Kitty*, 23, is an accountant from southeast England who earns £36k a year. In 2021, when she earned £31k, she was unhappy in her job and took out an interest-free credit card to start a business.
She only used it to buy things for the business at first, but it quickly became the card she used for everything – food, birthday presents, shopping sprees and going out.
By early 2022, Kitty was in £8.6k worth of debt – £1.6k on her credit card and £7k in car finance.
In March that year, her boyfriend’s grandparents floated the prospect of a holiday to Gibraltar, which spurred Kitty on to finally take control of her money. She knew she wouldn’t be able to go unless she got out of debt and saved up.
In April, she sold her car for £6,500 and paid off the remaining £500 between then and June. This made it easier to prioritise paying off her credit card.
By following a strict but realistic budget, curbing unnecessary spending and sorting her money into Pots, Kitty also cleared her credit card debt in just three months (four paydays) and made it to Gibraltar.
Her secret? Setting aside an hour a week for a solo weekly finance date, when she’d go through her spending and make sure she was sticking to her budget.
“I was really unhappy in my old job when I took out the credit card”
I disliked my old accounting job and wanted to do something completely different. I used a credit card to pay for a course in beauty treatments as my plan was to start a business. I’ve since started a new job in accounting which I’m a lot happier in, so I wound up my business.
When I took out the credit card, I turned a blind eye to the debt because it was interest free for two years. I'd make payments toward it every so often, but then I’d need to use it again because I’d paid so much off and didn’t have enough money left for other things.
“The stress was intense. It felt like the debt was on my shoulders all the time”
It was so stressful, even though £1.6k isn't a lot of debt compared to other stories I've seen. Whenever I spent money on anything else, I’d feel immense guilt.
Being an accountant made it worse because people think accountants are good with money and have it all together. I’m good at managing my clients’ money, I used to let mine go down the drain.
“The turning point was a trip to Gibraltar”
Last March my boyfriend’s grandparents came round and mentioned wanting to go to Gibraltar. They were really keen and wanted to book it straight away.
When they went home I said to my boyfriend, ‘Oh my God, I don't think I can afford this. I've got all this debt’. I felt so bad because they were so excited for it. I realised I couldn’t live like that anymore – not being able to book things and enjoy my life because I had all this debt in the background.
“I sat down with my boyfriend and made a plan to pay off the debt”
My boyfriend budgets all the time so he helped me put one together that would allow me to pay it off in three months so I could go to Gibraltar in June.
We laid out my earnings and everything I spent my money on, and then we cut out the things that weren’t essential. For example, I had a gym membership I was paying £80 a month for that I wasn’t using.
“Sticking to a strict budget meant making sacrifices”
I had to sell my car a month after I decided to pay off my debt, because car-related costs were making it even more difficult to pay off my credit card.
It also meant three months – and four pay days – of not going out much and not online shopping. Online shopping is my biggest thing – I'm always shopping on Asos, Amazon or anything. Often the stuff isn’t even suitable but I never return it.
I had to sit down and budget regularly. My boyfriend budgets once a week – he reviews everything he's bought and he really likes it, whereas I never did that. I started allocating an hour to it each week. It’s like a finance date with yourself where you sit down and go through your spending.
“I increased my food spending to keep me on track”
I'd always set unrealistic budgets, which I'd easily go over then give up and spend even more money. So I started spending more on things I’d skimped on.
Previously I had a budget of £100 a month for food which I was constantly going over. I increased my food budget by £30 extra a month, which helped so much because it was realistic.
"Now I have a Pot for everything"”
My boyfriend would always say, “You should have a pot for everything”. I thought this was overkill and not something I’d ever do. But I did it – now I've got a pot for everything.
I’ve got nine in total – including one for food, petrol, holidays, car insurance, service charges on my flat, eating out, personal care, and fun things like online shopping. They’re helpful because I can clearly see what I've allocated for each type of cost.
“I saved for the holiday while paying off the debt”
To do this I worked out my income minus all my essential expenses and then saw what I was left with. My priority was tackling the debt. I figured out how many months I wanted to spend paying it off, which was to fit around the Gibraltar trip, and then split it into four monthly instalments – the number of paydays I’d have.
Then I looked at what was left over and put that money into a Pot. It was also my birthday in June and I got a couple of hundred pounds from my family which I put towards the holiday.
The trip was four nights and relatively affordable. The accommodation was £650, which I split 50/50 with my boyfriend, and it was only £70 for a return flight. I took about £600 in spending money and I came back with change.
“Having the holiday to save for made me get my head down”
It really boosted my motivation. I just thought I have to do it, I have to knock this debt on the head. I also thought, three months isn't much time to calm down on my shopping and my other reckless spending. I knew I was doing it for a good reason and that I’d come out after the trip not owing anyone a penny.
“Once I’d cleared the debt I felt free, with nothing hanging over me anymore”
I felt liberated. Even though it was a stressful time in my life, I’m quite grateful because it taught me so much.
To anyone else in debt, I’d say speak to someone you trust and who cares about you. Get out in the open because when I did that with my partner it was really freeing. Take time to sit and look at everything. Don't bury your head in the sand. That's what I did for so long but budgeting saved me.
Take advantage of Monzo features. Now I’ve got a Pot for every aspect of my spending, I wouldn’t go back.
If you’re worried about money, or you find yourself struggling to pay back money you’ve borrowed, here are some resources from Monzo and others to try and help in difficult times.
To apply for a Monzo bank account and access Pots you must be a UK resident. Ts&Cs apply.
*We’ve changed her name