The other day, I came across something that left me gob-smacked: the average UK household spends £406 per month on debt repayments excluding mortgages! And if that wasn’t surprising enough, the average monthly car payment is also nearly £400. Jeez!, this is the norm for some everyday people.
As a dad who’s been through the financial ups and downs myself, I know exactly how those numbers can keep you up at night. But here’s the thing, I’ve learned a few tricks along the way and I’m here to share them with you, man to man.
Understanding the Debt Mindset 🧠
You know what’s funny? I used to think I was being clever with money. There I was, using my Amex credit card to rack up airline points, telling myself I was “beating the system.” The truth is the system was beating me! In no time I found myself sweating over a £8,000 credit card bill with interest payments I couldn’t keep up with, reality finally slapped me in the face.
The thing about debt is, it sneaks up on you without realising. One minute you’re treating yourself to a “small” purchase on your credit card, the next you’re juggling to keep up with payment dates.
What I’ve learned about the psychology of debt is it’s not just about the money, it’s about how we think about money.
- We’re hardwired to want instant gratification. That new 65-inch TV? Our brain says, “Yes please!” before our bank account can scream “no way!”
- We’re emotional spenders. Having a bad day at work? The Amazon “Buy Now” button starts looking like escapism.
- We’re masters of justification. “It’s an investment!” became my favourite phrase, even when buying yet another tool I’d use only once.
The breakthrough came when I started tracking every single penny my family and I spent for a month. This was an eye-opener! Turns out those Friday night takeaway pizzas and occasional Nando’s were costing me more than my monthly electric bill. Who knew?
Here’s the good news: by understanding why you’re falling into debt and creating a budget; you can start taking control before it’s too late. Now, whenever I feel the urge to spend, I pause and ask myself, “Do I want this item now, or do I want to give my family a future of financial stability?” In the bigger picture, a single purchase today won’t contribute to a better tomorrow.
Steps To Breaking the Debt Cycle🪜
After a month of scrambling to cover one bill while another popped up, I finally faced reality and started learning some real strategies to get back on track. First, let’s talk about the debt snowball method. I thought it sounded like why I would pay off the smallest debt when I had bigger ones with higher interest. But it wasn’t just a math problem, there’s something properly satisfying about completely wiping out debt, even a small one. I started with my £300 laptop on finance debt, and the boost I got from paying that off gave me the momentum to tackle the bigger ones.
The real game changer for me was using a proper budget. Now, I know what you’re thinking “spreadsheets are for accountants!” That’s what I thought too. But here’s the thing: I made it dead simple with a single-page budget spreadsheet, showing my income, expenses, savings, and debts I started tracking everything. Even my kid’s cheeky after-school treats.
Let me share the steps that worked for me:
- I set up different accounts for different purposes. One for bills, one for spending money, one for emergencies. No more robbing Peter to pay Paul!
- In the beginning, I used cash for my spending money. When it’s gone, it’s gone. None of this contactless payment stuff that makes it too easy to overspend.
- I started teaching myself financial literacy and learnt about by personal finances and investing.
Having an emergency fund was a game-changer. Started with just putting aside £100 a month which seemed pointless at first. Then one day my car had some issues (of course it did!), and instead of reaching for the credit card, I actually had the cash to get it fixed.
Here’s something nobody tells you about breaking the debt cycle you’ll 100% have setbacks. Christmas, birthdays, parking fines, flat tyres, kids’ activities, school shoes the list goes on. But you know what? It’s not about being perfect. It’s all about getting back on track when you slip up.
Sometimes you need professional help, and that’s alright. I spent ages trying to sort everything myself before turns out there were options I didn’t even know about! like a financial coach. I could’ve saved myself months of stress if I’d just asked for help sooner.
Teaching Your Kids About Money👶🏽
Remember when your parents taught you about money? No? Me neither! That’s why I made it my mission to do better with my own kids. Mind you, my first attempt was a bit of a failure I tried to explain compound interest to my nine-year-old daughter which ended up with a very confused child not interested in hearing what else I had to say.
These days, I’m taking a very different approach. Starting simply with my youngest – three jars labelled ‘Spend’, ‘Save’, and ‘Share’. Every time he gets his pocket money, we divide it up together. Sometimes he’ll move money between the jars, and we talk about why. It’s sweet watching him think about what he wants to do with his money especially when he wants to share it with his older sister.
Here’s what I’ve learned about teaching kids about money:
- Make it fun! We turned budgeting into a game, my kids love playing ” The Shopping Challenge” where they try to buy a week’s worth of snacks within a budget.
- Use real-life examples. When we’re shopping, I let them compare prices and work out the best deals.
- Let them make mistakes. My daughter blew all her savings on a toy she never played with within a week. Best lesson she could’ve had!
The junior ISA savings was a real eye-opener for me. Started one for each of my kids when they were younger just putting in what I could afford each month. It’s amazing how it adds up! Plus, it gives us something to talk about when we look at the statements together.
Teaching my kids about money has made me better with it too. I can’t tell them to save their pocket money when I’m splashing out on unnecessary stuff myself. They’re like my little accountability partners and they take their job very seriously, which is great to see.
Shifting Your Mindset To Be Debt-Free ⚙️
My biggest lightbulb moment happened in the middle of Tesco, of all places! There I was, a trolley full of stuff I didn’t really need, when my little girl asked, “Daddy, are we rich?” Talk about awkward! That’s when it hit me, I wasn’t just managing money, I was managing my whole mindset about what makes us “rich.”
The hardest thing to get my head around was this delayed gratification. I used to be terrible at it – if I wanted something, I wanted it yesterday! But then I started playing this game with myself. Every time I wanted to buy something non-essential, I’d wait 48 hours. Half the time, I completely forgot about what I wanted to buy! That one thing alone saved me a fortune.
The truth is nobody tells you about getting out of debt, I mean completely out of debt. I have been normalised to live with a credit card balance or car payment every month. To be honest it’s not just about the money, it’s also about your time and relationship with stuff. I used to think having the latest car made me a better dad. Turns out, my kids couldn’t care less about that. They were more excited about the time when I didn’t have to work and “free fun days” where we’d explore local parks and have picnics.
The mindset shifts that really made a difference for me:
- Started thinking in terms of hours worked rather than pounds spent. That £300 on a weekend out with the boys? That’s two days of work!
- Learned to separate needs from wants. Which was tricky at first, but it gets easier.
- Started focusing on experiences over things. My kids remember our camping trip way more than any toy I’ve bought them.
Here’s a confession – I still struggle sometimes. The other day, I nearly bought a brand-new iPhone just because my friend Jason got one. Caught myself just in time! Old habits die hard, but at least now I recognise them for what they are.
Resources For Managing Debt 📖
Right, let’s talk about all the help that’s out there for parents like us. I remember feeling really embarrassed about needing help with my own finances. Typically, I thought I should be able to sort it all myself, didn’t I? Well, I was wrong!
First off, Step Change is a debt charity that offers families free advice on ways to get out of debt. They help people take control of their finances and give alternative solutions. No judgment, just practical help.
The Help to Save scheme is a great incentive for low-income households to save. For every £1 you save, the government adds 50p. It allows certain people entitled to Working Tax Credit or receiving Universal Credit to get a bonus of 50p for every £1 they save over 4 years. Help to Save is backed by the government so all savings in the scheme are secure.
The Father Figures community is an online hub with personal finance courses, tools, guides, coaching and a network of fathers all routing for your success. They believe financial literacy is the missing key to changing ordinary fathers’ lives. This is especially true for those who find it hard to save, invest and manage money while being responsible for a family.
Here’s what I’ve learned about getting help:
- Accountability and support from others in a similar situation can be very beneficial. Don’t beat yourself up if you make financial mistakes.
- Seek help as soon as possible if you’re drowning in debt. The best way to get out of your situation is to stop digging a deeper hole.
- Speak to the people you owe money to asap e.g. mortgage company, credit card company or loan company and be honest if you’re struggling to make payments.
It turns out there’s loads of support available if you know where to look.
Motivation on Your Debt-Free Journey 🥳
Celebrating the small wins has been key to keeping us motivated on this journey.
Our first big celebration was when we paid off our smallest credit card. Just £500 it was, but wow, did that feel good! Made my wife and I fancy coffee at home (saved £8 on Costa!) and put a star on our debt-tracking chart. Sounds crazy but it was the first step to a whole new way of life living debt-free and changing our family’s future.
Here’s how we keep the motivation going:
- We’ve got a debt-free countdown calendar. Cross off each day and watch the numbers go down!
- Joined an online community with other dads trying to get debt-free. The support and accountability have been great.
- Set up little rewards for hitting our targets – nothing expensive, booked my wife a nice massage after reducing our debt by £1000.
The best part? Our kids have started celebrating with us. They’ve got their own little money goals now, and we make an event of it when they hit their targets. Teaching them that being good with money can be fun.
Well, there you have it, everything I’ve learned about getting out of the debt trap and staying out. It’s not always been easy, and I’ve had my fair share of setbacks. But you know what? Every step forward, no matter how small, is a step in the right direction.
Remember, this isn’t about being perfect with money it’s about being better than you were yesterday. Whether you’re just starting out on your debt-free journey or you’re halfway there, it’s all worth it in the end and if you’re struggling? Reach out for help. There’s no shame in it we’ve all been there.
So, what’s your next step going to be? Maybe it’s tracking your spending for a month or making that first call to Step Change or deciding to join Father Figures. Whatever it is, take that step today. Your future self (and your kids!) will thank you for it.
