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  • FIRST POST
    • worriedDan
    • By worriedDan 10th Feb 17, 11:12 PM
    • 167Posts
    • 470Thanks
    worriedDan
    I don't think it gets much worse than this. Feel totally beaten
    • #1
    • 10th Feb 17, 11:12 PM
    I don't think it gets much worse than this. Feel totally beaten 10th Feb 17 at 11:12 PM
    After many years of denial, I/we have to face up to our debt situation. I am sitting here feeling like the end of out world is about to come. I feel like I have let everyone down. SOA below

    We have always had some debt but an expensive few years have seen it really spike. Most of it is in my name although some is in my wife's name. She knows that we have loads of debt but I haven't shown her the bottom line and I am not going to. Not yet anyway. Things are difficult at the moment so I want to get on top of payments etc before sharing the true extent with her. I hope that this does not make me deceitful, but I think it's the best way for now.

    Household Information[/b]
    Number of adults in household........... 2
    Number of children in household......... 1
    Number of cars owned.................... 2

    Monthly Income Details

    Monthly income after tax................ 3378
    Partners monthly income after tax....... 1010
    Benefits................................ 82.8
    Other income............................ 0
    Total monthly income.................... 4470.8


    Monthly Expense Details

    Mortgage................................ 497
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 103
    Electricity............................. 40
    Gas..................................... 82
    Oil..................................... 0
    Water rates............................. 35
    Telephone (land line)................... 10
    Mobile phone............................ 60
    TV Licence.............................. 14
    Satellite/Cable TV...................... 10
    Internet Services....................... 10
    Groceries etc. ......................... 200
    Clothing................................ 50
    Petrol/diesel........................... 160
    Road tax................................ 5
    Car Insurance........................... 60
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 23
    Contents insurance...................... 0
    Life assurance ......................... 40
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 50
    Haircuts................................ 20
    Entertainment........................... 50
    Holiday................................. 0
    Emergency fund.......................... 0
    Total monthly expenses.................. 1519



    Assets

    Cash.................................... 0
    House value (Gross)..................... 150000
    Shares and bonds........................ 0
    Car(s).................................. 8000
    Other assets............................ 0
    Total Assets............................ 158000



    Secured & HP Debts

    Description....................Debt......Monthly.. .APR
    Mortgage...................... 75000....(497)......1.5
    Total secured & HP debts...... 75000.....-.........-


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    cc1............................15900.....304...... .0
    cc2............................6600......200...... .18.9
    cc3............................4500......45....... .0
    hsbc...........................2700......75....... .18.9
    creation.......................4500......45....... .0
    creation.......................4600......100...... .18
    cc2 wife.......................4500......45........45
    cc1 wife.......................7000......165.......6.9
    cc4............................5000......100...... .0
    Total unsecured debts..........55300.....1079......-



    Monthly Budget Summary

    Total monthly income.................... 4,470.8
    Expenses (including HP & secured debts). 1,519
    Available for debt repayments........... 2,951.8
    Monthly UNsecured debt repayments....... 1,079
    Amount left after debt repayments....... 1,872.8


    Personal Balance Sheet Summary
    Total assets (things you own)........... 158,000
    Total HP & Secured debt................. -75,000
    Total Unsecured debt.................... -55,300
    Net Assets.............................. 27,700
Page 1
    • sourcrates
    • By sourcrates 10th Feb 17, 11:22 PM
    • 10,545 Posts
    • 10,339 Thanks
    sourcrates
    • #2
    • 10th Feb 17, 11:22 PM
    • #2
    • 10th Feb 17, 11:22 PM
    Welcome to the forum.

    You appear to have a good income, and a reasonable amount of money left at month end to pay the debts with.

    So this is not insurmountable.

    The question is, do you really have 800 left after all payments have been made ?
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    • Mr.Generous
    • By Mr.Generous 10th Feb 17, 11:23 PM
    • 1,506 Posts
    • 2,153 Thanks
    Mr.Generous
    • #3
    • 10th Feb 17, 11:23 PM
    • #3
    • 10th Feb 17, 11:23 PM
    first stop spending on cards for stuff you don't need, plenty of income there to get the debt paid down. Set targets and goals and get started paying it off. Do not make minimum payments on interest payable cc's. Tell your wife and agree to a new lifestyle that will leave you happy, healthy and wealthy for years to come.
    • bsms1147
    • By bsms1147 10th Feb 17, 11:24 PM
    • 1,936 Posts
    • 3,457 Thanks
    bsms1147
    • #4
    • 10th Feb 17, 11:24 PM
    • #4
    • 10th Feb 17, 11:24 PM
    Well done for admitting the problem. It's often the hardest step and it will get better. The good news is that you have a good income, so that will help.

    The figures suggest you have 1,872.80 a month left over after debt repayments. Is this true? If not you need to work out where this is all going. Keep a spending diary.

    If it is true then pushing all that excess towards debt repayments would see you clear the balance in just over 18 months.

    Whatever the situation you will be able to sort this.
    • worriedDan
    • By worriedDan 10th Feb 17, 11:39 PM
    • 167 Posts
    • 470 Thanks
    worriedDan
    • #5
    • 10th Feb 17, 11:39 PM
    • #5
    • 10th Feb 17, 11:39 PM
    Thanks for the quick replies! In terms of the 'spare' 1872, my salary has recently increased quite a bit. I have also temporarily opted out of my pension scheme which is giving me 300 per month. I can see that this is fixable, I just feel absolutely wretched that I have allowed this to happen. I don't know why but I feel like I have let my son down - he is 6!
    • Worrierwalker
    • By Worrierwalker 10th Feb 17, 11:46 PM
    • 40 Posts
    • 175 Thanks
    Worrierwalker
    • #6
    • 10th Feb 17, 11:46 PM
    • #6
    • 10th Feb 17, 11:46 PM
    Pay as much of your debts off with your surplus as you can- it will reduce faster than you think. If it helps, clear cc1 first, then 2 etc.
    Also, get back into your pension scheme as soon as you can.
    • enthusiasticsaver
    • By enthusiasticsaver 11th Feb 17, 1:03 AM
    • 3,397 Posts
    • 5,685 Thanks
    enthusiasticsaver
    • #7
    • 11th Feb 17, 1:03 AM
    • #7
    • 11th Feb 17, 1:03 AM
    Do you know where the spare money is going and how has the debt built up? 55k is a lot when you already have a large disposable income. Is it everyday spending or is there a reason for the debt? Redundancy, gambling?

    If you really want to address this now though your large income will sort this relatively quickly with strict budgeting. Can you move any of the cards charging interest to 0% deals? The cc2 of your wife's needs sorting first if it really is charging 45%.
    Debt and mortgage free and saving for early retirement
    • worriedDan
    • By worriedDan 11th Feb 17, 7:05 AM
    • 167 Posts
    • 470 Thanks
    worriedDan
    • #8
    • 11th Feb 17, 7:05 AM
    • #8
    • 11th Feb 17, 7:05 AM
    Do you know where the spare money is going and how has the debt built up? 55k is a lot when you already have a large disposable income. Is it everyday spending or is there a reason for the debt? Redundancy, gambling?

    If you really want to address this now though your large income will sort this relatively quickly with strict budgeting. Can you move any of the cards charging interest to 0% deals? The cc2 of your wife's needs sorting first if it really is charging 45%.
    Originally posted by enthusiasticsaver
    oops it's 0% not 45%! Will edit

    The debt has built up just by general overspending over years. We also funded a wedding, maternity leave, new car etc, all sing 0% CC's.
    • DrWatson1
    • By DrWatson1 11th Feb 17, 7:27 AM
    • 90 Posts
    • 54 Thanks
    DrWatson1
    • #9
    • 11th Feb 17, 7:27 AM
    • #9
    • 11th Feb 17, 7:27 AM
    Electricity............................. 40
    Gas..................................... 82 - Both of these seem very high. By way of comparison, I pay 40 per month for both in my 2 bed semi

    Mobile phone............................ 60 - This can be reduced

    Petrol/diesel........................... 160 - This seems low for 2 cars - Do you really only fill both cars up 3 times a month?

    Secured & HP Debts[/b]
    Description....................Debt......Monthly.. .APR
    Mortgage...................... 75000....(497)......1.5[b] - A 75000 mortgage over 25 years at 1.5% would be 300 a month - are you overpaying? If so, the extra 197 should be going to your high CC debt first.
    Originally posted by worriedDan
    My financial situation is very similar to yours - aside from I have 1/3 of your total income! I only say this as despite my position, I know it's fixable and it's not something I now lose a moments thought over. Facing up to your situation is always the hardest part, and you have now done that, and resolving the issue should be fairly straightforward with your disposable income.
    • itchyfeet123
    • By itchyfeet123 11th Feb 17, 10:57 AM
    • 332 Posts
    • 363 Thanks
    itchyfeet123
    She knows that we have loads of debt but I haven't shown her the bottom line and I am not going to. Not yet anyway. Things are difficult at the moment so I want to get on top of payments etc before sharing the true extent with her. I hope that this does not make me deceitful, but I think it's the best way for now.
    Originally posted by worriedDan
    It does make you deceitful. You don't have the right to unilaterally decide what's best. Your decisions affect her, and she has the right to know where things stand.

    As a practical matter, how do you expect to clear the debt if your wife isn't part of the process? Is she going to be on board with a lot of belt tightening if she doesn't know the magnitude of the problem? On another thread you mentioned that you have been in charge of the money for some time; without meaning to sound harsh, that doesn't seem to have worked out so well, so maybe it's time your wife had some input.

    You say that things are difficult, but I guarantee they will be more difficult if your wife finds out you've been hiding this from her.

    Anyway, as others have said, you are in a pretty good place for clearing this quickly. You have comfortably 3k/month to pay towards debt (current minimums plus your monthly excess). You can do this easily, and without being particularly frugal, within two years.

    I would reconsider your pension contribution, assuming you have an employer match. Usually saving while you're paying interest is foolish, but judging from your salary you're at the type of place that offers a pretty generous match, probably in the range of 100-200% (i.e you pay 8% and they pay 16% or similar). Even if you were only paying 2700/month instead of 3000/month towards your debt, you'll still comfortably clear it within 2 years. If your employer doesn't offer a match, then you should continue to forego the contributions until your debt is paid.
    • FBaby
    • By FBaby 11th Feb 17, 11:10 AM
    • 15,330 Posts
    • 38,464 Thanks
    FBaby
    Indeed, this is a lot of debts accumulated with overspending, so if your wife is contributing to the needless spending because she thinks you can afford it due to your income, then why would she stop unless she fully understand the extend of the debt?

    It sounds like you are in a very good position to sort it out, so don't let it get to you, having options means having control and it is not that hard to go from overspending to spending only what is necessary, however, the change in mindset has to be in place.

    I personally think that if you can stick to your SOA, you would be better off continuing to pay in your pension. Have you considered that not doing so is taking you over 50K (I think) which mean that you will need to repay some of your child benefit?
    • enthusiasticsaver
    • By enthusiasticsaver 11th Feb 17, 12:32 PM
    • 3,397 Posts
    • 5,685 Thanks
    enthusiasticsaver
    Make a note of when all the 0% deals expire and prioritise the debt in order of when they should be paid off. Speak to your wife about budgeting and both stop using the cards. Start up an emergency fund and I would pay at least the amount into your pension that your employer will match. You have obviously overspent on as you say wedding, car and maternity leave. You need to start getting into the habit of saving. An emergency fund, saving for cars and maternity leaves and holidays.

    On the plus side a lot of the cards are on 0, you have a large income with lots of disposable money providing you get better at budgeting and less inclined to spend without thinking. Perhaps you could keep a spending diary which helps clarify bad spending habits - too many trips to supermarket, not meal planning, frequent takeaways or smoking, drinking, gambling are all critical spending habits. Maybe remove cards from online sites you spend on without thinking.
    Debt and mortgage free and saving for early retirement
    • LabRatty
    • By LabRatty 11th Feb 17, 12:57 PM
    • 66 Posts
    • 96 Thanks
    LabRatty
    take a deep breath....
    ... and breathe!

    I remember that feeling of total panic and I sympathise, but as others have said already there is always a way forward.

    First, I would go back over six months expenditure for the family and see where the money is actually going. A SOA is a good start but the bank/credit card statements are the real mine of information when trying to budget - you can't accurately plan future spending unless you know from historical data where the extra unbudgeted spend has gone. I found this to be a real eye-opener and it was important in plugging the leaks in the spending.

    At this point, when you have analysed the problem thoroughly, I'd suggest getting your wife on board for all the reasons mentioned so far, but particularly that without this knowledge she potentially remains part of the problem rather than part of the solution. Imagine if the boot was on the other foot - would you want to be kept in ignorance?? Most importantly, you need to be planning where to cut back, what to budget for occasional treats etc, and she needs to have a say in that process. I don't think you are currently being deceitful, but I do think it's not treating her as an equal partner to exclude her from important decisions re future expenditure.

    One thing I'd suggest in your position is paying down the HSBC card as a priority - once cleared, CC companies often send out 0% BT offers, and if such was offered you would be ahead of the game in moving the remaining debt to 0% until it is cleared.

    Set up a spreadsheet or two, detailing what you're going to pay to whom and when. They are really helpful in getting a complete picture. Investigate the snowball calculator to minimise the interest paid and if it helps, set up another bank account to make budgeting/planning easier (For example, my variable salary goes into my main account. I then divert anything over the amount needed to cover the DDs, SOs, etc to other places and ignore the main account so there is no chance of frittering away the mortgage/gas/electric/council tax money.)

    Finally, (for now) the subject of letting people down.... you would only be doing that if you were NOT trying to address the issues, which is obviously not the case. If you crack on and get on top of this now, you will be clear of debt and with a good chunk of a savings behind you by the time your son goes to senior school, which is when they become more independent and have the potential to get particularly expensive.

    All the best; it is daunting but you have so much going for you. I found huge satisfaction in getting on top of my debt (as do many) so there are many positives to be had.

    LR
    Save In 2017 #109
    • Silvertabby
    • By Silvertabby 11th Feb 17, 1:10 PM
    • 1,001 Posts
    • 1,108 Thanks
    Silvertabby
    I have also temporarily opted out of my pension scheme which is giving me 300 per month.
    Dan - what sort of pension is this? If it's a defined benefits scheme (which it certainly will be if you work for the public sector) then you need to opt back in as fast as you can. Apart from losing pension benefits, any death in service and dependents pensions would be hugely reduced if you were to die while you are not an active member of the scheme.

    I see that you are paying 40 per month life insurance, but would that be enough for your wife and child to live on?

    Sorry to be doom and gloom, but pooh happens.
    • DigForVictory
    • By DigForVictory 11th Feb 17, 2:16 PM
    • 6,675 Posts
    • 17,582 Thanks
    DigForVictory
    It *will* get worse if you don't tell herself.

    If you feel you are letting a 6 year old down, you will be sadly absolutely right if Mummy & Daddy split up over a fixable debt. So, talk to her!
    Before she takes the credit cards for a walk, "indulges you" on something for Valentines & unawares adds to the problem.

    She's a *vital* part of the solution.
    • Money Rollercoaster
    • By Money Rollercoaster 11th Feb 17, 3:43 PM
    • 244 Posts
    • 581 Thanks
    Money Rollercoaster
    OK, that's a lot of credit cards with balances to juggle monthly.


    As noted before, you've got to get a handle on ...
    • Tackling the debt as a couple
    • Living within your means
    • Paying off your debts in priority / cost order

    It looks to me like there's no-one knocking at your door at the moment and you have the benefit of good income(s). You need to tackle this head on and with absolute honesty now or you are only storing up bigger problems which might have catastrophic consequences financially and domestically at a later date.
    Living Life @ 174 BPM >> CC Balance (0%) -3,565.99 - Target DFD Dec 2017 >> Loan (Car) (3.1%) -19,803.74 - Target DFD Nov 2020
    • pennystretcher
    • By pennystretcher 11th Feb 17, 5:14 PM
    • 286 Posts
    • 1,302 Thanks
    pennystretcher
    With your income and if the 'available to spend end of month' is accurate, you should be able to clear the debts reasonably quickly, so consider yourself in a 'lucky' situation when you had your LBM.

    You don't seem to have an emergency fund - I'd suggest putting, say 150 a month aside AND paying off as much debt as you can until you have couple of thousand set aside (minimum). Also pare down to necessities only and pay anything extra you have towards debt. (even if it is 1 here and there!)

    Good luck with your journey!
    MFW May 2017 990 (almost there!!!)
    • worriedDan
    • By worriedDan 11th Feb 17, 5:57 PM
    • 167 Posts
    • 470 Thanks
    worriedDan
    Took the plunge... well sort of!
    Thanks for all of your replies guys. They all help a great deal. I already feel better having offloaded my situation on here.

    I know that my wife needs to be on board with this. I spent a couple of hours this morning going through everything that we pay etc. I have drawn up a spreadsheet showing our regular outgoings. I have included food, fuel for cars, after school clubs etc. Basically all of our living costs. This shows quite clearly that we do have 2700 surplus cash each month.

    I told my wife that I needed to speak to her about finances. I showed her the spreadsheet and talked through everything that we pay out. I struggled to say " We owe 50K", however I did say " We owe tens of thousands of pounds and we really need to sort it out now". She didn't ask for the exact figure.

    I showed her surplus and suggested that we think of it as a 3 year plan. We would really like to move house in 3 years, however we both accept that this can't happen until the debt is gone. I told her that our 2700 surplus over 3 years means that we effectively have close to 100K over the 3 years that we can use to pay debts and save.

    I feel loads better already. I know that I wimped out on the "we owe 50K" bit, but I think that everything else that I said made it quite clear that we are in a big hole! I am going to share the total balances with her in the next 3-6 months when I can also show her the progress that we have made.

    I feel like I am describing a different person. I am usually confident and upfront, but there is something about debt and money that makes me clam up!

    Is this progress?
    • enthusiasticsaver
    • By enthusiasticsaver 11th Feb 17, 6:28 PM
    • 3,397 Posts
    • 5,685 Thanks
    enthusiasticsaver
    Yes this is progress. Well done. You probably don't feel confident because it is overwhelming to have that amount of unsecured debt. Often people don't add it up so it doesn't seem as bad so well done for confronting it. I would also save emergency funds at same time by sticking 100 in an account for emergencies
    Debt and mortgage free and saving for early retirement
    • Kantankrus Mare
    • By Kantankrus Mare 11th Feb 17, 6:32 PM
    • 4,549 Posts
    • 9,557 Thanks
    Kantankrus Mare
    Its real progress!!! But........now the hard work begins.

    You have to not slip into old habits and I hope you wont. For some.....just seeing the debt balance come down (which should be quite quick in your case) is incentive enough to keep going.

    My advice would be to factor in something that gives you a treat every now and then but wont cost the earth. Otherwise it all gets boring and you wonder what you are working for.

    I also second trying to build an emergency fund up then if something like the boiler packing up or big expenses on the car are needed, you dont need to put any more on the card.

    Good luck!! Its doable!! I will be popping in to see your progress!
    Make 10 a day challenge Jan/215.84/ Feb 146.45/ Mar 192.55/Apr 171.20/ May 156.40
    Walk 2000 miles in 2017....781.35 miles
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