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

Jeems

You are at the age where you want to live on your own.

However, I imagine you are also at the stage where you don't want to be £50k in debt. Suck it up, rent out the room for 6-12 months, pay your debt off faster.

savingfortomorrow

Sadly it appears you wish to have a champagne life on a lemonade budget.
I would be considering moving into a shared house to live cheaper. You have a window of opportunity to clear debt and get a mortgage. The more pain now the better the long term out come.

I have used ebay a lot when times were hard and being honest, it pays poorly compared to working over time (and often less stress).
Could you re-locate outside of London as you are freelance?
Would your wife be able to become a british citizen to reduce costs of visas.

It may be worthwhile speaking to an adviser together.

KxMx

weebit wrote: »

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.

A SOA is a snapshot mainly made up of guesswork. A Spending Diary is a live track of exactly the state of your finances on any given day at any given time.

Spending apps, note pad apps or a notebook & pen, keeping all receipts and noting down anything which isn't covered by a receipt.

If you kept a total spending diary you will be able to see at a glance things like how and what you are spending on entertainment.

I know when I started my spending diary it became crystal clear instead of fooling myself and guessing all the while. I intended it to be temporary to see where my supposed surplus was going- 3 months in I have no plans to stop it is that useful.

I have a spreadsheet which is updated every time I spend cash, on a CC or DD out of my bank etc. So sometimes 3 times a week sometimes 3 times a day.

You are in serious and dangerous debt; you urgently need to make the effort to gain clarity.

I know you need a life and "only" have bought tickets to 9 gigs. But that's tickets x2, ticket fees x2, travel x2, food and drink x2 while out each time?

I know you need a life but you can't afford gigs and all the extras. Every tenner + going on gigs is cash unavailable to pay off your debts.

Stream music or borrow books. Again, you can't afford those right now. Wear and mend clothes you have. Don't replace anything in the household unless it breaks and can't be repaired. Don't go to the supermarket without combing cupboards and meal planning. Top-up shop after the same and stick to list.

I can almost guarantee a Spending Diary will be a shock on just how much you spend and show up all the places it is unnecessary. You will see those tenner gig tickets and think "no room in the budget this month" or "i'll pass as I want to do X instead and only money for one" or even "no because I don't want to add to the figures on SD right now!"

FinallyGettingFree

This blog post (link) was one of the things that really kicked me into touch about sorting out my debts. It's harsh, but it's a good wake-up call if you're still thinking of things like gig tickets as something you deserve, or something that is essential to your life.

I'm not going to pretend that it was fun clearing my debt - my lifestyle took a pounding for a couple of years - but being debt-free feels SO much better, and now I can eat out, go to gigs etc and feel zero guilt about it.

I think maybe you've not hit your real light bulb moment yet, but I am sure it will come!

patman99

So, Weebit starts 2 savings pots. One for his wife's visa and one to cover his costs should he find himself out of work for a short while and he gets the old 'you should not have savings when you have debts as the savings are dead money' rap.

Weebit, i think that you have done absolutley the right thing by ring-fencing this money in 2 savings accounts as they will be earning interest whilst being there for when they are needed for their respective 'jobs'.

I owe around £12k (excluding the mortgage) and am on a TPP as having a hard time getting a permanent job.
Having had periods where I had to spong from my parents to pay the mortgage whilst my benefits were being sorted-out, I decided back in October 2014 to aim to save a buffer of £1,000.

This year I achieved this thanks to a large Tax refund which I used to top-up my emergency fund to the £1,000 mark. Knowing I was getting 2 Tax refunds, and being a keen photographer, i had earmarked £300 of the refund on a good tripod and ball head. This still remains un-purchased.

For those who remark about ebay selling not generating a lot of money, surely every £1 Weebit pays of a debt will reduce that debt by not only the £1, but also the 24p interest it would have accrued over the year.

FinallyGettingFree

patmann99, I totally agree - I thought it was pretty good financial practice to have an emergency fund in place before paying down debt, that way you aren't getting into MORE debt when inevitable emergencies arise.

UrbanDanceSquad

patman99 wrote: »

So, Weebit starts 2 savings pots. One for his wife's visa and one to cover his costs should he find himself out of work for a short while and he gets the old 'you should not have savings when you have debts as the savings are dead money' rap.

Weebit, i think that you have done absolutley the right thing by ring-fencing this money in 2 savings accounts as they will be earning interest whilst being there for when they are needed for their respective 'jobs'.

I owe around £12k (excluding the mortgage) and am on a TPP as having a hard time getting a permanent job.
Having had periods where I had to spong from my parents to pay the mortgage whilst my benefits were being sorted-out, I decided back in October 2014 to aim to save a buffer of £1,000.

This year I achieved this thanks to a large Tax refund which I used to top-up my emergency fund to the £1,000 mark. Knowing I was getting 2 Tax refunds, and being a keen photographer, i had earmarked £300 of the refund on a good tripod and ball head. This still remains un-purchased.

For those who remark about ebay selling not generating a lot of money, surely every £1 Weebit pays of a debt will reduce that debt by not only the £1, but also the 24p interest it would have accrued over the year.

LOL...your last paragraph is exactly why it's utterly stupid to save rather than pay down debt. However, your last paragraph also assumed the OP has an infinite amount of assets to sell. Sooner or later, the OP will run out of stuff to sell.

Ring fenced saving funds will not accrue anything close in interest when compared to credit card debt interest. Not sure why you spouted that 'rap'?

UrbanDanceSquad

FinallyGettingFree wrote: »

patmann99, I totally agree - I thought it was pretty good financial practice to have an emergency fund in place before paying down debt, that way you aren't getting into MORE debt when inevitable emergencies arise.

But you are getting into MORE debt by not paying down the debt, unless of course, the interest on the debt has been frozen.

FinallyGettingFree

UrbanDanceSquad: We're talking about a small emergency fund here - a grand in savings compared to the 50 grand OP owns. It stops you having to put more debt onto credit cards when the inevitable happens and allows you to keep paying down debt in a thorough and consistent manner without added stress. It's pretty standard advice, and I think it makes perfect sense.

Obviously it doesn't mean "put all your money into savings and none into your debt" - it's money specifically for the emergencies that life throws at us.

lambda

FinallyGettingFree wrote: »

UrbanDanceSquad: We're talking about a small emergency fund here - a grand in savings compared to the 50 grand OP owns. It stops you having to put more debt onto credit cards when the inevitable happens and allows you to keep paying down debt in a thorough and consistent manner without added stress. It's pretty standard advice, and I think it makes perfect sense.

Obviously it doesn't mean "put all your money into savings and none into your debt" - it's money specifically for the emergencies that life throws at us.

Absolutely. And a good SOA should have this 'emergency' fund built in somewhere. That's why we always budget for things like car maintenance (cars break down, that's life), MOTs, car insurance, tax. This is effectively putting money aside for when these things crop up. It's too simple to consider it 'not paying off the debt'. These bills will inevitably crop up, and have to be paid; not having funds in place is what gets most people into debt in the first place.

Very sound advice indeed. Otherwise you will have no money to pay the mechanic when you get a huge bill to repair your car, and resort again to using your credit card (the very thing that puts most people into debt in the first place), or paying you car tax or whatever. At the end of the day, if no emergency arises, your car doesn't break down, your insurance goes down by 70% of whatever, then you have extra money you can pay your debt off with anyway.