
Amy, a 32-year-old accountant looked like she was living her best life. She rented a fabulous apartment in the eastern suburbs of Sydney, was going out for drinks, endless brunches, giving herself little shopping treats here and there, mini weekends away with friends and ubering all around town.
On Instagram anyone would think she was living the dream. But there was a secret looming over her which she knew she would soon have to face. After she didn’t get the pay rise she had expected at a job performance review, it became clear that now was the time. She took out her credit card statements - yes, all of them - and faced the cold hard truth.
“I saw the debt and was shocked. I was in $20,000 of credit card debt and, apart from superannuation, I had almost no assets (I was renting, had less than $1k in savings, no car and no investments), I knew I had to make a massive change”, Amy said.
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Prior to that moment Amy had always taken a more relaxed approach to her personal finances. She had known for a while she was probably living beyond her means, but had been avoiding facing the full reality of the situation and conveniently stuck her head in the sand.
“I wasn't earning enough to sustain the life I was living. Even though I was an accountant, I actually wasn’t on a very high salary. I was living in a suburb where rent was high, I was eating out often, travelling regularly... but couldn't really afford it.”
In 18 months, Amy was able to get out of $20,000 worth of debt.
And she took precisely eight steps.
1. She had an honest pep talk to herself
"Realising you are in debt, or finally coming to terms with the reality you actually knew about for some time and accepting it, can be quite confronting. It is really easy to beat yourself up over your past behaviour. The reality is that these thoughts are not going to help you move forward. Once you accept the situation, and your past spending behavior, making a commitment and a plan to turn things around is empowering."