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

weebit

Lemonsqueezer78 wrote: »

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.

I understand what you're saying, and I think in a round-about kind of way, we're agreeing with each other in that it can be hard to stick to your budget with many of the small and often unaccounted for costs. I am quite frugal when I go out though. I actually don't like getting drunk at gigs so usually only buy 1 or two drinks, so lets say £20 between me and wife. I don't like coffee and rarely visit coffee shops. When I buy lunch, I usually go to the cheaper places like Tesco who do meal deals for £3. As I've mentioned earlier, I do look after the pennies, but it's the pounds I struggle with and something I'm attempting to regain control over. With my new philosophy of only spending using cash or debit card, I'm attempting to get this control back and not rely on credit cards. I set myself an allowance each month, which could vary depending on what I know is happening that month such as nights out, birthdays etc, then whatever is left goes straight onto a credit card. Any cash left at the end of that month also goes onto a credit card.

Believe me, I've had a severe cyber kicking on this thread and I'm doing something about it. I'm not going to file for bankruptcy because it's possible to pay this all of without it. Should my circumstances change in the future then I may reconsider it, but for now I'm keeping this option off the table.

lucielle

We had a rather large amount of debt and not much income it can be done.
L

UrbanDanceSquad

weebit wrote: »

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.

I wish you good luck. And I do hope you seek professional advice.

Lemonsqueezer78

weebit wrote: »

I understand what you're saying, and I think in a round-about kind of way, we're agreeing with each other in that it can be hard to stick to your budget with many of the small and often unaccounted for costs. I am quite frugal when I go out though. I actually don't like getting drunk at gigs so usually only buy 1 or two drinks, so lets say £20 between me and wife. I don't like coffee and rarely visit coffee shops. When I buy lunch, I usually go to the cheaper places like Tesco who do meal deals for £3. As I've mentioned earlier, I do look after the pennies, but it's the pounds I struggle with and something I'm attempting to regain control over. With my new philosophy of only spending using cash or debit card, I'm attempting to get this control back and not rely on credit cards. I set myself an allowance each month, which could vary depending on what I know is happening that month such as nights out, birthdays etc, then whatever is left goes straight onto a credit card. Any cash left at the end of that month also goes onto a credit card.

Believe me, I've had a severe cyber kicking on this thread and I'm doing something about it. I'm not going to file for bankruptcy because it's possible to pay this all of without it. Should my circumstances change in the future then I may reconsider it, but for now I'm keeping this option off the table.

I'm not having a pop at you - just trying to pull back the veil a bit to help you see that these things all add up - and I'm convinced there is a lot about your spending you don't fully understand. I take on board what you say about your tesco meal deals and "frugal" nights out. But what myself - and others - are trying desperately to get you to see is that, just because you do these little things cheaper than could otherwise do them - that doesn't mean you can ignore them completely - or even somehow classify them in your mind as "savings". You can't - they are money that you spend, which you firstly have to realise you spend!

And what about your wife... does she sometimes skip the packed lunch too? Does she get Tesco meal deals? Do you know? Does she like tea/coffee sometimes? You know where I'm going with this, right? If you aren't even capturing some of your own stuff on here that accurately - how can you be sure you have a complete view of what she is doing? Its not easy I know, but at the end of the day, something has to account for the fact that you owe £50k.

weebit

sourcrates wrote: »

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.

Thanks for the words of encouragement. We may not have paid off much in this past year, but this month, both me and my wife had our wages increased, so this coming Friday will see the first pay check on our increased wages. Considering our expenses have remained the same, this gives us more money than ever before to pay off the cards, and in fact is part of the reason I came back to update this thread - I feel a lot more motivated now because it's starting to feel more achievable than ever.

UrbanDanceSquad

Lemonsqueezer78 wrote: »

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.

Thanks for that.

Lemonsqueezer78

UrbanDanceSquad wrote: »

Thanks for that.

You're welcome.:D

Since you bolded a section of my post, you presumably feel that section is pertinent in some way. For what its worth, I'm here because I have my own financial concerns and not in any official capacity on behalf of my employer. And in any case, I don't work in any kind credit/collections department. I'm an overworked, underpaid grunt in Marketing with this own money woes.

Lastly, Weebit doesn't happen to owe anything to the company I work for, not that it would be any of my concern, even if he did. I just found his thread to be a good read (and in fact highly reminiscent of myself, in the past)

FinallyGettingFree

You might find You Need A Budget really helpful - it makes you really think about where each pound is going, and is amazing for giving you laser-focus when clearing debt. I cleared all my debt much sooner once I could really see "hmmm I could go to that gig... but I'd need to take that money out of my 'music festival that I really want to go to next year' category" etc. You can give it a go for a month for free, and see if it is any use for you.

It's been a total game-changer for me, I went from "well I think I spend about this month on lunch at work" to "I am definitely making a packed lunch tomorrow, that extra three quid can go straight into my gigs category!"

snowqueen555

Paraphrased wrote:

We used to live with someone else but she moved out earlier this year and we decided to live here without her.... We're 32 and and 36 years old and at a stage in our lives where we no longer want to live with other people.

I do live in London so most things do cost more than outside of London.

According to my calculations (the perfect scenario), we'll be debt free by the end of 2020.

Do you have a spare room or something I assume? Seems to me if you can move to a cheaper place it is certainly worth saving, or rent out the extra room. That would increase your debt repayment by a big margin and probably the biggest single thing you could do to help yourself out. Currently around 40% of your payments are servicing the interest (£330 quid out of £864). In the space of two years you are now paying £500 more rent.

I know you mentioned in an earlier post you wanted to buy a house. I figure knocking off an extra couple of years off your debt free year is worth the sacrifice to reach your goal.

weebit

Yes, obviously finding a cheaper place or renting out the spare room would help a lot. It's something we talked about in January when our housemate said she was moving out. The deal was that we'd stay here for another year and see how things go. Obviously things haven't gone well as far as our debt is concerned, so come March when our tenancy agreement ends, we should consider moving. A quick look online now shows we could move into somewhere for around £300/month cheaper than our current place so it's worth considering. One thing we don't want to do though is rent out the spare room. We're not living with other people any more.

One other motivating factor in moving is we have a massive deposit on our current place of just over £3000! Hopefully a new place will demand a lower deposit so the extra will be a massive payment to our debt!