simple lick of paint or larger tasks such as modernising a kitchen with new appliances or a new bathroom, a secured loan could allow for a team of builders and contractors to come in and carry out the task to a professional level. A secured loan is made payable over a term to suit the borrower from 5 to 25 years for any amount between £10,000 and £100,000. Carrying out home improvements with a home improvement loan, home owners could also add value to their property.

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Who am I to preach to you?

This is the problem when you write something about which you know fairly little!

I’m not a financial guru, I’m not academically brilliant and I haven’t even managed to get rid of my debt yet! In fact, at the time of writing, I’ve only just really got started dealing with it.

In keeping with point 1 above, this is just a factual account of my experience, how I acknowledged my problem, how I managed to get in to this pickle in the first place and how I’m dealing with it. It’s up to you to gleam any useful points you can from my experiences.

You are presumably reading this because you are in a similar situation to me or perhaps someone has suggested you read it to prevent you getting in to the same situation. Either way, I’m going to try and assume you’re not stupid. I’m not stupid, but still I managed to end up here!
About me, how did I get to this point?

It might come as a surprise when you hear that I’m a fairly normal guy. I don’t drink excessively, I don’t have a gambling problem and I don’t have an expensive drug habit!

I had a good childhood with a supportive family, I have a well paid job, plenty of good friends and I’ve never suffered from any sort of depression. It’s safe to say, I’m generally very happy and always have been. So how did I end up here then?

“Easy.”

That one word sums up both how I could get here and also why I got here. It was both easy to get the credit I needed to get here and it was easy to ignore what I owed which is why I got here.

I can safely say that on my journey to digging my hole I’ve never seen a penny of the money I’ve spent. It’s all been invisible money. If I’d had to break in to a house, steal an old ladies hand bag, or choke a puppy to death to get the dosh I’d have known something was wrong – but no, it meant nothing. It wasn’t real.

I don’t like to blame other people for the situation I find myself in, it’s my own doing, and as difficult as it’s been for me to accept… I am an adult! All of that aside, I think it’s frightening how easy it has been for me to borrow money and I do believe it’s about time something changed in the credit industry. I’ll save this for later though (see Time for change) but in the mean-time it’s time to help myself.

A new homebuyer report from AA Legal Services has found that more than two in five first time property buyers don’t know the difference between a leasehold and freehold property. The report named “Safe as Houses” has also shown that a north-south divide on mortgage literacy is emerging, with people north of the Midlands less able to define a leasehold property than people in the south.

As we have seen four successive base rate rises in the past none of which have managed to have a major effect on house prices, mortgage lending in April is 18% higher than a year ago. Consequently the cost of getting on and staying on the property ladder has increased for first time buyers. The research has questioned whether a nation desperate to get a foot on the ladder is rushing into decisions purely because we are financially stretched as first time buyers.

The “Safe as Houses” campaign from AA Legal is a public awareness programme that helps homebuyers make informed decisions about purchasing their properties. The campaign also makes sure that homebuyers properly understand the financial and legal small print that surrounds the most important purchase of their life. A sample of 2,000 British homebuyers was asked by an AA poll whether they understood the difference between a leasehold and freehold property. From the poll, overall around 20% of those asked did not know what a freehold mortgage was, with 49% thinking it was something other than it was.

Among 18-24 year olds there was the lowest accurate understanding of the most basic of property terms. With an average spend of nearly £160,000 on a first property, only 59% knew what the term freehold meant and only 57% understood the term leasehold.

According to the survey AA found that a number of young homebuyers had some interesting ideas on that property terms meant. An example was around one in ten 18-24 year olds said that a leasehold property meant you were allowed to rent it to tenants and 2% thought it meant the homeowner was exempt from Council Tax.

James Molloy, Head of AA Legal Services commented: “Our research suggests that many homebuyers are so desperate to get onto the property ladder that they may be over-looking vitally important basic legal principals. For years, the legal community has not helped much in terms of engaging the public on legal aspects of home buying, something AA Legal Services intends to put right – by helping the public understand legal issues in plain English, so that they can make informed home buying decisions and feel in control of the process.”

Homebuyers who have recently moved into a new house and have found that they may be in need of a bit extra to carry out home improvements could look at taking out a secured loan as one of the many options available to help them on their way. A home improvement loan could allow for basic redecoration of living rooms and bedrooms to allow new owners to feel right at home.

Modernising a tired looking kitchen or bathroom with new appliances and surfaces could make a huge difference and could even add extra value to a property. With a secured loan there are endless possibilities, homeowners could even look outside to the garden for inspiration, conservatories and garden landscaping could add instant character to a property and could make a summer outside even more enjoyable. Made payable over a term to suit the borrower from 5 to 25 years and any amount from £10,000 to £100,000 a secured loan could allow homeowners to feel right at home in their new property.

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I turn 27 next week, and I owe £42,228.43

Let me just visualise that…

£42,228.43

That doesn’t quite do it really does it? Let’s visualise it in a way that I can understand a bit better, let’s give it wheels!

That’s right, at the time of writing, the amount of my debt could buy me a 2002 reg Porsche 911. So what have I actually got parked on the drive? A J reg Kia Pride!

I’d urge anyone at this point in debt just to do a similar thing, pick something that you covet after that matches your debt and visualise it in your head…or like I did, search auto trader! Hmm… I wonder if I could get a date with Angelina Jolie for £42,228.43!? Sorry, I digress.

So why am I writing this blog?

Three reasons:

1. The very act of writing this is helpful to me. Am I a writer? No, definitely not. As with anything you’re not that great at, it takes time, practice and thought. I’m having to think about how I want to structure things, what I’m going to say and how I actually write, and the entire time I’m doing this, I’m thinking about my debt; all £42,228.43 of it.
2. If I get a single click on an ad, I’ve lowered my debt. So, if you’ve clicked, I thank you very much.
3. If I can prevent a single person from getting in to the same situation, or help a single person with an existing debt, I’ll be very happy indeed.

As the possibility of a fifth interest rate rise in under a year looms large, home buyers are becoming more prudent in the steps to reduce the risk of mortgaging their homes to their financial limits. Research from Yorkshire Bank’s Mortgages team suggests that since the Bank of England has been taking measures to lower house prices and curb inflation homebuyers are becoming more cautious. Almost a quarter of buyers have admitted that they are looking to avoid taking out a maximum mortgage.

By cutting household expenditure back, homebuyers are hoping that they will find it easier affording their home. Many sacrificed holidays, social life and nice cars so that they could eventually own their homes. First time buyers are also cutting back on their lifestyle with over a third adapting their lifestyle to ensure that the dream of buying a first home becomes a reality.

Yorkshire Bank’s research has found that first time buyers intend to demonstrate greater caution with almost a third intending to avoid stretching their finances from the beginning to avoid a further rate rise tipping them over the edge of affordability. There was a great anticipation for a further rate rise over the next year with three quarters of those surveyed expecting it.

Gary Lumby, Yorkshire Bank’s Head of Retail, said: “What our survey shows is prudence, not panic - all the signs are that the market will still remain strong. But with rises in the Bank of England’s base rate, and with many economists predicting a further rise if not next month, then in the near future, it is inevitable that homebuyers will become more a little more cautious with their borrowing.

“The recent rises have started to make buyers take a realistic view of what they can and can’t afford and to take measures to protect themselves against unforeseen changes in their personal circumstances. What we’re seeing is buyers being shrewder than when the housing market was at its most buoyant, both in the price they’re prepared to pay for a home and how they choose to finance it.”

House prices were also expected to continue rising with seven out of ten people citing this. Despite this only one in six would be prepared to offer the full asking price for a property immediately.

Homeowners with multiple credit card bills, looking to remortgage their property to pay these off as a result of the increase in the Bank of England’s base rate, could consider a secured loan as an alternative. A secured loan could allow homeowners to consolidate existing debt into one monthly affordable payment. Multiple store and credit card bills could be consolidated leaving homeowners with peace of mind to plan ahead safe in the knowledge that their finances are in hand. Debt consolidation loans are made payable over a term to suit the borrower from 5 to 25 years and from any amount £10,000 to £100,000. Homeowners should remember that repaying over a longer term will increase overall interest charges.

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