Consolidate?????

MyMoneyTime

Hello all - heard Martin Lewis many times on Radio 2 and think he has some great things to say in a short amount of time! Therefore have put this site as one of my favourites underneath my banks website to constantly remind me to look after the finances!

I am in my 30s and married with two children and have consolidated before, both times after children to get the finances straight after being on maternity leave and the general cost of kids. We moved last Dec and kept some of the equity back to pay off some debt and keep some to refit the bathroom (which is nearly finished).

However, we find ourselves in trouble again with an overdraft that is still there even on the day we get paid. This is getting long so basically I have worked out that we do earn enough to pay our bills, feed ourselves and have a bit left, we just need to be careful.

Now that I know this do I go for consolidation to pay off the o/d, credit cards, existing loan and then we can 'start again' knowing that we have enough really and we just need to be cautious or are we just dropping ourselves in it more? The overall payment would be less per month.

Sorry its long .............

nrsql

Payment per month would be less but interest paid would be lots more.
Problem with consolidating is that you might think of the overdraft as available again.
Can you transfer to a o% or low balance transfer credit card and pay that off?

Whatever happens you need to get the outgoings under control.

CFC

I think you need to take a long look at your finances. You've done the consolidation route before and are still in the same mess. I just see you doing the same thing again.

Extending your mortgage term is one thing, moving non secured debt to secured debt is another matter entirely.

I would urge you to post a statement of affairs on here and then you will get more detailed advice or opinions.

youngandreckless

Consolidation can give you a chance to start again, however you need to be very disciplined in order to make it work. The majority of people that consolidate end up in more debt in the end - I know I have. I'm sure that people here can help you out, without consolidating, it feels like more of a slog, but will be worth it and the less interest you pay the better. Good luck x

joolz43

I think that if you can cut back on expenditure and plough the savings into your debt rather than consolidating and finding yourself back here saying the same thing in a year of two, then you should. Why don't you post a SOA and let the people here offer advice?

mrs_mug_2

I just wanted to add (from someone who has consolidated a fair few times...) that paying it off with 'real' money is a much better feeling than consolidating. And with a bit of thought, you'll find money in places you never knew about. 2 months ago we were eating beans on toast for every meal because we were so hard up. But this time next month we would have paid nearly £3000 off our debts, simply by reviewing, selling and increasing our income. It is a much better feeling to know the total debt is going down - once and for all.

Good luck.

quantumleap

In order to get the constructive advice I think you want and would benifit from you really should produce a SOA.

MyMoneyTime

Wow, thank you so much for your speedy replies.

I guess the more I look at this site the more advice I will get and will find things out.

I see your point about getting back in the situation because you just never know what expenses are around the corner.

About paying higher interest, am I not right in thinking that lots of lumps of debt is more interest than one large lump of debt as long as you get a decent interest rate ??!!! help!

A brief rundown of the debt is......

£4K overdraft which, on our last pay we found ourselves overdrawn even on the day we were paid - about £20 a month charge - (Barclays)

£6K loan with 9 yrs to go - £80 a month (Northern Rock)

£3,200 on one credit card. - £80 a month with about £40 of it interest (MINT)

£2,500 on another credit card - £60 a month (Morgan Stanley)

I should definitely go for the credit card swapping idea I know but I feel the overdraft is dangerously high because we are nearing the limit with two weeks to go before pay day.

We bring home about £2K a month.

£1,600 pays all the direct debits so £400 left.

Doesn't sound too bad but in reality its going to be hard work but I feel we need to buckle down now and get ourselves sorted and comfortable as soon as we can.

It does make sense that it is a better feeling to organise your finances and pay them off in 'real' money I must admit.

Time for a rethink.

Thanks again - all advice most welcome :T

Bestthingsinlifearefree

Hi MMT,

Welcome to MSE.

Consolidation is not paying of debt, it is just getting new debt to pay old debt.

Have a look at this thread:

http://forums.moneysavingexpert.com/showthread.html?t=107280

Could you put more detail on your incomings / out goings ?

What are the annual rate of interests on your debt ?

Maybe start a spending diary for you and your OH (that will be a real eye opener).

Keep posting.

MyMoneyTime

This site is definitely a motivator - the link from the last post is really good and I have bookmarked it to read again.

Looks like I have my work cut out for me to do this properly - I don't even know what the rates of interest are on my debts to be honest :embarasse

My main motivation at the moment is the financial struggle my parents are in at the age of 60+ in a time where they should be retired and worry free. I do not want to end up in that boat. I have given them the phone number of the CCC but they put their heads in the sand. Anyway, thats another thread.

I shall put consolidation to the back of my mind and challenge myself to sort it out other ways - scared!

:eek:

tomstickland

Well done. Consolidating is just a way of compressing the debt into another debt and allowing you to build up a new one.

Attack this the proper way. Full statement of affairs and within a day you'll have loads of suggestions for reducing expenditure. It's all about financial efficiency - getting the same quality of life for less money.

It's about gaining control of the situation. It's actually very satisfying, and, dare I say it, fun (as long as there is hope), getting a grip on debt.