Managing Debt + Paying it off

SeduLOUs

I may have misunderstood so correct me if I'm wrong but it sounds like you have savings for a house deposit?

If I were you, I'd use it to clear the debt. I know, I know, you don't want to touch it because it's for the house, but once the debt is clear you won't be paying all that interest anymore and it will be a much quicker to then get the savings back up to where there were than to battle debt that is charging interest... You'll be better off in the long run.

I doubt you would even be able to get a DMP if you have savings available to pay the debt, and if you do go down that route you can forget any ideas of getting a mortgage any time soon.

Just my two cents.

soutermon

We are not in possession of the savings, so shouldn't affect our chance at getting a DMP. It's to be a gift from my parents for the sole purpose of going towards the deposit on a house. I've tried to explain the money would be better suited to paying off debts now, but they won't budge. It's still their money, so they can spend it as they see fit I guess!

heartbreak_star

Charity shops and Asda for clothes - you likely aren't losing weight THAT fast

Good luck!

HBS x

ViolaLass

I know I'm echoing others but £650 a month on food! You should be able to half that, easily (if not more). By the looks of it, your partner doesn't have a job? So she could be in charge of finding bargains, batch cooking etc?

£600 a year on presents is a lot too. You simply can't afford the lifestyle you've been choosing to have.

blisteringblue

Personally IMHO you aren't that far away and your debts are almost manageable. I think you are right to look at it now and nip it in the bud before you end up like me with a good income but over 50K to pay back.

You really need a good budget more than anything and I'm sure you could pay all this back yourself without the need for a DMP or more borrowing.

A DMP and you can forget saving and moving house, you will be dead to the world of credit for 6-10 years. DMPs sound nice (and it has saved my skin) but they totally trash your credit scores for a long time.

I still have Sky on my DMP so you can have luxuries. I do play the sky cancel game though. I cancel it every year and wait until retention's ring to beg me back (Currently on 75% off everything for 12 months). It does go off for a while but longest has been around 6 weeks.

My 12 year old daughter has a phone too, it's Tesco Mobile and £7.50 a month, It's a smartphone not brilliant but she can facebook and wattsapp, and that comes with 250 mins, 3000 texts and 500mb data. I just checked and they have some better phones now on the same deal.

Have a look at YNAB software (You Need A Budget), it's completely changed how I look at money now. You assign pots to all your expenses ie your groceries. You can access it direct from your phone or your computer so when it's gone for that week/month it's gone and you know you are now overspending.

On_my_way

hollibobs wrote: »

My girls are 15 and 12 and have in the past until I found giffgaff had payg SIM cards.. They soon learned that when the credit ran out that was it until the month was up.. It taught them about money and made them think twice about texting/ calling all the time ......

The right message is that money doesn't grow on tress and you have to handle it wisely

I believe in this. I am 32 and perhaps rather old fashioned but kids get clothes etc given to them, I don't believe that they should need to be paid to do a bit of housework!

I know that OP is just trying to be nice and that's lovely, but you do need to bring your kids up to the reality of money and not spending more than you have. So many kids are brought up to believe that there's endless money coming in and then they suffer a huge shock or end up with problems very early on when reality kicks in.

On_my_way

soutermon wrote: »

We are not in possession of the savings, so shouldn't affect our chance at getting a DMP. It's to be a gift from my parents for the sole purpose of going towards the deposit on a house. I've tried to explain the money would be better suited to paying off debts now, but they won't budge. It's still their money, so they can spend it as they see fit I guess!

I totally understand this - but if you go on a DMP you will get defaults and are unlikely to be able to get a mortgage for at least six years!

Personally, I would do anything not to be on a DMP - becuase although it reduces the monthly amount that you have to find, it does ruin your credit rating for a number of years.

Jojo87_1

This may sound obvious but when you apply for a loan are you listing all the debt you have in total or just the debt you will be left with once you pay everything off with the loan?
I owed £12K spread over numerous store cards credit cards and loans, i applied online and was refused because i was listing the 12K debt. I went into the branch and they advised just to list what i would be left with after i consolidated and it was approved. Good Luck!!

Thrugelmir

Look into converting the overdrafts into loans. Despite the poor state of your finances the banks may well prefer a structured repayment plan even if it is over a period of years.