Massively in Debt and Sad

tweeniewoo_2

Hi and welcome

Wel done for posting your soa - i posted mine last week and it is a big but worthwhile step....

Your story has really struck a cord with me as it's almost word for word how me and dh also got into debt (41700) - we even got married the samed year as you !!. I cant really offer any advice other than put the highest card apr's off first but good luck with everything x

nearlyrich

Do you have £653 left every month? If not you need a spending diary for every penny you spend each day. Groceries are high for two we can manage on about £30 a week if we plan meals, do you have a store cupboard and a freezer full of food ? Can you cut down the budget here ?

Gas and Electricity are you on the cheapest tariff? Do you switch things off, lights, chargers, tv when you are not using them?

Luxuries such as Sat TV, new clothes, holidays and entertainment can you cut anything here?

Have you seen the snowball calculator? Helps you work out the order to pay off your debts to save interest.

You have a good amount of income and you should be able to make a lot of difference to your situation if you follow the advice on here. Good luck with your challenge...

Little_Miss_Uni-Debt

Hey NewYorkDreams, well done for posting - this place really is full of the best advice you will ever get.

The bit where you said...

Newyorkdreams wrote: »

... it upsets me that the banks keep refusing us.

You have to look at the banks refusing you as a blessing. Otherwise - where would it have stopped?

Now you're here making a start at £55k. Imagine if they'd let you carry on to £75k, or £80k or £100k!!!

£55k works out at an over spend of £15.05 every day for 10 years. We all know how easy it is to spend £15 in the blink of an eye! I know paying off a bit here & there can feel like a drop in the ocean & it's tough but those little amounts are what makes the big difference.

You have a very good income to tackle this with.

Carry on paying your minimums as normal then focus on your highest rate debt & rip it to shreds. Having 1 debt as your main focus can really motivate you.

Start with that Barclaycard (24%) that is your most expensive debt. With your current amount of £653 spare, the barclaycard could be gone in 8 months. Or faster if you can free up extra from your budget. Make it a challenge, how many months can you shave off?

Also I would be careful with the last 9 categories in your SOA. You should actually, physically be putting this cash aside each month, so that when the insurance, haircut or holiday is due - it's saved for. Or when it's time to buy presents the credit cards don't have to come to the rescue. I would suggest having a new current account (NO overdraft) & sending money to it to cover these things that occur less often (haircuts, presents, holiday etc)

If you aren't already doing this then there is a large amount going missing in your SOA & you need to keep a spending diary to find out where it goes!

Let us know how you get on!!

exarmydreamer

If you are able to forego the luxuries for a while, it would certainly help with the debt's. Maybe look out for voucher on line for days out and meals etc. The Old Style board on the Forum menu, has loads of lovely people who have menu's for budgets and ideas for frugal living.

One item that you should seriously look at, especially since you have a mortgage is life insurance. Try the price comparison websites.

Try the spending diary for a month and see if you can both find a pattern of spending. It may show you where your money is going. Good luck.

Newyorkdreams

Thank you little miss! Your advice is spot-on. Totally agree with the comment about the banks, it's made me reflect on it in a different way. Instead of seeing it as a bad thing, it really is a good thing. Re the haircuts etc. I don't put any money aside for these things so I must be putting them somewhere else!! I'll need to start doing this.

I've been toying with paying off a smaller debt first with lower APR to motivate me (e.g. Nationwide) but in reality this will lead to more interest being paid.

God bless financial education! I really wish that I had some now!!

NYD x:rotfl:

Newyorkdreams

One item that you should seriously look at, especially since you have a mortgage is life insurance. Try the price comparison websites.

Thanks exarmydreamer! I used to have life assurance then I cancelled it about 2 years ago. My husband gets a lump sum from my pension provider through my work if I die which would cover the mortgage as well as a spouses pension so I class this as an insurance policy. Do you think I need a separate policy? My husband isn't covered at all.

Thanks

NYD

exarmydreamer

I would serious look into insuring your husband. How would you manage with the bills and debt, should the worst happen?.

Sorry to sound so morbid, but is is really an important part of yours/husbands financial wellbeing.

eyeopener2

Newyorkdreams wrote: »

Thank you little miss! Your advice is spot-on. Totally agree with the comment about the banks, it's made me reflect on it in a different way. Instead of seeing it as a bad thing, it really is a good thing. Re the haircuts etc. I don't put any money aside for these things so I must be putting them somewhere else!! I'll need to start doing this.

I've been toying with paying off a smaller debt first with lower APR to motivate me (e.g. Nationwide) but in reality this will lead to more interest being paid.

God bless financial education! I really wish that I had some now!!

NYD x:rotfl:

Personally I would pay the smallest first to give you that motivation that it can be done. I know that goes against the usual advice but I don't think it will make that much of a difference short term. You pay one off and the feeling is amazing (my first debt repaid was great feeling).

Get the Nationwide paid off then get stuck into that Barclaycard.

racing_blue

A general point about the SOA calculator. For me, there are a few lines missing, which could lead to underestimating expenses. The most significant of these is probably car depreciation- I guess every household is different though.

I have added these lines to my own SOA:

Statement of Affairs

Monthly Expense Details
...
Hobbies................................. 91
House repairs........................... 31
ATM cash withdrawn assume spent! ....... 70
cars- depreciation...................... 258
bought in labour (eg. cleaning)......... 76
replace home furnishing, white goods ... 84
...

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

MoneyMission

Hi NYD. I would usually go with the highest APR first too. However, managing to pay off the smallest Nationwide debt would mean one less to think about. If you stick to your SOA you can do this in two months with money to spare. That takes you from 10 debts to 9. A big morale boost will help you on your way with the others.

If you are serious about getting rid of all your debts you will need to take a look at your entertainment budget. Its taking up a huge chunk of your income. That along with the £653 that you should have spare each month will go a long way to clearing some debts fairly rapido.

I reckon managing 9 or 10 debts is going to be fairly time consuming if you don't have a spreadsheet or even a notebook with it all written down. Suggest putting a debt page at the back of a spending diary so you can remind yourself why you don't need a latte / magazine / takeaway / etc.

Finally, really really good luck with it all. It will be hard at times but you can do it if you put your mind to it.

MM