Major problems, help please

threlfaw

Hello,

I have a bit of a problem, debt.
I am at my wits end and need to get it sorted as soon as possible.

The problem is as follows, I have raked up just over £30,000 debt.
My outgoings are more than my incomings and I need help.

My wife is totally unaware of the position I have got myself in and I would like to keep it that way.

Here is my current financial info:

Incoming:
Salary £1553

Outgoings:
Loan 1 £260
Loan 2 £141
Credit Card 1 £50
Credit Card 2 £100
Mobile Phone £15
Mortgage and all houshold bills £760
Bank Interest Charges £34
Bank Service Charges £12
Child Care £185
Savings £50
Child Savings £20
Pension £66

Balances:

Main Bank Account -£4070
Loan 1 £3700
Loan 2 £24000
Credit Card 1 £900
Credit Card 2 £2900

What advise can anyone give me.

Thanks in advance,

Gringo.

livinginhope

Hi gringo,welcome to DFW,well done for taking the first steps to sort your problems.Regarding your SOA,could you break down the household bills into individual amounts and then someone may be able to save you some money there,you may think nothing can be saved,but there is normally someone very savvy lurking who will come up with something
Just noticed the savings,these need to be stopped,one rule when you're in debt is to pay back debt before saving,maybe you could cash in these savings and clear some of the debt,just a thought.

Broken_hearted

Scrap the savings if you can't afford it. Break down the household expences into seperate sections so you know what goes where and tell your wife. Hugs.

Emmzi

Gringo, you only look £90 a month short to me.

What about wife's contribution? You have a childcare cost so assume she works. What happens to her cash, and can she pay childcare costs of, say £100 a month so you at least break even?

As livinginhope says, break down that £760 for us.. normally we can get £90 just out of your phone bill, leccy and foodshop!

What did you spend money on? (Can you sell it?)
Why can't you tell wife? Her income could help fix things.

dave318

I can understand the need not to tell your wife, but "a problem shared, blah, blah , blah".
This will never work if you don't tell her.
Because,...
First things to go would be £50 Savings and £20 child savings. No point getting miniscule interest on these if you are paying huge interest elsewhere.

Secondly, you would need to break down the household bills to see where you could save there. ie, switching providers, phone companies, etc.

Thirdly, just on basics, you have £140 per month more going out than coming in.

Would really need to pry and know your full situation. You pay all the bills and childcare, but there is no mention of food, car, (or other transport). Does your wife earn?

First port of call though, would be CAB or CCCS. Ask them for advice, but again, this will involve some effort which would be detectable by your wife. If she finds out herself, could that be worse than you letting her know and being honest about it.

happyformonths

Agree, you need to tell your wife. This'll take a long time to get sorted and it'll probably be very difficult to make the kind of changes you need to without her "noticing". And believe me you will feel hugely relieved. It'll be worse for her the longer you keep her in the dark.

Your total debt adds up to just over £35,500 if your balance figures are correct.

Also agree that you need to break down your expenditure further. You're almost breaking even so I'm sure there are ways you can get balanced each month: then you can think about cutting down even further to get those debts down.

I don't mean to sound "cold", I'm just in business mode! Well done for posting and all the best to you.

HFM

Edited to add: Dave318 just said all the things I meant to, but forgot!

EagerLearner

Hi TheRelFaw - I hope this spreadsheet will help you out - designed to work in addition to Martin's excellent budget planner:

http://forums.moneysavingexpert.com/showthread.html?t=238575

Money Pots will become easier, as will 'frills' spending - easier to keep track of when you have a spreadsheet to log everything in...

Good luck!

chevalier

Hi there
I am guessing you are posting this from work due to the time. First of all well done for coming on here and posting your problem. The most important first thing is admitting that there is a problem.
In addition to the other suggestions noted above ref a more detailed SOA, you will need to tell us the APR of each of the loans and your bank balance, and how long they have to run. Were the two loans to consolidate your previous debts? If so then you have to accept that you can not do this again, as you spending habits would not change.

And yes once you have got all the figures down on paper, then sit your wife down and tell her the problem. I am assuming that all the debt that you have put in your original post is in your name, but surely it was not all spent on just you? I mean the debt was spent on your children and her as well.

On a practical point does your firm do child care vouchers that would cut the cost of child care?

Best of luck with posting a revised SOA. And the conversation with your wife. You never know you may well find that she suspects something anyway.
regards
chev

tesuhoha

Maybe you could transfer those credit card balances to 0% if your credit rating is still ok. Then personally I would try to reduce the overdraft first and just make the payments on the loans for now and the minimum payments on the credit cards. I say that because your overdraft seems to be your most expensive debt and I think you should concentrate on that. I notice that you a paying a bank service charge. By that, do you mean you are paying a fee for your account because if so you should cancel it. I had an account where I was paying a fee of £9 per month and I went into the bank and opened a basic bank account with no fee. You can still have an overdraft on this type of account but you do not have to pay a fee in the same way. I calculated that your outgoings exceed your income by £160, I may be wrong in this but I did only a quick calculation. If you scrap the savings and the bank account fee then your outgoings would be reduced by £82 straight away. I know that you want to save for your child but you are in a desperate situation and cannot afford to. Also, whatever you have in savings you should use immediately to pay off your overdraft. That will reduce the interest payment as well or pay off some of your credit card with it. Is there any way that you could reduce your shopping bill? Think you have to work at reducing your outgoings. Also do you have anything to sell?

threlfaw

Thanks for the replys, you all talk so much sense.

The money that I spend on the Mortgage and all household bills cant be changed. That is unless I let my Wife know.

Deep down I know that I have to tell her, I am prepared to give her all of my salary and then to let her manage my finances.

Maybe put all the debt on to a new mortgage ?

The debt has been built up over the years, and trying to make things better by consolidating them has made it worse. I find myself spending again. Only in January I consolidated them all and again find my self overdrawn.

overbudget

Don't put them on the mortgage - you've said yourself you've tried consolidating and you've just racked up more debt. If you put this debt on your mortgage you will end up paying thousands more in interest charges and have it hanging round your neck for many more years. Instead look at snowballing - paying off the debts in the right order can save you thousands and get them paid off as quickly as possible - check this http://www.whatsthecost.co.uk/snowball.aspx to see how.

And do try to tell your wife - you're currently about £140 down each month - this is not going to go away without you working together. You need to reduce outgoings and/or increase income. Stopping the regular savings will knock your shortfall down to £90 - you will almost certainly be able to trim some more through switching utilities, checking insurance policies, reducing food spending. But as you say - you can't do this without her knowing. Nor can you really start selling belongings or getting a second job without telling her why. And you really need to do all of this. Please consider telling her.

All the best - you can get through this.