Beth Snow first got a credit card aged 19 because she wanted to boost her credit score.
She was offered a generous balance, but after she ‘recklessly’ spent on clothes, food and holidays, she racked up almost £18,000 in debt, and was soon unable to meet the minimum repayments.
‘I knew when I was spending the money that it was a problem, but I spent it anyway as I wanted to live my best life in my early twenties,’ Beth, now 27, tells Metro.co.uk.
She largely kept it a secret, but when she moved out of home and looked to buy a house with her partner, she knew she had to come clean.
‘It’s only when I moved out and started renting a house with my partner that I knew it had to go. We wanted to start saving for a house and so telling him about the debt and making a plan of action to pay it off was the best thing I could do.’
Almost half (48%) of 18 to 24-year-olds are currently in debt in the UK, a figure that rises to 65% for the 25 to 34 cohort. Amongst these age groups, research from Tesco Bank shows that credit cards are the main form of borrowing.
Younger generations are also more likely to owe family members money (16%), persistently be in their overdraft (14%) and have used Buy Now Pay Later schemes (12%).
Beth managed to get rid of her debt in just 18 months. She says: ‘I cut down on most expenses I felt I could live without, like beauty treatments and going out, and I worked hard to build multiple streams of income so I had enough disposable income to pay it off as soon as possible.’
Now, Beth has taken to TikTok, to share her experiences. She is one of a growing community of TikTokers using the app to dismantle the stigma surrounding debt. The hashtag #debt has accumulated over 162K posts, and, as the cost of living crisis deepens, users are getting candid about what they owe.
‘Carrying debt can feel very shameful and lonely at times,’ she says. ‘A problem shared is a problem halved, and talking openly with loved ones and sharing my story online really helped me to shift some of that burden.
‘I was also able to find people online in a similar situation sharing their tips for paying off debt and really cheerleading everyone on to do the same, which was so inspiring.’
It’s a refreshing change from the perceived notion that debt is the result of ‘bad’ decisions – but in reality, it’s no surprise that so many are struggling under piles of debt.
Society – and capitalism on the whole – encourages us, as consumers, to spend, spend, spend, visible through constant advertising that’s so widespread that even TikTok has now introduced its own shop. It’s nigh-on impossible to escape.
Likewise, in April 2023, data from debt management charity StepChange found that increasing cost of living was the second most common reason for household debt.
But, the moment people end up in debt, they’re shunned and shamed.
And the truth is, there are so many uncontrollable factors that can influence debt and money-making decisions, as Maddy Alexander-Grout believes.
When she was in her 20s, Maddy, now 40, ended up in £40,000 worth of debt. She’d racked up the balance on credit cards and store cards – but she later got a diagnosis that explained everything.
‘I had undiagnosed ADHD,’ Maddy, who lives in Southampton, shares. ‘I didn’t realise I was buying stuff because it gave me dopamine hits.’
Now, Maddy uses her platform as the founder of Mad About Money to help other neurodivergent people manage their relationship with debt.
‘I used to have no filter when it came to spending,’ Maddy details, suggesting that people with ADHD who do struggle with money should put as ‘many barriers as possible’ between themselves and the thing they’re tempted to spend on.
‘Pay in cash where you can; don’t just tap,’ she adds. ‘Have a buying process and keep things in your cart for 48 hours to help you make a decision. This is called delayed gratification.’
Ellyce Fulmore, 29, also has ADHD, and she’s on a mission to humanise personal finance. Like Maddy and Beth, she’s part of a growing movement that’s looking to tear down the stigma that surrounds debt, openly sharing the amount of debt she accrued with her followers – and, crucially, how she got out of it.
Growing up in a household that didn’t talk about money, Ellyce, from Calgary, Canada, was instructed by her parents ‘never’ to get into debt.
However, when she started university that quickly became untenable: she needed to take $20,000 out in student loan debt and accumulated $15,000 worth of high-interest debt because of her impulse spending. In total, she was in $35,000 of debt, the equivalent of around £20,000, by the age of 23.
Like Maddy, she didn’t realise she had ADHD until much later – and by the time she was diagnosed, it had already created a huge hole in her finances.
‘What did I buy? Plane tickets, new clothes, alcohol, decor from Homesense, the list goes on,’ Ellyce tells Metro.co.uk.
‘I avoided my debt; deleting emails about my student loans without even reading them and refusing to check my bank account.
‘After struggling for a while after graduation, I had a breaking point where I realised something needed to change.’
First, Ellyce saved a safety fund that equated to 3 months’ worth of expenses, which served as a backstop to prevent her from getting further into debt.
Then, she created a debt repayment plan, starting off by paying off the debt with the highest interest rate, which for her was her credit card.
‘From there I had to play around with my budget to figure out how much I could realistically put toward my debt each month,’ Ellyce recalls.
‘I aimed for as much as I could comfortably do, while still leaving some fun money for myself, and automated those payments each month.
‘I also started picking up extra shifts at work and selling my clothes on Facebook Marketplace in order to earn some extra cash that I could put toward my debt.’
Now, Ellyce has paid off all her high-interest debt and is balancing settling her student loans with saving. In fact, she’s invested $125,000.
6 tips to manage and clear debt
- Work out your budget before you borrow
‘If you are making a payment on a credit card, or taking out a personal loan for a set amount, look at how much you will be spending, and what the repayments will be. This will help you work out if you can afford to borrow the money, and factor in your repayments,’ suggests Ban Mahsoub, Spend & Save Director at Tesco Bank.
2. Go for the type of credit that suits your needs
‘Pick the right type of credit. A personal loan might be a great way to buy your first car, while you might want to book your flights for your summer holiday on a credit card,’ Ban adds.
3. Build a positive credit score
‘A good financial profile relies on having built a good credit score. A credit card, when used responsibly, can help build a positive score and enhance your creditworthiness,’ Ban says.
‘Paying at least your minimum payment, on time, and not exceeding your credit limit are some ways to show a lender you are a responsible borrower.’
4. Make a list of any borrowing
‘If you’re borrowing money, it’s important to stay on top of how much you’ve borrowed in total and how much you have to repay. It’s a key part of staying in control of your finances. Make a list of how much you owe, the APRs and your repayment dates,’ Ban says.
5. Ask for help if you need it
‘There is no shame in asking for some help managing your money, and that includes any borrowing you have. A little bit of expert advice can go a long way and you can get free tools and support from independent charities like StepChange, Money Advice Service or Citizens Advice,’ Ban outlines.
6. Consolidate your debts
‘Bringing together your debts into one loan could be a useful option if you have debts with several different lenders. A debt consolidation loan lets you pay off your existing debts, so you just have one monthly payment to manage.’
Empowered by the TikTok community, Ellyce wants to change the narrative surrounding debt, encouraging her followers to talk openly about their financial struggles to normalise it.
‘Realising that you’re not the only one feeling that way, and that it’s not a moral failing to be in debt, gives you back your power,’ she shares.
‘We often view being in debt as a result of careless personal choices, but in reality it is a symptom of our society and social systems.
‘It’s nearly impossible to move through life without taking on debt nowadays with the cost of living, stagnant wages, medical bills and lack of mental health support.
Most importantly? ‘Debt is clearly not an individual problem, but rather a collective issue that so many people are struggling with,’ Ellyce concludes.
‘Debt doesn’t dictate your self-worth, ability to manage your money, or your future financial state.’
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