Dealing with bad debt…

Dealing with debt can create anxiety, cause shame and confusion especially if you don’t know what to do and you don’t have the right people around you. Don’t worry this is normal and I speak from personal experience.

I grew up in Uganda, we saved before we spent! This included significant expenditures such as cars, house etc., because that was the culture. My parents were a prime example of this kind of model. Uganda is a cash economy,hence I didn’t grow up around financial credit. I therefore had no understanding of loans, mortgages or any financial credit.

When I moved to Scotland, it became clear that as opposed to a cash economy Scotland was a credit economy. Financial credit was easily accessible and I received several letters offering me loans. The possibility of having that much money and doing what I wanted with it came across like financial freedom and it was very tempting. I remember my first store card, I bought sketchers trainers I had been desiring for a while but couldn’t afford. I couldn’t believe I could now buy these shoes without paying cash upfront. Sounds exciting right,? Once I started accepting the loans, it was difficult to break the habit. It was not unusual to take out loans whether I needed them or not.

Before long, I accumulated personal loans and store cards with a view that with our household income we could pay them back slowly. The loans were spent on holidays, luxuries and supporting some family members in my home country. With this so-called financial freedom, I didn’t realise that we was living beyond my means. This was all fine until we had to manage on one household income. Then the pressure, anxiety and worry started. I was practically losing sleep over this. It was difficult to see how we could pay back all this money.

As a means of taking back control, I started educating myself on finances and consequently developed a personal relationship with my money. I found a few money-saving groups that I joined and was determined to be debt free… I hated debt, I wanted out and I convinced myself I could do this.

Here are a couple things I did to manage my debt.


For me to see the success, I needed to start prioritising my debt and clearing them off one at a time. In 2015, I paid off my first store card and was so encouraged and motivated which kept me focused to continue tackling my debt.


By living on one wage, we had mastered the art of needs and wants. If we could not afford, then we didn’t need it. We lived within our means. Everything was accounted for, so there was no room for unnecessary spending. Any balance went towards our debt sometimes it was difficult but we were determined to see this through. The feel good factor to all of this was that I was achieving my goals and my list of debts were reducing while my networth was increasing.

Tip: Develop a habit of checking your credit and debit monthly, you will notice some of the expenses that could have been avoided. Just for fun, add them up and see how much you could have left if you cut out some of the unnecessary expenses.  By avoiding eating out or buying those new shoes, when you add them up, this could pay off your debt.

When our financial circumstances positively changed, we were still focused to stay on the plan.

With the above discipline, I was able to pay off our last ‘bad debt’ in May 2017… This was about 25k plus of debt. At this point, I felt like a millionaire but this was not going to sway me from the healthy financial habits that I had acquired.!! I did it with determination so can you.

Sometimes if you are living with debt, it’s daunting and you may not know where to start or how to deal with it. Speak to someone you trust and get the right support in place, a problem shared is a problem solved.

Having said that, do we believe debt is good or bad? That’s up to you to decide. While some may think using a credit card is irresponsible, and sure it may be for those who can’t pay back what they spend, for those that can, by using a credit card just for the purchases you would be making anyways, you can earn rewards in the form of cash back or points. We pay back everything we spend on our credit card as we would on a debit card at the end of every month, we just take advantage of the points and rewards that come with it.

I hadn’t checked my credit score for a while because I didn’t need to, so recently for some reason I did and even though the only debt I personally have is my mortgage, I was very above average with my credit score if I needed to take out credit.  I hear people talking about financial freedom all the time, I must say I feel I have financial freedom without bad debt. Plan for Every penny just like the saying take care of the pennies….


“Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.’ Will Rogers

Disclaimer: This Blog does not constitute financial advice, if you are worried about Debt, talk to someone you trust.

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