Can't see a way out of this debt

kettlenic

I am not sure where to start. I eanr a good wage £26 000 (plus bonuses) and my husband £42k. Yet we have got ourselves into such amess debt wise and I honestly have no idea how to get out of it. It is so scary

We have a 3k overdraft and are currently £500 overdrawn, we also owe wonga £320 at the end of the month...

I have a credit card £2700 and another overdraft £1600 and a loan which I pay £110 into each month (this will be done end of 2013)

Combined we have a Lloyds CC £400 and loan £8000. My Husband has a hsbc cc £3700 and loan which will be done in december 2012. We also have a credit card with barlcays £200

We always seem to end with no money. I know we need to budget and spend less - we are trying

Any one have some amazing advice of reassurance on how to get out of all this debt? it makes me want to cry I honestly can't see a way out of it, it truly is an endless cycle...

HappyMJ

You really need to cut your expenses. That is an easily manageable debt on your income so at the end of the month pay Wonga off and DO NOT use them again. Pay all of your regular bills including all the minimum repayments on all the loans and credit cards. If you are left with anything then pay off the highest interest rate card first with the rest. Do not save anything. If you need to do some grocery shopping then use a credit card and buy as little as possible. If any emergency comes up then don't be afraid to use a credit card. DO NOT borrow money for entertainment expenses give yourself a weekly budget such as £20 a week for those and stick to it. You should be able to clear everything by the end of next year with some determination. It means you will not be going out as much.

Post an SOA (from makesenseofcards website http://www.makesenseofcards.com/soacalc.html )if you like and you'll get lots of advice on how to reduce your expenses.

kettlenic

you really belive we could pay it off so quickly - that would be amazing!!
How do you cope when people suggest things like family pub dinners ? my family are visitng from south africa soon and I am embrassed to fill them in on the extent of my problems...thinking I will have to work late etc to avoid some events and perphaps it will be the whole weekly allowance?

My husband travels a lot for work so we need to save for that - he can claim some things on expenses but not all and with the rise in petrol it eats a lot of our money.

do reckon we are better off getting rid of the overdraft first? and then the other debts?

thank you x

killerpeaty

Hi there, your panic made me come out of lurking. I've been reading this forum pretty much every day for roughly 2 years now and you'd be absolutely amazed by the amount of debt some people pay off.
I do agree that for the help you want, it would be really useful to get a SOA posted, this gives a clearer view of your situation. Have a look at the Old Style forum to cut down your food costs, bulking food out, making sandwiches to take with you and cutting meat consumption are my particular favourites.
Budgeting takes practice, ask any student, we all have slip ups when we first start : ) Personally, I give myself a set amount of money for a set amount of time (for me a month) and then every time I do a shop I round up, if it's greater than £10 then I round up to the next 5 and tell myself that money is gone now, so I always have a bit left over. It's also a great demotivator to pick up those extras on the weekly shop, just hitting a £10 shop (one person shop) means I've lost another £5 off my budget.
I wish you the best of luck with your debt free journey : )

HappyMJ

kettlenic wrote: »

you really belive we could pay it off so quickly - that would be amazing!!
How do you cope when people suggest things like family pub dinners ? my family are visitng from south africa soon and I am embrassed to fill them in on the extent of my problems...thinking I will have to work late etc to avoid some events and perphaps it will be the whole weekly allowance?

My husband travels a lot for work so we need to save for that - he can claim some things on expenses but not all and with the rise in petrol it eats a lot of our money.

do reckon we are better off getting rid of the overdraft first? and then the other debts?

thank you x

Ahhh...the family pub dinner that quickly turns into a £60 bill. Don't go. Suggest the family come around to yours and ask that they bring drinks and meat for the BBQ. The weather is perfect for it this weekend. You provide the salad, the fridge, squash, ice and the entertainment (the cd player or a music channel will be fine).

Family from South Africa would probably appreciate a house party rather than a pub dinner anyway.

Your husband should never spend money on work that is not reclaimable through expenses. He is not working to subsidize his employer.

Yes get rid of overdraft first as it gives you a buffer for emrgencies without having to resort to payday loans.

paulmapp8306

What to get rif od first depends in the interest charged. If the overdraft is the highest (after payday loans obviously) pay it first - if credit cards are higher then pay them first.

Seriously - post an SOA, as Im sure there are loads of places you could save without impacting on that family visit.

Weve all been there and can offer suggestions onec we know what your spending where.

kettlenic

Thank you- do you reckon we should set money aside for the OD in the online saver and then put it back in at the end of the month to avoid spending it?
I feel relief posting this - I know it may seem ridiculous as we are good earners and both have jobs but we have just been so silly!!

HappyMJ

kettlenic wrote: »

Thank you- do you reckon we should set money aside for the OD in the online saver and then put it back in at the end of the month to avoid spending it?
I feel relief posting this - I know it may seem ridiculous as we are good earners and both have jobs but we have just been so silly!!

Online saver...you should not be thinking about saving anything. Just clear the overdraft and if you really have to spend something on an emergency then the overdraft is there for you to use if the interest free credit card is not available. If you spend on a credit card and clear it in full each month then there is no interest to pay so you might want to clear one of them so you can do that. That will save quite a few pounds in interest and make your credit file appear quite good.

paulmapp8306

We have all been "silly". Facing up to it is the key - and you have done that. Its just planning now.

Theres no point in saving to pay the OD, as your p[aying interest if you use it. An SOA, and then a budget based on that should mean you clear the OD in a month or two while only incuring charges/interest towards the end of the month (when you go into it) rather than the whole month.

Consider things like the Santander 1,2,3 credit card. it ciosts yes, a whole £24 per year BUT it gives cashback on food (1%) and petrol (3%). Initially it may only be £500 (or maybe more in your case) but I put all my food/petrol on the card then clear it as it approaches its limit (so 2-3 times a month). That way I save on my outgoings, while also not using my OD (as the spends are on the card for a few days - every day out of the OD helps). We have a modest £100/month food shop and £200 petrol costs, and made the £24 fee back ion the first two months - every cashback for the rest of the year is proffit.

kettlenic

I could probably get a lona to cover the OD and then never use it again!! I also have ppi to reclaim which I am doing this weekend - any money from that will cover my credit cards.

Do you think it would be wise to get a loan to cover the od ? I just feel the fines we get for being overdrawn and interest are killing us!

kettlenic

We also had a claim with Admiral and they are sueing the guy who hit our car - we have a very good case - when this finally sorts we will have £500 plus a we have been paying 0 yrs no claims bonus since renewal (Nov) while this gets sorted so we will get a rebate on that which will be good.

The case has finally gone to court so we should know soon - been ongoing since August!!