£18,000 in debt and can't seem to get out of it...

Nishka

(After writing this and working it out I realised my debt is more than £18k!!!!!!)

Hi all (This is where you all say "Hi N" in that ever so slow group therapy type way.... !) :rotfl:

My name is N and I am a spendaholic.

Infact, it's not just me, it's my husband as well.

I wanted to keep a diary to try and inspire me to save a bit more and try and shift some of our debt.

I can't believe we're in as much debt as we are really... We both earn good wages (me = £28,000 and hubs £24,000) and we own our home outright so no mortgage or rent.

We don't have a car.

We rarely go out - maybe once a month to the cinema and pizza hut.

We have several debts -
Personal loan of £14,000 (Tesco's 7.9% apr, £136 a month)
Virgin 0% credit card £6000
Capital One card - £800
Halifax overdraft - £1,500

Total - about £22k :eek::eek::eek:

I feel so embarrassed about it but I really want to try and make a dent in it... I have considered remortgaging the house to try and make the payments smaller but I have a feeling we will end up in the same mess again unless we try and change our spending habits.

The trouble we have is that because we are already at the end of our overdraft when we get paid it takes us back to ground zero again and then that's gone by the time the other one gets paid and we're at the end of overdrawn every month.

We are making payments on all our debts, usually over the minimum but I want to try and pay off as much as we can.

This week was going okay - we had £226 of the overdraft left - which was better than last month when we had none.. but hubby has just taken out £200 for painball with his friends (they are going to pay him back - he is an area manager and it's something he has to do really) so we now have £26 left of the overdraft to last till Monday.

Disaster. Credit card out again... :eek:

It's things like this that seem to keep us in debt.

But I am determined to try and knock it down.

dizzytina

Hi N,

Try and keep positive. Atleast you don't have a mortgage and a car to pay for so thats a good thing. :j You could try having your OD limit reduced by the bank every month by a small amount so you don't notice it too much and are still paying it off. You need to write down exactly where your money is going each mon th as with your salaries it seems like you should have plenty (funnily enough in theory so should we but it never seems to work out like that!):rotfl:

gizmo111

I would open a new account and have all income and expenditure from that account. Then use any money after your your essential outgoings to pay off the debts. Treat the overdraft as just another debt, and keep your new account in credit.
Why does your hausband HAVE to pay for his friends?

Nishka

Thanks for the replies...

It's embarrassing and stupid isn't it?

My husband isn't paying for his friends as such - they are going to give him the money but they need to pay from a debit card, so husband is going to pay it and them pay him back - they haven't paid him yet but he is sure they will. :rolleyes:

We spend about £150 a week on food - as my mum lives with us and she is on a special allergy diet, my dd aged 5 and me and my husband never like to eat the same thing... So that's something we can't really change. We don't buy alcohol or booze or anything.

Our only real "luxury" is Sky TV which we really love as we live in a rural area so we can't get freeview (we tried, it doesn't work) and we pay £17 a month for broadband - again because we are rural we need a special connection.. Tried comparing deals etc.

However, because we don't go out much at all I see the Sky and broadband as our little entertainment expense.

We always seem to have something go wrong every month - we have no savings - and this eats up into our money. Last month it was our boiler going wrong and that cost us £200 to fix, as well as a random malfunction with a light which we needed to get an electrician to fix (another £60).

This weekend we have my mother in law coming down and we need to buy food for her to eat - again she is fussy and won't eat certain things. I plan to make tuna pasta as this is cheap and then some fish and chips on Sunday as it's something we can all eat and will work out cheaper than making special meals and buying her something in..

We're not going out anywhere - we're going to a dog show in town - free- and then the park on Sunday.

Every weekend is like this....! We really don't live extravagantly - its the things like food and things going wrong with the house that eat up our money.

Daughter is needing new shoes and she has very wide fitting feet so these will cost me around £30 (looking on ebay but they don't have her size - I am looking everyday)...

Husband had to buy some new suits for work - he needs to look very smart for his job - so brought them in the sale but they were still £240 (must admit I was :eek::eek: at that - I couldn't have brought them from Tesco or Next for less....)

I want to be in the position where I can work part time and we can try for another child but it seems a long way off...

I agree remortgaging would be nuts... I suppose I am just feeling desperate.

Emmzi

On those salaries you should have about £2500 minimum coming into the house.

Lets say
gas and leccy £150
council tax £150
water rates £50
mobiles £60 for 2
sky £50
broadband £20
phone £15
insurances £100
food £600 (which i think is ridiculous, as person with a special diet, but its whay you say you spend)
going out £200 maybe?

So you should have about £1100 left every month for debts.
Does that sound about right? If not, you need a spending diary, now!

List your monthly repaymenst and APRs please. You need to be snowballing.

Nishka

Okay, here goes.. ...

Income (monthly)
mine £1700
Hubs £1300 (maybe £100 or so more dependent on bonuses)
Child maintenance (from ex) - £60
Child benefit - £80

Outgoings
Food/Household stuff - £600-750 (3 adults, 1 child)
Travel (to work) - £134 a month - -train (me - husband walks)
Lunch at work - £6.00 a day (I know this is wrong, I just hate packed lunch!!:o)
Daughters dance class - £4.00 a week
Travel to London to get daughter fromm her dad's once a month - £50 all in all (train and tube etc).
Contact lenses - both me and husband, £26 me (allergic to solutions so I have daily ones from the internet), husband £14 a month

Hire purchase agreement for sofa (nearly paid off) - £36 p/month

Council tax - £100 p/ month
Oil (our house is heated by oil and the whole system needs an overhaul - hence we know we are spending too much but need to get it fixed and can't afford to do so ) - £180

Phones - £35 each (we are on contracts)

Husbands hair cut (he gets it coloured as well!!) - £35 p/month

Debt payments monthly
Tesco loan - £136
Virgin - minimum payment £56 - trying to pay at least £100
Capital one - no idea what min payment is, we pay over at £30

We also have the overdraft but we are not making a dent in this...

We are down to £26 of the overdraft and hub gets paid on Monday, bringing us back to ground zero.

I get paid on the last day of the month - but by then we will be back in the overdraft again.

Every single month we seem to end up nearly overdrawn again by this time... Mum keeps saying we overspend but we don't seem to overspend WAY much considering the salaries we have - or am I being daft?

_pale_

Emmzi

yes, you are being daft.

using your number above there seems to be £1300 that you have no idea where it goes.

£120 a month on lunch 'because you don't like packed lunches' is daft
£750 on food is daft
having a child and no payment for life insurance is very daft!

Plus you havent listed sky, allowance for pressies, holidays - you don't have a full picture yet.

Let's start by asking - are you actually prepared to change?

david_hellier

Emmzi wrote: »

On those salaries you should have about £2500 minimum coming into the house.

Lets say
gas and leccy £150
council tax £150
water rates £50
mobiles £60 for 2
sky £50
broadband £20
phone £15
insurances £100
food £600 (which i think is ridiculous, as person with a special diet, but its whay you say you spend)
going out £200 maybe?

So you should have about £1100 left every month for debts.
Does that sound about right? If not, you need a spending diary, now!

List your monthly repaymenst and APRs please. You need to be snowballing.

Another way of using a spending diary is to allocate a specific amount to yourself from your budget each week and deduct from it as you spend through the week. This has the combined effect of exposing your spending habits and preventing overspend.

Nishka

Emmzi wrote: »

yes, you are being daft.

using your number above there seems to be £1300 that you have no idea where it goes.

£120 a month on lunch 'because you don't like packed lunches' is daft
£750 on food is daft
having a child and no payment for life insurance is very daft!

Plus you havent listed sky, allowance for pressies, holidays - you don't have a full picture yet.

Let's start by asking - are you actually prepared to change?

Yes absolutely. That's why I am here.

As soon as husband gets paid on Monday I am planning to try and pay off as much of the debt as I can.

I really do want to do it... It is a case of not knowing where the money goes. So I intend to keep this diary and write down every thing I spend and try and sort it out.

Nishka

david_hellier wrote: »

Another way of using a spending diary is to allocate a specific amount to yourself from your budget each week and deduct from it as you spend through the week. This has the combined effect of exposing your spending habits and preventing overspend.

Good idea, thanks. I will work on a budget and sort a weekly spending budget out.

Emmzi

In which case, you need to do a proper statement of affairs. I can think of at least another 8 thingsd you should have listed as spends that aren't there.

Get a bank statement, slow down a bit, do it properly, and repost?

You have already given 2 reasons/ excuses for not cutting back

Sky - remote area
Food - allergies

Neither really hold water if you are serious about getting out of debt. That's why I asked if you were serious about changing.

So just to warn you, you will be challenged on every aspect of your spending. probably starting with your mobile phones.