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A Chronic Case of Overspending......

Hello. Ive been reading the posts on this board for a few months now and have finally gotten the courage to go through all my debts and work out my finances. I am ashamed to say that the sum total of what I currently owe is a whopping £88k. Im not too good with figures (evidently) but here is a summary of my situation. I hope that you will be able to offer me some good advice as I have been treading water financially for some time now and fear that I may drown soon unless I take some serious action.

Incoming
I work in a sales environment and earn approx £36k pa. I get paid every 4 weeks as opposed to monthly and can receive between £2 - 3 k per month (varies) which also complicates things a bit.

Outgoings

Credit Cards
Debenhams 5.9% £6834
Amex 5.1% £4360
Barclaycard 6.9% £4630
Goldfish 9.9% £7990
MBNA music 14.9% £1857
MBNA 14.9% £4391
MBNA Breastcancer Card 13.9% £4433

Loans
Egg 6.7% £9866
M&S 11.9% £2900
HSBC 7.9% 40524

Total debt is 88K

My monthly outgoings aside from the £2k i pay per month for the above is as follows:
Orange £33
Water £18.60
Electricity £25.20
Gas £39
Petplan £24 (have 2 cats)
BT £14 (approx £56 per quarter)
TV Licence £10.99
Pipex Broadband £14.99
Council Tax £87
Scottish Widows House & Life Assurance £98.83
Food & Gen Groceries £150 (inc cat food & Litter, cleaning products etc)
Socialising approx £100
Other Gen expenses £75 (Birthdays, ad hoc expenses)


So there you have the grim details. I am married and we have a mortgage on our house which is paid by my partner hence no rent or mortgage expenses for me although I pay for all the household bills and food etc.

I have been doing my best to pay things off where i can and have swapped balances around onto the cheapest ones where i can. Have stopped buying new toiletries and am finishing up everything i have before buying new. Also only buying BOGOF products and have registered with PIGSBACK so will get my next lot from one of their boots vouchers. Did a bootsale last week and made £140. Also placing everything worth anything onto ebay / amazon etc in hope of generating a bit more cash. Even though Ive been making these small changes I still feel like Im drowning in all this although Im trying to keep positive and am determined to pay this lot off even if it does take the 10 years it sounds like its going to take. Does anyone have any suggestions as to how I could move forward? I dont think that Ive read any threads where people are in this much debt and i am very ashamed of the state that i have got myself into. I am determined to rectify things though.
Lightbulb Moment July 2006
Total Debt July 2006 = £88k
Debt Free Date = 2016
«134

Comments

  • Gemmzie
    Gemmzie Posts: 14,876 Forumite
    Welcome to the boards :)

    You've made the first step and that's the hardest part (in my eyes anyway). I'm sure the regulars here can help you lower your outgoings.


    I'd take a look at snowballing to work out the best order to pay off your cards in. Find out if you can make overpayments on your loans with/without charges.
    No longer using this account for new posts from 2013
  • Ali-OK
    Ali-OK Posts: 4,073 Forumite
    Part of the Furniture Debt-free and Proud!
    Hi and welcome to the boards :wave:

    You've made a good first step in pulling together all the figures and posting on here.

    Do you have a good credit rating? Might be worth getting another low LOB card to transfer the higher APR cards to chop some of that interest down. Also, visit https://www.whatsthecost.com and use the Snowball calculator to enter the debts - it will put them in order to pay them off (if you can overpay anywhere) and also a DFD date (debt free date) to aim for.

    On your bills, could you swap Orange to PAYG and use for emergencies only? That could reduce the £33 to £10 a month.

    Pet Insurance, house and life insurance seem high - would be worth shopping around to see if you can get these cheaper. Also, join up to https://www.quidco.com as you can get cashback for these sort of purchases and more.

    If you could break down your Other/Ad-hoc expenses, there might be items you can cut out. Start a spending diary and write down everything you spend...see if you're leaking money that could be paid towards your debts.

    There are others here with similar debt, so please don't feel you're alone.

    I'm sure others will be along to offer more suggestions to help you too.
    Back on the DFW Wagon:

    CC - £3,300 on 0% til 04/2020
    CC - £4,500 on 0% til 02/2019
    Loan - £12,063.84 as at 4/1/18
  • Gemmzie
    Gemmzie Posts: 14,876 Forumite
    Shelton wrote:

    Incoming
    I work in a sales environment and earn approx £36k pa. I get paid every 4 weeks as opposed to monthly and can receive between £2 - 3 k per month (varies) which also complicates things a bit.

    Outgoings

    Credit Cards
    Debenhams 5.9% for life £6834
    Amex 5.1% for life £4360
    Barclaycard 6.9% for life £4630
    Goldfish 9.9% £7990
    MBNA music 14.9% £1857
    MBNA 14.9% £4391
    MBNA Breastcancer Card 13.9% £4433

    Loans
    Egg 6.7% £9866
    M&S 11.9% £2900
    HSBC 7.9% 40524

    Total debt is 88K

    My monthly outgoings aside from the £2k i pay per month for the above is as follows:
    Orange £33 Switch to PAYG
    Water £18.60
    Electricity £25.20
    Gas £39
    Petplan £24 (have 2 cats)
    BT £14 (approx £56 per quarter)
    TV Licence £10.99
    Pipex Broadband £14.99
    Council Tax £87
    Scottish Widows House & Life Assurance £98.83 This seems quite high - perhaps ask on Insurance board
    Food & Gen Groceries £150 (inc cat food & Litter, cleaning products etc) See OS boards for ways to lower
    Socialising approx £100 It's gotta go or be drastically cut down
    Other Gen expenses £75 (Birthdays, ad hoc expenses) Work out these figures exactly and keep them low

    Hope that helps a little :)
    No longer using this account for new posts from 2013
  • Thanks for your advice guys. Am going to check out the situation with the insurance and reduce the socialising expenses to a quarter of that. Will look into the PAYG phone option too. Both of my electricity and gas are with british gas and i have never switched supplier although when i checked martins board the other week he was saying that now is not a good time to switch. apart from using less of both (turning off lights, turning thermostat down etc) have you any thoughts on when it would be a good idea to swap providers? p.s. thanks for your help so far - I know that i have been a total idiot but i really will take onboard any advice you can offer.
    Lightbulb Moment July 2006
    Total Debt July 2006 = £88k
    Debt Free Date = 2016
  • chevalier
    chevalier Posts: 7,937 Forumite
    Part of the Furniture Combo Breaker
    I suppose the first question to be asked is does your husband know about this debt? Even if the debts are in your name, I believe it can make a difference to his credit score, as I am assuming you live at the same house.
    The reason I asked is that I agree with the other posters that you need to stop the socialising. the £1200 a year you spend on this would pay off a quarter of one of your cards and hence save you the interest as well. Also if you pay everything except the mortgage then surely some of this debt is his. Ie I am assuming you don't only heat half of the house etc:o .

    Secondly, is there something you can do with MBNA? Three of your cards are provided by them, so would they let you put the debt on just one card? In this way you could symbolically cut up two of the cards, which might be a psychological boost.

    With regard to the pet insurance, I gather from other posters that M&S pet insurance is competitive. I am sure that if you check the site, there will be a comparison web site for all of this.

    Finally I would ring up either CCCS or Payplan. These are FREE to use organisations that act as intermedieries (sp) between you and your creditors. They work with both sides to draw up a repayment plan so that the creditors get their money, and you have a decent amount of money to pay for essentials. I am not sure how this would work if you OH was unaware of the debt.

    Best of luck with your new challenge
    regards
    chev
    I want a job that is less than an hour driving away from my house! Are you listening universe?
  • Hi Shelton,

    Sounds like you're already making a brilliant start with tackling these debts. Something in your tone makes me KNOW you can do this. :)

    One question that springs to my mind is: do you know what it is you've overspent on to get in this situation? I know I had to break it right down to specific habits I had (had... hmm... or have...) in order not just to think "it's no good, I just can't afford to live on my salary". Now you don't seem to be thinking this which is great, but I just wonder whether you know where all that money went? And if you've already made the changes necessary to stop overspending like you have been.

    From your SOA what leaps out is your insurance costs (life & contents). They seem enormous! Assume you are a non-smoker and of reasonable health - I'm sure you can get cheaper than this.

    Anyway, many kind thoughts,

    HFM

    PS sorry if this sounds a bit befuddled (which it does to me, on re-reading). A long day and a glass of wine to blame.
    Everything turns out all right in the end. If it's not all right, it's not the end.
    __________________
  • Ali-OK
    Ali-OK Posts: 4,073 Forumite
    Part of the Furniture Debt-free and Proud!
    If you've been with BG a long time, did you sign up to the price cap to 2009 scheme? If you did, I'd suggest staying with it - saves you paying charges to get out, plus with all the price increases you're sitting pretty for a while.

    We take Martin's advice here on changing utilities..he says hold fire, so we do! :D The one thing you can do is cut your amount of usage - switch appliances off at the socket when not in use (I no longer leave microwave and cooker on for the clocks!), get free low energy lightbulbs (see Freebies board), switch lights off when not in room, turn themostat down 1-2 degrees when heating is on and reduce how long you have water heating up for your hot water tank (unless you've a combi). We've gone from 3 hours overnight to 1 hr and it's plenty for 2 of us. Use appliances like dishwasher, washing machine overnight if you have Economy 7. Don't use the tumble dryer unless absolutely necessary. All little things on their own, but decent savings to be had in the long run. Also do you pay by monthly DD? It attracts a price discount, so worth doing.

    Orange PAYG probably isn't the cheapest for calls/texts, but they give you £1 with the new SIM, and 10% for each top-up of £10 or more. I've got over £8 left from when I swapped over in April - started with £12 !! Big saving on my previous £25 a month contract with them!

    The other thing you could work towards is making your 4 weekly pay last a month. This way, you get an extra pay packet each year - if you could throw that at your debt as extra it will really help.

    With BT, if you get Option 2 at £11 line rental per month, you could use some of the override providers (I forget the web addresses :o ) and bring down your call costs further.

    You'll be amazed at how implementing each small thing will add up and you can then throw it at the debt.

    Hope some of that helps.
    Back on the DFW Wagon:

    CC - £3,300 on 0% til 04/2020
    CC - £4,500 on 0% til 02/2019
    Loan - £12,063.84 as at 4/1/18
  • my OH is also a nightmare with ££s and owes about £30k himself. He knows that I am in huge debt although he doesnt know the exact figures. A lot of the debt was a result of going to uni, getting married and trying to sort our house out which was virtually falling down around our ears. 5 or so years of transferring balances and consolidating debts has meant that it has all spiralled out of control. In the last 3 months I have cleared and cancelled 3 credit cards and cancelled them with the provider so that I cannot respend and this is my aim for the other cc's. The loans are almost less of a worry even though the total on those is actually higher as you cant spend money on a loan in the way that you can keep spending on cc's once you have cleared them. I have recognised my weaknesses where money is concerned and I am literally trying to watch every penny i can now. Just did the snowball and it gave me 2016 as a debt free date. Im totally committed to clearing these debts and so will contact those agencies you suggested and see if they can help. Bankruptcy etc not an option - Ive spent the money and its my responsibility to pay it back. Thanks for your support and encouragment!
    Lightbulb Moment July 2006
    Total Debt July 2006 = £88k
    Debt Free Date = 2016
  • Gemmzie
    Gemmzie Posts: 14,876 Forumite
    Put your DFD and amounts in your signature - it'll spur you on in times of temptation :)
    No longer using this account for new posts from 2013
  • Its there in black and white now for all to see! I feel quite sick :eek:
    Lightbulb Moment July 2006
    Total Debt July 2006 = £88k
    Debt Free Date = 2016
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