Please help me get a plan together to manage our debt.

Murphy2011

PCN, you have no idea of how much your hubby sounds like mine! He smokes when he's stressed and debt is very stressful, he also pranged our car....remind me again why we have them ? Lol!
If he has a company car can you take him off the insurance for the other one at the moment to reduce the costs? Also the interest rate on the Visa is eye watering, is it right & have you missed payments? Might be worth a call to see if they would consider dropping it at all if your payments are up to date?
You don't pay a lot on your mortgage/rent, do you own your home or renting? If own it do you have any equity in the house? Also what type of mortgage; if interest rates go up then your situation gets worse.
I have to be honest and say that with the outgoings you have you may well be looking at a DMP, I'm not sure you are going to be able to shave the outgoings enough to make a difference large enough when there will also always be those emergencies and odd dipping into the account times. I wish I had done it when our debts were at your level; I waited 18 months and as you can see from my signature it only got worse! We hope to be debt free in about 5 years allowing for a few bonus payments here and there & the relief is enormous. Have a chat with Stepchange or the other charities or try their website for suggestions, let us know how you get on.

penaltychargenotice

Really Spacey2012????????

I seen posters on here with much bigger debts and are sorting them without bankrupcty. The total is about £18000.

penaltychargenotice

Thank you for your kind words Murphy. I will phone the insurers and see how much we would save by taking him off the car insurance.
Unfortunately the Visa is correct.

At the moment we are making minimum repayments just but I feel like we are teetering on the brink of disaster. I need to sit down with hubby and talk to him about all this.

penaltychargenotice

Sorry forgot to say we are renting, it is cheap as it is through a friend so we are not paying market rate.

Murphy2011

No worries, you and I could be twins although I am further down the road! I also think bankruptcy is a bit drastic, there are other routes to explore first but I think you need to really pull no punches with hubby, honesty is the only route. I run all of the money in our house because he works away and I felt like a huge failure when it all finally went bang but honestly, it is solve able. We have been completely honest with the kids ( 1 of my own and 3 of his) & my 14 year old daughter especially has been a star. Frankly I never want to see credit again so messing with my credit file doesn't bother me at all and at least I know I am paying it back as well even if they don't get the interest! Let me know how you get on and feel free to have a chat anytime

thecassman86

penaltychargenotice wrote: »

Really Spacey2012????????

I seen posters on here with much bigger debts and are sorting them without bankrupcty. The total is about £18000.

I personally think you can get through this without the need for bankruptcy but it's not going to be an easy ride.

Taking the advice given to you on here will be massively important. You've already had some great suggestions and sometimes just seeing it all written down in black and white helps to kick-start the solution!

Regarding your comment on bankruptcy though (for the record), it's actually irrelevant how much people owe compared to other people; it's more down to how much they owe compared to how much THEY can afford. You may very well have seen people on here who have bigger debts who don't declare bankruptcy - but they are likely earning massive amounts more than you too. I've seen people on this board who owe over £100,000 which would cripple 99% of people... But they have a household income of £90kpa so they have more flexibility with their money.

You can go bankrupt with a few £100's of debt, if you can't afford to pay it back!

I'm sure you'll be fine though, you've come to the right place

FireWyrm

penaltychargenotice wrote: »

Also to FireWyrm - you are correct. It is the actual seperating money out that I struggle with especially as hubby may need to spend something while at work (often away overnight) and I don't realise where it's come from until I see the bank statement.

I've made approx £30 on ebay last month which I will use to buy my daughters birthday present as all my pots are empty. So even though it says on the SOA that there is money in little pots for things there isn't in real life.

Ok, this is easy to sort out then. I know it sounds like it isnt, but when I had my lightbulb moment, I was in the following predicament.

1) Just been paid (day after payday)
2) Standing at the checkout with a belt of food (£300+ on the cash register) and my current account card (the account I get paid into) was declined....that meant the following;
3) I was £2000+ into overdraft and the bank had just cut me off at the knees
4) I had no savings
5) I had 1 credit card (almost maxed out)
6) Bills had yet to go out.

Sounds bad doesnt it.

What I did...

1) Paid for the food on the credit card and cut it up
2) When we got home I got 6 months of account printouts from the bank and a packet of highlighters
3) Went through and accounted for every single spend. Analysed the spends to find out where it was going. BTW, in the previous 3 months over £800 a month had gone in 'cash withdrawals', I kid you not.
4) Analysed how much money I really needed for every category, no matter how small.
5) Set up new accounts (just 2 to start) and set up a SO individually for 'food' and 'fuel' into which money goes. Those accounts are not used for any other purpose.
6) Stopped spending on the current account. What we had that month was what we had, no exceptions. Let everything bounce (there wasnt much I could do about it anyway) but we managed for the month until payday.
7) Stopped smoking. Literally. That day. I finished the packet and that was it. I simply couldnt justify spending £100 a month while my family effectively faced starvation - and that's what I told myself. It's that simple. No matter how rotten or desperate I was feeling, I told myself I was doing it for one purpose and I had to make it work. Latterly, I went back to e-cigs and told myself again, that it was for the greater good. If I wanted to smoke, I was going to have to find the additional money and put up with the slight inconvenience of it not being 'normal' cigarettes. You get used to it.
8) From the next payday, money went into pots and no money at all was spent from the current account.

It has taken me the best part of 2 years to pull us all out, but with meal planning our grocery bill is £250 and that is that. Any money left out of the 'fuel' bill gets cascaded to other accounts like 'insurance' and 'car tax' as well as 'MOT'. Christmas is self budgeted over the year. The first year, I could only manage to save a paltry £250 and that bought our xmas food and presents which were mostly made by me out of crafts. The next year, I saved £500 and next year, I will have £1600.

I slashed out energy bills by buying a meter and getting puritanical about turning things off and doing things by hand. We wash up, we air-dry - I dont waste energy. Consequently, this year, we are going to be +£400 on the energy bill which will go to 'winter fuel' for next winter.

I meal plan on a white board (Staples, about £10) and forward plan for the month. We have a small amount of money for 'emergencies' like milk, but we make everything else where possible. The kids need sausage rolls for lunch? We make them from puff pastry (£1) and sausage meat (£1.50). We like garlic roule (soft cheese) - I make it from jersey milk and cream (about £3.00 for approx 500g and about 30 minutes work. Wine and beer are home brewed. We shop at Aldi and I buy whole food - nothing in a packet and only concession to tins are chopped tomatoes. Chips are sliced potatoes we bake for instance.

I know it sounds trite, but if you take care of the pennies, the pounds really do take care of themselves. Every penny is budgeted, every penny is accounted for. Nothing gets spent that wasnt forseen before hand. I run a general budget on an excel spreadsheets showing all categories and that is a guide to what money gets sent via what SO's to which accounts.

When other people talk about 'no spend days', I dont spend at all other than what was pre-arranged at the beginning of the month. It sounds like a terrible way to live, but believe me when I tell you that there is freedom to be had in knowing that all the bills are paid and all spending accounted for. There are no longer any surprises and if there were, I now have a modest emergency fund to deal with it. Last month, I could repair wind damage on the roof out of what was in my 'emergency' tin and didnt even bat an eyelid. My cars failed the MOT, as expected, but then, I had the money to repair them. That is where you need to be.

You can tinker around the edges of your SOA, make some savings here and there, but until and unless you truly internalise your predicament and make it a personal mission to get out by taking complete and total control of every penny that comes in and goes out, you wont make much headway and will eventually slide back in again. It is all about psychology.

getmore4less

penaltychargenotice wrote: »

Hopefully I can answer questions here:

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.

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nancmat

This balance is about £24,750, right?

You can definitely do it, cut back, budget, can you work any hours/make extra money selling?

tabby_cats_mum

FireWyrm wrote: »

5) Set up new accounts (just 2 to start) and set up a SO individually for 'food' and 'fuel' into which money goes. Those accounts are not used for any other purpose.

Out of interest how do you pay for things? Do you have lots of cards or do you pay on a credit card and then transfer the money out of the allocated amount or do you use cash?