How a year stuck at home in lockdown taught me to live with £76,000 debt

With nowhere to go, it was easier to make changes and learn restraint ... but it will be 12 years before I am out of the red

A year struggling to come to terms with £76,000 debt.
A year struggling to come to terms with £76,000 debt. Photograph: Olivia Crellin
A year struggling to come to terms with £76,000 debt. Photograph: Olivia Crellin
Olivia Crellin

Last modified on Mon 14 Dec 2020 06.05 EST

It was terrifying to see the state of my finances written down in such a specific way: I owed more than £37,000 on four different credit cards, had a £37,000 loan and maxed out my £2,000 overdraft. In an article in the Guardian I explained how I had set up a social enterprise – and ended up £76,000 in debt.

A year on, it feels no less embarrassing and surreal. Despite a debt management plan which I started a year ago, I feel I’ve barely made a dent in the headline figures. Unless my fortunes change dramatically, like many others, I’m looking at over a decade living with debt.

I set up a social enterprise in my spare time as a journalist. Starting it cost me tens of thousands of pounds – which I didn’t anticipate – and I had to spend up to £500 more a month to run it. Named PressPad, it matches established journalists who have a spare room and live in a big city, such as London, with media interns who live outside that city.

Last year I raised £45,000 from crowdfunding. But the money had barely cleared into our bank account when Covid hit. As PressPad is a host-mentorship service – think Airbnb meets LinkedIn – and relies on young people being hosted in the homes of experienced professionals, it wasn’t possible to run it during the pandemic, completely undermining our business model.

So we changed direction – using a government grant – to provide an online support programme that reached more than 7,800 young people during the first three and a half months of lockdown. We built a website, so that when hosting is possible again, we will be more efficient.

But that was business. While PressPad was able to ramp up support because of the timing of a crucial grant, I was in a very different relationship with my personal finances.

Before I faced up to the severity of my situation, I knew nothing about debt repayment schemes. While it’s only a year ago, my memories of how I found the company I’m now signed up to, Debt Support Service, is hazy.

I was in such a panic I probably clicked on its website in the early hours of the morning, unable to sleep, constantly Googling for a way out.

It offered me the chance to declare bankruptcy, although that was not an option for me, and I forwarded its final written repayment proposal to my parents to check out. The benefits of the scheme are clear: you stop being dragged into further debt; most of the threatening and scary communications from banks and credit card providers are intercepted, and you’re given a dedicated individual you can talk to and be honest with about your repayment capabilities. You feel as if things “under control”.

On the downside, without any access to personal credit, you feel, like millions in this position, as if the day-to-day budgeting amounts to a tightrope exercise. You’re freed from the pressures of debt and yet simultaneously constrained by them.

The repayments, while intended to be manageable, provide slow progress. Every month, I pay £531. But in the first six months, the fee to the debt management company is £383 – so I am paying £148 off my debt. After those first six months, the fee goes down to £40.

I’ve now paid £6,628 and have another 12 years and four months of payments at the current rate. I can increase or decrease repayments at any time.

It has been a sobering experience for someone who, until the age of 30, did not have to worry about money. However, living with debt during a worldwide pandemic has been easier than it might otherwise have been.

Pre-Covid, my professional impatience and the determination to make PressPad work meant that I took risks and invested in pushing ahead as if my finances were as limitless as my energy.

During lockdown, stuck at home, I started to look inwards and make changes, dictated by necessity, but facilitated by lockdown. The pandemic has wrecked many lives and businesses, but for those of us that are still hanging on in, it has also taught the benefit of restraint.

I started with little things, cutting monthly costs like Spotify, Amazon Prime and my mobile phone bill – I was on home wifi every day, anyway – and made positive changes that have stuck, like using a separate bank account for my “disposable” income, batch-cooking to avoid waste and switching from Asda to Iceland for the online food shop.

Small-scale deprivations, like only going to the shop for milk and catfood, were a godsend. And I wasn’t the only one stuck at home, unable to take a holiday or pick myself up by throwing money at a nice restaurant meal or cinema trip. Nowhere to go, nothing to spend money on.

Not everyone is as lucky as me. I have been able to carry on my part-time work at a media organisation, I have a home that I can still make mortgage payments on, and a supportive family. So many business owners – startups or otherwise – have not had these.

My parents have been a great mental, and at times financial, support lending me £50 here and there when cashflow issues and a lack of credit cards (relinquished with the debt management plan) meant I hadn’t quite made it through to my next pay day.

But it’s been my war-era grandparents’ advice, passed on through my mother, that really hit home: “Want less. If you can’t have something convince yourself you don’t need it, and there, perhaps, you’ll find happiness.”

I believe spending money on PressPad was worth it. But cash has once again dried up and there are other threats ahead – the uncertainty of the pandemic and the move of funders away from social enterprises towards frontline Covid resources.

I’m not able to put any more money into the organisation – in the past I might have taken out another 0% interest credit card.

The need to support young people is more important than ever, but Covid 19 has taught me, on a personal level, both to want and expect less. I hope, however, for the sake of the organisation and its good work, such expectations will be surpassed.

More information about PressPad and its online Covid-response support programme #PressPadRemote, which is now fundraising, is at presspad.co.uk