Jacqueline* started using the Afterpay app so she could purchase more expensive items and pay them off over time — but things soon spiralled.
The 34-year-old history teacher from the NSW city of Newcastle says she became addicted to using the buy now, pay later (BNPL) app and found herself $40,000 in debt.
“I started using buy now, pay later services about 10 years ago. At the time, I wanted to make larger, more expensive fashion purchases, such as handbags and a pair of RM Williams boots, without paying a large sum upfront,” Jacqueline tells 7Life.
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“The appeal of BNPL services was irresistible, especially since I love shopping for clothes, and it allowed me to buy items I wanted immediately without the initial financial burden.”
The history teacher’s spiral began when she used credit to pay for much-needed surgery, opening up a world of temptation.
“Using credit can change your brain chemistry, making it more tempting to continue spending. Before BNPL, I enjoyed using layby services, where you paid off an item layby before taking it home,” Jacqueline says.
“It provided delayed gratification and was a much healthier way to manage finances.”
Before using BNPL services, Jacqueline had always had enough money for everyday needs and paid her bills on time.
“I would typically save up for things I wanted to buy. However, after using BNPL services, my spending habits changed drastically. It became easier to accumulate debt because I didn’t feel the immediate impact of my purchases,” Jacqueline explains.
Jacqueline mainly used Afterpay to purchase clothes and other fashion items and she felt liberated being able to buy the latest trends “without worrying about paying for everything upfront.
“This gave me a sense of freedom and instant gratification but also led to impulsive buying, which eventually resulted in significant debt.
“I also used credit to finance a trip to Europe, which was an amazing experience, but something I could have been more responsible about. I had always been advised to avoid going on holidays on credit, and it’s advice I wish I had followed,” Jacqueline says.
Jacqueline warns it is essential for people to understand how BNPL services can affect brain chemistry.
“By the time you’ve paid off those amazing shoes, they’re already eight weeks old, and you want the next new thing. If you had saved up, the satisfaction and anticipation would have been greater, and you would likely make more mindful purchases.”
Jacqueline realised there was a problem when her debt hit $40,000.
“It was a shocking wake-up call that my spending habits had spiralled out of control.
“The weight of the debt was daunting, and I knew I had to make significant changes to my financial behaviour to overcome it.
“I felt overwhelmed and anxious. It was a constant source of stress, and I would stay up at night worrying about it. Strangely, the stress drove me to spend more, as shopping felt like the only thing that could make me feel better.
“It had reached a point where I was using buy now, pay later services to pay for essentials like fuel and food, even buying food for my cat. I think I had an outlay of $1000 each fortnight that I had to repay with BNPL.”
When it came to paying off the debt, Jacqueline says it required “a lot of discipline and a solid plan”.
“I had to cut back significantly on my spending, prioritising paying off my debt over other financial goals. It has taken me about two years to get to where I am now, with a little over $4000 remaining,” she says.
“It has been hard work, and I have had to forgo many things. Part of this journey involved being honest with myself and others, saying, ‘Sorry, I can’t afford that, I’m in debt’.”
To pay down the debt, Jacqueline took on extra work such as doing online surveys, mystery shopping, tutoring, and almost anything else she could find.
She also educated herself on financial management and her bank enrolled her in a program they had created, which she says was “incredibly helpful”.
Jacqueline says her biggest lesson is “the importance of being mindful about your spending and understanding the long-term implications of BNPL services.
“While they can be convenient, they can also lead to accumulating debt quickly if not used responsibly.
“It’s crucial to stay within your budget and only use these services for things you genuinely need, rather than succumbing to the temptation of impulse purchases.”
She also says that it’s important “to be honest with the people around you about your financial situation.
“As a society, we often don’t talk about money, and part of my journey involved overcoming the embarrassment and shame associated with debt.
“When I finally told my family about my problems, I was surprised at how supportive they were, and this was one of the most significant factors in turning around my spending habits.
“I also realised I am not the only person who has suffered through this, so I am hoping by spreading my story I can help those who are spending sleepless nights stressing about money.”
* Name withheld for privacy