How I Went Broke and Survived (All in a Year!)
Here is my story of how I survived being in debt and the financial lessons I learned the hard way. I am sharing my story, so you don’t make the same mistakes.

It’s difficult to imagine a life without money when you have enough of it.
I had a job fresh out of college and had zero responsibilities, apart from a student loan that I was paying off. In your twenties, when nothing seems impossible, it is easy to get swept up in the moment.
I was having a great time drinking, eating out most of the time, buying anything that caught my eye, and doing whatever I wanted. That is, until my cards were declined and I became totally broke and began getting calls from debt collectors.
I went from splurging cash to applying for the loans for employees scheme at work, and let me tell you it’s no fun.
Here is my story of how I survived being in debt and the financial lessons I learned the hard way. I am sharing my story, so you don’t make the same mistakes.
How I Lost All My Money?
I Never Used to Budget
I was making money and spending it without thinking about saving or creating a budget. Because I had no accountability—not even to myself—and no budget to follow, my spending habits had gotten out of hand. Once I had exhausted my savings account, I started paying with my credit card. By the end of the month, I was discarding meat and milk that had gone past their expiration date because I had made careless purchases that I had never even eaten.
Purchasing Everything
I should not have bought everything I saw just because I could. For example, I saw a colleague buy an exercise bike and decided to do the same. In retrospect, I was mindlessly buying whatever I could, both in person and online, that I did not really need or enjoy. The more things I bought, the more cluttered my flat became, creating a vicious cycle.
Not Having an Auto-Debit Option for My Loans
Whether it was my student loan, car loan or credit card bills, nothing was set to auto-debit. Due to my focus on work and socialising, I often forgot to make my installment payments on time. This led to accumulating fees and interest, further increasing my debt.
Making Risky Investments
It is easy to understand that I am not the smartest cookie when it comes to financial management. Yet, I was suddenly excited to ‘invest’ my money. Encouraged by my sudden resolution, I invested a few thousand pounds in the stock market and cryptocurrency without really understanding anything about it.
It must come as no surprise when I say I lost all my money. This is where things started going downhill. I could no longer play catchup. I soon discovered that I was broke and in bad debt when I began receiving emails and letters with terms like “Final Notice,” “Legal Action,” “Default Notice,” and so forth. This served as a wake-up call for me.
How I Survived?
Once I had the harshest reality check, there was no going back. I was about to lose my job, and I was getting my eviction notice from my landlord. Here’s what I did to survive from being in debt to reaching financial solvency.
I Went Back Home
In Chiswick, I was paying £515 every week for my rent alone. I left London and moved back to Oxford, where my parents lived. The commute took me an hour each way and cost about £12, and just like that, I was saving hundreds of pounds every week. A year later, with some stable footing, I moved out of my parent’s home but rented a smaller, more affordable flat in Oxford.
I Had a Side Job
Yes, with thousands of pounds in debt, my salary wasn’t enough to cover them. I had to look for a side hustle. While I worked in sales, I always had a knack for writing. I started looking for writing gigs on freelancing websites and landed a few. They required me to work for a few hours every day, sometimes over the weekend as well, but I was making extra money, and that was enough motivation.
Cutting Back and Budgeting
For the first six months, I completely cut back on all socialising; whether it was going for a coffee date or movies or concerts, everything took a back seat. Most of my friends understood, and they made plans accordingly. It was the first holiday, since I was a child, that I gave my parents and siblings only Christmas cards. They were kind enough to say it was the best thing ever.
Since then I have religiously stuck to my 50-30-20 rule, where 50% of my salary goes towards necessities, 30% for needs, and 20% for savings. I have built an emergency fund worth six months of living expenses, and any money that I save by the end of the month goes towards my savings and investments.
Accepted Help
First thing first, I had a conversation with my banks about my default payments and the best way to reach a mutually agreeable solution. I started adding the auto-debit feature to all my outstanding loans and credit cards. This ensured I didn’t miss any payments.
I made sure I didn’t make any unnecessary purchases on my credit cards until it was completely paid off. I spoke with a financial advisor about my investment and saving options who gave me solutions that will provide me with long-term benefits.
As I felt completely lost and crippled during those dark times, it’s not easy making a lifestyle change and accepting that you are responsible for your miseries. I sought therapy, and that has changed my relationship with money and social anxiety, which always leads me to hide behind splurging rather than dealing with it more maturely.
Wrapping Up…
This was my story on how I ended up being broke and then surviving it. After almost 5 years of working, I had saved nothing. It almost feels like I am starting out again. This time around, I am more careful and cautious. I was lucky to have the support of my parents and loved ones to help me get through the tough times.
Remember, don’t make the same mistakes I made! Life can be unpredictable, which is why it’s always best to save and stick to a budget.