What I’ve Learned from Being in Debt: A Journey from Impulse to Awareness

Being in debt changes your relationship with money.

Things you once bought without much thought start to look different when you're still paying for them months later. A bargain doesn't feel like such a bargain once interest is added. And spending £20 today feels different when you know exactly what that £20 could do against a balance you're trying to clear.

That was one of the biggest shifts for me.

Debt made me much more aware of the difference between wanting something now and wanting financial freedom more.

But it also taught me something else: getting out of debt isn't simply about throwing every spare penny at a balance and cutting everything enjoyable from your life.

It's about becoming much more deliberate with money.

That means deciding what genuinely matters, understanding which financial problem needs your attention first, and creating a plan that works for your circumstances rather than somebody else's.

And importantly, it means thinking beyond the day your debt reaches £0.

Because becoming debt-free is one goal.

Staying out of debt when life inevitably throws you an unexpected bill is another.

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Start With Your Situation 

There is no single debt strategy that works for everyone.

If your essential bills are covered, your repayments are affordable and you have money left over each month, you might be in a position to aggressively overpay your debts.

But if you're struggling with rent, mortgage payments, council tax, energy bills, food or other essentials, the answer may not be to send more money to a credit card.

Your first job is to protect the things that matter most.

This is why it helps to separate debts and bills into priorities.

In the UK, certain debts can have more serious consequences if they aren't dealt with — for example, rent or mortgage arrears, council tax arrears, some energy debts, court fines and certain debts owed to government departments.

Credit cards, personal loans, overdrafts and catalogue debts are usually treated differently.

That doesn't mean you should ignore them. It means the order in which you deal with your money problems matters.

If you can't afford all of your payments, getting free debt advice can be far more useful than trying to stretch an already impossible budget.

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If You Can Afford Your Repayments

If your household bills are up to date and you can comfortably make the minimum payments on your debts, you may be able to create your own repayment plan.

Two popular strategies are the debt snowball and the debt avalanche.

With the snowball method, you focus extra money on your smallest debt first while maintaining the required payments on the others. Clearing that first balance can provide motivation and momentum.

With the avalanche method, you concentrate on the debt charging the highest interest rate first. Mathematically, this will normally reduce the amount of interest you pay overall.

Neither method is automatically "better".

The best method is the one you can realistically stick with.

And if you have expensive debt, it can also be worth investigating whether you qualify for a lower-interest option, such as a balance-transfer credit card or cheaper consolidation loan.

But be careful.

Moving debt doesn't eliminate it. And consolidating borrowing can make your position worse if you continue borrowing afterwards, extend the repayment period dramatically, or turn unsecured debt into borrowing secured against your home.

The goal isn't simply to move the balance somewhere else.

The goal is to create a realistic route to £0.

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What If You Can't Afford the Minimum Payments?

This is where the conversation needs to change.

If you're borrowing to make debt repayments, regularly missing essential bills, using one credit card to pay another, or finding that there simply isn't enough money to cover everything, a standard snowball or avalanche plan may not be appropriate.

There are debt solutions available in the UK for people in different circumstances.

Depending on your income, assets, debts and where you live in the UK, these could include arrangements such as:

• reduced or temporary payment arrangements with creditors;
• a Debt Management Plan;
• a Debt Relief Order in parts of the UK where this solution is available and where the eligibility rules are met;
• an Individual Voluntary Arrangement in England, Wales and Northern Ireland;
• bankruptcy;
• or, in Scotland, Scottish-specific solutions such as the Debt Arrangement Scheme, Protected Trust Deeds or sequestration.

These solutions work very differently and can have significant consequences for your credit record, assets, home, employment or future finances.

That is why I wouldn't choose a formal debt solution simply because it sounds attractive in an advert.

Speak to a reputable free debt-advice organisation first, such as StepChange, National Debtline, Citizens Advice or MoneyHelper, and make sure you understand both the advantages and disadvantages.

If you're already in serious financial difficulty, getting appropriate advice is not the same thing as giving up on repayment.

Sometimes it's the most sensible way of getting control back.

Don't Forget the Emergency Fund

One of the biggest lessons I've learned about debt is that paying it off is only half of the equation.

You also need some protection against going straight back into it.

Imagine you've worked hard to reduce a credit-card balance, but then your washing machine breaks, the car needs repairing or you suddenly have an unexpected travel expense.

Without any savings, where does that money come from?

For many people, it goes straight back onto the card.

That's why even a small emergency fund can be valuable while you're paying down debt.

You don't necessarily need thousands of pounds sitting in savings while expensive debt is charging interest. But having a modest cash buffer can stop every unexpected expense becoming new borrowing.

You might begin with a small target — perhaps enough to cover the sort of unexpected bill that would normally send you back to your credit card — and gradually build from there.

Once your expensive debts are cleared, you can concentrate on building a larger emergency fund.

How much you ultimately need depends on your circumstances. Someone with a secure salary, low essential expenses and good insurance may need a different buffer from someone who is self-employed, supporting children or relying on an older car for work.

The important thing is the principle:

Your debt repayment plan should help you become debt-free. Your emergency fund should help you stay that way.

Try Our Free Emergency Fund Calculator to work out a savings target based on your own circumstances.

Making Smarter Choices

Managing money isn't about depriving yourself of everything you enjoy.

It's about understanding the trade-offs you're making.

Instead of automatically buying something because you can afford the monthly payment, start asking what the purchase actually costs and whether it moves you closer to — or further away from — the life you want.

Is having the latest phone more important to you than reducing a credit-card balance?

Would you rather spend £100 on something today or put £100 towards getting rid of a payment that appears every month?

There isn't always a morally "correct" answer.

Money is there to support your life.

But once you become conscious of the trade-offs, spending becomes a decision rather than a habit.

The Reality of Repayment

Paying off debt isn't always exciting.

There will be months when the balance barely seems to move. There will be things you'd rather spend the money on. And there may be unexpected expenses that temporarily slow your progress.

That doesn't mean the plan has failed.

What matters is having a plan that you can continue with.

If you can afford to overpay your debts, every extra pound can shorten the journey and potentially reduce the amount of interest you pay.

But don't make your repayment plan so aggressive that one unexpected £200 bill forces you to borrow £200 again.

Sustainable progress usually beats a perfect plan that lasts three months.

Free tool

See how long your debt could take to clear — and how changing your repayments could affect the interest you pay.

→ Use the Free Debt Calculator

When Should You Save and When Should You Repay Debt?

This is one of the most difficult questions because the answer depends on your situation.

If you're behind on essential household bills or priority debts, deal with those first and consider getting debt advice.

If you're managing your bills but have no emergency savings at all, building a small buffer while maintaining your required debt payments can make sense.

If you already have some emergency savings and you're carrying expensive credit-card debt, you might choose to direct most of your spare money towards clearing that debt.

And once high-interest debt has gone, you can usually put much more energy into building a stronger emergency fund.

Think of it less as debt versus savings and more as building your finances in the right order.

You need stability today, a route out of debt, and protection against tomorrow's unexpected expenses.

Living a Fulfilled Life While Paying Off Debt

Being financially responsible doesn't mean putting your entire life on hold.

In fact, a budget that allows absolutely nothing enjoyable can be much harder to stick to.

You can still see friends, enjoy hobbies, have occasional treats and spend money on things that genuinely matter to you.

The difference is that those choices become intentional.

You decide what deserves a place in your budget instead of wondering at the end of the month where all the money went.

Financial freedom isn't about never spending money.

It's about reaching the point where you control your money instead of your payments controlling you.

Your Goal Isn't Just Debt Freedom — It's Financial Resilience

Clearing debt is an important milestone.

But imagine reaching £0 debt with no savings and no financial breathing room. One broken appliance or unexpected expense could put you straight back where you started.

That's why I think the bigger goal should be financial resilience.

That might mean:

1. keeping essential bills under control;
2. dealing with urgent or priority debts;
3. building a realistic budget;
4. creating a small emergency buffer;
5. systematically reducing expensive debt;
6. increasing your emergency savings once the debt is under control; and
7. eventually directing the money that once went towards debt into savings, investments and your longer-term goals.

The exact order won't be identical for everybody.

But the destination is the same: fewer financial emergencies, less reliance on borrowing and more control over what happens to your money.

Final Thoughts

Debt can change the way you look at money.

It can make you question purchases you once made automatically. It can teach you how much interest really costs. And it can force you to decide which things matter enough to deserve your money.

But the lesson doesn't have to end when the final balance disappears.

Use what you've learned to build something stronger.

Create a budget that leaves room for real life. Build emergency savings so unexpected expenses don't automatically become new debt. Understand which debts need dealing with first. And if the numbers simply don't work, get proper debt advice instead of struggling alone with a repayment strategy you can't afford.

Financial freedom isn't simply about owing £0.

It's about having enough control, savings and breathing room that borrowing no longer feels like the answer every time life gets expensive.

Related reading:
Avalanche vs. Snowball: Which Debt Strategy Saves You the Most?
Why Minimum Payments Are a Debt Trap
5 Ways to Stay Motivated on a Debt-Free Journey