The start of the change

[iwishidbeenmoresensible]

Hey,

How are you all doing?

I'm fairly new to the whole forum thing, but I've got to get out of debt, and quickly!

Over the last 16 years, I've been what can only be described as "a bit of a moron".

I've spent money that I shouldn't have on credit cards, then consolidated into a loan, then spent it all again, repeat until the level of debt I have is frightening me. I thought it was about 10k, but last night, I realised it's close to double that. Ooops!

The sleepless nights and sudden feelings of panic are now so normal that that I can't remember that last time I felt good about things.

On valentines day my partner decided she wanted to take a massive step back from our relationship, so here I am, 33 and living back at home with my parents. I need to get out of debt, get a house/flat/tent, basically sort my life out and finally get control of my finances.

Luckily I have very few outgoings, I'm fortunate enough that my parents won't charge me rent. My biggest problem is my appalling discipline.

I'll do a full SOA and post on here later. Any advice or tips you can fire over would be awesome super great.

Thanks in advance for your support, and please feel free to tell it to me straight, I can be a bit of an idiot and frank, direct feedback is probably what I need. Keep it friendly though, sometimes I get a bit emotional!

[Freshstart2012]

Hi

Firstly well done for coming here and sharing your storey with everyone. Secondly I'm sorry to hear about the problems you are having with your relationship. I hope things work out for you.

There is no shame in moving back with your parents, in fact this could be the perfect opportunity for you to get your life back on track. No rent/mortgage to pay means that you can really chip away at those debts.

As we haven't seen your SOA yet I cant say whether or not a DMP is the way to go. However you could always have a look at Step changes website and fill in their debt remedy tool, this will give you a list of possible solutions, until the experts on here come along with more advice.

I to built my debt in the same manner as yourself and have absolutely nothing to show for it and a lot of people are in the same boat. Nobody will have a go at you, the main thing is to get your spending under control and get a plan into place to pay back what you owe.

Good luck with everything.

[dancingfairy]

Perhaps the level of debt was stressing your partner out and perhaps they couldn't cope with you being so stressed out and irritable with itall? Hopefully by getting a plan in place and begining to tackle the debts you will begin to feel better in yourself (which can only help in terms of your relationship).
Best of Luck
df

[MrsPorridge]

Originally Posted by iwishidbeenmoresensible

I've spent money that I shouldn't have on credit cards, then consolidated into a loan, then spent it all again, repeat until the level of debt I have is frightening me. I thought it was about 10k, but last night, I realised it's close to double that. Ooops!

!

That rings a bell with me - you are certainly not the only one to have gone down this route several times.

At least now you are facing up to it.

Sorry to hear about your partner - but its great that you have the support of your parents and this forum. Make the most of the time you can live with your parents to turn your situation around.

Wishing you the best of luck.

[iwishidbeenmoresensible]

So this is my SOA as of this month now I'm back at my parents. Whilst living with my partner I was covering a lot more costs. So the situation really isn't that bad. I can see a way out of it, I just need to actually be sensible. Must resist temptation to win back the other half with grand gestures of weekends in Venice and fancy meals. Going to be picnics in the park and walks along the river instead. Romance doesn't have to cost thousands if you put in a little effort!

Statement of Affairs & Personal Balance Sheet

Summary

Monthly Budget Summary Amount(£)
Total monthly income 1,300
Monthly expenses (incl. HP & secured loans) 532.5
Available for debt repayments 767.5
UNsecured debt repayments 240
Amount left after debt repayments 527.5
Personal Balance Sheet Summary Amount(£)
Total Assets (things you own) 500
Total Secured & HP Debt -0
Total Unsecured Debt -17,300
Net Assets -16,800
Income, Expense, Debt & Asset Details

Income Amount(£)
Monthly income after tax 1300
Partners monthly income 0
Benefits 0
Other income 0
Total monthly income 1300
Expenses Amount(£)
Mortgage 0
Secured/HP loan payments 0
Rent 0
Management charge (leasehold property) 0
Council tax 0
Electricity 0
Gas 0
Oil 0
Water Rates 0
Telephone (land line) 0
Mobile phone 10
TV Licence 0
Satellite/Cable TV 0
Internet services 0
Groceries etc. 0
Clothing 0
Petrol/diesel 200
Road tax 12.5
Car Insurance 25
Car maintenance (including MOT) 35
Car Parking 0
Other travel 0
Childcare/nursery 0
Other child related expenses 0
Medical (prescriptions, dentists, opticians etc.) 0
Pet Insurance/Vet bills 10
Buildings Insurance 0
Contents Insurance 0
Life Assurance 0
Other Insurance 0
Presents (birthday, christmas etc.) 40
Haircuts 0
Entertainment 100
Holiday 100
Emergency Fund 0
Total monthly expenses 532.5
Secured & HP Debt Description Debt(£) Monthly(£) APR(%)
Mortgage 0 (0) 0
Secured & HP Debt totals 0 - -
Unsecured Debt Description Debt(£) Monthly(£) APR(%)
Barclaycard 8800 140 28
HSBC Card 1000 20 26
MBNA Card 1000 20 26
Overdraft 3000 0 27
Virgin Card 3500 60 25
Unsecured Debt totals 17300 240 -
Asset Description Value (£)
Cash 0
House Value (Gross) 0
Shares and bonds 0
Car(s) 0
Other assets (e.g. endowments, jewellery etc) 500
Total Assets 500
Comments on the results

You have sufficient monthly income to meet your expenses and your minimum monthly debt repayments with £527.5 left over. You can use this to pay off your debts more quickly or to build/top-up an emergency fund.

[iwishidbeenmoresensible]

It's 1:30 and I can't sleep. I can't believe I'm 17k in debt. This is horrible. What have I done. :-(

[PurpleGoldFish]

Originally Posted by iwishidbeenmoresensible

It's 1:30 and I can't sleep. I can't believe I'm 17k in debt. This is horrible. What have I done. :-(

You've had your light bulb moment and you've started on the path to a debt free future. Be proud of yourself for that. You have the ability, both willfully (with help from the good folk on here plus the help of your folks) and financially, given that you have £500+ to pay debts each month. Try not to beat yourself up too much, you've taken a massive step forward.

[PurpleGoldFish]

Oh, and only thing I look at on SOA is the holiday budget. £100 a month is a lot, could you half it or even just knock of £25? The more you can throw at your debts the quicker you'll be free.

[Tryingagainandagain]

I did exactly the same as you and was nearly 50 before I saw sense. It took me a while to pay off the debt.

I then paid off my mortgage and decided never to have credit again.

I don't have much money, but I know I can live on very little.

There must be huge numbers of people who still haven't realised what they are getting into.

You are on the path to getting out of debt. Well done.

[Time to face the music]

Originally Posted by iwishidbeenmoresensible

Unsecured Debt Description Debt(£) Monthly(£) APR(%)
Barclaycard 8800 140 28
HSBC Card 1000 20 26
MBNA Card 1000 20 26
Overdraft 3000 0 27
Virgin Card 3500 60 25
Unsecured Debt totals 17300 240 -

Comments on the results

You have sufficient monthly income to meet your expenses and your minimum monthly debt repayments with £527.5 left over. You can use this to pay off your debts more quickly

Your APRs are very high and I assume these are minimum payments?

You could use the snowball calculator

http://www.whatsthecost.com/snowball.aspx

Pay minimums on everything except your highest interest debt, currently Barclaycard, when that has gone, go onto the next one etc.

That's the best way to reduce interest costs but because you have a couple of small debts at similar interest rates, HSBC and MBNA, it could be more motivating to clear those first, and with your spare funds, each could be gone in a couple of months.

You appear to have a true LBM and be in good shape to deal with your debts. Your debts could be gone in 31 months but if you can throw a bit of extra money at them, by adjusting your SOA, it could be even quicker.

Good luck and please let us know how you get on

[iwishidbeenmoresensible]

I really need to move my debt onto 0%. Problem is, I can't believe anybody would offer me more credit with the amount of debt I'm in.

Any suggestions welcome.

[conisme]

Originally Posted by iwishidbeenmoresensible

I really need to move my debt onto 0%. Problem is, I can't believe anybody would offer me more credit with the amount of debt I'm in.

Any suggestions welcome.

I'd love a 0% card but it will be a year before I can get one I am just concentrating on paying off as much on my CCs as I can.

[miketaff1408]

Originally Posted by iwishidbeenmoresensible

It's 1:30 and I can't sleep. I can't believe I'm 17k in debt. This is horrible. What have I done. :-(

If you have truly had your LBM then you MUST be disciplined enough to have no holidays until the debt is paid off. Plus your entertainment budget could be halved (or more!)

Reduce your gifts and present budget as well. £480 a year on presents is too much with your current debt levels. Explain to your loved ones your present situation and I am sure they will be more than happy for you not to buy a Birthday/Mothers Day gift etc. What about £10?

So that would be an extra £100 + £50 + £30 = £180 extra per month to throw at your debts.

[iwishidbeenmoresensible]

It really does all add up. I suppose that's also how I got into this mess!

[Thrifty Pixie]

i highly doubt anyone will give you a 0% card or even a consolidation loan (although i wouldn't recommend this anyway) with your debt to income ratio.

therefore what i would suggest:

cut out your holiday fund: £100pm
cut your entertainment fund :£50pm
plus excess as per SOA: £527.50
makes a total of: £677.50 towards your debts each month.

having said that i would advise you keep a spending diary as i suspect your SOA isn't exactly accurate when you add a few things like toothpaste, snacks etc.

use the snowball calculator, list all your c/cs in interest descending order and throw all excess money at them one by one...cutting up the cards and closing accounts as you go!

[foxgloves]

Agree that having a holiday fund is a luxury while you need to clear this level of debt. Many people have trodden the same path as you. Consolidation loans rarely help a debt situation as the old behaviour generally continues. I don't say this in judgement. We consolidated 3 times before we decided to change & continued to run up cards/overdrafts. You have a choice now. You can cut the expenses previous posts suggest & throw everything at your debts or you can panic a bit, feel stressed but not really turn it into any practical strategy. As your debts start to reduce, you will feel more motivated. You have obviously spent a lot of money....if you have anything to show for this that can be sold, do get it on ebay, every little bit of extra money made is another potential debt payment. For this to be successful, you need to make yourself a budget every month when you get paid & stick to it like glue. Every £1 saved on the most boring everyday things will add up. As you are able to live rent-free at your parents', make the most of this by committing to living a couple of very frugal years. It'll be worth it to clear this lot & start again. Remember that if you don't turn your plans into a budget, though, you are likely to slip, as without that, money has a nasty habit of leaking away. Good luck with it all.