Nearly there...

anotherdebtor

I;ve been lurking around this place for a while, but thought I would finally register and post.

To cut a long story short, our family had a disasterous 2008 and ended up in a tonne of debt - long and personal story. I didnt add it up at the time but it was a lot - probably over £25K. In Feb 2009, we ran out of credit and either we did yet more consolidation (4 months after a 15K loan) or we got on top of things.

Once bills and debt repayments have been made we have been living off pretty much fresh air for the past 18 months to get this sorted. We have 3 children and have been spending £400pcm on living expenses (food, clothes, shoes, travel basically everything non-bills) by transferring £100pw into a savings account and using that as spending money and my god its been hard but we got there.

We lost the card to the savings account last week and dusted off the current account card (that I had given to someone else to look after) and its all gone to pot. We've spent loads...hundred of pounds just this weekend...on nothing much, but so many things that we *needed* (a tinopener, new mugs, a new dvd, books, a bottle of wine) and have been denying ourselves for too damn long.

Suddenly I'm really scared that we cant do this anymore - either live denying ourself stuff, or live within our means.

The major loan that we have (£15K @ £700pcm - nearly 1/3 of our total income) gets paid off in Oct and we had been thinking that we could maybe live a little then but it scares me now to have monthly rather than weekly money after 18m of cash living weekly and the prospect of having "spare" money just seems to daunt me.

We can recover from this weekend's spending - even if it does mean sticking a couple of hundred onto the CC and watch it go up rather than down, but somehow spending money just seems so wrong now.

Has anyone else paid off debt by living v. frugally then panicked that they havent really properly learned their lesson?

Even after this loan, we still owe about 3K on CC + 3K in other debts so we're not out of the woods yet but it seemed so wrong to be spending money on things that we didnt really *need* and I dont think thats a healthy attitude to money.

Oh I dont know...

Hannah_10

It's a very common problem on here, you're certainly not the only one. A bit like taking off a corset and gasping for air all of a sudden. If you restrict yourself too hard you rebel, it took me a lot of tries to work out what sustainable living meant to me. I hope that helps you feel less alone.

You really need to find a middle way. You're just in debt, it's only money, it's not like you've killed someones kids or tried to take over the world or anything, debt is pretty normal! (But if, as it happens, you actually are a heartless weirdo or a meglomaniac simply join a political party, you will be earning a fortune in no time!) Debt's a fact of life these days, you do not deserve to be punished! The sad part is, you're the one punishing you. I'm sad to think you feel you ought.

Would you like to get that loan payment reduced? Find a bit of slack in the budget so you can craft a middle way? We could help with that you know. I promise if you do a SOA not to set upon it with an axe!

You DO need a tinopener and mugs. A couple of books and a DVD is hardly a wild extravagance and a bottle of wine once or twice a month is a miniscule luxury in real terms. You should have enough for that kind of thing. As I said, it's a debt, not a crime against humanity.

anotherdebtor

I dont want the loan payment reduced at all - its nearly gone and I so, so much want it gone, I'm just scared about what will happen when it does. I'm not used to having money any more.

Rough SOA is below - Lots of categories are 0 as they are all bundled together in the £400 pcm living money. I know the gas and electric are high - the house is old and dreadfully drafty - will get it sorted once we have the money to do it. Partner is stay at home parent. House was bought for cash as it had previous structural problems (now sorted).


Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 2150
Partners monthly income after tax....... 0
Benefits................................ 170
Other income............................ 0
Total monthly income.................... 2320

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 225
Electricity............................. 70
Gas..................................... 80
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 75
Mobile phone............................ 40
TV Licence.............................. 10
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 400
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 250
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 30
Pet insurance/vet bills................. 0
Buildings insurance..................... 35
Contents insurance...................... 20
Life assurance ......................... 0
Other insurance......................... 10
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Bank charges............................ 45
Union dues.............................. 25
Emergency cash.......................... 50
Childrens pensions...................... 90
Boiler/plumbing care.................... 35
Total monthly expenses.................. 1490


Assets
Cash.................................... 0
House value (Gross)..................... 100000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 100000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Bank loan......................2100......700.......19
Credit card....................3000......100.......21
Family loan....................1500......0.........0
overdraft......................1500......0.........0
Total unsecured debts..........8100......800.......-


Monthly Budget Summary
Total monthly income.................... 2,320
Expenses (including HP & secured debts). 1,490
Available for debt repayments........... 830
Monthly UNsecured debt repayments....... 800
Amount left after debt repayments....... 30

Personal Balance Sheet Summary
Total assets (things you own)........... 100,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -8,100
Net Assets.............................. 91,900

anotherdebtor

Thanks btw for reassuring me that its not criminal to be in debt. I've never really been in debt as such - but played 0% credit cards to build up savings etc. We've never really been extravagent people - it just all went so wrong in such a short space of time - family problems led to unexpected expenses and the whole 0% credit card thing - that had served me well for the last 5 years turned into a nightmare - that together with just not managing money as we were managing other things just got us into a hideous mess.

isy1011

I feel like that too. I compare my habits with money to being like a gambler. I've realised that I cant really have credit cards. I have found a little system now where I budget weekly and I think wether Im in debt in future or not I'm never going to use cc's because me and those things just dont get on. So when you get your extra money put some of it aside for your treats and bank the rest. Just dont abandon your system that's working.

Hannah_10

It doesn't matter if your debt was run up trying to get a dying child cured the USA or drinking, gambling and womanising, it's still ONLY debt. Countries have debts, banks have debts, even Martin Lewis has debts (read his blog, he's got loads of Credit Cards). Debt is a fact of modern life, if you want to go to Uni- you will go into debt, if you buy a house- you will go into debt, even utilities are billed in arrears- as debts. Those people who get on thier high horse about debt are simply being selective in what they count!

Looking at your SOA the first thing that leaps out is that your money is going to all the wrong things which aren't priorities and then you're leaving yourself below what the law even says is possible on the important things (like food). The amount of times I've seen this in army households is unreal, I put it down to a kind of grinding-down of a person when repeatedly told that everything in life is more important than they are until they believe it. I may not make much headway in telling you you have a right to live, but perhaps if I tell you your children do then you will hear it.

Nothing in life is more important than your family and thier welfare. Your creditors aren't "people" you owe money to, they are mechanised systems of generating profit from "people", they will merrily starve you all to death, kids first, if it makes them a profit. Any court ruling on your debts would be giving them only what you had AFTER the essentials of life (like food etc) were paid. You're doing this all the wrong way round.

Incidentally the court will allow you up to £200 per person per month for food alone. In your case (depending on the age of your children) this could be £1000 a month.

Right lecture over, come have a look what I make of these numbers...

Household Information
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 2150
Partners monthly income after tax....... 0 << Any possibility she would take work?
Benefits................................ 170 << Child benefit I presume, I think you could be eligable for council tax benefit at the very least, but probably Working Tax Credit too. Use the benefits checker tool here http://www.turn2us.org.uk/benefits_search.aspx for a better indication.
Other income............................ 0
Total monthly income.................... 2320

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 225 << HOW MUCH :eek: On a £100k property? This absolutely has got to be wrong somewhere, ask for your house to be rebanded and claim back the rest (could easily be more than your current total debt).
Electricity............................. 70 << If your heating is gas then this isn't going to be affected by the drafty condition of the property. Can you think of any other reason it might be high? Are you using immersion heating?
Gas..................................... 80 << There are lots of tips online to reducing both gas and electric consumption and as I am sure you have gathered from reading this board using a comparisson engine is a very very good idea.
Oil..................................... 0
Water rates............................. 0 << Are you Scottish or are you running up arrears?
Telephone (land line)................... 75 << This is very high. Don't forget to use a comparisson engine for this and to use the MSE callchecker tool if you are calling mobiles, non-geographics or internationals.
Mobile phone............................ 40 << No harm looking to reduce this a little too.
TV Licence.............................. 10 << It's about £12 now, but yeah.
Satellite/Cable TV...................... 0
Internet Services....................... 0 << In with the landline bill? You should be able to put yourself on a good free landline calls package and an unlimited internet package for about £30 (inc. line rental) and £15 respectively.
Groceries etc. ......................... 400 << See clothes
Clothing................................ 0 << I would usually say well done, but for 18 months of this the situation must be getting very difficult now, martyring yourself and the kids is not the way to go.
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 250 << If your wife is a stay at home mother, why do you need nursery or childcare fees?
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 30 << If this is prescriptions ask for a 6 or 8 week prescription not a 4 week. If this is glasses or contacts use the main site to find out about prescription glasses for £9.50 a pair (they are nice too). If this is a dentist be sure yours is an NHS one. If you are awarded Working Tax Credits you may see this catagory fall.
Pet insurance/vet bills................. 0
Buildings insurance..................... 35 << This is very high for a £100k house.
Contents insurance...................... 20 << This could probably come down too, again try comparisson engines and fiddling with accidental damage cover, shed cover and excesses for example to see what happens.
Life assurance ......................... 0
Other insurance......................... 10 << What is this one?
Presents (birthday, christmas etc)...... 0 << Unless there are religious reasons then this is so, so sad. They are just children, they are precious!
Haircuts................................ 0 << X
Entertainment........................... 0 << Normally all these ones I've marked with an X would be "well done's" but in total your lives must be very austere.
Holiday................................. 0 << X
Emergency fund.......................... 0
Bank charges............................ 45 << Why? What are you paying a money grabbing corporate entity instead of clothing your children for? A tin opener is not a luxury, this is though!
Union dues.............................. 25 << This is sad. Yes unions matter, yes some things are important, but to see it set in the priorities above the children is again desperately sad.
Emergency cash.......................... 50 << Good.
Childrens pensions...................... 90 << You can't afford this.
Boiler/plumbing care.................... 35<< This is very expensive, for something that may never happen. If you put this into the emergency budget instead then 99 times out of a hundred you are in profit. If not consider shopping around again, or just calling them to say you can't really afford it, can they cut you a deal.
Total monthly expenses.................. 1490


Assets
Cash.................................... 0
House value (Gross)..................... 100000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 100000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly.. .APR
Bank loan......................2100......700.......19
Credit card....................3000......100.......21
Family loan....................1500......0.........0
overdraft......................1500......0........ .0
Total unsecured debts..........8100......800.......- << That £800 a month is crippling your family. It's not sustainable, don't do this to yourself, you will never have your childrens younger years again. The bank and the CC absolutely CAN freeze the interest and accept lower payments if you put it to them in the right way that they should.


Monthly Budget Summary
Total monthly income.................... 2,320
Expenses (including HP & secured debts). 1,490
Available for debt repayments........... 830
Monthly UNsecured debt repayments....... 800
Amount left after debt repayments....... 30

Personal Balance Sheet Summary
Total assets (things you own)........... 100,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -8,100
Net Assets.............................. 91,900

MFWannabe

Hi
Welcome to the board; please remember you can get through this.
Hannah has made some very good points in your soa; some of the payments such as council tax and insurances seem incredibly high! Are you in arrears with c/tax? If not then they seriously need to take a look at this; it can't be right. Also do you pay over 10 months or 12? Could change it to 12 if you don't already do so.
Another few months and your loan will be finished which will free up £700 per month. I would cut yourself a bit more slack then; maybe give yourselves £200 out of this and put the remainder (£500) towards your credit card debt then; should soon get it paid off; especailly with that nasty interest rate

DVardysShadow

anotherdebtor wrote: »

We lost the card to the savings account last week and dusted off the current account card (that I had given to someone else to look after) and its all gone to pot. We've spent loads...hundred of pounds just this weekend...on nothing much, but so many things that we *needed* (a tinopener, new mugs, a new dvd, books, a bottle of wine) and have been denying ourselves for too damn long.

Suddenly I'm really scared that we cant do this anymore - either live denying ourself stuff, or live within our means.

The major loan that we have (£15K @ £700pcm - nearly 1/3 of our total income) gets paid off in Oct and we had been thinking that we could maybe live a little then but it scares me now to have monthly rather than weekly money after 18m of cash living weekly and the prospect of having "spare" money just seems to daunt me.

Actually, you are doing fine. You have put up an SoA within an hour of it being suggested, so your must be managing your situation very well.

As Hannah_10 says, your spends on a tin opener and mugs are not indulgent - and as you know your loan expires in October, you are actually borrowing your future £700/month surplus. If you said you needed those things and I knew your loan was finishing, I would tell you to go out and get them on the strength of the loan finishing.

anotherdebtor

The council tax includes arrears of around £50pcm, and inc. water rates. The buildings insurance is high, but the insurance value of the house and the sellable value of the house is vastly different because of the previous structural damage. The nursery and childcare expenses are for 1 day's nursery + clubs for the two schoolage ones - like you said they are only young once and it doesnt seem fair that they should go without because of our stupidity, so maybe it would be more appropriate to put this in entertainment rather than childcare.

Not sure why the electric is so high, it might be differently balanced as its a duel fuel agreement at £148pcm. Telephone includes internet broadband

We get most of the children's clothes from family who hand us down stuff, and underwear, jammies etc comes from presents, both our families are very kind. Our own clothes are looking rather shabby tho, I must admit. The medical expenses is a dental bill that we are paying off, but seem to run up dental expenses as quickly as we can pay them, Presents come from the £100pw spending money -we're kind of hoping that by xmas we can relax the reigns a bit, but thats all scary now.

Bank charges are £25pcm for the overdraft + £20 interest. The other insurances are washing machine cover, fridge cover and dishwasher cover.

The childrens pensions are non-negotiable and I cant imagine giving up union subs. The thought of the boiler going in the middle of winter and us not having the money to pay for it scares me too much.

We've kindof got used to this way of life and I'm a bit scared that once we have money again it will all get frittered and we will end up in the same mess as last time. Since we got the card back, we have spent £350 in 4 days, this isnt good, the idea that we could actually buy what we wanted just seemed to overpower us.

byrnedolly

I would like to say thank you to everyone on this forum for making me feel a bit better, I too thought, that being in debt is a crime, especially since my (now estranged) husband called me a thief for taking out a loan and Credit Cards without his knowledge.It's a long story, but to sum it up, I was foolish, I used Credit Cards for everyday living expenses, when I had no money left, and the reason I kept it quiet is that he tended to get violent even if we were 10 pounds overdrawn in the bank, so I started hiding things from him.He thought that living was a lot cheaper than it really is, he just had no idea and we never talked about it, cos I was too scared.Then the usual spiral started,I took out a loan to pay off cc,then ran more debt on cc, now I wake up every morning wondering how I will ever get rid of my debt. Reading the stories on this forum,I am so glad that there is hope.I have finally learned my lesson, and now the journey to being debtfree begins.Thanks again,folks.

anotherdebtor

I just want all this bloody debt gone. Its been dragging us down so long - it affect *everything* - our marriage, our relationship with the kids and wider family. My parents would be horrified to find out the debt that we got ourselves into. ...and I'm sick of scrimping and saving, we both try to be stoical about it, carefully doing a budget on a Thursday night about what we need for the week, but its bloody hard going - this weekend was such fun, but I felt terrible when we got back and realised exactly how much money we had spent - thats over 10% of the cc debt on treats.