Diary of a shopaholic...champagne tastes on a lemonade budget!

ladyfox

Dear Diary

Had a visit from a very bad man last week. Actually he's a lovely man called Simon, but after what he told us he's now affectionately known as the 'bad man' _pale_

My husband and I have finally had our own 'light bulb' moment, but it's taken us 3 years, nearly £40k :eek: and some plain talking from Simon, to get us there.

Brief (ish) debt synopsis....broke up with ex bf in 2006, from then on decided to live the life I'd always wanted, bought new house, spent far to much on doing it up/buying 'stuff' for it to keep up with my friends (and their lovely houses), buying expensive clothes, shoes, posh meals out etc, and ran up nearly £15k in debt. Met now husband in 2007, who had his own £7k debt, over next 3 years, ran up a further £20k between us on holidays, lifestyle, clothes (me), shoes (me) new kitchen and bathroom, extravagant wedding etc.

Fast forward to 2010...I got made redundant, got new job but on £10k less, now on just £2.5k less due to bringing in new contracts, but have been subsidising income with credit cards in the meantime. .

We realised we were in trouble in May and have been trying to find a solution.....that didn't involve having to cut back :rotfl:...(we thought we could just add our debt to the mortgage and carry on living our lifestyle....yes, I know now!). We applied, got rejected, applied again, got accepted but house under valued, applied again, got rejected...and so on.

So before Christmas we finally sought help from a financial advisor friend, Simon (the bad man). We didn't really want our friends knowing how bad things were, but had nowhere else to turn at this point and desperately needed some advice.

Surprise surprise...he wasn't at all shocked or judgemental..people are really understanding and willing to help if you just give them the opportunity He didn't pull any punches though. For the first time in our lives we have actually had to sit down and list exactly how much we owe, and where our money goes (down to the last pound!). I felt like we were being cross examined by Scotland Yard!! He wanted to know everything, and I mean everything.....I was so ashamed when husband realised how much I had hidden from him, even just recently, eBay is the devil! (or should really blame my lack of self control)

Once he was satisfied we weren't withholding information (!) Simon said he would come back to us with figures and a solution. In the meantime, we had a bet on how much we thought our total debt actually was, as we'd never added it up (3 loans, 5 credit cards)....I guessed around £25k. Husband thought it was more like £30k. Imagine shocked faces last week when Simon told us it was actually nearly £40k and that, with our current arrangements, it would take at least 10 years to pay it back :eek: Hence the 'bad man'!

So now I have a list:
1. Do a budget (almost done)
2. Register on MSE for advice (done!)
3. Cancel all unsettled credit (experian report shows I have nearly 30k!)
4. Shift debt to lower interest rates (tried but got rejected!)
5. Get some self control (this is going to be the hard one)

I've already got our utility bills down as far as possible and starting thinking about what I can sell on eBay. I really want to make this work, and I know my husband will be so disappointed and angry if I don't stick to it. I love him so much and really want to help get us out of this mess. So February is going to be the new 'lemonade' version of me! As soon as the budget's done I'll post all the financials here, and hopefully you can help me stick to it?! xx

ladyfox

As usual, started with the best intentions and my air head ways screw it all up grrrr. Decided that this week would be all about getting as much money 'back' as possible, so that I can pay looming bill bill from Uni without using more credit i.e. ebaying all those things I don't use/wear/need and taking back the all the things I bought over Christmas either for me or as emergency presents (!) that are still sat in my wardrobe. Started out well until I realised I can't find the receipts to take anything back! At all!! God, I am so disorganised.

Have now decided that the only way I am going to make this work is if I either a) pay someone to take control of my life (yes, that would probably still be cheaper!) or b) commit a serious crime and go to prison - 3 square meals a day, rent free, what's not to love about that?!

Am off to find a phone box where I can transform into a new super human, super organised, debt free version of myself, in spandex just so I don't have to resort to armed robbery of the local post office....

ladyfox

I took the first small steps today....towards the new organised, frugal and debt free version of myself! I like her lol!

Step one was to tidy my desk! So I'm feeling smug My desk is an exact replica of my life, stuff everywhere, disorganised, and generally messy! I did a search to find out what a desk says about a person (procrastination at it's best lol!) and I am definitely The Multi Tasker lol (The multi-tasker - A more impulsively ordered desk demonstrates someone who is skilful at multi tasking and can change between different tasks quite quickly and easily. They are usually flexible and creative in their attitude to work.) However, after today I am now 'Neat and Tidy' ! (Neat and Tidy - A clear and organised office desk is often an indication of a conscientious individual – an individual who is well organised and prefers to focus on one thing at a time). That's meeeeeee, hurrah!

As I spend most of my life at work, I'm hoping that this new found organisation will spill over into my home life! We'll see. I also found out today that I am an A-Typical 'person in debt' (at a presentation about getting out of debt - it's loosely related to the project I am working on, so I know, I should know better, but 'the shoemaker's children' and all that!) in that I haven't opened my post for over a year. Apparently that's a common sign that someone is struggling and should seek help....oops. I've been telling myself it's actually because I hate filing!! But apparently the filing fairly doesn't exist.....damn

So in my quest for excellence I have decided that my goal for this evening is to open all of the post I'm struggling to contain within the four walls of my house and, (gasp) deal with it. This will be step number three on my long, long journey, and the one I will probably find the hardest, seeing as I've gotten so good at avoiding it! Hate it already.

Anyway, Step two was to finally get my statement of affairs done and posted - I'd much rather sit here gabbing on about how I'm going to get organised and get out of debt, rather than actually getting on with it sometimes!!

So here it is: omg

Type Company Amount % Payment Time left Order to pay
Loan RBS £8849.67 10.10 £132.47 8yr 2m 6
Loan RBS £8226.05 7.00 £226.69 3yr 9m 8
Loan Natwest £4269.20 8.00 £164.20 2yr 2m 7
C/C RBS £2129.78 19.00 £ 50.00 4yr 10m 3
C/C MBNA (1) £5608.80 12.00 £107.30 6yr 3m 4
C/C Halifax £2682.62 21.95 £ 60.93 7yr 7m 1
C/C MBNA (2) £3935.00 12.00 £ 61.20 8yr 8m 5
C/C Natwest £2990.00 20.00 £ 64.00 6yr 6m 2

Total £38,691.12 £866.79

We earn £2905 between us (take home). I should get bonuses as well, based on the business I bring in, which will help, but the company is still working out how much, when, and how I will get paid, so I can't rely on them just yet.

I've worked out the time left on the credit cards based on if we carried on exactly as we are now, and only pay the minimum payment each month. The plan our FA friend worked out was over ten years and involved consolidating the cards into a loan on a lower interest rate, but when I applied this week I got rejected again (so frustrating when I'm actually trying to do something about it). Obviously just paying the debts as they are would get them paid off quicker with the longest one being 8yr 8m, but the problem is that we need to reduce our outgoings now, so that we don't keep adding to the cards each month as we have been doing to make ends meet. I would consider moving the cards onto 0% but I'm worried we won't have the willpower not to add to them as that's how we ended up with so many in the first place, by shifting debt and not cancelling the old cards. Grrrr

What a mess. V v grumpy now. I've done a budget which will hopefully shed some light on how we can save the extra money we need to each month, but need to wait until 28th Jan when we get paid until we can put it into operation. Only £2.54 left in the bank and would normally be using the credit card now as still need food and petrol.....seriously, how do you do it?

ladyfox

Sorry, SOA wasn't very well formatted! Have posted again below, which is hopefully easier to read. I've put order to pay off on the left.


6 - Loan RBS - £8849.67 @ 10.10%, Min payment: £132.47, Time left: 8yr 2m

8 - Loan RBS - £8226.05 @ 7%, Min payment: £226.69, Time left: 3yr 9m

7 - Loan Natwest - £4269.20 @ 8%, Min payment: £164.20, Time left: 2yr 2m

3 - C/C RBS - £2129.78 - 19% - Min payment: £50.00, Time left: 4yr 10m

4 - C/C MBNA (1) - £5608.80 - 12%, Min payment: £107.30, Time left: 6yr 3m

1 - C/C Halifax - £2682.62 - 21.95%, Min payment: £60.93, Time left: 7yr 7m

5 - C/C MBNA (2) - £3935.00 - 12%, Min payment: £61.20, Time left: 8yr 8m

2 - C/C Natwest - £2990.00 - 20%, Min payment: £64.00, Time left: 6yr 6m

Total £38,691.12
Total Monthly payment: £866.79