I’ve written a couple of previous Weekend Essays about the amount of debt I have accrued. It’s completely my own fault for not living more frugally. I take ‘you only live once, and you might die tomorrow’ to the extreme when it comes to spending money.
The last time I wrote about my debt was in August 2023, when I laid out my plan to get “money fit”. I said I was going to make sure I was in a better financial position by August last year and, although I didn’t go into the exact details of how, it did involve cutting down on spending.
I said that I wrote that Weekend Essay because it was therapeutic to do so, and so that you guys could serve as my accountability coach.
And, I must say, you’ve been terrible accountability coaches. Now, in February 2025, I’m in the most debt I’ve been in. And it’s not unmanageable… but I still would massively benefit from not having it.
The problem is, I’ve always been able to draw money from somewhere. Back-up savings, credit cards, personal loans. And I never think I’ve gone so far as to not being able to pay it back. But, of course, the more I owe, the slower I pay back.
Then I get demotivated and think: ‘Well, I’m in it now – might as well keep going’ (completely the wrong attitude, I’m aware). It doesn’t (and does) help that I have thousands of pounds in a lifetime Isa, which is my safety blanket.
Changing habits
People (who have little knowledge of how Lisas work) have asked me why I don’t just take the majority of that out to pay off my debt. Well, my answer is that if I did that, I’d lose about £6,000, because of not being able to keep the government bonus, and the extra 6.25% I’d have to give back on top of that for withdrawing.
I also very much do not want to rely on my parents (hugely generous as they are) to get out of it. I need to do it myself. But the truth is, until recently I haven’t truly and genuinely wanted to change my money habits.
Until last month, that is, when the six weeks between paydays, coupled with Christmas and New Year spending, really started to bite and I found myself in the most precarious financial position I’ve ever been in.
So, I sat down with my boyfriend, who is equally ‘live in the moment’ as me, and we had an hours-long conversation about how to get into a better position financially.
He mentioned that he has a friend whose salary is about £60,000, but he lives like he earns £20,000.
I thought that was probably a bit far for me, but my boyfriend said it meant he had accrued enough savings that, when he needed a new car, he could just go out and buy a nearly brand-new Mercedes outright, with no monthly finance payments.
OK, I don’t want a Mercedes, or a new car of any kind, but it did highlight to me something I already knew deep down: that it can pay to be sensible.
I don’t want to go to the extreme of living like I earn £20,000 a year, but this conversation made me really, genuinely, want to change my money mindset. After all, you can only change your habits long-term if you truly want to.
Simple but effective
One thing my boyfriend suggested was something some of his friends have done when they’ve been hard up or just wanted to save: focus on a specific amount per week rather than per month.
For example, you can set a maximum amount you can spend every week and put each amount into a separate envelope or a separate account in your banking app.
It sounds so simple and obvious, but I did it in February and it’s been so effective – I have much more money left today than I usually do at the end of the month.
In this situation, my boyfriend was effectively acting as my financial coach, and he did a very good job of it.
Obviously, in my situation, ‘full fat’ financial advice would not be appropriate. But, if I want to really instil a mindset where I’m not spending well above my means every month in the long-term, and not slip back into old habits, perhaps a qualified financial coach would be a good idea.
When I attended the Lang Cat’s most recent conference in London earlier in February, there was a guy on one of the panels called Pete Matthew – financial planner and chief executive of Jacksons Wealth Management.
He spoke about financial coaching as an “emerging profession” and an “obvious solution to fill the advice gap”.
“In a world where you can open an Isa in 40 seconds, the key element is behaviour, which isn’t regulated and can be addressed at a much lower cost, making it more accessible,” he suggested.
He also suggested financial coaching also has a much lower barrier to entry for those wanting to work in this space without the “burden of regulation”.
I’m sure Money Marketing readers know the difference between a coach and an adviser.
While advisers provide specific product recommendations, coaches are not regulated and do not provide guidance on products. Instead, they aim to understand your financial goals and behaviour around money so that you can help yourself.
I feel very positive after successfully sticking to my plan for February, but sticking to it forever will be more challenging.
This is where coaching could be ideal for someone like me, because I don’t have enough savings to put into any products yet anyway.
All I need is someone to help me understand the exact reasons behind how I’ve got into debt and help me change my mindset so I can rectify it for good.
