SOA: A decade as a DFW

cpfc_sam

Hello,

I have been in debt for almost a decade now and really would appreciate a cold, hard, frank perspective on what I can do to really sort my life out.

My situation: I'm married with two young children. I am finding life tough because my other half doesn't know about the debts I am in and I am having to support my family (which is struggling anyway) on top of pay my own debts (which are crippling me).

I have posted by SOA below, but first some background.

I first got into debt in 2003 in my second year of university. I had little financial support from my family, who are quite poor as well. Despite working hard during term-time and holidays, I ended up with quite a hefty credit card debt on graduation.

Stupidly...I took out a Barclays Graduate Loan for £10k at the end of my course. I then moved to London for my first job. It paid peanuts and I soon found myself racking up even more debt.

At the worst point I had a £10k loan with Barclays and a £15k loan with Abbey, plus around £4k on credit cards. I was a mess. Total debt was approximately £21k, excluding my Student Loan (£11k).

Slowly but surely I began ploughing into the debt, but after marrying I found myself being dragged into a worse financial situation. I never had the chance to 'get myself straight' financially or pay my debts off, but I felt obliged by my other half (who has quite a lot of savings) to pursue a lifestyle that has ended up unaffordable.

I say 'unaffordable'; I am surviving, but I absolutely hate the financial aspect of my life. I can't afford anything and I feel like a cog in a machine, working several jobs just to keep everyone else happy. I feel utterly depressed. I am only surviving because I am bending the rules left, right and centre; pushing the limits of my expenses claims, invoicing suppliers in advance, asking for support from close friends - and spending on my credit card.

Over the past few years I have worked several jobs and - recently - have run my own business after finding myself out of work. This has given my a lot of flexibility to support my family, but it has its own stresses and the business looks like it might fold in the next few months. As part of this, I found myself incurring more debt just to support my family.

Because our household expenditure is so high I found myself eating into the savings I had put aside for my tax bill, so I have a repayment plan in place with HMRC that I am struggling to afford. I worry that unless I act now my whole life is going to collapse on top of me.

I should say that I have a high earning potential. I have previously been on £70k, but:

CURRENT INCOME:

Day job: £2070 per month (just stopping)
Consultancy: £2100 per month (just started, self-employed)
Part-time job: £400 per month

TOTAL: Approximately £2500 variable

SOA:

Personal debts (with monthly repayments in brackets):

£-1400 Barclays overdraft (£0 per month)
£-800 HSBC overdraft (£0 per month
£-333 Finance agreement (soon to be paid off, but £111 per month)
£-1400 HSBC Personal Loan (£148 per month)
£-3000 Barclaycard credit card (£150 per month)
£-4109 HMRC tax repayment plan (£500 per month)

In total, the repayment of my debts is costing me £909 per month

As a family, our monthly expenditure is £3100 per month (all-in, including several joint debts). I am expected to put in £2,000 a month towards this.

Personal expenditure:

Travel-to-work: £0 (covered by company)
Additional household expenses: £50
Personal (clothing, toiletries): £55
Cash: £150
Phone and utilities: £115
Gifts: £30
Food: £25
Other 'lifestyle': £25

I do not spend beyond the essentials: any personal expenditure goes on necessities only (e.g. shoes where the soles are falling off!). My phone bill is high, but I do claim part of this back as expenses.

Summary:

Income: £2,500 approx

Contribution to joint finances: £2,000
Personal debt: £900
Personal spending: £450

So, as you can see, there is a shortfall.

I absolutely cannot talk to my other half about this. They are not very understanding and I fear that it may result in the collapse of our marriage. Part of the issue - as I said - is that our relationship moved quite quickly and my other half has set lifestyle expectations that I can't keep up with.

As I said though, somehow I am coping. I don't know how I'm doing it, but I'm getting by in some way.

As per another post, I have incurred around £5k of bank charges over the past 10 years but others have suggested I may not be able to reclaim these.

My total debt is £15k. I want to be able to clear my debt as quickly as possible, without putting any extra pressure on my family.

19lottie82

Hi Sam, people might be able to offer you better advice if you complete a "proper" SOA

http://www.stoozing.com/calculator/soa.php

[Deleted User]

I agree 19lottie82.

For a start, it'll help if we know the APRs on the various debts, so we can determine what the OP should overpay, when their DFD is, and would be with any lifestyle adjustments.

FinanciallyUnsavvy

Thank you for posting, and welcome!

First, I'd recommend you fill in the commonly-used SOA here - http://www.stoozing.com/calculator/soa.php . We're all familiar with this on MSE so it's likely someone else will advise you to do this, so we can better give you advice!

As hard as it may be, I'd urge you to talk to your OH about the debt. Keeping stuff from a loved one does no good, and I'm sure he will support you & will probably be more disappointed that you felt you had to keep it from him rather than having the debt in the first place. Loved ones are there to support us through thick and thin and I'm sure he'll want to help you, even if it's only moral support. You can't go on keeping it from him and be expected to live up to his more expensive lifestyle, it just won't work!

Since your overall expenditure is £3100, why are you putting in 2/3 of this? Surely it should be half?!

But putting that aside, you have £500 "personal" money. You say you only buy the "essentials" but £500 essentially "fun" money a month is a LOT!

What does the £150 a month cash go on?
£115 for phone/utilities? What utilities does this include?
What are the £50 additional household expenses that aren't including in your family monthly expenditure?

It seems to me that you could cut back a LOT on that £500 spare money you have if you sit down and think about where it all really goes. Although I don't know exactly where it's going without more detail, it seems to me that you can probably get by with at most £100, leaving you £400 to throw at debts.

Good luck, you've taken the first step. It's scary, but once you've really got to grips with your budget and where your money is going, it will gradually get easier. You're in the right place - there's a lot of awesome support to be found around here. x

runforlife

It's crazy. You are living almost separate lives…well, certainly financially. You say your other half has considerable savings. Then there should be no reason why these can't be used to pay your debts. Your marriage is a joining of two lives. For better or for worse? Your OH should share your current burden.

thecassman86

Hello and welcome to the forum! :wave:

As others have suggested, the SOA linked above will allow you to lay out the information in a way we're all familiar with here but will also need you to populate the APR's of your debts etc which will help us in determining the best way for you to clear the debts quickly.

As FinanciallyUnsavvy mentioned above, i know you said it's absolutely not something you want to do, but i'd definitely *definitely* talk to your OH about this. We have seen so many people come through these boards who keep debts secret from their partners and, exactly like you're saying, their OH (blissfully unaware of the problems) tries to live a better life than is affordable and it puts a lot of strain on the relationship. With OH on board (and they will be, i assure you) the debts can be cleared in a much much quicker and painless manner. You're a high earner, and i presume OH is too so it can be cleared easily as a combined effort.

Anyway, post up the SOA and we'll see what we can suggest. As FinanciallyUnsavvy also suggested, you say that you have £450 "personal spending" per month so we could do with knowing what this entails?

Essentially, if you want "a cold, hard, frank perspective on what I can do" as you put in your first sentence, then really, with debts of £15k and a shortfall every month - your personal spending should be close to £0. Simples.

Best of luck with it, you've come to the right place

Aquamania

cpfc_sam wrote: »

Hello,

I have been in debt for almost a decade now and really would appreciate a cold, hard, frank perspective on what I can do to really sort my life out.

My situation: I'm married with two young children. I am finding life tough because my other half doesn't know about the debts I am in and I am having to support my family (which is struggling anyway) on top of pay my own debts (which are crippling me).

I have posted by SOA below, but first some background.

I first got into debt in 2003 in my second year of university. I had little financial support from my family, who are quite poor as well. Despite working hard during term-time and holidays, I ended up with quite a hefty credit card debt on graduation.

Stupidly...I took out a Barclays Graduate Loan for £10k at the end of my course. I then moved to London for my first job. It paid peanuts and I soon found myself racking up even more debt.

At the worst point I had a £10k loan with Barclays and a £15k loan with Abbey, plus around £4k on credit cards. I was a mess. Total debt was approximately £21k, excluding my Student Loan (£11k).

Slowly but surely I began ploughing into the debt, but after marrying I found myself being dragged into a worse financial situation. I never had the chance to 'get myself straight' financially or pay my debts off, but I felt obliged by my other half (who has quite a lot of savings) to pursue a lifestyle that has ended up unaffordable.

I say 'unaffordable'; I am surviving, but I absolutely hate the financial aspect of my life. I can't afford anything and I feel like a cog in a machine, working several jobs just to keep everyone else happy. I feel utterly depressed. I am only surviving because I am bending the rules left, right and centre; pushing the limits of my expenses claims, invoicing suppliers in advance, asking for support from close friends - and spending on my credit card.

Over the past few years I have worked several jobs and - recently - have run my own business after finding myself out of work. This has given my a lot of flexibility to support my family, but it has its own stresses and the business looks like it might fold in the next few months. As part of this, I found myself incurring more debt just to support my family.

Because our household expenditure is so high I found myself eating into the savings I had put aside for my tax bill, so I have a repayment plan in place with HMRC that I am struggling to afford. I worry that unless I act now my whole life is going to collapse on top of me.

I should say that I have a high earning potential. I have previously been on £70k, but:

CURRENT INCOME:

Day job: £2070 per month (just stopping)
Consultancy: £2100 per month (just started, self-employed)
Part-time job: £400 per month

TOTAL: Approximately £2500 variable

SOA:

Personal debts (with monthly repayments in brackets):

£-1400 Barclays overdraft (£0 per month)
£-800 HSBC overdraft (£0 per month
£-333 Finance agreement (soon to be paid off, but £111 per month)
£-1400 HSBC Personal Loan (£148 per month)
£-3000 Barclaycard credit card (£150 per month)
£-4109 HMRC tax repayment plan (£500 per month)

In total, the repayment of my debts is costing me £909 per month

As a family, our monthly expenditure is £3100 per month (all-in, including several joint debts). I am expected to put in £2,000 a month towards this.

Personal expenditure:

Travel-to-work: £0 (covered by company)
Additional household expenses: £50
Personal (clothing, toiletries): £55
Cash: £150
Phone and utilities: £115
Gifts: £30
Food: £25
Other 'lifestyle': £25

I do not spend beyond the essentials: any personal expenditure goes on necessities only (e.g. shoes where the soles are falling off!). My phone bill is high, but I do claim part of this back as expenses.

Summary:

Income: £2,500 approx

Contribution to joint finances: £2,000
Personal debt: £900
Personal spending: £450

So, as you can see, there is a shortfall.

I absolutely cannot talk to my other half about this. They are not very understanding and I fear that it may result in the collapse of our marriage. Part of the issue - as I said - is that our relationship moved quite quickly and my other half has set lifestyle expectations that I can't keep up with.

As I said though, somehow I am coping. I don't know how I'm doing it, but I'm getting by in some way.

As per another post, I have incurred around £5k of bank charges over the past 10 years but others have suggested I may not be able to reclaim these.

My total debt is £15k. I want to be able to clear my debt as quickly as possible, without putting any extra pressure on my family.

That would be nice wouldn't it? But realistically if you are spending more than you are bringing in, then you either need to increase what you bring in (probably unlikley) or reduce what you are spending - and that's before addressing the issue of the existing debts.

How is it you currently owe HMRC over £4000?
Presumably your full time and part time jobs operate under PAYE?
Have you tried negotiating with HMRC to reduce the monthly payment, albeit over a longer period?

Lots of things are missing from your expenditure (e.g. mortgage/rent, council tax etc)

You need to split out exactly what you are paying £2k on joint finances for. Perhaps even better if you could include your partner's income & expenditure in a separate column too - claiming back bank charges due to financial hardship will need to be assessed on total household income & expenditure.
https://forums.moneysavingexpert.com/discussion/4913728

Are you really spending more on gifts than on food?

What is the £150 cash for? That's £1800 a year!

What is other lifestyle? That is £300 a year - the same as you claim to spend on food?

£115 a month on phones and utilities? - again what is the £2k 'joint finances' figure for?

As others say, if you need more advice, please complete the usual SOA - a bank will not accept your version above as evidence of financial hardship.