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

inflationbuster

@weebit - I'm afraid you are on a one way to ticket to going bankrupt as you've lost control. Good luck.

greensalad

Have a read up on the sunk cost fallacy.

Your flights to Ibiza might have cost money, and not going on the holiday might seem like a waste of that money.

But when you consider going, you've also got to consider the cost of your accommodation, your food and drink, festival tickets, even getting a drink in the airport... these are all extra costs.

The sunken cost is the flights. The flights have already been paid for, and assuming you can't get your money back, the money is spent whether you go or not. Therefore you discount them from your decision making. They have no effect. You only consider the other things e.g it'll cost a lot in all the other bits, but you'll have a fun time, but you cannot afford to buy the other things, but you'd like to go etc. You just need to completely ignore the sunken cost because it doesn't matter.

Here's an example from the wikipedia page:

Economists argue that sunk costs are not taken into account when making rational decisions. In the case of a Yankees ticket that has already been purchased, the ticket-buyer can choose between the following two end results if he realizes that he doesn't like the game:

1. Having paid the price of the ticket and having suffered watching a game that he does not want to see, or;
2. Having paid the price of the ticket and having used the time to do something more fun.

purdyoaten

greensalad wrote: »

Have a read up on the sunk cost fallacy.

Your flights to Ibiza might have cost money, and not going on the holiday might seem like a waste of that money.

But when you consider going, you've also got to consider the cost of your accommodation, your food and drink, festival tickets, even getting a drink in the airport... these are all extra costs.

The op has previously indicated his costs for Ibiza.

I also have another holiday planned and partially paid for in May for a music festival in Ibiza. The flights are booked and a deposit has been paid with the remainder to be paid for in February. We also expect to need about £1000 in spending money for the week (but we're not going to any of the stupidly expensive clubs on the island)

£1000 for a week seems a tad excessive for spending money. Excess seems to be the common theme really.

her_welshness

Question: How much debt have you accrued since you met your wife?

Like others have read the whole thread and I am really worried about you:

a) There is a real level of expectation from your wife that 'required' holidays need to be forked out for.
b) That she has not had her LBM and she is putting too much pressure on you to spend is causing you to have sleepless nights and a huge amount of worry on your part. This may impact on your work life.
c) What would be the scenario if your wife were to leave you and move back to SA? Are the debts in both your name?

Please could you post an updated SOA (as your circumstances have changed since you started this diary)

I wish you all the very best of luck.

greensalad

purdyoaten wrote: »

The op has previously indicated his costs for Ibiza.

I also have another holiday planned and partially paid for in May for a music festival in Ibiza. The flights are booked and a deposit has been paid with the remainder to be paid for in February. We also expect to need about £1000 in spending money for the week (but we're not going to any of the stupidly expensive clubs on the island)

£1000 for a week seems a tad excessive for spending money. Excess seems to be the common theme really.

Well there you go.

When you consider that the cost of the flights is not included, it's absolutely clear that he doesn't need to go.

It's an emotional thing, he's already spent £300 on your flights so if he doesn't go he feels like he's wasting £300. Actually, if he doesn't go he saves £1000 on all the other things. So he comes out £1000 better off.

I definitely think this is something we can all apply to situations in our lives. I know I've done the same thing.

And of course if you can get any discount back on the flights then you're even better off.

peaceandfreedom

greensalad wrote: »

Economists argue that sunk costs are not taken into account when making rational decisions. In the case of a Yankees ticket that has already been purchased, the ticket-buyer can choose between the following two end results if he realizes that he doesn't like the game:

1. Having paid the price of the ticket and having suffered watching a game that he does not want to see, or;
2. Having paid the price of the ticket and having used the time to do something more fun.

This is a good viewpoint - it's easy to persuade yourself into further spending based on sunk costs - I shall remember this one in future.

greensalad

peaceandfreedom wrote: »

This is a good viewpoint - it's easy to persuade yourself into further spending based on sunk costs - I shall remember this one in future.

The first time I ever had it was with a sewing class. I'd paid £75 for a day course in my local town, and paid a few months in advance.

Circumstances led me to leave my hometown and move in with my partner early.

To go to the class was going to cost me about £25 in train fare and take time out of my day that I didn't want to spend. I wasn't that interested in the class any more either. But I felt like I had to go because I'd be wasting £75.

OH pointed out to me that if I didn't go I'd be happier and still only have spent £75. So I saved myself a day of travelling and a train fare and stayed at home for free

weebit

Hi all,

Thanks for the advice and words of encouragement.

I made a projected budget and showed it to my wife. She is now in total agreement that we need to make drastic changes to our lives to help pay this off. Ibiza is now fully cancelled. We have contacted the agent who is arranging the event and told her we can't go. This will result in the loss of our deposit, however if we can find someone else to buy our ticket from us, they can change the name on the booking for free. So that's possibly up to £100 we could get back. The only other "sunk cost" is the cost of the flights (the tax refund is wiped out by the cancellation fee ). This cancellation will have the added bonus that I could be working during the 2 weeks I was going to take off. As a freelancer, working for as many weeks of the year as possible is important.

As mentioned previously, we're still going to go to Dubai and Cape Town next weekend, but we're going to be more stringent with the money now and spend more time on the beach than in the shopping malls and tourist areas. I'm going to set myself a spending limit and stick to it. I've yet to work this figure out, but I will work something realistic.

We have also ear-marked a lot of items in the house we can sell, including some higher value stuff such as an old iPhone 4S and the 2nd TV with Bluray player. This will give us a bit of a cash injection in the short-term and count someway towards reducing the interest being charged. We're also going to cancel our Sky subscription and stick to Freeview and YouView instead (It'll be my first time without Sky for about 10 years!)

My wife has also taken some extra shifts at work, the equivalent of 1 and a half extra days a month at time-and-a-half, giving us around £250 more a month after tax.

Regarding my wife's brother's wedding, we'll cross that bridge when we come to it. We may decide that only my wife travels out and I stay behind, but it's going to be a tough decision to say that neither of us go. This will depend entirely on the date of the wedding and the cost of the flights at the time. (And just to add to our story, my wife's cousin got engaged yesterday too! We've already said that if her wedding is in South Africa as well, then neither of us are going!)

I've just started a month-by-month budget which I'm going to update with every spend so we can keep track, and reign ourselves in if we ever overspend in certain categories. I did this a few years ago and it worked for a while until I got bored and stopped filling it in. This won't happen this time!

I suppose I might turn this thread into a diary. It will help me and give me motivation to carry on knowing that people are following my progress with me.

ratrace

weebit wrote: »

Hi all,

Thanks for the advice and words of encouragement.

I made a projected budget and showed it to my wife. She is now in total agreement that we need to make drastic changes to our lives to help pay this off. Ibiza is now fully cancelled. We have contacted the agent who is arranging the event and told her we can't go. This will result in the loss of our deposit, however if we can find someone else to buy our ticket from us, they can change the name on the booking for free. So that's possibly up to £100 we could get back. The only other "sunk cost" is the cost of the flights (the tax refund is wiped out by the cancellation fee ). This cancellation will have the added bonus that I could be working during the 2 weeks I was going to take off. As a freelancer, working for as many weeks of the year as possible is important.

As mentioned previously, we're still going to go to Dubai and Cape Town next weekend, but we're going to be more stringent with the money now and spend more time on the beach than in the shopping malls and tourist areas. I'm going to set myself a spending limit and stick to it. I've yet to work this figure out, but I will work something realistic.

We have also ear-marked a lot of items in the house we can sell, including some higher value stuff such as an old iPhone 4S and the 2nd TV with Bluray player. This will give us a bit of a cash injection in the short-term and count someway towards reducing the interest being charged. We're also going to cancel our Sky subscription and stick to Freeview and YouView instead (It'll be my first time without Sky for about 10 years!)

My wife has also taken some extra shifts at work, the equivalent of 1 and a half extra days a month at time-and-a-half, giving us around £250 more a month after tax.

Regarding my wife's brother's wedding, we'll cross that bridge when we come to it. We may decide that only my wife travels out and I stay behind, but it's going to be a tough decision to say that neither of us go. This will depend entirely on the date of the wedding and the cost of the flights at the time. (And just to add to our story, my wife's cousin got engaged yesterday too! We've already said that if her wedding is in South Africa as well, then neither of us are going!)

I've just started a month-by-month budget which I'm going to update with every spend so we can keep track, and reign ourselves in if we ever overspend in certain categories. I did this a few years ago and it worked for a while until I got bored and stopped filling it in. This won't happen this time!

I suppose I might turn this thread into a diary. It will help me and give me motivation to carry on knowing that people are following my progress with me.

That's great weebit, your doing well and acknowledging that you need to change your spending habits.

Just a thought but have you considered going bankrupt this may be an option depending on how much debt is in your own name, also you dont own your own house so it may be worth considering and starting a fresh like i said it's just a thought im not saying you should go for it or not

bspm

I suppose I might turn this thread into a diary. It will help me and give me motivation to carry on knowing that people are following my progress with me

What progress!?!?!?

Just found and read this entire thread, absolutely amazed and disgusted that someone can get this much in debt.

You have spent more than you earn, you are continuing to spend more than you earn, you will crash and burn.

Good lord, unbelievable.