I've got myself into a MASSIVE debt in 9 months...

KxMx

Have you kept a spending diary at all?

Every penny gets written down/inputted, CC's, DD's, debit card & cash.

There are apps out there or you can just do a spreadsheet +notebook & pen/ notepad app like I do.

Also keep going with things like trying to cut down on food shopping. Just because you've tried unsuccessfully before doesn't mean you should give up.

I think you'll find a spending diary very illuminating and you'll quickly look for reasons not to buy this, that or the other at the supermarket, because you won't want to add to the spending diary This happens to me often.

weebit

I did try to keep a spending diary but I found it hard to motivate myself to update it I once kept one for about 4 months, but this is when I used credit cards to buy almost everything (and paying it off in full, I might add). Now that I'm using cash a lot more, it's harder to keep track.

The £250 on entertainment is a guess, I'll be honest. The thing with SOAs is that it's a catch-all and has no baring on my actual life. It misses things out and includes things I don't think about. For example, where is the lunches at work line? I do take my own lunch to work often, but occasionally I don't and buy a sandwich instead. Also what do you count as "Entertainment"? Does buying a book count? Music downloads?

We are going to fewer gigs than we previously did. One year we went to 3 music festivals at £200 each, plus spending money! That's not happening again whilst we're paying this off! We have seen most of the bigger bands we'd like to see so we tend to just go to see smaller bands, those who charge around £10 a ticket rather than £50. A quick count-up shows we've bought tickets for 9 gigs since January which is much lower than in previous years when we'd often go 2 or 3 times a month.

I've finally got round to selling a broken laptop on eBay. listed it about 2 hours ago on a buy-it-now, and it's already sold for £50! so once that's posted tomorrow, I'll stick the profits straight onto a credit card! I have a cupboard full of stuff to sell too, so I'm going to continue listing these today and hopefully make some more cash.

UrbanDanceSquad

OP, you're at critical mass with those CCs and, possibly, beyond the point of no return. Read up on compound interest and you'll see why your ebaying etc is a waste of time and money. You have 50k+ of debt and most of it looks to be subject to compound interest. Your CCs are not a loan and, even if you simply service the debt, the debt will grow and grow.

Face facts OP, your finances are out of your control and the credit taps have to be turned off, either by you or by one or many of your creditors. Either way, the credit taps will be switched off.

You need to seek professional advice and call time on this nonsense before it seriously impacts your well-being.

weebit

UrbanDanceSquad wrote: »

OP, you're at critical mass with those CCs and, possibly, beyond the point of no return. Read up on compound interest and you'll see why your ebaying etc is a waste of time and money. You have 50k+ of debt and most of it looks to be subject to compound interest. Your CCs are not a loan and, even if you simply service the debt, the debt will grow and grow.

Face facts OP, your finances are out of your control and the credit taps have to be turned off, either by you or by one or many of your creditors. Either way, the credit taps will be switched off.

You need to seek professional advice and call time on this nonsense before it seriously impacts your well-being.

I know all of this, but please explain why you think selling my unwanted stuff is a waste of time and money? Me and my wife are earning enough money to pay off the debt from our jobs alone (in theory at least, we'll see what happens in practice!). The extra money we make from eBay etc. will help to reduce the debt even more in the short term.

The start is the hardest time in my journey to pay this all off. I'm being charged more interest now than I ever will be going forward, so each pound paid means less, so it's best to pay off more now to reduce the balance.

Lemonsqueezer78

Yes, books, music downloads, drinking, gig tickets, eating out all need to be included. I strongly suspect you are leaving a lot of this stuff out.

If you only do some of these things a few times a year (such as major gigs etc) you need to take a broader year-long view (and please be honest with yourself) and then divide those costs out over the year with a monthly allowance worked out for them. At the end of the day the money has to come from somewhere, when you do these things - so pretending these costs don't exist may be part of your problem.

Packed lunches should be included in your groceries line... (assuming the definition of a packed lunch is a lunch box made up of items you have purchased as part of your weekly/monthly shop). If you are not including those costs there for some reason, then you need to...

If you are buying sandwiches "some days" then you should include those costs somewhere. As well as things like your morning shop-bought coffees. They can add up to significant amounts over the month. A sandwich can be upwards of £2-3. If you just did that 2 days a week that could be £25 a month. Not much you might think - but when you deny those costs exist, you are in fact lying to yourself about this amount you believe you have left over at the end of the month (lets assume you don't have crisps too on those days ).

Similarly, a shop bought coffee can be £2-3 a day... might seem like nothing at the time, but that's £40-60 a month! Added to your occasional sandwich and that could be £60-80+ a month. And suddenly that £350 you "think" you should have left over is only actually £290. And then add in those books, music downloads, gigs, movie tickets etc that you are probably ignoring and you might realise that you actually don't have ANYTHING remaining at the end of the month - or worse, you go over.

As much as we all like to try and help by commenting on your SOA... in reality it is just that - Your SOA. For you. Only you can take the necessary accountability for ensuring it includes absolutely everything that occurs in your true monthly spending. If you don't, then it is worthless I'm afraid and you risk continuing on unable to see or admit where the root of your problems lay.

The fact that the template might not include categories that reflect your life is not a valid excuse really is it? At the end of the day its just a spreadsheet to add things up. It wouldn't matter a single iota if you decided to include your gas bill in the "hair cut" section - as long as it was included, the outcome is the same. It doesn't matter where you put these things - as long as you first identify that your spend money on them - and then put them in somewhere.

UrbanDanceSquad

weebit wrote: »

I know all of this, but please explain why you think selling my unwanted stuff is a waste of time and money? Me and my wife are earning enough money to pay off the debt from our jobs alone (in theory at least, we'll see what happens in practice!). The extra money we make from eBay etc. will help to reduce the debt even more in the short term.

The start is the hardest time in my journey to pay this all off. I'm being charged more interest now than I ever will be going forward, so each pound paid means less, so it's best to pay off more now to reduce the balance.

Because of that little understood wonder of the world "compound interest". Your CCs are not loans nor is there a fixed interest cost and loan term. Your CC charges you interest on the debt. The debt is a combination of your spending and previous interest charges. In other words, you are paying interest on interest. The worst thing is the fact the overall monthly interest figure is spread across many CCs, making your journey that more difficult track. Do you know how much you're paying in interest alone and on a monthly basis?

At your exposure, 50 quid here and there is going to be wiped out by compound interest. The options are to either stop the interest, hit those balances with payments in the thousands or simply call time on the whole thing: bankruptcy.

Lemonsqueezer78

We have seen most of the bigger bands we'd like to see so we tend to just go to see smaller bands, those who charge around £10 a ticket rather than £50. A quick count-up shows we've bought tickets for 9 gigs since January which is much lower than in previous years when we'd often go 2 or 3 times a month.

Lets examine this for a second. 9 Gigs in 11 months. Let include a "margin" there to keep things simple and call that 1 gig a month. Tickets alone are £20 for you and your wife. And what else do you spend at these gigs? Drink's I'll bet... so what, maybe another £50 (probably at least) for that night out?

Don't get me wrong - I'm not going to tell you not to go on these nights out, and I think it's great that you have reduced the number and scale of the bands you're seeing. All I'm saying is don't ignore these costs and pretend they don't happen.

And yes, given what you have said here, I remain dubious that £250 for both of you is anywhere near accurate for Entertainment, or that you are including a lot of your other small-but-highly-cumulative monthly spending in your SOA.

I have read your entire thread here and I'm not going to lie to you - I think you have made some...interesting... choices along the way. But I really am rooting for you still, and I do want you to get on top of this, have your lightbulb moment and take some real honest action to address things.

weebit

As a matter of fact, I do know how much interest has been charged because my spreadsheet tells me. this is how much i've been charged in the last 6 months:
June: £364.96
July: £369.54
August £497.51 (a large 0% deal ended this month)
September: £438.10
October: £395.96 (new 0% deal started!)
November: £368.11

and my projected interest for the next 6 months is:
December: £333.18
January: £339.96
February: £333.88
March: £324.68
April: £321.73
May: £314.30

So yes I am aware of compound interest and it's effect on my finances. £50 may only be 0.1% of my total debt, but it will help, perhaps not by much, but it will help.

sourcrates

weebit wrote: »

I know all of this, but please explain why you think selling my unwanted stuff is a waste of time and money? Me and my wife are earning enough money to pay off the debt from our jobs alone (in theory at least, we'll see what happens in practice!). The extra money we make from eBay etc. will help to reduce the debt even more in the short term.

The start is the hardest time in my journey to pay this all off. I'm being charged more interest now than I ever will be going forward, so each pound paid means less, so it's best to pay off more now to reduce the balance.

I think what the poster was trying to say is that earning the odd extra pound here and there is not going to make a whole lot of difference in the grand scheme of things.
You say you can manage your debt through your combined saleries, but you have not done too well so far on that score have you !!

You say you'll "see what happens in practice" I notice you have not listed any interest rates, but I would guess that probebly half of your £864 a month payments will be swallowed up by that alone.

There may be months when you can throw extra cash at the debts, but will you ?
Best guess on timescale to repay the 50k plus interest on all accounts, at your current level of payment is about 12 years, do you think that is achievable with out resorting to further borrowing ?

I wish you well with your aims, but I suspect eventually, some kind of debt solution will be nessessary to deal with this, most people on this forum, at one tine, thought they could manage to repay what they had borrowed with ease, until reality hit.

Lemonsqueezer78

UrbanDanceSquad wrote: »

OP, you're at critical mass with those CCs and, possibly, beyond the point of no return. Read up on compound interest and you'll see why your ebaying etc is a waste of time and money. You have 50k+ of debt and most of it looks to be subject to compound interest. Your CCs are not a loan and, even if you simply service the debt, the debt will grow and grow.

I'm not sure I understand what you are talking about here with this piece around compound interest.

You may believe the OPs case is hopeless...You can argue that throwing only a few pounds at his debts may make little difference - but they will make "some" impact - even if its only very small. Its not mathematically impossible, as you seem to be implying?

Nearly all credit card Minimum Payment calculations these days are set at an amount that covers both the full accrued monthly interest PLUS a small amount of the debt "capital" - and so even paying the minimum due IS actually clearing the debt down by a very tiny amount (but still down). Nothing about compound interest changes that fact. So every pound paid off in excess of the minimum payment (which again, itself covers the interest plus a tiny bit of capital) is reducing the core debt.

As the OP is making their minimum payments (covering the accrued interest - whether that is compounded or not) - then he is not wrong to be looking at ways to increase, even by a small amount, the amount he pays of as extra.

Please don't let your beliefs about "compound interest" and what that is, lead to telling someone not to try and reduce their debts - even by small amounts at a time. It is not a waste of time. It is the type of behaviour that should be encouraged.

And yes, I do understand the inner workings of compound interest. I work for a credit card company.