SINGLE mum Euphemia Senar thought she hit rock bottom when she became homeless and faced £12,000 in debt, but now she’s out of the red and running her own business.
Euphemia, 39, from London, said she had “always been bad with money” when she was younger, taking Credit cards and missing their monthly payments.
Starting a young family with her then-husband put a strain on her finances and Euphemia’s marriage broke down, meaning she had to move into a shelter with her three children.
She fought to keep paying her bills as a single mother, falling behind on rent and shelter bills.
For 2019, his debt it amounted to £12,000, most of which was £6,300 of arrears on rent for his hostel.
Other debts he owed included more than £2,400 at a debt collection agency for a number of debts, including an unpaid credit card, a Very bill, and a mobile phone bill, and outstanding gas and electricity bills totaling over £1,400.
“I got a job teaching science at a school and things seemed brighter, but I knew I had to pay it back,” he said.
“I didn’t even know where to start, I even considered filing for bankruptcy. I couldn’t see a way out of my debts, it seemed like an overwhelming amount of money.”
But using the snowball method to pay off her debts and taking on two extra jobs, one of which was her own business, helped her become debt-free in less than two years.
Snowball method and cash cut
The first step Euphemia took to start dealing with her debts was to create a budget.
He wrote down each one of the debts he had, how much income he received per month and began to prioritize which bills and debts needed to be paid first.
“I prioritized my rent, council taxes, all essential bills, then I paid some of the money I had left over to pay off my debts.
“Armed with my budget, I went to my lenders to ask for a more affordable payment plan.”
Once he established the monthly payments he could afford, he used the snowball method to pay off his debt.
This is where you pay the minimum repayments on all your debts, and with the extra money left over, you put it towards paying off more of the smaller debt.
Even though experts often recommend that you pay off debts with the highest interest rate first So that she doesn’t pay more in huge fees, Euphemia chose the snowball method to stay motivated.
“First I paid the smallest to feel like I was making progress; I thought I could get out of debt faster then,” he said.
To help her keep up, Euphemia also used the cash-cut method to monitor exactly how much cash she had.
Cash Trimming Jobs taking money out of your bank account and dividing it into separate pots for different uses.
Once she had paid all the bills that came from her bank by direct debit, such as rent and debt payments, Euphemia took out the money she had left over and put it in envelopes.
He had 17 envelopes for different savings – for example, his grocery shoppingcar maintenance and their children’s birthdays.
But there are risks to using this method: you could lose an envelope and your cash, or lose the interest you could earn by depositing it in a savings account.
To make sure she could put aside as much cash as possible to pay off her debt, Euphemia began looking at where she could cut back on her spending.
He managed for half his shopping bill of around £80 to £40 per week switching to cheaper supermarkets.
“Instead of shopping at Tesco and buying whatever we wanted to eat, I went to Aldi and wrote a prepared list of foods we needed,” he said.
“I planned what our meals would be and I knew exactly what I would pay for.
“We ate noodle and pasta meals, which were cheap, and because we are vegetarians, we didn’t buy meat, which is very expensive.”
He then turned his attention to lowering his energy bills.
Turning off the scheduled timer on her heating system and turning on the heat when she needed it helped save her money, while turning appliances off at the plug helped lower her bills.
Managed to save £20 a month with theseand tricks to save energyreducing your bill from approximately £140 a month to £120 a month.
Cutting down on unnecessary trips and better planning her commute helped her save money on her fuel bills.
She arranged her after-school tutoring sessions so she could pick up her children from school at the same time and stopped driving to see family and friends on the weekends.
This helped her cut her fuel bill in half from £140 to £70.
As well as her day job as a teacher at a local primary school, Euphemia earned hundreds of pounds in extra income per month juggling two other jobs.
She gave private math and science tutoring lessons after school Monday through Thursday, giving her an extra month.
Setting up her own business in May 2020 has also helped her increase her income.
She sells budgeting tools like diaries and stationery on Etsy and can earn up to £6,000 a month during busy periods.
The business has become so successful that Euphemia was able to deliver her notice to the school where she worked to focus on increasing sales in May of last year.
It helped him pay off his debts much sooner and he was debt free in October.
She is relieved that the debt she had, which once felt overwhelming, is gone.
“I’m still dealing with impulse spending and unnecessary purchases, so I’m working hard to make sure I stay on track,” he said.
She said anyone can tackle their debt and pay it off if they have the right mindset.
“Many people are in the same position: listening to other people’s stories has a huge impact on your life.
“Research and analyze debt, help yourself, even looking at hashtags on Instagram can help you.
“With rising bills, many people are in the same boat as you; it’s good to talk to friends and family for support.”
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