Shopping-obsessed single mom has paid off £ 24,500 in debt in 17 months saving more than her annual salary and is now helping others get off debt.
In April 2020, Malaika, 35, from London, was shocked to discover the enormous debt she had accumulated on credit cards and store credit over a 12-year period.
Although she knew she was in debt, the Special Education Needs Learning Support Worker had no idea she had accumulated up to £ 24,500 and did not realize it. than when she tried to save for a car depot.
For Malaika, debt grew over time – in large part due to child care costs, easy access to “buy now, pay later” programs, and loans that offered 0% interest on the loan. household goods.
The mother-of-two, who worked in the retail business, also became obsessed with shopping for clothes and other items.
Ashamed of her money problems, Malaika hid the extent of her purchases from those close to her.
“I used to love shopping all the time – and always wanted to buy something,” Malaika, who has 13-year-old son and six-year-old daughter, told Jam Press.
“I was in retail and with each new season we had to buy new items. So it’s become a habit to always want the latest trends – and social media and ads don’t help either.
“My debt was not just for clothes purchases.
“I’m a single mom and things are popping up – child care expenses, the kids new clothes as they grow so fast, school activities, food shopping.
“Before you knew it, you used your credit card or took out a loan to pay for something.
“Looking at the final amount was a huge shock to me because everything is not in one place – you have a credit card, overdraft or buy a sofa on credit.
“The small amounts you pay each month seem manageable, but it’s when you add the totals up when you decide to pay it all off that you start to panic and wonder how you’ll ever get away with it.
“Before you know it, your minimum payments are £ 200-300 per month and you don’t realize you’re only paying interest then – you don’t pay for the product in some cases.
“I was not good at finances. “
The mother of two is currently renting out her house and wanted to get a mortgage in the future, but knew she had to pay her bills first to have a chance.
Malaika has decided to set a deadline of February 2022 to be completely debt free – giving herself 22 months to clear the big sum.
Using an Excel spreadsheet to track her finances, she calculated the minimum payments on her credit card and found that it would take her 35 years to pay off her debt.
The foul-smelling stones left the mom feeling “defeated” even before she started her journey.
She said, “When you see that, it scares you.
“You start to wonder if you will ever be in debt. [I wondered] is it easier to pay the minimum and wait.
“When you can’t see the light at the end of the tunnel, you already feel very defeated. “
But Malaika was determined to take control of her finances.
The first step was to join a debt-free online community on Instagram, where she connected with other people who were facing similar challenges.
“Some of our debts are not because we’re ‘bad’ with money – sometimes we don’t have a savings bank big enough to make bigger purchases or don’t earn enough to save. for them. “
The lockdown restrictions also became a blessing for mum as it meant she couldn’t go shopping or be tempted to buy things.
She said: “I became focused on the razor and said ‘things have to change to break the cycle’.
“We were in a pandemic so I couldn’t see my friends, I couldn’t go out and shop – everything was closed so I knew it was a good time to pay off as much debt as possible and start making money. save for the future.
“By the time the foreclosure started, I had just received a refund for a car I bought broken – it was my first debt payment settled and helped me start paying off my debt.”
Malaika wrote down all of her debts and expenses and created a budget plan that she could stick to while saving money.
She also acquired financial knowledge by educating herself with it; finance books, learn new ways to save money through the online community, and start selling junk.
With a 49.9% APR credit card, Malaika wanted to tackle her bad credit score and found a finance company run by a charity, Credit Union, where she managed to secure a lower rate loan. , which helped him save interest.
She said, “I didn’t want to take credit anymore and damage my credit rating – I wanted to find ways to build my credit rating so I could be in a better position and hopefully get a good mortgage one day. “
Malaika also helped save money by setting more modest goals – like cooking meals using only food she already had in the house or finding ten items to sell around the house – which made her happy. encouraged to continue her journey debt-free.
She also made a meal plan to help budget food costs and save food waste for the week and involved her kids so they found the activity more fun.
The family cooked together, preparing budget meals such as curries, spaghetti bolognese and lasagna.
Malaika said: “The changes have not been easy, but what is change?
“It was necessary. I sat down with my kids to explain to them what I was doing and why, and how it would benefit us in the long run, and to teach them the value of money.
“There really isn’t a lot of help getting people out of debt.
“Debt is associated with a lot of shame.
“Some of our debts are not because we’re ‘bad’ with money – sometimes we don’t have a savings bank big enough for larger purchases or don’t earn enough to save. for them.
“We weren’t taught financial stability, emergency funds or credit scores in school.
“I knew I didn’t want this to be my life or the lives of my children.”
The online community acted like its “cheerleaders”, keeping the mom motivated and “in the zone”.
The shopping-loving mom has worked to change her mindset from wanting to buy things to wanting to pay off some of her debt each month – which she says has become her “main focus”.
She found tips online, like using cash envelopes to budget for expenses and skipping coffee dates in favor of saving money.
Malaika said: “What you don’t realize while you are doing this is that even adding these small amounts reduces your interest.”
By September 2021, after just 17 months, Malaika had written off her debt of £ 24,500.
She added: “I couldn’t believe it – it took me a whole month to let it in.
“I now feel more in control of my finances and have kept the same habits as when I paid off my debt because they are fundamental to tracking my money and helping it grow.
“I firmly believe in showing your kids the right way to do things rather than just telling them.
“Actions speak louder than words and that will be a great foundation on which to build.
“I wanted them to see money in a different way, and for that to happen I had to look at it in a different way.
“Now I have no more debt, I have more options and choices.
“I’m more in control and I feel lighter, less anxious and I’m not living beyond my means – I can’t wait to see what else I can accomplish. “
Malaika is now focusing on building up her emergency fund and saving for a deposit to buy a house – a challenge she is “excited” to take on.
She also has a fundraiser dedicated only to fun shopping, so she can enjoy life while continuing to save.
For smarter ways to get out of debt, find out how this mom paid off £ 16,000 in debt in just two years.
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