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  • FIRST POST
    • wheely
    • By wheely 10th Jan 18, 2:24 PM
    • 47Posts
    • 12Thanks
    wheely
    Day 1
    • #1
    • 10th Jan 18, 2:24 PM
    Day 1 10th Jan 18 at 2:24 PM
    Good afternoon,

    I have to admit to myself that I am in trouble. I cannot talk to family or friends, as I am just to embarrassed. I have not been able to talk to my wife about it, as it will cause unbearable pressure on our relationship.

    I have approximately £36k of debt, accumulated over a decade of keeping my head above water and living beyond my means.

    The debt is spread over 5 credit cards, with varying rates of interest, and no hope of transferring to lower interest/0% cards.

    I have an outstanding mortgage of £100k on a £170k house, and I cannot afford to lose the house.

    I am in the fortunate position of having a good job, that is as secure as any job can be nowadays.

    My income is around £2600/month, plus a contribution to bills of £450 from my wife. My outgoings are around £2700 before living/fuel costs of around £400.

    I am not in arrears and I can meet the minimum payments, (just) but this weighs round my neck every day.

    I recognise I need some lifestyle changes and can cut back on non-essentials, and will take Martin's advice and set a day aside to do a Money Makeover.

    I just wanted somewhere to turn and someone to talk to.

    Thanks
Page 1
    • bargainbetty
    • By bargainbetty 10th Jan 18, 2:43 PM
    • 3,103 Posts
    • 7,147 Thanks
    bargainbetty
    • #2
    • 10th Jan 18, 2:43 PM
    • #2
    • 10th Jan 18, 2:43 PM
    Hi Wheely, welcome to the boards.

    There are plenty of people on here who have stood in those shoes and worked their way out and upwards, and they will be here to offer help and advice along your way. Don't lose hope - this is a big first step, and every journey starts with one of those!

    If you would like some specific advice on your budget, don't be afraid to use the statement of affairs (there is a sticky linking you to it) and put up your figures in all their glory - it's nerve-racking and people may be blunt, but they will give you good and useful information on how to reduce your outgoings.

    You will have advice to share the problem with your wife. If you have been living beyond your means then cutting back won't be a thing you can do unnoticed. If she understands the situation and can recognise her part in fixing it, then it will be easier for both of you to move forward with a plan.

    I wish you every success on your journey.
    Some days, it's just not worth chewing through the leather straps....
    LB moment - March 2006. DFD - 1 June 2012!!! DEBT FREE!
    MFW - Joined May 2012, aiming to cut the mortgage by an extra two months every year. (Overpaid £3000 so far)
    , only 11 years to go.

    • enjoyyourshoes
    • By enjoyyourshoes 10th Jan 18, 3:03 PM
    • 959 Posts
    • 1,176 Thanks
    enjoyyourshoes
    • #3
    • 10th Jan 18, 3:03 PM
    • #3
    • 10th Jan 18, 3:03 PM
    Need to discuss with wife.

    Then agree life goals and put these is financial terms (sound like being debt free in X years/months may be a starter for ten)

    The rigorously investigate research analyse all monthly outgoings , split into needs and wants, then ditch the wants.

    reconcile bank account daily, accrue for medium and long term costs and deduct these (as accrual) including all monthly so/dd.

    do cash flow with all debts and calculate maximum contribution by month
    by debt (based on affordability and when removed all wants from monthly expenditure)

    Set up DD to above amount by debt , sit back live frugally till debts paid off.

    The start saving the debt repayments in to regular savers
    Debt is a symptom, solve the problem.
    • Distiller72
    • By Distiller72 10th Jan 18, 4:06 PM
    • 13 Posts
    • 8 Thanks
    Distiller72
    • #4
    • 10th Jan 18, 4:06 PM
    • #4
    • 10th Jan 18, 4:06 PM
    I was in your position bit with 50k+ and i only dealt with it when i lost my job through illness.
    My income reduced by arpund 90% so major changes needed to be made. Now I am surprised how much money i actually wasted month in month out.
  • National Debtline
    • #5
    • 10th Jan 18, 5:26 PM
    • #5
    • 10th Jan 18, 5:26 PM
    Hi wheely


    It can be difficult dealing with something like this when you feel like you don't have anyone to confide in. You'll find lots of lovely helpful people on the board. And if you would like more specific advice it's a good idea to complete a statement of affairs (SOA) and post it back on here. It gives a more detailed view of your financial situation and allows others to give some useful advice on the best way to get your debt reduced. You'll find the SOA here
    http://www.stoozing.com/calculator/soa.php. Good luck with it all.


    Susie
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
    • fatrab
    • By fatrab 10th Jan 18, 8:48 PM
    • 154 Posts
    • 298 Thanks
    fatrab
    • #6
    • 10th Jan 18, 8:48 PM
    • #6
    • 10th Jan 18, 8:48 PM
    Good luck on your journey.

    At one point amongst other debts and commitments I was over £18000 on cards, overdraft maxed out (£3000), outgoings almost as much as income. That was just over 4 years ago.

    Currently £5000 left on cards to pay, all at 0%, no overdraft, £1000 emergency fund and a surplus of £800+/month

    It just takes time and following good advice.

    I only started using the forum properly last month and no matter how bad you think your situation is there's always someone with the right advice. I followed the advice on the main site for most of my journey so far, but really wish I'd known about the amazing additional advice and support available here.

    Definitely do an SOA. It really helps

    Best wishes
    Last edited by fatrab; 10-01-2018 at 8:58 PM.
    LBM Dec 2017 - Wannabe debt free by Dec 2022 - Wannalose 3st in the process - 10lbs lost so far
    10 x £2 coins (#32) - 9/12 NSD in January
    • fatbelly
    • By fatbelly 10th Jan 18, 8:57 PM
    • 11,801 Posts
    • 8,898 Thanks
    fatbelly
    • #7
    • 10th Jan 18, 8:57 PM
    • #7
    • 10th Jan 18, 8:57 PM
    Good afternoon,

    I have to admit to myself that I am in trouble. I cannot talk to family or friends, as I am just to embarrassed. I have not been able to talk to my wife about it, as it will cause unbearable pressure on our relationship.

    I have approximately £36k of debt, accumulated over a decade of keeping my head above water and living beyond my means.

    The debt is spread over 5 credit cards, with varying rates of interest, and no hope of transferring to lower interest/0% cards.

    I have an outstanding mortgage of £100k on a £170k house, and I cannot afford to lose the house.

    I am in the fortunate position of having a good job, that is as secure as any job can be nowadays.

    My income is around £2600/month, plus a contribution to bills of £450 from my wife. My outgoings are around £2700 before living/fuel costs of around £400.

    I am not in arrears and I can meet the minimum payments, (just) but this weighs round my neck every day.

    I recognise I need some lifestyle changes and can cut back on non-essentials, and will take Martin's advice and set a day aside to do a Money Makeover.

    I just wanted somewhere to turn and someone to talk to.

    Thanks
    Originally posted by wheely
    Well you're in the right place.

    What are the total minimum payments over the 5 cards? I'm estimating around £1000.

    If you could get the cards to 0% that would clear them in 3 years. However your credit rating means you cannot do this.

    Now may be the time to bite the bullet and go for a dmp with stepchange or payplan, to get the same result and get rid of this non-priority debt.
    • wheely
    • By wheely 11th Jan 18, 7:09 AM
    • 47 Posts
    • 12 Thanks
    wheely
    • #8
    • 11th Jan 18, 7:09 AM
    • #8
    • 11th Jan 18, 7:09 AM
    Thank you. I will upload a SOA once I've been to work and reviewed my budget spreadsheet.

    It's nice to know someone is listening.
    • CoffeeCakeYarn
    • By CoffeeCakeYarn 11th Jan 18, 1:15 PM
    • 122 Posts
    • 340 Thanks
    CoffeeCakeYarn
    • #9
    • 11th Jan 18, 1:15 PM
    • #9
    • 11th Jan 18, 1:15 PM
    Just wanted to say welcome. I'm just starting out too, with £25k and just my (okay-ish) income. It seemed like a huge number, but once I'd got my head around the SOA and got a plan in place I felt so much better. You can do it!
    MBNA - £2249.73/£2385 - 5.67%
    Emergency Fund £25.92/£1000
    • wheely
    • By wheely 16th Jan 18, 1:17 PM
    • 47 Posts
    • 12 Thanks
    wheely
    Not really sure of the best way to format this, but here goes. Do your worst/best.

    I know i am not in the worst position possible, but i want to get to a point where i can actually use the salary I earn, instead of using it all to pay off debts.

    I know there are some easy wins, such as TV, utility bills etc, and I am trying to find a day off, so as I can sit at home an do a MoneyMakover. Any hints, tips or advice i can put into place during my Makeover would be greatly appreciated.

    Thank you.

    Statement of Affairs & Personal Balance Sheet
    Summary
    Monthly Budget Summary Amount(£)
    Total monthly income 3,070.6
    Monthly expenses (incl. HP & secured loans) 1,815
    Available for debt repayments 1,255.6
    UNsecured debt repayments 1,045
    Amount left after debt repayments 210.6
    Personal Balance Sheet Summary Amount(£)
    Total Assets (things you own) 193,500
    Total Secured & HP Debt -100,000
    Total Unsecured Debt -36,869
    Net Assets 56,631
    Household Information
    Number of adults in household 2
    Number of children in household 0
    Number of cars owned 1
    Income, Expense, Debt & Asset Details
    Income Amount(£)
    Monthly income after tax 2620.6
    Partners monthly income 0
    Benefits 0
    Other income 450
    Total monthly income 3070.6
    Expenses Amount(£)
    Mortgage 650
    Secured/HP loan payments 0
    Rent 0
    Management charge (leasehold property) 0
    Council tax 142
    Electricity 40
    Gas 43
    Oil 0
    Water Rates 23
    Telephone (land line) 0
    Mobile phone 35
    TV Licence 12
    Satellite/Cable TV 63
    Internet services 0
    Groceries etc. 25
    Clothing 25
    Petrol/diesel 300
    Road tax 24
    Car Insurance 31
    Car maintenance (including MOT) 50
    Car Parking 0
    Other travel 0
    Childcare/nursery 0
    Other child related expenses 0
    Medical (prescriptions, dentists, opticians etc.) 0
    Pet Insurance/Vet bills 94
    Buildings Insurance 21
    Contents Insurance 16
    Life Assurance 43
    Other Insurance 0
    Presents (birthday, christmas etc.) 0
    Haircuts 8
    Entertainment 50
    Holiday 0
    Emergency Fund 120
    Total monthly expenses 1815
    Secured & HP Debt Description Debt(£) Monthly(£) APR(%)
    Mortgage 100000 (650) 1.5
    Secured & HP Debt totals 100000 - -
    Unsecured Debt Description Debt(£) Monthly(£) APR(%)
    car loan 3500 300 0
    santander everyday CC 7000 225 18.9
    Tesco Card 10735 214 18.9
    Halifax 1834 109 18.9
    Natwest 2700 56 18.9
    MBNA CC 11100 141 NaN
    Unsecured Debt totals 36869 1045 -
    Asset Description Value (£)
    Cash 0
    House Value (Gross) 185000
    Shares and bonds 0
    Car(s) 8500
    Other assets (e.g. endowments, jewellery etc) 0
    Total Assets 193500
    • fatbelly
    • By fatbelly 16th Jan 18, 1:38 PM
    • 11,801 Posts
    • 8,898 Thanks
    fatbelly
    That seems to say you can make your contractual payments and have £210 left over.

    However, your food bill is £25 per month. So changing that to something realistic wipes out your surplus.

    I would go for a debt management plan as I said earlier. I wasn't far off with my estimate of £1000 per month as the contractual payments. It's the interest that is the killer.

    If you want to re-jig your soa (and others may have some more suggestions) then can you try to pick 'format for mse' as this format is very difficult to read.
    • Working Mum
    • By Working Mum 16th Jan 18, 3:10 PM
    • 39 Posts
    • 142 Thanks
    Working Mum
    Hi Wheely,
    Well done for taking this first step and deciding to change things!!

    Have you kept a budget before? Do you know where you currently spend your cash/cards??

    I started by writing down a list of all of my direct debits, expriy dates of insurances and if it was necessary or a luxury. I slowly refined everything so that I saved money at renewal on all of my insurances by looking for renewal prices a month ahead of renewal which reduced the likelihood of a panic buy.

    I keep a journal of all of my cash and card spends so i know where I spend money (and also when!).

    I have a "control centre" in my kitchen where I plan everything from birthday card/present spends for the forthcoming month, weekly menus etc - having all my home finance stuff in one place means I can add to my shopping list as I run out of something and plan for any spends I need to make.

    I did a huge inventory of everything - from toiletries through to my kitchen store cupboards and freezer - this way I wasn't buying duplicates of stuff - I have a "shop at home first" mentality which helps keep an eye on the pennies.

    It took a mental shift for me to realise that this debt reduction job was doable and that I could influence things every single day.

    I would face your fears and get the log in details for your bank and credit cards and ensure you track when payments are due and pay them in a timely manner to avoid charges.

    Register for a free credit score via Noddle or someone similar - this is a good stake in the ground!!

    Track your progress towards your goal and be kind to yourself if you slip up every now and again.

    Read the Boards here as daily motivation to chip away at your debt. There is so much awesome practical advice from people who have been in your shoes and really care!

    Good luck on your debt free journey!!
    • Bedsit Bob
    • By Bedsit Bob 16th Jan 18, 4:00 PM
    • 9,920 Posts
    • 52,011 Thanks
    Bedsit Bob
    That SOA is hard to follow, so, using the OP's own figures, I've redone it (see below) and, while there are some items that could potentially be improved (Pay TV and some insurances jump out at me), there are other items that seem unreasonably low (food for example).

    Statement of Affairs and Personal Balance Sheet

    Household Information

    Number of adults in household........... 2
    Number of children in household.........
    Number of cars owned.................... 1

    Monthly Income Details

    Monthly income after tax................ 2600
    Partners monthly income after tax....... 450
    Benefits................................ 0
    Other income............................ 0
    Total monthly income.................... 3050


    Monthly Expense Details

    Mortgage................................ 650
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 142 - If over 10 months, switching to 12 months will reduce this to £118-33 per month.
    Electricity............................. 40
    Gas..................................... 43
    Oil..................................... 0
    Water rates............................. 23
    Telephone (land line)................... 0
    Mobile phone............................ 35 - How many phones, and how long before the contract(s) end?
    TV Licence.............................. 12.25
    Satellite/Cable TV...................... 63 - This is £756 per year, which is a lot. Cancel and go Freeview/Freesat instead.
    Internet Services....................... 0
    Groceries etc. ......................... 25 - This is very low. Are you sure this isn't per week?
    Clothing................................ 25
    Petrol/diesel........................... 300
    Road tax................................ 24
    Car Insurance........................... 31
    Car maintenance (including MOT)......... 50
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 94 - This is £1,128 per year, which is a lot. Check comparison sites for a better price.
    Buildings insurance..................... 21
    Contents insurance...................... 16
    Life assurance ......................... 43 - This seems quite high. Check comparison sites for a better price.
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 0 - Nothing at all? Not even a card or small gift for each other?
    Haircuts................................ 8
    Entertainment........................... 50
    Holiday................................. 0 - Not even a day out at the seaside or zoo?
    Emergency fund.......................... 120
    Total monthly expenses.................. 1815.25



    Assets

    Cash.................................... 0
    House value (Gross)..................... 185000
    Shares and bonds........................ 0
    Car(s).................................. 8500
    Other assets............................ 0
    Total Assets............................ 193500



    Secured & HP Debts

    Description....................Debt......Monthly.. .APR
    Mortgage...................... 100000...(650)......1.5
    Total secured & HP debts...... 100000....-.........-


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Santander Everyday CC..........7000......225.......18.9
    Tesco Card.....................10735.....214.......18.9
    Halifax........................1834......109...... .18.9
    Car Loan.......................3500......300.......0
    MBNA CC........................11100.....141.......NaN - What does NaN stand for?
    Natwest........................2700......56....... .18.9
    Total unsecured debts..........36869.....1045.......-



    Monthly Budget Summary

    Total monthly income.................... 3,050
    Expenses (including HP & secured debts). 1,815.25
    Available for debt repayments........... 1,234.75
    Monthly UNsecured debt repayments....... 745
    Amount left after debt repayments....... 189.75


    Personal Balance Sheet Summary
    Total assets (things you own)........... 193,500
    Total HP & Secured debt................. -100,000
    Total Unsecured debt.................... -33,369
    Net Assets.............................. 60,131


    Created using the SOA calculator at www.stoozing.com.
    Reproduced on Moneysavingexpert with permission, using other browser.


    I suggest the OP takes a look at the above, and sees if it really does represent their situation.

    Also, I've added my observations in red.

    Do you actually have around £190 left each month? If not, you need to figure out where it is going to.
    Last edited by Bedsit Bob; 16-01-2018 at 8:22 PM.
    My job is Top Secret. Even I don't know what I'm doing.

    Amount I have so far denied the BBC - £1161
    • fatbelly
    • By fatbelly 16th Jan 18, 7:18 PM
    • 11,801 Posts
    • 8,898 Thanks
    fatbelly
    Bob - Has the car loan

    car loan 3500 300 0

    disappeared?

    OP - is it definitely an unsecured loan and not HP?
    • Bedsit Bob
    • By Bedsit Bob 16th Jan 18, 8:24 PM
    • 9,920 Posts
    • 52,011 Thanks
    Bedsit Bob
    Bob - Has the car loan

    car loan 3500 300 0

    disappeared?
    Originally posted by fatbelly
    Oops, missed that.

    Now added.
    My job is Top Secret. Even I don't know what I'm doing.

    Amount I have so far denied the BBC - £1161
    • wheely
    • By wheely 17th Jan 18, 12:01 AM
    • 47 Posts
    • 12 Thanks
    wheely
    Thankyou all.

    To clarify a few things.
    The additional £450 is my wife's contribution towards bills.
    She also funds purchases, such as holidays and presents etc
    I have one mobile phone that is about out of contract (Makeover day job)
    We have 4 dogs, hence steep insurance. But we have used it numerous times and effectively saved thousands.
    Council tax is over 10months.
    NAN on MBNA card was meant to be a mixture of 0% and 6%
    Thanks
    • Bedsit Bob
    • By Bedsit Bob 17th Jan 18, 2:07 AM
    • 9,920 Posts
    • 52,011 Thanks
    Bedsit Bob
    The additional £450 is my wife's contribution towards bills.
    She also funds purchases, such as holidays and presents etc.
    Originally posted by wheely
    Then you should either include those expenses in the SOA, or leave out your wife's contribution. Including the £450, but leaving out what it is spent on, is giving a distorted view of your situation.

    Indeed, it probably explains where the "spare" £190 is going.

    I have one mobile phone that is about out of contract
    I suggest you then keep the phone and go PAYG/sim only, for ~ £10 per month.
    My job is Top Secret. Even I don't know what I'm doing.

    Amount I have so far denied the BBC - £1161
    • Pixie5740
    • By Pixie5740 17th Jan 18, 8:22 AM
    • 11,381 Posts
    • 16,017 Thanks
    Pixie5740
    Have you sat down and discussed your debts with your wife? What exactly have you been spending your money on that has led to almost £37k of unsecured debt? It might be that you and your wife need to sit down and look at the total household income and the total household expenditure if you are finding that that your share of the expenditure has resulted in that much debt.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • PrettyKittyKat
    • By PrettyKittyKat 17th Jan 18, 9:02 PM
    • 158 Posts
    • 252 Thanks
    PrettyKittyKat
    Then you should either include those expenses in the SOA, or leave out your wife's contribution. Including the £450, but leaving out what it is spent on, is giving a distorted view of your situation.

    Indeed, it probably explains where the "spare" £190 is going.



    I suggest you then keep the phone and go PAYG/sim only, for ~ £10 per month.
    Originally posted by Bedsit Bob
    I think he means that she gives him the £450 as well as paying for the things he hasn't listed. So he can include the £450 as this goes towards mortgage, council tax, utilities etc which he oays and has listed but doesn't need to include those other expenditures (eg presents) as his wife covers these.
    • wheely
    • By wheely 18th Jan 18, 12:01 AM
    • 47 Posts
    • 12 Thanks
    wheely
    That is correct. The £450 contributes to the outgoings on the SOA, and the remainder of her salary pays for groceries, and holidays etc.

    I've tried to list the items I currently pay for out of the funds I have available.

    This may seem like a daft question....I have paid off over £50k of mortgage over the last 10 years, the house has appreciated (certainly not depreciated) in value, and I am on a base rate (plus about 0.5%) mortgage. Is there any possibility, or sense in re-mortgaging against the equity? I do not know if this is feasible, or even an option.
    Whilst i realise the overal cost of he repayment may be higher, and it would take longer to pay off, even if I paid 50% extra a month on my mortgage , the additional amount would be a third of my current debt repayments.
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