Standing in front of a mountain

Ninnins

Looking at some of your inspirational stories on here I need to face up to my debts once and for all.

I have been trying for years to stop spending :mad: and pay off debt. This has resulted in many attempts at consolidation (didn't stop me I'm afraid )

There was a time not so long ago where financial institutions were falling over themselves to lend, lend, lend whether you wanted it or not - but I'm blaming no-one but myself.

Now, once and for all, it is payback time. I am only 8 years from retirement so time is limited. I have sleepless nights and angst-filled days worrying about my debts. I have compiled an SOA and budget and gone through both with a fine-toothed comb, several hundreds of times. Therefore I know what I must do.


Total monthly income: £3,420
Total monthly outgoings: £3,050
Surplus for paying off debt: £370

Unsecured debt: £27,300

Mortgage: £223,000

My question:

What are my chances of clearing my unsecured debt as quickly as possible? Does this state of affairs seem insurmountable? I've been refused a cheaper mortgage in order to consolidate (hello, deja vue!) so my only choice at the moment is to chip away at the three expensive credit cards. I can't get more credit at the moment so can't move any of the debt.

Any thoughts, advice or encouragement would be so well-received right now ...

Thank you.

sourcrates

Hi there:hello:


You would be best advised to complete this first, then folk may be able to offer advice as to were savings can be made, cheers


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

Ninnins

Thank you sourcrates I will do that asap

sourcrates

Ninnins wrote: »

Thank you sourcrates I will do that asap

No probs :beer:

NHS_worker_bee

Ninnins wrote: »

Surplus for paying off debt: £370

Unsecured debt: £27,300

Mortgage: £223,000

My question:

What are my chances of clearing my unsecured debt as quickly as possible? Does this state of affairs seem insurmountable? I've been refused a cheaper mortgage in order to consolidate (hello, deja vue!) so my only choice at the moment is to chip away at the three expensive credit cards.

Hello

If you do have £370 surplus each month and are managing to make above the minimum payments, your chance to clear this debt is there, so it all depends on how motivated you are to finally get rid of this debt. When you post your SOA you might find you can cut back on spending even more and put extra money towards the debt.

Have you put the three expensive credit cards into the snowball calculator so that you are paying off the most expensive one first? (Whilst still making minimum payments on the others?)

http://www.whatsthecost.com/snowball.aspx?country=uk

Have you cut the credit cards up? Best wishes, you're in the right place

longtermplanner

That is a huge mortgage so close to retirement. Is it repayment or interest only? How much equity is there?

Previously you said you had sons living at home for free as they were hoping to move out - have they gone? If they have, then you either need to let out their rooms or downsize the house.

looking forward to seeing the SoA. Only £327 a month against 27k unsecured debt is not good at your age with that large a mortgage.

What are your pension provisions like?

[Deleted User]

Ninnins wrote: »

Any thoughts, advice or encouragement would be so well-received right now ...

My first bit of advice would be, stop trying to consolidate.

Consolidating seldom works (take it from someone who knows, from bitter experience), and even less so for someone who can't stop spending.

As others have said, post an SOA, so we can see where you can economise.

Ninnins

Thanks for taking the time to reply everyone.

I spent quite a few hours today using the SOA and snowballing tools (thanks for those - great resources) and coming to terms with the reality of my situation.

I agree, 223,000 is a huge mortgage at my age, and this is what makes me shudder. Coupled with the unsecured debt - this is why I feel I'm at the foot of the mountain with no hope of climbing it.

I do have a modest pension mercifully - it would cover the unsecured debts with a little left over and provide a small income - although I see myself working well past normal pension age of 60.

I still have DS2 living at home trying desperately to get on to the property ladder - he contributes but as he is also saving it would be counter-productive to ask for more.

There is quite a bit of equity in the house - the rise in property at the moment is a double-edged sword (bad for first-timers like DS2 but lucky for the likes of me) but on a good day could be around £150,00 so down-sizing is an option.

I just feel completely frozen - no choice but to keep paying minimum payments and not seeing any progress.

BedsitBob, thanks for that, as I've consolidated several times before I know it's not the answer so it was a blessing in disguise being declined for another mortgage.

I made the biggest mistake of all time when I went for one of the "all-in" mortgage/bank accounts where my salary is paid directly into one account. The temptation to use all the available funds is too great, which is what I have been doing, consequently, I've only been making interest-only payments hence I am behind on my repayments and RBS will be cutting my facility by £7000 in Feb 2015.

Finally, I am just not ready to post an SOA yet although I have been through everything and there is nowhere to cut down on further. I know where the problem has lain - squarely at my over-spending on frivolities and wasteful purchases. It doesn't take much for things to go pear-shaped if you take your eye off the ball does it?

As I said, my head was in the wrong place, and I feel that now that the fog has lifted I am ready to tackle this.

Cottage_Economy

Is downsizing an option where you live - will £150k buy you something you want to live your retirement out in?

Also, is your pension of sufficient size that you could realistically take a lump sum option to throw at the debt and live on the rest? Or will it leave you with too small a pension to live on really?

You say you are 8 years off retirement, and put your normal retirement age at 60? 65 is generally considered to be the normal retirement age...

So does that make you 52 or 58?

Sorry for all the questions...

Ninnins

Hi Cottage - to be honest, where I live, £150,000 wouldn't even buy a parking space ... !!! It would mean a big move into a slightly less urban area - maybe around 25 miles down the road. I feel a little sad about that as since my father passed away three years ago my mother has needed more care, and I keep thinking that I may be a grandma soon .... still, what are my options?

Cottage_Economy

Ninnins wrote: »

Hi Cottage - to be honest, where I live, £150,000 wouldn't even buy a parking space ... !!! It would mean a big move into a slightly less urban area - maybe around 25 miles down the road. I feel a little sad about that as since my father passed away three years ago my mother has needed more care, and I keep thinking that I may be a grandma soon .... still, what are my options?

Hi Ninnins

Sorry, i edited my post to include more questions at the same time you were posting!