What have we done? Too much debt so young

katchambers

I am 24 and my husband is 28. This year we moved into a new home, bought a hot tub, hubby got a new job with a big pay rise, I have a part-time job plus a business on the side earning a fair bit and somehow we have landed ourselves in such a HUGE debt that it is very scarey.

After reading some of these threads for the first time I am even wondering if we are alone, I don't know if anyone as young as we are has as much debt as we do and it is disconcerting.

Here is a breakdown of what we owe:

£177,000 mortgage
£29,000 loan at same rate as mortgage
£17,000 loan
£23,000 loan
£3,000 hubby student loan
£11,000 my student loan
£600 store card

Total = £260,600
Now if we take away the mortgage that still leaves: £83,600!!! :eek:
What a horrible amount of debt to be in so young. When I look at that figure it makes me feel sick. I have known it was around that amount for awhile but didn't really want to acknowledge it, hence why I have stayed away from the DFW board until now.

Because we have been struggling to pay all of these as well as have a fairly happy life we have extended our mortgage to 35 years temporarily so that we have slightly less to pay out, because if we carried on based on the last couple of months we would rack up about £3k debt worth of overdrafts in the space of 10 months, so at least we have sorted that out. However, that isn't going to clear it off very quickly and as far as the other debts go we won't be debt free (excluding the mortgage) untill 2014! That is such a long way off, and we are supposed to be enjoying these years not worrying about debt. I don't know how we could have been so stupid as to run up these kind of debts in such a short space of time with almost nothing to show for it.

Are we really stupid? Do we have too much debt?

I don't even know what the future holds because I am going to be made redundant in either march or july and I really want to focus on my business, but that seems selfish when we have so much debt. My hubby is totally behind my business but there is a big worry that our debts will worsen if I go for it, however, the redundancy is making it the best time to just go for it and if I lock myself into another job I know I will never get the business off the ground like we want. However, if the business does take off it could clear out debt, and if it at the minimum just covers our bills at least I will be happy and not in a job I don't like anymore.

None of our friends have got themselves into trouble like us and now I just feel so bad and guilty, especially as I know my husband wouldn't be in debt if it wasn't for me, if he hadn't married me he would be rolling in money, probably unhappy, but loaded! I feel terrible for bringing him down, and now he has to travel 100 miles everyday for work to pay off what is mostly my debt and my doing, I just feel rotten right now.

Well at least it is out in the open and at least we are making sure the debt doesn't increase, that's about the best we can do for now.

Sorry if I have bored you all.

Kat x

Welshlassie

Welcome, and well done for starting to face the prospect of paying off your debts. Yes it is a large amount but the longer you leave it the longer it will take to pay off.

Firstly you need to post a SOA (Statement of Affairs) see Southern Scousers post for First time posters. This will list all your incomings and outgoings and give us something to work with to identify any areas that can be shaved off and give you more money to throw at your debts. I see from your signature that you already do amazon selling - what happens to the money you make from this?

Have you also got accounts with places like Quidco and Pigsback, another great why of making extra cash from the things you would buy anyway.

How do you know your friends aren't in debt as well and have just not told you? If is a scary prospect but looking how you can reduce it will help to make it manageable.

msmicawber

Hi Kat and welcome - no, you're not boring me!

You do have a heck of a lot of debt, but you're also both young, so have plenty of time to get to grips with it. However, while you're this over-extended you're leaving yourselves open to a big crash if you have a small change of circumstances such as redundancy, illness, business not netting you as much as you expected, etc.

Why not post a Statement of Affairs and see what advice people can give on how to reduce your debt. I'd advise getting out of such a precarious position. Please have a look at this sticky from SouthernScouser: http://forums.moneysavingexpert.com/showthread.html?t=107280

Murtle

following on from the previous two posts, I'd just like to add that happiness with money is a very lonely place to be. Happiness with money is the best place to be, and happiness and debt isn't as lonely as happy with money.....

There you go - in circles yet....I am. I am sure your OH loves you more then any amount of debt. So chin up, get cracking with the SOA and don't think negative thoughts - just get more books selling on Amazon

x x x

Red_Fraggle_3

You don't know your friends aren't in debt - do they wear a badge - I always thought my debt was bad but actually with time I realised some people saw my figure as a drop in the ocean

As long as you take control of the situation now and moveforward with it - your age can be a bonus - Good luc and youcn always use te hot tub as a stress reflief lol

foxy-lady

:rotfl: Hiya Kat,
I can see why you are stressed about your financial situation. I am new to mse so i dont feel i'm able to offer any clever ideas on how to reduce your debt. The only thing that i thought of was possibly selling the house if theres any equity in it and paying some debts off. Then buy a smaller house with a more managable mortgage leaving more each month for chipping away the remaining debts.

Money isn't everything in life. Try to focus on other things.....like having a supportive husband. Bet you'd sell everything you have if he needed it for a life-saving operation. There's always someone worse off than us.

Every so often my hubby gets envious of the big houses our friends have. We live in a terraced house with no garage or garden. He toys with the idea of moving until i remind him of what we wont be able to afford with a big mortgage. I wouldn't want him to have the pressure of paying it every month either.
Lastly i remind him that if we had a garden it would need to be maintained :rotfl: :rotfl: :rotfl: :rotfl:

clarkylou

Hi Kat,

I took the jump from having a job to self-employment last year - it's been difficult and I have taken a few steps backwards with debt - but it's been worth it and it can only improve. Have you contacted your local business gateway for advice on your business, I got a £1000 start up and lots of contacts by attending their free networking events.

As you are 24 the Princes Trust gives grants to help start up businesses, and another great resource for advice and support is Shell Livewire. https://www.shell-livewire.org

It is alot of debt - but you are aware of it now and if you start to tackle it now then you'll be amazed how quickly it can go down (never as fast as you want it to!). I've just used the snowball calculator and feel a lot more positive about how and when I can get debt free.

Good luck with it!

ariba10

If you are in a hole the first thing you do is to stop digging.

Sit down, take stock and do not take out any more loans.

We have been lucky in that when we married (many many years ago) we could not get into so much debt but that is not to say we did not have our problems.

There are a lot of friends on this site that will be able to help you.

katchambers

Thank you all so much for your lovely advice. I am going to try to put some of it into action, for example I like the idea of startup grants for my business and the statement of affairs.

Foxy-lady - we have no equity in the house coz we have only just moved in this year so moving would be a bad idea, plus we really need the extra space for my business, the stock takes up alot of room.

Thank you all for being kind and understanding.

itsarichmansworld

Hiya Kat

Welcome to MSE I'm 25 me and my hubby are 25k in debt.

I feel the same way I lead him down the horrible path of debt. But I know no matter what he loves me and I love him.

As long as you have each other you'll be fine.

If you ever need to talk just email me

x:happylove

livinginhope

Hi Kat,I know just how you feel with the level of debt you have,big hug for you.
The first thing you need to do is STOP spending,I have noticed you are planning a break at christmas and that you spend £800 for christmas,yikes where is that going to come from?
You need to post a statement of affairs and keep a spending diary to see where your money is going.
Don't worry about your friends,they are probably in debt too,but they haven't told you,I know my friends are also in deep debt,but they tell me they are debt free!
You haven't bored us with your post,it takes guts to tell everyone and you are not alone.
Just to let you know,I too extended my mortgage to 35 years to lower the payments,but cannot now increase them.