Young Aussie reveals how she got out of debt

A young Aussie has revealed how she got into so much debt and the moment she realised her financial situation was “dire”.

Right now, Jacqueline Liddell is in $4500 of debt.

While nobody likes to owe money, it’s a significant achievement for the young Aussie who owed a staggering $40,000 just two years ago.

The 33-year-old from Newcastle found herself in a dire financial position after getting swept up using buy now pay later (BNPL) services and credit cards.

She told news.com.au she started buying now and paying later when she was 25. She didn’t think it would “hurt”, but the habit sent her down a slippery and expensive slope.

“I ended up using BNPL services repeatedly and got several credit cards to pay off the purchases,” she told news.com.au.

When Jacqueline Liddell was 25, she started getting into debt. Picture: Supplied

In 2022 her financial situation was ‘dire’. Picture: Supplied

Once she started owing money, it became impossible to get ahead again. Suddenly, she was paying off debt with one provider by amassing credit card debt.

“I didn’t cut up the credit cards and kept them for emergencies, but eventually, I found myself using them again and again. I also took out loans to pay off family and friends, which added to my debt. At one point, I was managing a consolidated loan, Afterpay, Zip Pay, a credit card, and various other loans,” she said.

Falling financially behind quickly began to take its toll. She realised her financial situation wasn’t just shaky; it was “dire” and fast becoming crippling.

“I was having sleepless nights, wracked with guilt and worry, and felt embarrassed and ashamed,” she said.

The first step to clearing her debt was adding up everything she owed. This confronted her because her wage wasn’t enough to cover her expenses and bills. She considered declaring bankruptcy but worried about the long-term impact on her credit rating.

“I created a list of all my debts and crossed off each as I paid it off. This visual representation of my progress kept me motivated and focused,” she told news.com.au.

Ms Liddell also realised that she couldn’t keep her debt a secret.

“I confided in my aunt, who encouraged me to tell my family; their support was crucial. My brother, in particular, was incredibly supportive,” she said.

“He would call me weekly to go through my finances and help me manage my debt using the snowball approach, which involves paying off the smallest debts first. This gave me small wins and helped build momentum.”

When she started paying off the debt she was living on negative. Picture: Supplied

The young Aussie revealed how she changed her spending. Picture: Supplied

At this point, her fortnightly repayments were about $1000, and she lived on a negative balance each week.

“The amount I paid back varied, but my approach was to focus on small, manageable payments rather than overwhelming myself with large sums,” Ms Liddell said.

The only way to get ahead of her debt was to bench herself socially. She couldn’t afford to participate in most activities, and she had to constantly be honest with people about her financial situation.

“It was tough but necessary. I haven’t taken a holiday in two years, and I sold a lot of my clothes on eBay and Depop to help raise money. I also missed out on the freedom and peace of mind that comes with being financially stable,” she said.

She took on multiple jobs and worked any extra hours that were available. She worked at a friend’s coffee shop, did mystery shopping, participated in online surveys, edited university work, and tutored students.

Ms Liddell has shared how she fought her way out of debt. Picture: Istock

It wasn’t just about earning more money to pay off her debt. Ms Liddell also knew she needed to change her spending habits and relinquish control of her multiple BNPL accounts.

“I gave my family access to my BNPL accounts to hold me accountable. They would monitor my spending. Eventually, I had them change the details so I couldn’t use the accounts. This helped me break the cycle of impulse buying,” she said.

“I enrolled in financial literacy programs through my bank, which helped me understand better money management and avoid falling into the same traps again.”

On reflection, Ms Liddell, who has climbed her way out of debt, said she doesn’t blame the buy now pay later services but now understands how using them impacted her.

“It’s important to understand how these services can impact your brain chemistry and lead to a cycle of wanting more. By the time you’ve paid off one purchase, you might already be looking for the next thing. For me, they exacerbated my lack of financial literacy and self-control,” she said.

“I don’t want to speak negatively about BNPL schemes themselves; they were always kind and supportive when I reached out for help. The key is to use them wisely and stay within your budget to avoid falling into the same traps I did.”