Todays the day I woke up

MountainOfDebt_2

Hi everyone, I have been lurking for about 7/8 months. We've been living beyond our means for years and now we''re lving within in our means, but with massive debt. This week I finally decided I wanted to stop the sleepless nights and start doing something positive about the debt. I have aksed all over the site, various questions and am over whelmed with the, mostly, positive support. I spent an hour on the phone with the wife last night, outlining why today really does have to be the start of the rest of our lives and not to waste much more time worrying about debt. So thanks for you all posting your diaries, your advice, your support to others and thanks for any titbits of info given or about to be given.

Once we really get to the bottom line (my sig file is there or there abouts), I'll update this and that's my starting reference.

We are selling our house, which should be finished soon. That could, potentially, if I am extremel lucky, pay off all my debts, leaving my wife's debt of £17k which would be the new reference point

gonzo127

well done, it feels so much better to grab the bull by the horns and start dealign with it, and you are very lucky if your wife is fully on board, i am still personally battling with my wife as she is yet to have her light bulb moment so i am trying to clear the debts being really tight fisted with money and she is still spending as if there is no problem gggrrr but i am doing better than her and the debt is going down

JA1000

Where are you going to live? Are you downsizing, by selling it is the quick way out but have you looked at overpaying your CC. I don't know income levels or if affordability is a problem, you haven't indicated this, but using the snowballing calculator you could really reduce your cards over a much quicker period 4-5 years, seems a lot but you still keep your house. Why sell at bottom of market if you can ride it out?

JA1000

gonzo127 wrote: »

well done, it feels so much better to grab the bull by the horns and start dealign with it, and you are very lucky if your wife is fully on board, i am still personally battling with my wife as she is yet to have her light bulb moment so i am trying to clear the debts being really tight fisted with money and she is still spending as if there is no problem gggrrr but i am doing better than her and the debt is going down

Leapords and spots - needs drastic measures, threaten to leave, a culture shock might do the trick.

It's cruel to be kind.

Ames

Can I ask why you're only paying off your debts? Is the house just in your name? I'm just thinking that if (god forbid) anything happens in future your wife would be saddled with a load of debt, wouldn't it be better to pay of a proportion of each?

MountainOfDebt_2

JA1000 wrote: »

Leapords and spots - needs drastic measures, threaten to leave, a culture shock might do the trick.

It's cruel to be kind.

I have been complaining about costs and overspending for months, possibly longer than that. However, I have always left my wife in charge of finances, company and personal and, to eb frank, I thought she'd been good. However, the events of the past 3 months (I will not go into detail) tell me different...

Last night, we had a pretty sobering conversation which went along the lines of we are f**ked if we carry on like we are. we need a completely different culture change from the way we're living and consuming, We live in a dreamland and we need to wake up and realise we have seriosu issues which will affect the rest of our lives if we carry on spending like we are. The main problem is that we earn a very high amount, and have nudged along spending what ever we like with debt hanging over us thinking we'll be ok. But if we lose our jobs, it would bring come down a house of cards. Myu wife was informed a few weks ago she's being made redundant, and that the payment for her redundancy wouldn't be paid for 5 months.

So, drastic times call for drastic measures. She even realised Mothering Sunday wouldn't be down to the aquarium with the kids, big expensive lunch and the cinema. So maybe she has woken up. I ereally hope so as I would have to take charge otherwise.

It's just time for change.

We're selling the house as we have good equity and it could just completely wipe the slte clean, leaving us free to start from scratch again. I'd rather that pain than 5 years of fear about it: I have been worried too long. Also, I believe the housing market will go into freefall later this year. So it's a moot point if we don't sell the house...

MountainOfDebt_2

Ames wrote: »

Can I ask why you're only paying off your debts? Is the house just in your name? I'm just thinking that if (god forbid) anything happens in future your wife would be saddled with a load of debt, wouldn't it be better to pay of a proportion of each?

I have 500k life insurance so if something did go badly, the family would be ok.

We're starting on my debts, then working on hers. It's a two stage thing. Once my debts are cleared, we'll be able to pay her's off in 2-3 months.

happyhaddock_2

Hi, just wanted to say good luck and well done for dealing with your debt, we've all been there:A

geordie_ben

MountainOfDebt, having had the lightbulb monent myself last year I understand how good it feels! A huge congrats and well done to you. Grabbing the bull by the horns is great. Although my debt wasn't anywhere near as much as yours (and i didnt have a missus), I think the same principle applies to getting rid of debt no matter what the size.

My first step was to move the debt around so that I was paying the least interest on it I possibly could. One credit card to another, your credit cards onto hers (or vice versa) I even moved debt onto my parents CC as it was the cheapest option, using the balance transfer methods was the best step for me. (34.9% down to 6.9% was a god send!)
Next paying as much as you can off the most expensive debt. this isnt always the biggest debt. work out how much each of your debts cost you over 12 months, there's lot of spreadsheets out there. I even have one you could play around with if need be. Do minimum payments on everything else bar the most expensive until its gone, then onto the next with the same method, then onto the next etc

As for keeping yours and your wives debt seperate. You may be able to look at it another way to make things as cheap as possible. If you're going to shift debts around to make them cheaper i'd suggest moving both yours and hers onto cheaper methods. Keeping them apart will mean you're paying possibly higher interest on her debt while you are paying yours off, whereas if you shifted them both you could save your self paying extra interest for nothing

Once you've shifted your debt around, made a payment plan, and given yourself a debt free date, then look at getting money back, things like PPI Reclaim etc

Once again, good luck!! and I look forward to seeing a post from you saying you're debt free :T:j:T

richardvc

Hi Mountainofdebt,

Firstly, well done for your LBM - it is such a good feeling that will become very empowering.

Might I recommend that you have a glance at a thread by Tolip (apologies can't remember where it is) about his journey from debtors to debt free. He is a pilot (tolip backwards) and with his wife is used to a large income.

He was a huge amount in debt (can't remember the figure) and woth discipline, perseverance and effort has just become debt free.

You'll find his thread inspiring and may have a few things in common.

I would also like to add that selling your house may clear your debts but it will not change your habits of old. That is where you need to put your efforts, learning how to live within your means.

Good luck on your journey and keep us informed how it is going.