I’ve paid off £60,000 in debt in FIVE years and here are 3 tips I’ve used to get my finances in order
A WOMAN who paid off a whopping £60,000 in debt in five years swears by three tips that have helped put her finances in order.
dr Nikki Ramskill took out her first credit card at age 18, before she started medical school – and her bank balance plummeted into the red.
Loans, overdrafts, high tax bills and credit card bills quickly got her into deep debt.
But it wasn’t until she decided to take five months off to travel around Australia, New Zealand and Thailand that she realized how dire the situation had gotten, reports the Mirror.
Nikki, who is now 37 and lives in Milton Keynes, panicked trying to pay her bills and her trips after finding no money coming in.
Soon the doom and gloom of being a few bad decisions away from real trouble that prompted them to change their habits.
She said: “That was the point where I was like, ‘Oh my god, this is awful.’ I had the chance to embark on a lifetime journey that I would never do again.”
Returning to the UK at 31, she vowed to do the work to fix herself – but found getting out of debt was harder than she thought.
Zero percent transfer credit cards were no longer an option as their credit ratings began to decline.
She turned to the snowball method – by paying the smallest amounts outstanding and due first.
Nikki found that paying off a debt motivated her to move on to the next higher sum.
But after taking a pay cut, she still struggled to make things work.
After accessing all of her options, Nikki decided to take out a debt consolidation loan to reduce her debt in one monthly payment.
She said: “I cut up all my credit cards and didn’t use them because I didn’t trust myself. I had to go cold turkey.
“The good thing was that it halved my payments. The other good thing was that the interest rates I was paying were much lower.”
Within five years, Nikki – who now runs The Female Money Doctor – was able to pay off the £60,000 while making around £2,600 a month.
She credits the snowball method with helping her repay £10,000.
She was able to repay around £40,000 through the consolidation loan and she inherited £10,000 after losing her father.
Although a debt consolidation loan was the right move for Nikki, she admits she was “lucky” in agreeing good interest rates with the bank manager.
She said: “Some debt consolidation loans are secured against your house. So if you miss payments, your home could be at risk. Debt counselors would never suggest taking out a secured loan to pay off unsecured debt.
“You should also check whether there are any fees for switching from an existing loan agreement – and whether there are prepayment penalties. With bad credit, that might not be an option at all.”
For anyone struggling with money problems, Nikki has three key pieces of advice.
She says to tell someone as soon as possible, speak to a debt counselor for free and make a decision about how to get help, and quickly come up with a plan.