This Guy Borrowed $7,000 For A Holiday. Now He's $22,000 In Debt.

I was working in retail filling shelves at night and I got promoted to assistant business manager. It was a huge jump in income. I went up from about $30,000 to about $60,000. Six weeks later, I got a new car, a top-of-the-line Toyota Camry. I was like, “It’s the next thing to do, you buy a new car when you get a new job”. So I had $2,000 for the deposit and it was a $33,000 loan through the seller’s financing company. I assumed that every year my salary would go up with inflation and I thought I could pay it off within two or three years. I don't have the car anymore, it was taken off me when I went bankrupt.

I had a single bed. I thought, “Well, I’m meeting people, so I’m going to buy some furniture”. I bought a bedroom suite from Domayne a few months after the car. It was a queen bed, mattress, bedside table, tallboy, and lamps. It cost $6,500. I got an interest-free credit card with a $10,000 limit. I paid $150 a month on a fixed five-year term.

My Dad has never been good with money. He’s a truck driver, an owner-trader. For one of his loans to buy a truck, the security was my grandparents’ house. He was about to default on that loan, which means that my grandparents would have lost the house. I was the only one who was financially viable at that point, so Dad expected me to help. I took out a $15,000 loan to pay off his loan.

The job I had was killing me. I was working 15-hour days. Over Christmas, I’d be there from 10am until 7am the next morning. It was just too much for me. Retail is exceptionally draining, so it was affecting my mental health. It got to a point where I was like, “I don't want to do this for the rest of my life.” I decided I wanted to study, but at this point, I was obviously in too much debt to do that.

I didn’t know what else to do, so I went bankrupt. It will be three years ago on January 4. It was maybe a year and a half after the car loan. It was a total of $65,000 at 22. I spent a bit of time researching bankruptcy, but the longer it took, the more stressed I became. The hard part was it was my Dad’s loan that really kicked me right under. We don’t talk anymore because of it.

Honestly, going bankrupt was just extremely relieving. It didn’t really hit me how the repercussions would affect me afterwards. The debt was with me when I was at work, before I got to work, it was the only thing keeping me at work, and work was destroying my psyche.

Going bankrupt allowed me to go to uni, to move out of my parents’ house, to work less and focus on myself and my interests. It gave me a sense of freedom and independence, which is what I needed. But every year, I have to fill out a statement of income and make sure I don’t earn more than $52,000 a year, or I have to make repayments to my debt. I couldn’t get an energy provider when I moved house. I couldn’t move telco providers.

When I was applying for bankruptcy, I had applied for a credit card. I forgot I applied for it because it took ages. My application was approved just before my bankruptcy went through, but it just sat there. Then in March last year, I moved from Newcastle to Melbourne. I used it for the cost of moving, and then my phone died so I had to buy a new one. The phone was like $2,000. My cost of living skyrocketed when I moved as well. My rent was obviously a lot more, and everything else in general. I was working in retail again, and I thought, “All up it’s $5,000, I can pay it off”. I just paid the minimum to stop the interest from becoming astronomical.

Then I also got a tax debt. They audited me for the last seven years. I was like, “Well, no one’s ever shown me how to do my tax, so if I’ve done it wrong, whatever”. I had claimed work expenses, but I didn’t have adequate evidence. It was about $2,000 over seven years. I pay $13 a week, and then if I get a tax refund in the future it comes straight off it. Plus there’s interest.

I start a new part-time job in January, with the student union at my university. It’s an honorarium of around $20,000 a year. That’s when I’ll start paying it all off. I don’t work at the moment – I left my last job because it was death.

* Surname withheld for privacy reasons.

The first significant chunk of debt was a personal loan I took out when I was working in my previous career in a sales role. I was about 23. I got five weeks off work and travelled to Europe with a couple of friends. I was bringing in good money. I had a 12-month goal to have it clear. The bank had no problem with that and I was confident of being able to do that.

In that career, you are expected to keep up appearances. I had reasonably expensive clothing; I was expected to socialise often and doing so isn’t cheap. Another component of my debt that came later was the car loan for the car that came with that career. I’ve still got the car. Now it’s a piece of shit. I owe more on it than I will get for it, that’s for sure.

I’ve never made significant inroads into the loan. I came home and went back to living that lifestyle. I made my minimum repayments, but I was never in a position to significantly impact on the principal. Given the fluctuations in my industry and my income, I managed to compartmentalise it as something that needed to be paid off, but that I had the capacity to do if things improved and I had that big payday.

Over the next three years, I went through some challenges. I wasn’t happy with where I was at. I felt that I was being trapped into the cycle of having to keep working to keep everything running and not wanting to commit to that career for the rest of my life. It was 100% commission. I have made some fantastic money, but if you’re not prepared to continue that until your dying day, then you don’t have any money coming in. That had a big impact on my mental health, which comes with additional costs.

In 2016, I got out of that career and went back to uni. I wasn’t able to get a place in a full-time master’s so I’ve been studying part-time online. It was a huge decision. But I got to the point where if I didn’t make some change then there were going to be some pretty bad outcomes for my mental health and my future in this world.

I don’t think I’ve bought a new piece of clothing since I left that career. Every three months I’d buy a new suit. Now if I need to, I still wear the suits I have from then. Some of the other lifestyle choices, like occasionally going on holiday or going out for a nice dinner, I think I wasn’t prepared to give up as immediately as I should.

All up my debt is about $22,000 the last time I checked. It’s not something I check very often. The personal loan sits at about $11,000 and the car’s at about $5,000. Overdraft is the other main component. My repayments come to just over $300 a fortnight, which is about a third of my take-home income. There have been periods where other expenses come up and I need to dip back into that money, to be able to keep my car on the road, get to work, pay for medication, those sorts of things.

I’m working a couple of different casual jobs as I try to complete my MBA. I define myself as underemployed. I apply for on average two jobs a day. If I take a day off work, if I’m not bringing money in on a day, then I don’t have the motivation to get out of bed because I’m not taking steps to pay it off. When I graduate, I’m planning to look for an executive business role using the skills from my previous career. Hopefully that degree elevates me to a salary which will alleviate a lot of these issues.

It’s probably the biggest stress in my relationship with my girlfriend. Her career path has been very different and she’s been a lot more disciplined than I have. It impacts on the choices we can make as a couple. That’s one of the biggest stresses on me individually, fearing that at some point this level of debt will cost me that relationship.

* Pseudonym used for privacy reasons.

Pretty much the second I turned 18, I got an email from my bank saying I’d been pre-approved for a credit card with a $10,000 limit. I wasn’t exactly in the best headspace. I just went for it. I was working full-time in aged care in Canberra. I was earning relatively decent money – I think I was on about $1,000 to $1,500 a fortnight.

There was an issue with my pay so I didn’t get paid for seven weeks. I used the card for everyday things like petrol. I went to Melbourne with it. I was able to pay some of it off, but not a lot. Then randomly my brother asked if I could move in with him and I left my job and moved to the Central Coast. I was not in a good home environment so having an out was good.

That’s when I took out the $5,000 personal loan. The bank knew I didn’t have a job but I think they gave it to me because I’d recently had my last pay come in. I’d managed to keep the card under $10,000 with little bits until I left my job and then I couldn’t afford it at all.

I didn’t end up getting a job on the Central Coast. I was there for two months. Then I moved down to Victoria to live with a friend. That’s when the phone calls started coming from the bank. It wasn’t until about six months after I got the personal loan that I was able to get another job. I was full-time, but I was on an apprentice wage. It might have been $700 a fortnight.

It was pretty stressful. Obviously I’d never had any debt before and I was just not able to pay any of it. The constant phone calls meant that I basically didn’t answer my phone ever.

At the end of 2013, I got a really bad spinal condition so I couldn’t continue working. At the beginning of 2014, I went back and got my Year 12 and then I went straight into studying at uni, a double degree in criminology and psychology. I’ve got about another two years because I’m doing a reduced load.

In 2014, I got a call from debt collectors. They got me on a payment plan, which I’ve been on since. The interest increase is faster than I can actually pay anything off the principal. At the moment I’m doing $60 a month and just going nowhere.

I have three part-time jobs. I work at Maccas and as a delivery driver for a Chinese restaurant. I’m also editor-in-chief of a magazine on campus. That one’s technically unpaid but it still takes up time. I live alone at the moment, paying $300 per week in rent. And then covering my car and my phone bills means I can't really do more than $60 a month.

I’m talking to a financial counsellor about maybe going bankrupt. The debt is only increasing, but I’m still losing money each fortnight. There’s no chance within the next two years for me to actually get it done. In the last two years, it’s already gone up $3,000. I can’t travel if I go bankrupt, you have to get pre-approval every time you go overseas for the next five years. It might affect if I want to eventually buy a house.

I believe my debt is around $19,000. It might be slightly more. I’ve pretty much gotten used to it. It gets really frustrating knowing that I’m still where I was a few years ago, nothing’s changed. No matter how much I’m paying, no matter how much effort I’m putting into trying to get rid of it, it’s not going anywhere. I’m unable to get a phone plan and things like that. I’m quite overweight and I want to get weight loss surgery to help my physical health as well, but I wasn’t able to get any financing. I’m not able to get financing to get braces. It’s just little things. I get reminded that I’ve got this thing and it’s something that I did when I was so much younger.

I had a huge screw-up at my previous job. I worked for a not-for-profit, so there were different tax arrangements. I was getting the tax discount, but they hadn’t factored in my HECS debt.

In July 2016, I went to put in a tax return and got hit with a negative $14,000 tax return. I did it myself on eTax and that last screen was very, very unpleasant. I definitely thought it was a mistake. After payroll did some digging they realised the mistake they made. They were apologetic but offered no assistance. I ended up going to see an accountant. He said it was all legitimate but we can delay lodging your tax return until the very last day and that will give you almost a year to scrounge up the money.

I had maybe two or three thousand dollars in savings at the time. Instead of paying anything at the start, I saved for as long as possible. I ended up paying off around $10,000 and then entered a payment plan for the last $5,000. It felt terrible. I had saved up all that money, and all of a sudden I was $500 a fortnight worse off and all the money I had saved was gone. I was also paying an extra $250 in tax once my work figured out how to tax me properly. I was probably taking home just over a grand week then, minus the $500 a fortnight I paid to my debt. I ate a lot of noodles and rice.

I had a credit card before I got the debt, just for emergencies. But all of a sudden, I was so much worse off. My fortnightly income paid for my rent and some groceries and fuel if I was lucky. I have a couple of pets, I occasionally like to go out to dinner and treat myself to luxuries like a cup of coffee. If anything was outside of the bare essentials it didn’t happen or I put it on a credit card.

One of the things I found with debt was that I could go a month or so without spending too much, but then every now and then something stressful happens and you just need to have a drink or go to the movies. The more you dip into it, the more you continue to dip into it. It became, “Oh this is fine, there’s no immediate penalty, I can afford the immediate repayments”. Until you end up with a $15,000 credit card debt.

I hit the credit limit and then spent a couple of months pretending that everything was fine and that I could continue making payments and eventually I’d whittle it down. But 20% interest on a $15,000 credit limit is a lot, it turns out.

After a couple of months, halfway through this year, I rolled the leftover tax debt and the credit card debt into one $20,000 bank loan. It’s at a slightly lower interest rate, about 13 or 14%. It costs me $600 a month.

I’m still in debt, but I’m in a better job as a government consultant now, I’m getting taxed correctly, I earn a bit more money. Now I’m on $94,000. I’m not really saving very much, but I can now afford to put a couple of hundred dollars aside.

I proposed to my fiancee earlier this year. Neither of our parents are in a position to chip in a huge amount of money for our wedding. We’re trying to keep it as cheap as possible. We’re hoping for between $15,000 and $20,000. We definitely want to save for a house as well. But it’s a bit of a pipe dream. I don’t want to be too much the millennial that harps on about how the housing market is ruined, but I think the average house price in Canberra is somewhere around $750,000. If we want a 10% deposit, it’s about $75,000 and that’s the minimum we could get away with.

* Surname withheld for privacy reasons.

I’m an allied health professional, and now a self-employed consultant. I’ve been in debt several times since turning 18. My first experience with it was a credit card. It wasn’t too bad at the beginning, since my parents gave us a pretty good education around finance. But that first period being out on your own, especially when you get your first paycheck, you can go a little hard. I was able to bring that down.

The most significant debt I’ve got at the moment is my mortgages, which I’ve had for the last two years, and I’m just looking at getting my next one as well. That can be stressful at times, because it’s probably over the million dollar mark now. It makes you think, “Is this the right choice? What am I doing?” You can obviously balance it all, but the way things are going in the market and with employment and whatnot, you think “What would happen if my circumstances were to change, how would I manage that?”

In 2014, I was living in Sydney. We were in Pyrmont, quite central, and the rent was only like $620 for a 3-bedroom, 2-bathroom apartment. The owner decided to sell the apartment and almost as soon as he sold it, the rent went from $620 to $1,300. So it forced my hand. A job in Queensland popped up. I looked at Brisbane and it was just a lot more affordable and I decided to make the move back to Queensland. When I got back up here I was bummed about leaving Sydney. I thought, “Well, if I’m going to be here I should try to make the most of what Brisbane can offer, a more reasonable housing market”.

In Sydney, I was on about $90,000 and then I went up to about $120,000. And then my current salary being self-employed is probably around $200,000. The job was obviously paying well. I thought, I’ll go hard. It took me two years to save and then I got the first mortgage in 2016. It was about $400,000 in total. My Mum and siblings live in that place, I’m renting it to them. It was both an option for me to get into the market while also helping them out.

I’ve got two properties now. I’ve just purchased my second one, which is where I’m living. The mortgage is about $550,000. I guess you kind of have to risk it sometimes. The repayments in total work out to be just over $500 a week.

The first one was fairly manageable and this one now adding another lot on to it, sometimes I have little moments where I’m like, “Oooh, shit, have I got in a bit too far now?” But I’m still managing it. At the end of the day, you can always sell your property if something happens. It’s not like a credit card debt where you just amass a large sum on items that don’t hold their value. I just try to think, “What else would I be doing?” I would be paying rent. If I wanted to live alone that would be close to $500 a week.

Who knows how long it will take me to pay it. It’s shocking when you see the amount of interest you pay back for the life of the loan. You’re probably looking at 25 to 30 years, and you’ve got to live as well. We’ll see.

* Pseudonym used for privacy reasons.