Teetering on the brink

faceuptoit

Hello all

I have followed this site for some time and I think it's finally time that I face up to my situation.

Now some of you may think I'm worrying over nothing - but I can feel the situation getting out of hand every month. I'm extremely extravagant and I can't seem to stop myself.

I earn £38,000 per year (2106 clear, which includes a travelcard paid through interest free loan) and pay £680 in rent, around £120 in bills. I don't manage to save any money, in fact I raid my savings account more frequently than I put money into it (which are the savings I'm trying to raise to buy a flat for me and my gf).

My gf, despite earning far less than me, is extremely strict with herself and would never get into debt. She's so responsible and I don't want to drag her down, I want to be able to provide for her.

I think I just need a wake-up call. I am currently £1000 in 0% debt (my gf has £1000 0% on the same card, which is in my name, but I gave to her as she urgently needed dental treatment and couldn't get it on the NHS) and hoping to get another 0% credit card so that we can go on holiday at the end of August.

I just need to know how, spending less than a third of my income on rent, I manage to be left in the red at the end of every month, and how to stop.

ss3n08

Hi faceuptoit,

Well done for posting. It really is not a good idea to be getting a cc to pay or a holiday even if it is interest free. That is exactly how the downward spiral begins. If you are struggling to pay off an original 0% cc then you will not find this one any easier, plus £1000 seems excessive for a holiday for 2. You can get some great last minute deals if you shop around. It is probably worth posting a Soa (statement of affairs) so we can all see where your spending too much and you wll get advice on how to cut that down. It won't always be easy to hear and will nvolve drastic changes but that's what we are all here for and nearly all in the same boat

Just to add- my bf took out a cc n 0% interest before we met in 2002 to go on holiday and 5 years later at a cost of about £4000 he paid it off. Anything could happen, you are far better saving up the money and enjoying it rather than putting it on cc. If you are worried about debt then getting yourself into more debt to go n holiday is not a good idea. You will be ale to enjoy your holiday far more if you have paid for it before you go rather than knowing all the time that you have today for it when you get back x

faceuptoit

Statement of Affairs and Personal Balance Sheet

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

Monthly Income Details
Monthly income after tax................ 2106
Partners monthly income after tax....... 1500
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3606

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 1083
Management charge (leasehold property).. 0
Council tax............................. 94
Electricity............................. 20
Gas..................................... 40
Oil..................................... 0
Water rates............................. 26
Telephone (land line)................... 0
Mobile phone............................ 50
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 16
Groceries etc. ......................... 400
Clothing................................ 100
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 13
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 50
Entertainment........................... 400
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2354


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

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
M&S - me.......................1042......0.........0
M&S - gf.......................996.......0.........0
Total unsecured debts..........2038......0.........-


Monthly Budget Summary
Total monthly income.................... 3,606
Expenses (including HP & secured debts). 2,354
Available for debt repayments........... 1,252
Monthly UNsecured debt repayments....... 380
Amount left after debt repayments....... 872

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -2,038
Net Assets.............................. -2,038

Seaxwyn

Hi faceuptoit - and well done for facing up to it!

The easiest way to find out how you end up in the red each month is to keep a spending diary and write down every single thing you spend every day. Every coffee, beer, newspaper, whatever. Plus write down all the things that go out of your account each month. Bills, subscriptions,etc. It is surprising how fast these add up.

I agree with ss3, it's not a good idea to borrow for a holiday. It's so easy to borrow £1,000 and so hard to pay it back! (Believe me, I have spent the last five years or more paying off debts and it's miserable.) You can get a nice holiday much cheaper than £1000 and you'll enjoy it all the more if it's paid for upfront.

Good luck!

faceuptoit

I do have savings, but I feel funny about posting the amount so have chosen not to, as I am trying to consider them 'off limits' anyway.

I am soon to get a decent pay rise and gf is soon to get a huge payrise...but I am just worried that me and her are always looking to the next thing that's going to make our money situation better, yet when we get to that next month, that next pay, the situation (for me, not her) has gotten worse.

I am also £310 overdrawn (0%).

I pay £250 off my M&S card every month and the gf pays £130 off and saves £120.

asparagus1968

well done on finding this site.if you do actually want to change and save for a house or whatever,it will be a god-send to you.
however,you talk about wanting to stop using your savings ,whilst talking about geting more debt to fund a holiday?so i think at the moment you are not really serious about the situation.thats your choice,you are only young once i suppose.:)
if you did want some advice though,i'd suggest keeping track of everything you are spending,daily.eg,spending diary-there are plenty on internet/for use on smartphones etc or just pen and paper!
your household bills don't seem excessive,apart from haircuts and entertainment,halving both thers two for a while would pay for your holiday.
you could look at your grocery shop-try and plan your meals etc,use up whats in fridge/freezer,cook from scratch.
it depends how far you want to go really,you could become really frugall for a few months and pay off the CC completely i expect.
good luck on whatever you decide

ss3n08

£400 seems like a crazy amount for groceries or 2 people. My boyfriend and I live very well indeed off £200 and we are going to try and cut that down to £150. Also £400 for entertainment? That seems really steep. If you cut down on those two things for a couple of months you would be debt free before you know it and saving up for a holiday.

faceuptoit

The thing is, I can't locate where the rest of my money goes. According to that SOA, I should have basically paid off my card almost every month!

I use an American Express card for most of my spending as it gives me nectar points, then if I need cash I get it out of an account I have a £500 0% overdraft on and top that account back up to 0 when I get paid.

This month I've paid off £783 on my Amex, and I'm £310 in my overdraft. I've incurred around £610 of new spend on my Amex, so a total spend this month (my bill dates run 19-19) of £920.

So I think I spend around £1000 every month - which doesn't include rent, bills or travel. However, putting those three things on to that figure, my total spend should still only be around £1800, then I pay £250 off my card.

I just don't know where to begin cutting back on that £1000 expenses. I try to buy all the groceries in bulk and on offer, and we always make up 'freezer meals' so in the last week of the month we never buy groceries except milk and bread. I try to spend around £5 or less on lunch at work, although occasionally I splurge and go to Pret. The only thing left is going out, and I just can't see how that can account for so much money every month...I think I'm in denial but right now I can't see the wood for the trees. But I need to learn how to if I can save up for a ring and deposit on a flat.

eyeopener2

Hang on a minute, I think we are missing a point here. Which is why the OP posted.

You have £872 OVER each month according to your Statement of Affairs and yet you are overdrawn, have a credit card and want another credit card to buy a holiday.

You have to ask where that £872 goes and if you have savings why on earth have you got an overdraft?

Sort out where the £800 goes and your life will be sorted. I bet the £400 a month entertainment budget is conservative at the least.

Do as the others have said, get a small spending diary and write everything down for a couple of months. Believe me you will be really surprised where it all goes.

Oh and don't get a credit card for a holiday, that is what savings are for.

E2

faceuptoit

OK, I know I have a problem. I can't say no to anything, even when I'm totally brassic.

Positive things I have done so far (since my offline LBM about a month ago when I realised that if I stayed on this slope I would end up in debt a few years down the line) are selling my car and stopping smoking.

I will start a spending diary and try to figure out *exactly* how much I'm spending on going out every month (the idea that it might be as much as £600 is making me feel quite sick!!). Thanks all.

TeaForOne

Well done on wanting to face up to it. This is the first step.

Now (at risk of sounding like your mother, which I'm probably old enough to be) you absolutely must keep a record of all your spending from today. Use pen and paper, a spreadsheet, an app - doesn't matter - but keep a record of every penny that you spend.

Those £5 lunches are costing you £100 per month alone - and more if you go wild in Pret (easily done....:)). If you turned that into £2 packed lunches (and you can do a very nice packed lunch for £2) you could save £720 per year which is your half of a rather nice holiday. Add to that one less night out per month (I'm guessing £60 a time) and you've got £1,440...... Disney World/luxury cruise/African safari here we come.

Use the Motivator on the main site to scare the living daylights out of yourself of necessary.....

Good luck and keep us posted. You may find you turn saving every possible penny into an art form.