Help! Don't want to consolidate again.

judi24

Hello all! I have been reading some of threads on this board over the last few weeks and I have finally had the courage to work out exactly how much debt we have and look for serious solutions to our problems. My OH and I have a very bad relationship with money. Both of us are on our second marriage. Both of our first relationships ended with us both in debt. We have four kids. 2 teenagers from my first marriage and a 2 and 4 year old together. We both work and have good incomes. I have been studying for a masters degree over the last year which I am due to complete next month. This should result in a new job and pay increase. Each month it feels like there is never any money left to live. Yes we cover the bill, the debt we have means we don't seem to be able to do anything else.
We have consolidated out debt before. Last time we borrowed money with the mortgage to add a granny flat onto our house for my mum and consolidate. We had a disater with the builder and ended up finnishing the job by running up credit everywhere!!!
Our fixed rate mortgage is due to finnish in Oct. My OH wants to consolidate again, but I disagree. I need to find an alternative solution and show him how we can get rid of the debt without this. Most of the unsecured debt is in his name because I ran up CC's many years ago when I was a single parent that led to a ccj. My credit rating is OK now, but I am very reluctant to have credit cards.
I sound like I am blaming him but I'm not. We are both terrible with money and like to spend. We don't have any hobbies but I know my OH would love to play golf more. We spend mostly on the kids. They are the most expensive hobby!
I just want to learn how to manage money better so that we can provide help for the kids in the future.

I have tried to do a SOA. I hope it makes sense:

Monthly income:
My income - 1929
OH income 1690
Benefit - 240

Total - 3859

Monthly outgoings:
TV/Phone/Broadband - 72
Insurances (life & home) - 90
Mortgage - 1098
Council tax - 113
Water - 40
Gas - 30
Elec - 30
Mobiles - 40
Car ins (2 cars) - 60
Nursery fees - 260
Food etc - 500
fuel - 120
School meals/pocket money/bus fare - 100

Total = 2553

Debt

MBNA CC - 7083
MBNA CC - 487
Mint CC - 7083
Black Horse 0% loan - 2000 approx
Asda CC - 589
HFC loan - 2000 approx (29.5%!!!)
Mothercare card - 544
OD 1 - 950
OD 2 - 350

Total = 21086


I just don't know where to start. My OH is still sitting here muttering about the ONE Account mortgage and borrowing more at a low interest rate. What experience has any one got of this?

Any advice would be greatly appreciated.

PS sorry if this is a bit of an essay but I'm in dissertation mode at the moment!!! But I can't concentrate cos my financial concerns are constantly playing on my mind.

judi24

Sorry! forgot to say, we are currently only covering the minnimum payment on all the CC's except the ASDA one which I try to pay off each month. I only took this to earn points to use at Christmas!!

jessicamb

judi24 wrote:

Monthly income:
My income - 1929
OH income 1690
Benefit - 240

Total - 3859

Monthly outgoings:
TV/Phone/Broadband - 72 This is pretty high
Insurances (life & home) - 90
Mortgage - 1098 cor blimey
Council tax - 113
Water - 40
Gas - 30
Elec - 30
Mobiles - 40
Car ins (2 cars) - 60
Nursery fees - 260
Food etc - 500 This should be able to be reduced a fair bit with meal planning etc
fuel - 120
School meals/pocket money/bus fare - 100

You also have irregular bills like Xmas, Birthdays, Car Tax etc not built in. These also need to be taken into consideration

Total = 2553

So you have a surplus of 1306 every month to go towards debt repayments?

Debt

MBNA CC - 7083
MBNA CC - 487
Mint CC - 7083
Black Horse 0% loan - 2000 approx
Asda CC - 589
HFC loan - 2000 approx (29.5%!!!)
Mothercare card - 544
OD 1 - 950
OD 2 - 350

What are you paying on these?

Total = 21086


I just don't know where to start. My OH is still sitting here muttering about the ONE Account mortgage and borrowing more at a low interest rate. What experience has any one got of this?

Any advice would be greatly appreciated.

PS sorry if this is a bit of an essay but I'm in dissertation mode at the moment!!! But I can't concentrate cos my financial concerns are constantly playing on my mind.

The general feeling on here is that consolidation is not the answer for most people as you have already paid so much in interest and will be paying substantially more. Also it doesnt necessarily stop you spending and you build up the debt you originally consolidated again leaving you in a worse position.

If you have some money spare each month that you can throw at debt repayments then check out the debt snowballer at

https://www.whatsthecost.co.uk/snowball.aspx and see how long it takes to clear off.

CLAPTON

well done for posting..you've make the first important step.

before you can make decisions you need to establish the full spending picture.
the budget needs to contain everything you spend, not just this month but eveything that you are going to spend every month. so you need to include everything you will spend in the next 12 months.

at the moment you have nothing in the budget for clothes, school clothes, kids hobbies/sports/activities, holidays, treats for the kids, car tax, MOTs, servicing, car repairs, work lunches, going out, odd take aways, schooltrips, presents, xmas, any contact lens/glasses/dental/medical costs and i'm sure theres lots more. you also need an modest emergency fund for 'expected' unexpected things like washing m/c or central heating breaking down...for the yearly or one off things divide by 12 to get a monthly figure.
once you have done that you will be better placed to see what needs to be done...what needs to be cut out or what needs to be reduced.

also can you post the minimum payments on all the debts and all the APRs on the CCs and the overdrafts...
Pay the minimum on all the debts except the one with the highest APR (or the overdraft if you're near the OD limits) on the highest APR pay anything you can afford. this reduces the interest you pay and will reduce the debts the fastest.

before you make any decision about consolidating you must get your spending under control..otherwise it will only be a tempory get out of jail card and you will soon run up new debts. find out the full details of your spending...reduce it to be below your income only then think about how to reduce the interest rates you're paying...think about paying the debts off more quickly not about reducing repayments. also in todays papers it said that the average income is about 29,000 per annum...so dont think your income is anything exceptional but only about average.

Wizwoo

judi24 wrote:

Monthly outgoings:
TV/Phone/Broadband - 72 Seems high? What's the breakdown?
Insurances (life & home) - 90 Ours is about £45 so I'd try to look around for some different options
Mortgage - 1098 Phew!!! Was this through an IFA?
Council tax - 113
Water - 40 Again this is nearly double ours - are you on a meter?
Gas - 30
Elec - 30
Mobiles - 40
Car ins (2 cars) - 60
Nursery fees - 260
Food etc - 500 Most people on here really save lots here - how many of you does this cover. My OH and I now manage easily on £200 pcm
fuel - 120
School meals/pocket money/bus fare - 100

Total = 2553

Debt

MBNA CC - 7083
MBNA CC - 487
Mint CC - 7083
Black Horse 0% loan - 2000 approx
Asda CC - 589
HFC loan - 2000 approx (29.5%!!!)
Mothercare card - 544
OD 1 - 950
OD 2 - 350

Total = 21086

Just notied I've crossed with jess...! your surplus per month should easily cover the minimum and as others will advise you anything extra beyond that (a few hundred quid at my estimate) you should focus on throwing at the highest interest debt (can you make over payments on your loan?)

There are things that seem to be missing. It might be an idea for the fasmily to keep a money diary for a month or 2 to at least really understand where that money's going (lunches / meals out, magazines etc - they all add up pretty quickly!).

Just keep tackling away at it...just like we are!:o

calleyw

Has Jessica has already mentioned there are few areas to cut back like food. What else is included beside food and cleaning stuffs.

I assume you are family if 4. if so you should be able to shave bout £200 off of that.

Mobiles why are you spending another £40 a month. when you have landline and phone and broad band for £72 a month :eek: You should be able to get tha down to about £35-£40 a month. And mobiles shoule be PAYG and for emergencies only.

Before making any changes you have surplus of £1300 as pointed out by Jessica. But how much is that is taken up debt replaymens. As you have not put the monthly figures down.

You are of course right because if you consoildate but do nothing to stop the over spending you are in no better position.

Maybe you need to keep a spending diary to see where the money is going.

Again as Jessica mentioned there is nothing for haircuts/presents etc.

All the best.


Yours


Calley

lynsayjane

hi! congrats on finding the site and having a lightbulb moment.

jessi had some good ideas on her post, thught i'd add mine too.

you mention school meals. think packed lunches from now on. you give the kids (i presume the older two) pocket money? what do they do to earn this?? do they help around the house? i know it doesnt help with the debt but it'd give you a bit less to worry about. my sis and i did most of the cleaning in our house to get ours, never did us any harm. i've even seen someone on here do a chore chart and each chore earned a bit of money, but money was knocked off for misbehavin/making a mess in the first place etc.

do you really need two cars or can you get rid of one and walk/bus more places? i'd also look at the mobiles, are they essential?

i know it's hard to find the first steps to take, and consolidation seems like the easy option, but i did this once before and like you i'm back i debt while paying interest for the next 23 years on a loan that would have been repaid next year...and back in debt again doh! take a few baby steps, i guarentee it'll become addictive and you'll be leaping down the road shortly!

judi24

Thanks to everyone who has offered advice so far.
Firstly, the minimum payments for the various debts add up to 490. Also I realise I haven't budgeted for presents etc. and I think that might be one of my problems. I never do seem to budget for them. When I look at what's coming in and what's going out it looks ok, but there never seems to be anything left at the end of the month. I always plan to pay more than the minimum payment on CC's but something always comes up.

My OH is very generous, which is one of the things that attracted me to him. But he dosen't seem to realise that we can't always be as loose with our money.

I can be very controlled at times with what we spend, but then have terrible blow out or get really down when I can't buy what the kids want.

Money has a terrible emotional hold over me. It's taken me 37 years to work that out!! I know I need to get debt free cos it's really getting me down but my OH dosen't seem that concerned. Sorry I'm becoming very negative!

I think my first thing to do seems to be to get going with a spending diary and really start to see where all our money is actually going. I also plan to try to reduce our grocery bill.

Thanks again for all your suggestions so far.

jessicamb

judi24 wrote:

Thanks to everyone who has offered advice so far.
Firstly, the minimum payments for the various debts add up to 490. Also I realise I haven't budgeted for presents etc. and I think that might be one of my problems. I never do seem to budget for them. When I look at what's coming in and what's going out it looks ok, but there never seems to be anything left at the end of the month. I always plan to pay more than the minimum payment on CC's but something always comes up.

My OH is very generous, which is one of the things that attracted me to him. But he dosen't seem to realise that we can't always be as loose with our money.

I can be very controlled at times with what we spend, but then have terrible blow out or get really down when I can't buy what the kids want.

Money has a terrible emotional hold over me. It's taken me 37 years to work that out!! I know I need to get debt free cos it's really getting me down but my OH dosen't seem that concerned. Sorry I'm becoming very negative!

I think my first thing to do seems to be to get going with a spending diary and really start to see where all our money is actually going. I also plan to try to reduce our grocery bill.

Thanks again for all your suggestions so far.

Judi

You'd be amazed at how little you spend once you actually start writing it all down. :rotfl:

Keep coming back here for support/tell us how you are doing.

judi24

Sorry I haven't really addressed all of the comments made about the SOA so far.
we pay 47 for broadband and tv with NTL. Just changes to Talk talk for landline phone. It's supposed to be 11 per month, but my oldest daughter has a habit of phoning mobiles which has run the phone up recently. I have got her to pay some of it herself and I will consider a call barring if it happens again. 10.99 for tv licence.
Mortgage is with alliance and leicester. The fixed rate is due up soon so I am also looking for advice on best deals around. It was for 181,000. It now stands at 165,000. Huge I know. This is partly cos of our serial consolidation and the fact that both OH and I lost money on property during divorces. So basically had to start again with nothing.
Water is not on a meter. But it has gone up by 10 this year. Apparently partly due to the Open Golf Championship held here recently!
The food bill is for six of us. I know it's high. I have just got into bad habits while I've been studying and only going to asda for my weekly shop.
As for the cars I use mine in my job, i'm a district nurse and my OH works shifts. It would be very difficult to manage with one car.
The older kids do help out around the house for thier pocket money but perhaps not as much as they should.
I hope that helps to clear up peoples queries.
Thanks again. It's just good to acknowledge whats happening.

Gemmzie

How old are your teenagers? Are they at school/college?