Quality of life.

M_C_3

Hello all, I'm new on here, need some advice.

My wife and I are both on good salaries, 40k and 32k but at the end of each month we find ourselves at £0, every month for the last 4 years.
We have no savings.
We have a flat, mortgage is 1k a month.
Outgoings to credit cards, store cards and loans per month is around 2k.
When are are done with car insurance, council tax, bills, petrol and all the rest of it, we have nothing left. A nominal budget for cloths, food and other essentials is incorporated into the above.

We are just existing without really living so you can imagine that the quality of life is not great. Its home to work, work to home, eat in between, sleep and that is it.

I need help but don't know what to do, I am tempted to apply for a 50k loan or something to consolidate everything and bring the payment down to 500 pounds.

Any advise? I don't want to stop paying anything as I'm not sure how much this will have an impact on me getting a mortgage in the future for example. I am reading other posts on here for some ideas.

Thanks for reading.

mwddrwg

We got a consolidation loan for a period of five years but within a year we'd spent some more on the old cards and are back where we started. Be very careful to cut up the cards if you go down this route.

Cyril

It would help to do an SOA so we can see where your money is going. As you will know two people on good salaries should have something left at the end of the month.

It sounds like debt repayments are a hefty amount of your income and again without knowing more detail I would hold fire on additional lending as there may be ways to resolve your issues.

tony_ack

If you owe so much in loans, and credit cards already, then I would worry that you'd use a consolidation loan as an extension of your credit, not to replace the cards. It's very easy to say now that you wouldn't use the cards, but it's easier said than done when faced with either an emergency, or temptation to 'improve' your quality of life

I do disagree with the statement about quality of life not being great however - if you can cover all of your monthly bills, put a roof over your head and food on the table, then quality of life is down to what you make of it, and you do not need to spend lots of money to enjoy yourself.

With the money you are earning, imagine what sort of life you would be living, guilt free, if all of your debts were paid off?

Tixy

A 50K loan is very unlikely to be approved. To bring it down to a repayment of £500 a month you'd be looking at a loan over 15years plus. That just won't happen on an unsecured loan.

Before you consider consolidation I would do a really detailed budget of exactly where all your money is going and detailing all your debts and the APRs etc. Perhaps if you could compelted the statement of affairs calculator and post up here you would get suggestions as to what other options you have as well as suggestions for where you could save money/ get things cheaper etc so that you can afford to put more towards your debts each month. http://www.makesenseofcards.com/soacalc.html

Obviously you are in a sizeable amount of debt and it is costing you a lot per month and it probably will take you a while to pay it off, but it probably also took some time to build up to the level it is, so its unlikely there will be any quick fixes and its likely you might need to adjust how you live to start to make inroads into it. But I'm sure people here can help with suggestions.

mrsb83_2

Debt can really get you down.

At a combined income of £72k, you shouldn't need to default on anything. £1k is quite a sizeable mortgage but there should be plenty of room for savings.

Post an SOA and also check out the snowball calculator at whatsthecost.com to help you figure out how quickly you could be debt free.

dancingfairy

Hi - is the 2k on credit cards etc the minimum monthly payments or are you overpaying? Are the balances increasing or decreasing - ie are you still spending on the cards?
At the end of the day it basically comes down to increasing income/decreasing spending and getting the debts paid off as quickly as possible or defaulting on your payments and taking action with the debt - ie dmp, IVA, bankruptcy.
Getting more debt really is not the answer. Unfortunately so many people fall into that trap and end up in a worse mess and as tixy has said it is not always that easy to consolidate anyway.
I suspect that even though you have decent salaries you have the same problem as everybody else - it's just the numbers are that much bigger.
I'd first off look at easy savings that can be made - is your mortgage competitive, are you being energy efficient, are you on the best electric and gas tariffs, have you considered a water meter, - go through every bill and see where you can save money without it affecting the quality of life.
Then frankly you've got to look at the lifestyle issues - what can you get rid of/downgrade that will get that debt paid off quicker - what are you willing to sacrifice in the bigger picture of things.
Obviously if increasing your income and trying to decrease your outgoings fails then you are stuck with clinging on and making the minimum payments or defaulting and looking at other options.
Best of Luck
df

CC01

Good advice here!

dancingfairy

Assuiming that it's not down to some major trauma/business disaster/left from a failed relationship then it's highly likely to be a gradual build-up of spending more than you earn each month and interest on interst creeping up on you.
As you both have good salaries hopefully there is scope for savings in your outgoings.
In terms of lifestyle -it's about making the money you do have go further and being creative and looking for cheaper entertainment etc - ie 2 for 1 meals, going to the cinema when there is a deal on, using Tesco vouchers etc, having friends over rather than going out, cutting back on things where quality doesn't matter as much - ie chepaer tinned beans and tomatoes, shopping for clothes in the sales and with vouchers to get key pieces etc.
df

gfplux

Living sensibly starts with "will I allocate my income" NOT "this is what I want"
If you buy some thing in the sale reduced from £80 to £50 and pay with a credit card. You will pay OVER £80 in the end if you do not pay it off but only pay the minimum.

M_C_3

Thanks everyone, work has been so mad recently for both of us, we have been trapped in a circle of not really being able to assess the situation properly. I mean, I use Microsoft Money for budgeting, and recently got my salary increase by 5k so now we should have a little more disposable cash to try and pay some stuff off.

Balances on cards have not increased for some months and i managed to get the interest frozen on one of them.

I will get on the case with a SOA and post in the next few days. Cheers everyone for the helpful replies, appreciate it.