BACK ON TRACK
I felt sick and embarrassed over £11,000 debt – but an all-or-nothing promise helped me pay it off in a year
Watch the video above for Rachel's tips on how to save cash and clear debt
TEACHER Rachel Noakes felt sick when she realised she owed £11,000.
It was December 2020 and the mum-of-one had taken out credit cards, an overdraft and a car loan.
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Recalling the moment she worked out how large her debt had got, the 37-year-old said: “Feeling sick I looked around my two-bedroom house. I didn’t see any flashy technology and there were no designer clothes in my wardrobe. So how on earth had I got here?
“I got my first credit card at 18 when I was still living at home and had an admin job. It was exciting to use the card for nights out and clothes. It felt grown up.”
At first, Rachel paid off the bill in full each month, but when she started a new relationship at 19, that all changed.
“We moved in together and money was tight. Earning £11,000 each we were soon relying on credit cards and payday loans. It was a constant money struggle.”
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Rachel got married in 2007 and had a child called Noah in 2009.
Then in 2012, Rachel, from Devon, went to university to study teaching.
After her marriage ended two years later, things were "hard".
“I coped by keeping myself busy. That meant doing things with Noah, going out with my friends, or buying things.”
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“It was lunches in cafes, cheap fast fashion or bits for the house. Nothing extravagant. But it felt good as I swiped the card, and I didn’t let myself think about the bill I couldn’t pay off.”
Then the pandemic hit and Rachel realised how bad her spending habits had got.
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“I was forced to slow down. I realised that I didn’t need to be a whirlwind of activity and spending to be happy. And I admitted to myself that I needed to know just how much debt I was in.
“Seeing the £11,000 I felt sick and embarrassed.
“I had a stable, respectable job and was earning £30,000 a year. But if something went wrong with the car, I had no way of coping financially without asking my parents for help.”
But Rachel didn’t close her computer and pretend it wasn’t happening.
“I felt a surge of determination. I was going to get rid of this debt, whatever it took. That’s when I remembered reading about people having a no-spend year, where you cut your outgoings to the bare minimum.
“It sounds extreme, but I’m an all-or-nothing kind of person. I needed to do something radical.”
How to cut the cost of your debt
IF you're in large amounts of debt it can be really worrying. Here are some tips from Citizens Advice on how you can take action.
Check your bank balance regularly - knowing your spending patterns is the first step to managing your money
Work out your budget - by writing down your income and taking away your essential bills such as food and transport
If you have money left over, plan in advance what else you’ll spend or save. If you don’t, look at ways to cut your costs
Pay off more than the minimum - If you’ve got credit card debts aim to pay off more than the minimum amount on your credit card each month to bring down your bill quicker
Pay your most expensive credit card sooner - If you have more than one credit card and can’t pay them off in full each month, prioritise the most expensive card (the one with the highest interest rate)
Prioritise your debts - If you’ve got several debts and you can’t afford to pay them all it’s important to prioritise them
Your rent, mortgage, council tax and energy bills should be paid first because the consequences can be more serious if you don't pay
Get advice - If you’re struggling to pay your debts month after month it’s important you get advice as soon as possible before they build up even further
Groups like Citizens Advice and National Debtline can help you prioritise and negotiate with your creditors to offer you more affordable repayment plans
Rachel even set up a account to film her journey and hold herself accountable.
“In my first video, I laid out my ‘no spend rules’. They included not having my hair done, or buying makeup or clothes for a year. I’d use a laundry egg instead of detergent and hang my washing rather than tumble dry.”
Rachel was strict with meal planning and used to give herself a £50 a month buffer for unexpected costs like a new oven light or clothes that Noah absolutely needed.
“I explained it all to Noah in a way that he’d understand and let my close friends know. It felt good to be taking those first steps.”
From day one Rachel watched every penny. She stopped buying presents for friends and made them candles or embroidery hoops instead.
She swapped meals out for walks or picnics.
“I realised I was having just as much fun as I used to, but without the spending. I’d be out with Noah eating a picnic in the park and kicking myself at the times I’d spent £20 in a café without even blinking.”
“If I was tempted by a purchase, I made myself wait for a full 30 days before pressing ‘buy’. It was amazing how often I realised that I didn’t need it after all.”
Meanwhile, Rachel focused on the second part of her debt-busting plan – selling as much of her stuff as she could.
“My house was full of clothes and furniture that I didn’t need. There were even boxes of my old childhood toys. Why on earth was I keeping them?”
She sold a box of old Polly Pocket toys on eBay for £250 and in total she made around £1,000.
Rachel paid off the car loan first, as it had the highest interest rate, then the overdraft, before moving to the credit cards.
Watching the debt drop each month was a huge boost for Rachel, keeping her motivated and on track.
But the decluttering quickly became much more than a way to just make money.
“With everything I sold, I felt lighter. As it emptied my home was calmer, and my anxiety reduced. I realised that for years the ‘stuff’ had been owning me – not the other way around.”
Making that final credit card payment in December 2021 was a milestone.
“With one click I became debt-free for the first time in two decades. I felt incredible.”
“It was like a physical weight had been lifted from my shoulders. I’d spent years carrying the worry about my debt, even though I was trying to ignore it. Suddenly that was gone. I promised myself never to get into debt again.”
Rachel has now kept up her good money habits and it’s even changed how Noah, now 14, feels about money.
“He’ll happily buy things second-hand. And when they’re no longer useful he’ll sell them and use the money to buy more.
“He’s seen the impact of being mindful about spending and I’m so happy that he’d got that sensible foundation for the future.”
As for decluttering, it has turned from a hobby to a passion.
“In that year I fell in love with living minimally. Now I have thousands of people watching my videos about decluttering on YouTube and Instagram. I want to show other people that you don’t need stuff to make you feel good.”
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“I’m happier, healthier and debt-free. The no-spend year transformed my life.”
Follow Rachel at //www.instagram.com/declutter.your.life
How to get free debt help
There are several groups which can help you with your problem debts for free.
- Citizens Advice - 0800 144 8848 (England) / 0800 702 2020 (Wales)
- StepChange - 0800138 1111
- National Debtline - 0808 808 4000
- Debt Advice Foundation - 0800 043 4050
You can also find information about Debt Management Plans (DMP) and Individual Voluntary Agreements (IVA) by visiting MoneyHelper.org.uk or Gov.UK.
Speak to one of these organisations - don't be tempted to use a claims management firm.
They say they can write off lots of your debt in return for a large upfront fee.
But there are other options where you don't need to pay.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
Plus, you can join our Facebook group to share your tips and stories
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