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Debt crisis: “Why do I live a life I know I can’t afford?”

As a national debt crisis is announced, five women share the real reasons why they continue to live a life they can’t really afford.

We need to talk debt. Not a self-deprecating “Oh, I’m such a disaster that I put a vegan bean burger on my credit card last night LOL” kind of chat. And certainly not a shame-coated “I don’t even want to admit how far I am into my overdraft after three weddings this month HAHA” conversation. We need to get very frank.

Because according to a new report by debt charity Step Change, we are walking into a “debt crisis”. The research shows that 1.2 million people in the UK have faced serious financial issues, including falling behind on essential bills and using more credit to make debt repayments, during the pandemic. And the ones being hit the hardest are 25 to 34-year-olds.

The pandemic and recession are clearly causing a lot of millennials to be in more debt than ever before. But the truth is that so many of us have been living with debt for years… we just choose to hide it. 

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Last year, the Women’s Budget Group found that the over-indebted population is “younger, more likely to be female, have children and live in privately-rented accommodation”.  There are plenty of explanations for this: the gender pay gap, a housing market that only works for people with a Bank of Mum and Dad, the perpetual rollover of university fees, overdrafts and credits cards, and the fact that 9/10 single parents raising a kid are women.

And yet the Money & Pensions Service (MaPS) recently reported that three in five millennials aged 25-34 are keeping “money secrets” such as debt problems from their loved ones. But perhaps a confirmed national crisis will finally cause the penny to drop and break the silence.

And now that we’re getting the ball rolling, we need to admit another reason for debt: so many of us are trying to live a life that we know we can’t really afford. 

woman paying on credit card
We need to start talking honestly about debt.

I’ll go first, shall I? My name is Hollie and, despite having credit card debt and reaching the bottom of my overdraft at the end of every month, I still pretend to myself and everybody else that I’m financially fine. I have a little growing savings pot, but the debt far exceeds this (which makes the savings seem pointless but oh well). 

Yes, I’m bad with money, but I’ve never had a lot of money to play around with in the first place. My single-parent family grew up pretty much living hand-to-mouth and I’ve continued to be that way ever since. I know I’ll not become a homeowner anytime soon, if ever. I’ve chosen a middle-class dominated career field that will never fill my pockets. And, as a perpetually single person, I’ve never had the financial perks of “couple privilege”

And that’s my weak explanation for why I say yes to meals, holidays and new trainers that I know I can’t afford. The biggest thing I’ve spent money that’s not really mine on is a brace, which I’d wanted for my whole adult life. Was it worth getting into more debt over? Probably not. But I feel I’ll never get the really big and important stuff, so I rationalise borrowing a little here and spending a lot more there to make up for that. 

My friend Laura* also had a lot to (secretly) say about the subject in a frustrated voicenote, saying: “Money was very scarce when I was growing up, so as soon as I earned my own money from my Saturday job in the hairdressers when I was 14, I would immediately spend it on chocolate, clothes and makeup. 

“When I finally left for uni, I was bombarded with offers of credit, a student loan, a Topshop card and an overdraft that I’m still in. My ex-boyfriend also introduced me to the not-so-wonderful world of credit cards and we used it while travelling around for a bit. I’m still in £7,000 debt with that. 

“Because of my creative career choice, I’ve never been on a big salary. My friends, however, earn a lot and I always try to keep up with them because I don’t want to miss out. The thing is that I don’t even do anything extravagant: I rent a cheap house in Leeds, I’ve only been on one weekend away in the last three years and I’ve been paying towards my debt every month. But I do spend little bits on my social life and it all just adds up. 

“I had to freeze those debt repayments for a bit because I was put on furlough for over six months. And now, instead of making up for those missed payments, I’m spending a little extra money on making my room nicer so that I have somewhere nice to hibernate in this crappy time. But I do know I need to stop this and I will take control of it again, because it’s not really my money and being debt-free will feel better than buying things.”

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And my fashion PR friend Hannah* had to deeply explore her psyche to readdress her relationship with spending.

“I had a complicated relationship with money while growing up because my dad was a really bad spender and had a lot of debts,” she tells me. “When I left home and started out as a journalist, I worked so many unpaid internships and had to spend all my weekend salary on train fares to get to them. I was lucky enough to be able to live at home, but I worked seven days a week and used all my earnings to do so. I constantly had zero in the bank and was always living on my overdraft.

“But I have always worried I have that same personality trait as my dad when it comes to overspending, so have never allowed myself a credit card and no longer have an overdraft. My mission is to try and live on whatever I get paid myself.”

Woman with an empty piggy bank
Debt crisis: why do so many of us live a life we know we can't afford?

Much to my surprise and relief, my Stylist colleagues felt very seen when I shared this in a morning meeting. I’d assumed that everybody else is in a much healthier financial position than me, but it’s just not the case.

“I’m not good with money,” Anna* tells me after saying she wants to remain anonymous (there is still a stigma attached to this stuff, after all). “I have savings, but not as much as I wish I had – probably because my rent is ridiculous, but I also don’t deny myself dinners out or drinks with friends because ‘Hey, we only live once!’

“I’m a big believer in living my life within reason, and this holds weight for both saving and spending. I allow myself one or two nights out a week but make sure the other nights I meal prep to save. However if one week I’m feeling low and know for my mental health I need to see friends, I’ll do it more.

“I also used to work for a fashion brand and admit that I always wanted to buy something from the newest Instagram brand come pay day – something I’m trying to do less now.”

My other colleague, Chloe, says there is a lot of pressure on social media to live the life she can’t afford: “Living a life I can’t afford is something I’ve been thinking a lot about the last few weeks. While it’s not necessarily landed me in debt, I do live paycheck to paycheck and hate how much I spend on things I don’t really need.

“I think so much of this is heavily influenced by social media – we all know the idealistic bodies and faces we see online are unattainable and unrealistic, but there’s still something very chaseable about the women we see with perfect homes, clothes, food, nights out, etc.

“Plus, every single one of my friends out earns me and, while none of them are crazy rich or loose with cash, they do drop more money on a dinner, night out or activities than I would necessarily be comfortable with, but I don’t want to be left out over a simple £20. Except that simple £20 every week really adds up…”

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Although there is great comfort that comes in knowing that hidden debt is something many people are going through, it is an issue that we need to properly tackle for the sake of our financial and mental health. 

There is help out there. You can contact Citizen’s Advice for information and advice on debt. Or Step Change is a charity dedicated to giving free help to people who need it. 

And, if you relate to any of the above, it’s so important to remember that you really are not the only person whose card declined at the Tesco self-checkout till last week.

Speak to a Financial Conduct Authority registered financial adviser before taking financial advice, and think carefully before making any decision.

*Name changed at contributor’s request

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