Thanks to a unique savings method, one single mother has paid off over £5,500 in 18 months. Rachel Easter of Ipswich was in a tough position in 2020 after splitting from her husband. Only earning around a £16,000 income, she managed the fantastic feat of overcoming a £5,500 debt using the 1p savings method.
18 months of hard work
Rachel, mother of 11-year-old Jack, was claiming universal income and using food vouchers after her split. It was a difficult time but she made the first step to eliminating any debt by working as a self employed cleaner. This boosted her income enough to begin looking at repayment options.
Talking to the press, Rachel said "The thought that I couldn't put a roof over my son's head because I relied on another being devastated me. The debt was from my gas and electric provider, water, bank loan, a sofa, and a credit card."
"I sorted my household bills first including water, and gas and electricity. I called the companies and with both monthly bills they put my debt on top."
She initially used the "snowball" method which focuses on paying smaller debts first, moving on to the next biggest debt as you go. While she was motivated by providing for her son, Rachel ensured she didn't go beyond her means. She added the 1p savings method and slowly started reclaiming her life.
The 1p savings method is very simple:
- Day 1: You put away 1p into a savings pot
- Day 2: You place 2p into the pot
- You repeat these steps, adding a penny to the total every day
- Doing it this way would provide a savings pot of £667.95 per year
Get stuff done
From a debt recovery perspective, AYOM are pleased to see these type of success stories. The first stage of getting out of debt is to work out what you can feasibly achieve. Rachel's story is inspiring as even a low-income single parent can find a way. Savings and repayments don’t have to be a large portion of income. If it is manageable and has an effect, it's a method that works for you.
Rachel now owns 2 small businesses and offers tips to help people become debt free. You can visit her page on Instagram at @getstuffdone_withcoffee. Her profile offers insights into her story, methods and how you can benefit from her top tips. Some snippets from her page include:
- Find out how much debt you are and where from
- Work out what is coming in and going out
- Have your debt put on top of monthly bills
- Use online banking saving pots
- Try the 1p savings challenge
- Use the snowball method to pay debts
- Sell unwanted/unused belongings on eBay and Facebook
- Start up a side hustle
- Meal plan to save money on food shopping and stick to offers/discounts
AYOM's Collections Manager spoke about the story and how those in debt can use Rachel as a model for getting out of their own debt.
"We recently published an article about the fact that simply, debt happens. It creeps into everyday life and doesn’t have to be a negative. Debt that is manageable and funds a positive change is good debt. When debt becomes bad is when you slowly lose the ability to repay comfortably."
"Rachel’s snowball method and 1p savings challenge is a great way for those worrying about how to properly save money to regiment themselves and ease into positive savings behaviour. We always want to encourage positive behaviour in the hope once we have settled a debt with a debtor, we’ll never have to call them again about a different issue."
"We strive to make a difference both for clients and debtors. We encourage any debtors in contact with us or other debt collectors to look at Rachel’s inspiring story. There lies a blueprint to managing personal finance right. It doesn’t always have to be large payments and unrealistic savings."
A better future
We hope Rachel's story is an inspiring one not just for those with debts who need help. We also hope her methods show you can save effectively without overstretching yourself. In house, AYOM is going to be setting the 1p challenge to staff in the hope we can learn about the method first hand. That way we can personally endorse how effective and simple it is.
It is part of building a better future for all we interact with. We always hope to settle clients’ debts but also do so positively. If we can help a debtor manage their money responsibly, our clients hopefully will never have to call us again. We are experts in mediation and helping clients reunite with their money. The above methods are just a selection of many ways we can help debtors repay debts in full.
If you have outstanding debts, be it business or personal, you can get help today. To speak to a specialist debt adviser, you can call 0800 130 3357 or email firstname.lastname@example.org. We provide a full suite of debt recovery services and have a track record of success. Speak to our award-winning team today and find a positive resolution to your debt matters.