How Vicki conquered her credit card

Facing a debt mountain led Vicki Lanini to reform her spending and realise a dream, writes Sylvia Pennington.

A former automobile sales person, Vicki Lanini (pictured) decided to pursue a new career in the fitness industry in 2013 after losing 40 kilograms and acquiring the gym bug.

Her decision to change jobs coincided with the break-up of her marriage. The resulting sudden drop in income, coupled with the cost of establishing a new household and personal-training business saw her turn to her credit card to fund the shortfall.

“I had to set myself up again and I also needed to buy a lot of equipment – it was an expensive combination of circumstances,” Lanini says.

Over a six-month period her balance crept above five figures, all the way to the card’s $14,000 limit.

“I just went to use it one day and it was rejected and I was like, ‘oh-oh. I’m in trouble’,” Lanini says.

Ignoring the problem was her first instinct.

“Basically I sat on it for a few months just paying the minimum payments, but then finally I decided I needed to get serious about it,” Lanini says.

“I gave the card to my mum so that I couldn’t use it anymore and just started putting everything that was spare onto it. It became my biggest priority to get it paid off.”

‘I really just smashed it’

Transferring her balance to a new credit card which offered a 0 per cent interest rate for the first six months provided breathing space for her to attack the principal.

The bulk of her income was dedicated to the debt, bar a couple of hundred dollars a week for food and her rent in a share house.

“I gave up a lot of the things I had been doing and putting on the credit card,” Lanini says. “I started cooking my own food and working harder and became a bit of a home body.”

She set herself what felt like an ambitious goal of clearing the debt in six months but ended up paying it off in just four.

“I really just smashed it as quickly as I could – it involved a lot of sacrifices at the time but it was definitely worth it,” Lanini says.

“It was really nice to see the balance going down. The reason I gave the card to my mum was so that I couldn’t be tempted to go back to relying on it again, after I’d paid half the debt off.”

The handful of friends and relatives who were aware of Lanini’s predicament provided moral support while she scrimped her way back to financial health.

“I hadn’t told many people about it at the time because I was trying to do the whole ‘I’m fine, I’m fine, yeah I’ve got money’ thing so most folk didn’t know I’d racked up so much debt,” she says. “Everyone who did know was really understanding and supportive – that really helped.”

From debt to dream

Lanini’s newfound frugality has since stood her in good stead in both her business and personal life.

Three months after getting herself back in the black she opened the doors at Vic Fit Factory, her own industrial-style gym in the outer eastern suburb of Kilsyth, Victoria. The business has since expanded to offer a range of fitness and wellness facilities, courses and services.

Taking on her own premises was a risk she would have been unable to contemplate – or finance – with a consumer debt hanging over her head.

On the home front, impulse purchasing has been largely eradicated and Lanini has a healthy bank balance to prove it.

“I’ve been able to save a lot more because I got so used to putting so much towards the debt during those few months,” Lanini says.

“I’ve done a bit of travelling overseas and for the most part I’ve become much more minimalist. There are some areas where I do splurge occasionally but it’s way easier now for me to budget and be disciplined.

“I eat at home a lot more often or if I do eat out, I’m smarter about it and I don’t really go out partying any more. It’s just been about being more thoughtful with every purchase and asking myself if it’s something that I really need and want.”

Her advice to others staring at a bigger-than-Ben-Hur credit card balance?

Take a deep breath, put the problem in perspective then get stuck in to paying it off.

“It can sometimes really overwhelm you and make you feel like it’s all too hard,” Lanini says. “Take a step back. It’s only money at the end of the day and we always have the opportunity to make more. You need to just do your best and get it done, rather than ignoring it because that can be an easy option but it doesn’t solve anything in the long term.”

'My financial journey' is a series from ANZ Women on how Australian women overcome major obstacles and taken charge of their finances.