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
    • 183Posts
    • 538Thanks
    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
    • 183 Posts
    • 538 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
    • 803 Posts
    • 2,832 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: £456/£650 70%
    Emergency fund £1k
    • Suffolk lass
    • By Suffolk lass 15th Sep 17, 4:13 PM
    • 1,476 Posts
    • 16,888 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 31.2% after Q6
    Save £12k in 2017 #64 - £8112.39 saved (73.74%) after August - my annual target is £11,000
    OS Grocery Challenge 2017 budget of £3,600 £3000 (reduced from Apr) - 61.61/66.66% including stores after July
    My DFD is http://forums.moneysavingexpert.com/showthread.php?t=5593594
    • worriedDan
    • By worriedDan 17th Sep 17, 3:13 PM
    • 183 Posts
    • 538 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
    • 2,227 Posts
    • 3,139 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
    Emptying my lake with a teaspoon
    Short term goal £535/£1796
    EF/1k
    • worriedDan
    • By worriedDan 17th Sep 17, 8:28 PM
    • 183 Posts
    • 538 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
    • 2,227 Posts
    • 3,139 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
    Emptying my lake with a teaspoon
    Short term goal £535/£1796
    EF/1k
    • worriedDan
    • By worriedDan 21st Sep 17, 10:09 PM
    • 183 Posts
    • 538 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
    • 32 Posts
    • 34 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
    • 488 Posts
    • 1,259 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 .
    Aug 2017 CC1 £3549 CC 2 £1000

    Debt Free Nov 2019: earlier if I have my way
    • enthusiasticsaver
    • By enthusiasticsaver 22nd Sep 17, 8:18 AM
    • 4,265 Posts
    • 7,720 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.
    Countdown to early retirement on 21.12.17 3 months to go.
    • enthusiasticsaver
    • By enthusiasticsaver 22nd Sep 17, 8:29 AM
    • 4,265 Posts
    • 7,720 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.
    Countdown to early retirement on 21.12.17 3 months to go.
    • Filo25
    • By Filo25 23rd Sep 17, 11:18 PM
    • 1,006 Posts
    • 1,567 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
    • 68 Posts
    • 141 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
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

1,586Posts Today

8,569Users online

Martin's Twitter