Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • worriedDan
    • By worriedDan 25th Feb 17, 7:12 AM
    • 186Posts
    • 548Thanks
    worriedDan
    Dan's desperate dash towards solvency
    • #1
    • 25th Feb 17, 7:12 AM
    Dan's desperate dash towards solvency 25th Feb 17 at 7:12 AM
    Hi everyone,

    After posting on the DFW board, I have decided to start a diary. My earlier posts can be found here - http://forums.moneysavingexpert.com/showthread.php?t=5601202

    In a nutshell, we 55K in debt with not much to show for it. I have reached a point where something HAS to be done to sort out this awful mess. I do all of our finances and whilst my wife always knew that were in lots of debt, it has only been over the last couple of weeks that I have really started to discuss it with her.

    I put together a budget that would realistically allow us to clear the debt in about 3 years. I sat down with m wife and shared it with her. She was fully on board and agrees that we need to clear the debt before we turn 40 ( 3 & 4 years away for us)

    I still haven't said "we owe 55K" but I have shared with her the rough payments that we will make and the timescale. All of the statements are also there for her perusal and I offered to make her a list of what we owed - she declined. This was the worst part for me and I feel so much better having opened up our communication. My plan from this point onwards is to keep a check that we are both following our budget. I am also going to sit down with my wife every few months and do an update on how we are doing. I don't want to keep talking about the total balance though. It makes me feel physically unwell. Noone else knows about our debt and our friends and family probably think that we are doing well!

    The good news....

    We are able to throw about £1750 at our debts each months. Most are 0% so the majority of this comes off the balance. We take home just under 4.5K between us.

    We have 13K saved. This is saved with my wife's family ( complicated situation that I won't go into on here) . In theory I suppose that this makes our 55K debt 43K. We are not going to use the money to pay debts, not right now anyway, however the psychology of knowing that the money is there is a real help to me.

    I have set our budget so that after all bills and debt payments, we have 200 for food, money to cover diesel, kids clubs, emergency savings and £300 for 'fun' I think that this is realistic and doable. I cannot see a reason why this should fail. This new budget starts from next payday - early next week.

    I still can't believe that we owe such a large amount of money. I struggle with the total figure and am desperate for it to go down!!!!
Page 10
    • worriedDan
    • By worriedDan 15th Sep 17, 12:12 PM
    • 186 Posts
    • 548 Thanks
    worriedDan
    Hi, Yes we really do need to do that. We started an emergency savings pot at the start of the journey but failed to build it up again after we had used it.
    • triple choc chip
    • By triple choc chip 15th Sep 17, 1:29 PM
    • 815 Posts
    • 2,880 Thanks
    triple choc chip
    Considering the figures you're dealing with an emergency fund seems a bit redundant - you can pay all your bills and expenses, pay all the minimum debt repayments and you still have in excess of £2000 each month to enjoy however you choose - there's your emergency fund right there! You get to choose whether you use it to pay more debt, have a busy social life, buy 'stuff', replace white goods/boiler in an emergency or, (drum roll) save it for a rainy day/ mortgage deposit / new car / holiday.
    Life's greatest satisfactions: Getting the last laugh, having the last word and paying the last instalment.
    Debt Free since 6.8.13
    Saving for Xmas 2017 #3: £590/£650 90.76%
    Emergency fund £1k
    • Suffolk lass
    • By Suffolk lass 15th Sep 17, 4:13 PM
    • 1,556 Posts
    • 17,918 Thanks
    Suffolk lass
    Hi Dan, I've been working so hard this week I only checked who had been posting this morning. Good to see you back and posting.

    I don't agree with triple choice chip about emergency fund. The idea is to build up approximately six months of expenses so that if you had an emergency where you were not earning, you give yourself a window of time to sort things out before you get back to work.

    I am with Essex on a target to clear that interest-paying debt as soon as possible, and then start overpaying the 0% cards in the order of expiry of deal date. I always think when that part is done you will have the bug and want to start overpaying that mortgage.

    I've just cleared my 0% card debt that expired on 1st September so now my only debts are another year on the 0% double glazing loan and the mortgage. I took that card deal as a cash transfer when my husband wrote our commuting car off last September and it meant I could pay cash for the replacement car with no interest - just the £76 fee. The rest came from my incomplete emergency fund. Had the emergency fund been big enough I could have avoided spending that £76. Against £7,500 I realise it is small but it could have been zero.
    MFiT T4 #2 update 42.67% after Q7 £5,465 behind where I should be
    Save £12k in 2017 #64 - £9,260.94 saved (84.19%) after October - my annual target is £11,000
    OS Grocery Challenge 2017 budget of £3,600 £3000 (reduced from Apr) - 78.56% including stores after October
    My DFD is http://forums.moneysavingexpert.com/showthread.php?t=5593594
    • worriedDan
    • By worriedDan 17th Sep 17, 3:13 PM
    • 186 Posts
    • 548 Thanks
    worriedDan
    I suppose subconsciously we know that we have my wifes 14K that we could potentially use if we lost our jobs. I have mentioned this money in several of my previous posts so I won't bore you all with the details, but in a nutshell, this is money that my wife's family gave her that we are keeping tucked away and not touching.

    I would like us to build some additional savings though that we can draw on if we needed to. The reality for us is that even after we have made our debt overpayments, Paid all of the other bills, bought our food and filled the cars, we are left with over 1K a month. We really should be saving a significant proportion of that money OR perhaps we should pay some more off our debts?

    I have set myself a target to pay off a further 7K by the end of this year and I am determined to do it. This will give us a total of £16119 paid off since the start of our journey in March of this year.

    I am planning ahead a little as I am conscious that some of our 0% rates will come to an end around February time. We have started receiving 0% offers for other accounts that we have paid off etc, so there is no reason why this should be a problem, however, me being me I need to know the worst case scenario if we couldn't obtain a new 0% offer. I have used a snowball calculator and have identified the 'damage' if ALL of our 50K debt reverted back to a standard rate of around 20% - In reality this won't happen as a large chunk is on long term 0% deals and a chunk of our debt is at 6.9% for the life of the balance BUT I wanted to know just how bad it would be if this happened......Here are the results..

    If ALL of our debt was at 20% it would take us 33 months to clear it all based on us paying 2K per month.

    Based on our current interest rates it will take us about 26 months.

    This isn't anywhere near as bad as I thought. I know that the interest that we would pay would be horrendous but our journey would be just 7 months longer. I expected it be be years more! I think that I can live with that 'worst case scenario'. It just shows that getting rid of debt, even at high interest rates is possible.
    • motivated
    • By motivated 17th Sep 17, 5:55 PM
    • 2,273 Posts
    • 3,392 Thanks
    motivated
    Hi Dan

    Just popping in to say you are doing so well and the change in your posts now and your positive attitude is amazing. It's great to see you are tackling this head on and you are so focussed. Keep going and I can't wait to see you posting on the Debt Free thread.
    M
    I have arrived in DMP land and I like it, I may stay a while
    Short term goal £735/£1796

    0/98 payments
    SPC # 91
    • worriedDan
    • By worriedDan 17th Sep 17, 8:28 PM
    • 186 Posts
    • 548 Thanks
    worriedDan
    Thanks Motivated!

    I am feeling more positive compared to the start of my journey. I still think about money a great deal and there are still the odd moments when I feel my stress levels rising, but overall I feel positive that I am able to deal with it. Hope all is going well for you.
    • motivated
    • By motivated 17th Sep 17, 8:32 PM
    • 2,273 Posts
    • 3,392 Thanks
    motivated
    Thanks Motivated!

    I am feeling more positive compared to the start of my journey. I still think about money a great deal and there are still the odd moments when I feel my stress levels rising, but overall I feel positive that I am able to deal with it. Hope all is going well for you.
    Originally posted by worriedDan

    I don't think you would be normal if you didn't have the odd wobble Dan. I've had a few since starting . I also think about money and debt quite a bit but I try to think positively rather than negatively. Easier said than done sometimes but planning and budgeting is what keeps me going.
    Things are a lot calmer here too. Just plodding along and one day we will get there
    M
    I have arrived in DMP land and I like it, I may stay a while
    Short term goal £735/£1796

    0/98 payments
    SPC # 91
    • worriedDan
    • By worriedDan 21st Sep 17, 10:09 PM
    • 186 Posts
    • 548 Thanks
    worriedDan
    Had to have a little word with myself this evening
    Hi Everyone,

    Tonight we have been to my wife's brothers house for a birthday celebration. I always come away from there feeling a little deflated; not because of anything they have done, but because their house/lifestyle makes me feel like a failure.

    They are a little older than us, in their early forties. They both made sensible financial decisions when they were young and single and as a result they both had their own houses when they met, purchased for relatively low prices compared with today. They have worked hard, saved and sacrificed and now they are 6/7 years older than us, living in a lovely big house in a nice area, with a relatively low mortgage and no other debts. My brother in law is even able to work part time! Their income is way less than ours but they are far more financially secure. Don't get me wrong, I love both of them and don''t begrudge them a thing. They have worked hard and deserve everything that they have.

    So as I drove home, I am ashamed to say that I had the same feeling that I always have after I have visited them - 'Why didn't I make better choices', 'Will I ever have their level of security', ' Why was I so stupid in my younger years'... It's a horrible way to think and I must admit that it is probably the part of myself that I like the least. .... So I have had to have a little word with myself and remove myself from the self pity party!

    I have thought about the family that I work with who have spent the last few nights sleeping in their car after the council housed them in an absolutely filthy B&B. I reminded myself of my hard working younger colleagues who have little chance of even getting on the property ladder any time soon. I reminded myself of my lovely hardworking parents who have grafted all their lives, just to be mortgage free before they are 70. I thought about families I know who have to choose between eating and heating. Suddenly my little bit of envy seems very silly!!

    I am going to adopt this approach if and when these thoughts plague me again. All of a sudden, the fact that I am not currently able to upgrade my very comfortable 3 bed semi for a four bed detached with a garage seems very unimportant.
    • plush
    • By plush 21st Sep 17, 10:52 PM
    • 39 Posts
    • 144 Thanks
    plush
    I have thought about the family that I work with who have spent the last few nights sleeping in their car after the council housed them in an absolutely filthy B&B. I reminded myself of my hard working younger colleagues who have little chance of even getting on the property ladder any time soon. I reminded myself of my lovely hardworking parents who have grafted all their lives, just to be mortgage free before they are 70. I thought about families I know who have to choose between eating and heating. Suddenly my little bit of envy seems very silly!!

    I am going to adopt this approach if and when these thoughts plague me again. All of a sudden, the fact that I am not currently able to upgrade my very comfortable 3 bed semi for a four bed detached with a garage seems very unimportant.
    Originally posted by worriedDan
    We'll always find many others in a better situation - luckier, smarter, richer, thinner, less indebted And much more people in a worse situation, just look at household income statistics.

    Just wanted to stop by and say you're doing great in spite of the debt level. I'll be following with interest!


    PS. Had no idea that average household debt was £13K. I'm at £14K (single parent household though).
    • Cumbria lass
    • By Cumbria lass 22nd Sep 17, 7:48 AM
    • 788 Posts
    • 3,777 Thanks
    Cumbria lass
    Dan you are doing so well after your first initial postings , you should be proud of what you have achieved to date.

    Why don't you and your OH set yourself some goals for after you are debt free i.e. Retiring early , how you would go about it etc.

    Sadly we only have one life , what is done is done . A wealthy friend of mine has a saying that I think of if I feel like you did coming away from your relatives . "Money only makes misery more acceptable " Being comfortable in life is wonderful but not everyone has the opportunity as you have pointed out . Plus your in laws may envy you for something they think they haven't got and you have .

    Your doing a great job . Have a great weekend Dan .
    Nov 2017 CC1 £3329 CC2 £600

    Debt Free Nov 2019: earlier if I have my way
    • enthusiasticsaver
    • By enthusiasticsaver 22nd Sep 17, 8:18 AM
    • 4,674 Posts
    • 8,836 Thanks
    enthusiasticsaver
    No point in looking back Dan. You have a high income and are bringing the debt down and once it is cleared this period of regret will be a distant memory. You could say it has been a life lesson which has taught you never to take good financial handling as carelessly as you have in the past. Comparing your lives to others is never useful whether it is aspiring to their lifestyle (plenty of people in debt due to keeping up with Jones's) or in your brother in laws case, financial security. Just resolve going forward to carry on as you have over the last few months to keep on getting the debt down and then, I cannot stress this too much, do not go back to your old ways of spending without budgeting. Start your early retirement or saving for university savings pot. Loosen the reins a little but don't go mad.
    4 weeks to go until early retirement in December . Debt free and mortgage free.

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • enthusiasticsaver
    • By enthusiasticsaver 22nd Sep 17, 8:29 AM
    • 4,674 Posts
    • 8,836 Thanks
    enthusiasticsaver
    Looking at your soa from a week ago I think aiming for a £2k per month reduction is sensible. I also think you need to rebuild an emergency fund although I can see that your wife's £14000 isa is there. If it is in a cash isa interest rates on those are awful by the way.

    I would also say I am still a little worried about you opting out of your pension as you did earlier on in the year. Saving for retirement is important. Initially it was just for a year and I would urge you not to let it go later than that and make it up once the debt is lower. The benefits of compounding are so important in pensions and you are missing out on employer contributions (presumably?) and tax relief.
    Last edited by enthusiasticsaver; 22-09-2017 at 8:33 AM.
    4 weeks to go until early retirement in December . Debt free and mortgage free.

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • Filo25
    • By Filo25 23rd Sep 17, 11:18 PM
    • 1,149 Posts
    • 1,767 Thanks
    Filo25
    Dan, I just saw this thread today and have just read through it and your original thread on the main DFW board.

    I just wanted to say many congratulations on getting on top of everything and getting it all moving in the right direction, as someone who has suffered from Anxiety myself I can well appreciate how unpleasant this experience was and can recognise so many of the typical behaviours in your earlier posts, but you seem like a completely changed person now and that is also worth patting yourself on the back for just as much as the debt reduction is.

    Have you found the CBT sessions useful by the way, they were a godsend for me.

    Just in case you are still feeling bad about your debt levels, ours peaked at a even higher level than yours, but there really is no point dwelling on past decisions, far better to focus on all of the progress you are making towards your future goals.
    • Happierdays
    • By Happierdays 24th Sep 17, 8:32 AM
    • 147 Posts
    • 453 Thanks
    Happierdays
    Hi dan, just stopping by to say wow! What a journey you have been on and how well you are doing! Thank you
    • worriedDan
    • By worriedDan 15th Nov 17, 10:26 PM
    • 186 Posts
    • 548 Thanks
    worriedDan
    Hi Everyone, I hope that everyone is ok

    We had a really good month in October and managed to clear a full 2k. By the end of this month we will have paid off 14K since we started our journey in the Spring. We are starting to feel the difference now as minimum payments have decreased etc.

    I have a slight dilemma ... We have agreed to buy our son the games console that he wants for Christmas. it's a bit more than we would lie to pay at £279, however we have decided to not really buy for each other so that we can justify buying it. I have the money saved, however we have been offered 0% for 12 months from the place that we are buying it from. My first reaction was to say no way. I have gotten so used to living without credit!

    On the other hand I could use the £300 that I have saved to clear another debt that isn't 0%, and then pay for the console at 0% over 12 months. I guess that this would essentially be swapping interest accruing debt for 0% debt.

    My wife thinks it's a no brainer but I can't help feel weird about taking debt.

    What are your thoughts?
    • enthusiasticsaver
    • By enthusiasticsaver 15th Nov 17, 11:39 PM
    • 4,674 Posts
    • 8,836 Thanks
    enthusiasticsaver
    I would think twice about adding to your debt by taking on a new debt considering you still have almost £50k of credit card debt to be honest. I know you say you would use £300 to pay off 0% debt but in your situation I would be the savings to Pay off the non 0% debt as they are surely costing you more than you are earning in interest and paying more off each month as you still have a high disposable income. As you have £2k spare each month and only pay £700 or £800 towards the credit cards from that surely that means £1200 spare? Can't the £300 come from that?

    Different people have different attitudes to debt though and if you are content to bring it down at the current rate that is of course your choice.
    4 weeks to go until early retirement in December . Debt free and mortgage free.

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • EssexHebridean
    • By EssexHebridean 16th Nov 17, 12:58 PM
    • 8,133 Posts
    • 42,870 Thanks
    EssexHebridean
    I'll be honest, and say that right at the moment I think you're better to go cold turkey on credit - so not take anything new regardless of the fact that it's at 0%. This is mostly due to needing to cure the old habit of just putting things on credit - but also the fact that putting that purchase on credit now means an additional sum being paid over the next 12 months, and the fact that this will mean that you'r still paying for the christmas present by the time his birthday comes around...so what happens if (when?) he wants another £300 present then?

    You've saved the money, so use what you've saved. In the future, when you're debt free, you can play about with offers like this to your own benefit, but for the time being, I'd say keep things very, very simple.
    MORTGAGE FREE 30/09/2016
    Sainsbugs 0% card: 22/12/16 £1229.00/£632.77 (20/11/17)
    SOA Calculator for DFW newbies: Stoozing.com SOA Calculator
    • Suffolk lass
    • By Suffolk lass 17th Nov 17, 7:07 AM
    • 1,556 Posts
    • 17,918 Thanks
    Suffolk lass
    It is a dilemma isn't it? Reading both the post above they make perfect sense and address the mental "addiction" element of taking the credit as it is offered. It has made me reflect on my own position. I have the mortgage (going up from 7th December) and I now have a 0% finance deal. For me it comes down to my hatred of paying interest. I am overpaying the mortgage and letting the 0% deal run. This means I am nearly £400 down on cashflow though. Martin warned the 0% deals were shortening and becoming less available so for me, I would be paying down an interest bearing CC and, I would look on Martin's Credit-checker to see what your credit score is now, with a view to moving one to a 0% deal and then concentrating on the other for a few months.

    I know it is my little brain but I like seeing the total go down more quickly on the accounts that I pay for. It does mean I have struggled with cash-flow three months out of the last four, where big things mean my CC use has been enormous, but we have resorted to freezer and low-cost meals to get them paid in full each month (just).

    Either option would work for you but you need to reflect on the psychological impact and whether it would affect your manageability filter - by which I mean, if having another account would impact on your mental sense of coping - don't do it. On the other hand, if you can see that balance reducing on an interest bearing card and you can reconcile that additional account (in your head, the money appears to be there) - then do it
    MFiT T4 #2 update 42.67% after Q7 £5,465 behind where I should be
    Save £12k in 2017 #64 - £9,260.94 saved (84.19%) after October - my annual target is £11,000
    OS Grocery Challenge 2017 budget of £3,600 £3000 (reduced from Apr) - 78.56% including stores after October
    My DFD is http://forums.moneysavingexpert.com/showthread.php?t=5593594
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

4,737Posts Today

9,187Users online

Martin's Twitter
  • RT @GabbyLogan: @MartinSLewis you are just brilliant. Love the format, great pairing with Angelica ????

  • Hi folks. Thanks for watching.am shattered. Hope you enjoyed the show. Must admit can't remember any of it right no? https://t.co/zPn8xwVKqv

  • Anthony here (Martin's tweet-double), signing off now. The next voice you hear will be Martin's. Thanks all and goodnight. #MartinLewis

  • Follow Martin