Please Help.

AlexLK

My name is Alexander and I'm a spendaholic .... No really, I have a problem and really wish to change my destructive habits.

I am somebody who has enjoyed the finer things in life for more time than I can possibly recall. I was lucky in my childhood to have a privileged upbringing and I blissfully sailed through life until around four years ago. The concept of hardly having enough money to see me through until the end of the month was completely alien to me nor was I taught how to budget, not that I would have wanted to know back then. However, things changed dramatically when my health began to suffer as a result of my previously fast paced, stressful job. To cut a long story short I ended up in hospital having tried to take my own life.

Since then things dramatically changed for my wife and I. The job went but so did my generous salary and two years ago our son arrived meaning for the past few years things have been very difficult financially. I found myself getting deeper and deeper into debt and trying to hide the problem from my wife as I set up my own business. Basically, I was trying to live my old lifestyle but without the funds. Recently I have sold much of what I once had and bought cheaper alternatives but I'm still in the red with the burning desire to buy more luxury toys always weighing on my mind.

I am concerned my son will not have what I had as a child and my wife and I will not be able to give him a decent education because of my mistakes. Whilst my wife now knows the extent of the mess I have made, she has already threatened divorce should things ever get as they were before. I'm completely lost as to where to begin so far as trying to live within my means. What is worse still, I am more than aware there are people much worse off than I but whom manage to more than make ends meet because they are much more careful with their money. However, I simply do not know where to begin nor how to curb my desire for only the best.

Writing this has been awfully difficult for me so I apologise in advance for this post's incoherence.

Regards,
Alex.

antonia86

Hi Alex,

I would suggest you complete a SOA (statement of Affairs) from www.stoozing.com and format it for MSE and add it to this thread. People are very helpful at suggesting areas you could cut back. There are also lots of challenges on the forums, NSDs (No Spend Days) for example.

It will take some time to shift your mindset but it is doable.

Good luck x

MoneyMission

Hi Alex

Didn't want to read and run. Someone with a better idea of what to say will be along soon I'm sure. As a start, you could do yourself a Statement of Affairs (SOA). If you post it here you will get some great advice. If you choose not to post it here you will at least have a black and white record of what you have and what you haven't got.

Your mind set is a whole different kettle of fish. No-one knows you or your situation better than you yourself. However, I'm sure the majority of people on here are here because they have at some point in their lives experienced the same spendy mindset as you describe. You will not be alone!

Me and Mr MM used to have more disposable income than we do now. It is sometimes hard for both of us to deny ourselves new toys some days but we don't have anyone other than ourselves to support us and there wouldn't be a magic wand to pay off debts if we accrued them. So, we live simply and happily. I try to remember that by not buying stuff we are helping to preserve the planets resources! It helps me anyway!

Then there are the moments that we enjoy as a family. Taking a small camping stove with some rolls and some bacon on a walk. Finding a big hill and having a lovely breakfast / lunch at the top of it. Cheap but it makes all four of us happy. Not the sort of thing we would have done in our previous life.

I guess what I'm trying to say is that you will manage but it will be different than what you are used to. And mostly, to repeat myself, YOU ARE NOT ALONE!

All the best.

MM

AlexLK

Antonia, thank you I will have a go at filling in the statement of affairs. I shall also post it up in this thread.

MM, Thank you for your reply. I'm not really sure how to enjoy the simpler things in life which I think is much of the problem. A walk in the countryside does sound nice though, especially as I have always lived in a rural area. Not that I explore it anymore. However, your post made me smile as I was reminded of things I used to do when I was a child.

AlexLK

I'm just filling out the statement of affairs and in all honesty I don't even know the exact figures for a lot of my bills, so I am estimating to within about £10 per month.

AlexLK

OK here goes, it's not 100% accurate but is not far off, a few things I have rounded and a few I have guestimated as I was unsure of how much certain things cost.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 3

Monthly Income Details
Monthly income after tax................ 1000
Partners monthly income after tax....... 1700
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2700

Monthly Expense Details
Mortgage................................ 700
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 160
Electricity............................. 80
Gas..................................... 80
Oil..................................... 0
Water rates............................. 35
Telephone (land line)................... 65
Mobile phone............................ 60
TV Licence.............................. 12.3
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 400
Clothing................................ 200
Petrol/diesel........................... 450
Road tax................................ 47
Car Insurance........................... 75
Car maintenance (including MOT)......... 100
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 100
Medical (prescriptions, dentist etc).... 30
Pet insurance/vet bills................. 0
Buildings insurance..................... 15
Contents insurance...................... 10
Life assurance ......................... 15
Other insurance......................... 0
Presents (birthday, christmas etc)...... 100
Haircuts................................ 50
Entertainment........................... 50
Holiday................................. 250
Emergency fund.......................... 0
Total monthly expenses.................. 3084.3


Assets
Cash.................................... 0
House value (Gross)..................... 210000
Shares and bonds........................ 0
Car(s).................................. 15000
Other assets............................ 0
Total Assets............................ 225000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 170000...(700)......4
Total secured & HP debts...... 170000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................5000......305.......12
Total unsecured debts..........5000......305.......-


Monthly Budget Summary
Total monthly income.................... 2,700
Expenses (including HP & secured debts). 3,084.3
Available for debt repayments........... -384.3
Monthly UNsecured debt repayments....... 305
Amount short for making debt repayments. -689.3

Personal Balance Sheet Summary
Total assets (things you own)........... 225,000
Total HP & Secured debt................. -170,000
Total Unsecured debt.................... -5,000
Net Assets.............................. 50,000

Created using the SOA calculator at
Reproduced on Moneysavingexpert with permission, using other browser.

Deep_In_Debt

Hi

First thing that jumps out at me is that you have 3 cars. Do you really need 3?

Deep_In_Debt

Also, your presents fund is high - can you cut this right back and £250 for a holiday fund - can that be cut back?

nicp60

Hi Alex,
It sounds like you've had your lightbulb moment, and you should stop beating yourself up about mistakes in your past. None of us would be on this forum if we'd been perfect in the past!
If you are committed to working through this, then your life will never be the same, and you will be wealthier than you ever have been before - even by earning less! Honestly, the mse way of life is addictive and the best thing most of us have ever done!!

I've made some comments below which I hope are helpful. You've already identified the issue - you are simply living far far beyond your means and are currently digging yourself further into debt.

Your first priority needs to be to live within your means, and then pay off your debt.

Fortunately your problem at the moment is largely budget based, and not that you are drowning in debt. One thing I will say though is that you cannot afford to keep running the cars you are now.

You will have to make some pretty hefty changes to your lifestyle and mindset - you can't spend £200 a month on clothes when you have a shortfall this size for instance.

You say that your wife knows about these problems - is she actually on board with cutting spending? Does she realise how your life will change?

By cutting back on the things I've suggested below - not cutting them out, just cutting them back, you'd save something like £500 a month, before factoring in savings from the cars!

AlexLK wrote: »

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 3 Unless your business relies on both you and your wife having a car, get rid of 2 of these cars.

Monthly Income Details
Monthly income after tax................ 1000
Partners monthly income after tax....... 1700
Benefits................................ 0 Who gets the Child benefit? Neither of you are earning enough to not get this.
Other income............................ 0
Total monthly income.................... 2700

Monthly Expense Details
Mortgage................................ 700
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 160
Electricity............................. 80
Gas..................................... 80
Oil..................................... 0
Water rates............................. 35
Telephone (land line)................... 65 I guess this is TV, Phone and internet altogether? Switch to a cheaper provider and ditch the sky/virgin to a cheaper package. You can save £30 a month here.
Mobile phone............................ 60 How long are you in contract for? You can step down a tariff for free with most providers
TV Licence.............................. 12.3
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 400 For 3 people??? This is very very high - switch down a brand on most stuff, plan meals, batch cook and freeze. You can save at least £100 easily here. Even including cleaning and household items.
Clothing................................ 200 Every month?? Clothes for your child can come from (and go back on) eBay. Ask for vouchers for bdays and xmas or clothes for the little one. You and your wife can go without for a while.
Petrol/diesel........................... 450 Are these very inefficient cars, or lots of miles?
Road tax................................ 47 Every month????
Car Insurance........................... 75
Car maintenance (including MOT)......... 100 Every month? Are you putting this away or putting it on credit?
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 100 What's this?
Medical (prescriptions, dentist etc).... 30
Pet insurance/vet bills................. 0
Buildings insurance..................... 15
Contents insurance...................... 10
Life assurance ......................... 15
Other insurance......................... 0
Presents (birthday, christmas etc)...... 100 Too much - you need to cut back on these.
Haircuts................................ 50 Get rid
Entertainment........................... 50
Holiday................................. 250 Go without for a bit, or holiday in the UK without spending thousands.
Emergency fund.......................... 0
Total monthly expenses.................. 3084.3


Assets
Cash.................................... 0
House value (Gross)..................... 210000
Shares and bonds........................ 0
Car(s).................................. 15000
Other assets............................ 0
Total Assets............................ 225000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 170000...(700)......4
Total secured & HP debts...... 170000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Loan...........................5000......305.......12
Total unsecured debts..........5000......305.......-


Monthly Budget Summary
Total monthly income.................... 2,700
Expenses (including HP & secured debts). 3,084.3
Available for debt repayments........... -384.3
Monthly UNsecured debt repayments....... 305
Amount short for making debt repayments. -689.3

Personal Balance Sheet Summary
Total assets (things you own)........... 225,000
Total HP & Secured debt................. -170,000
Total Unsecured debt.................... -5,000
Net Assets.............................. 50,000

Created using the SOA calculator at
Reproduced on Moneysavingexpert with permission, using other browser.

sketchingkari

You've had some wonderful advice about the financial cutbacks you should be considering.

I just want to add a little something else to think about, when I had children, it was a defining moment for me, we all want our children to have the best, a wonderful childhood that they will look back on with fondness.

But, they don't remember money (or at least they shouldn't) having the best gadgets and the most stuff, or designer clothes isn't what childhood is about.

No holiday for us this year, no funds for it as we are working towards being debt free, we took them last week to the seaside, took some old garden twine, stones and bacon and took them crabbing, then for icecreams and digging/sandcastle building on the beach. We took a picnic and spent less than a tenner that day, on the way home, all they could talk about was what a wonderful day they had, best they could remember, we played, we laughed, we got mucky and we were a family, what more do they need than that?

Also, what kind of a world do you want your child to grow up in? One that has been ravaged and destroyed because of our consumerist ways, all those expensive gadgets and cars have an impact on the environment.......,maybe you could cut back on 'stuff' become more eco-friendly and teach your child the value of the world around him/her instead of just having as many things as possible?

For me, my lightbulb moment wasn't just about money, it was about why we feel so compelled to own so much useless junk, what do we really need it for, surely there is more to life than just working for stuff?

Oh and I think your wife threatening divorce was very underhanded

Mara_uk7

Looked at your soa , agree with everything the folks above are saying. Cut the clothing budget, the present budget, forget about the expensive holidays for a couple of years, get rid of at least one car, give up trying to keep up with the Joneses. Youre not in too deep and can easily get out at this stage. Good Luck