I cleared £40K debt after crippling spending addiction left me homeless – I dragged myself back with snowball method

A SAVVY former “spending addict” has lifted the lid on how she managed to crawl out of £40,000 worth of debt.

Mum-of-two Maddy Alexander-Grout said a series of frivolous spending habits brought her to rock bottom – becoming addicted to the buzz she got from swiping her card.

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She admitted to blowing bags of cash when signing up for “every” credit card and loan available and then spending up to £30 a day on going out and shopping with friends.

It came to a head when she defaulted on all of her loans for a year and tried to escape them by moving house – but they eventually caught up with her and the only option she had was to file for bankruptcy.

She said: “I would, on average, spend £20 to £30 every night, and that’s with student prices. 

“Then I’d still be spending on taxis and food when I got home – and pre-drinks before we went out. 

“I lived a very, very frivolous lifestyle.”

But instead of going bankrupt, she decided to learn how to save money and used three clever techniques to get herself out of the sticky situation she found herself in.

Posting on social media, she said: “I’m a really stubborn person so I made it my mission to learn as much as I could about saving money.

“I’m going to teach you how to use some of these methods, like how to use the 50/30/20 rule, and how to use the snowball or avalanche method to clear your debts as soon as possible.”

One of the methods she used was the ‘snowball’ method, the process involves focussing on the smaller debts first – as these can be the often-overlooked costs that increase due to missed payments and interest being added.

So in theory, if you have a smaller debt of £100 you should pay that off as quick as possible, then once it’s cleared roll what you were paying into the next smallest debt until they’re all paid off.

Maddy’s spending started when she was 18 and began her studies at Leicester’s De Montfort University, where she was being offered credit cards that she saw as “free money”.

Soon after, she had maxed them all out and had to get a hospitality job to supplement her addiction – but found herself on the other side of the bar after her shift blowing the cash she had just earnt.

After a year she left university due to her spiralling debt, but her spending continued after she went into full-time work, throwing her wages at designer clothes and said a short trip to the shops could end in hundreds of pounds being spent.

In recent times she has become a money-saving expert and shares her £40,000 mistake online to help others who are “feeling alone” and don’t know where to start.

But it’s more than just saving habits that have helped her – and her followers – escape debt.

She also posts tips on how to lower your weekly spending to help build up finances.

In one video she mentions some top-tips on how to keep cash flows high throughout the month.

She said: “I don’t buy tea or coffee out anymore.

“I try and buy fruit and veg from markets, and buy them loose so I only get what I need.

“I shop for yellow stickers three times a week at the supermarket.

“I have a budget which I update twice a month to keep myself accountable.

“I take out cash as my own ‘pocket money’ so I prioritise my own self-care.

“I have a ‘tap’ account, so I can tap and go on a fully budgeted card, this way I don’t get ‘tap happy’.

“I check my bank account daily so I’m always mindful of my spending.”

And for those who just want to avoid debt entirely, her genius videos also show how to not get into debt in the first place.

Last year she revealed the four money-mistakes that see Brits fall behind on their finances.

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This post first appeared on thesun.co.uk