Going to wash this debt right out of my hair!

TopCat1978

Hi all

I am relatively new to this forum but have been using it for advice on the sidelines!

We are on the verge of remortgaging to clear our debts and I thought by keeping a DF Diary I would be able to keep myself motivated to stay credit card debt free.

By way of background, DH and I bought our first house in 2000 and since then we have accumulated debt over the years. Various things have set it escalating

• 2 lots of maternity leave for me over the time which leaves us short as I am the main breadwinner.
• Hubby is self employed and the money can be really good and can also be non existent.
• Every house we have bought we have done some type of extension / renovation to.

So when we moved to our current house we moved over £32k of unsecured debt with us and extended the mortgage slightly. :eek:

Over the next 4 years we have doubled the size of the house and built the house we always dreamed of having. However, despite funding a lot of this through income we have also added to our debts. This got to the point where we had a large amount on credit cards with 'standard' interest rates. the interest alone last month was over £600 which is why we have remortgaged.

The new mortgage clears all our debts and overdrafts and I intend on paying everything off and not having a splurge - this happened with the last few times we 'remortgaged' to clear debts.

DH is not particularly financially savvy so he trusts that things will be sorted but is easily led if I made a suggestion. However, things feel different this time as we have two young boys who we absolutely adore. We are in a gorgeous (almost finished) home which is perfect for us - close to parents and in-laws (can be a problem at times), close to the primary school / preschool and we don't want to risk losing the house.

I suppose my biggest worry is I will fall into my normal ways - I like clothes shopping and buying 'pretty' household things. I need to train my brain into not buying things unless we need them and believe me we don't need anything else. The house is full with stuff.

So hopefully in the next few weeks a large equity fund will hit the account. I will then repay every card we have and close all but two cards - one will be DH's and the other will be one of mine for emergencies. The rest, which total 9 accounts, will be closed to help improve our rating and also not enable me to give into temptation.

I am sorry if this diary turns into endless ramblings but I want do the best for me and my family. We have 'got out of debt', at least the credit card debts and have made them more manageable. So I want to stick to a budget and keep track of how things are going. I want to build up a large buffer to make things comfortable. So I am going to be writing about how I am doing with budgets and savings.

I hope this is in the right place, I am a debt free wannabe as I don't want to get back into where we are now.

MissLaura

Hi TC,

Welcome to the forums.

I know a lot of people on here aren't keen on the idea of remortgaging to repay your debts and I think this is because sometimes not learning the 'hard way' doesn't teach you new habits.

So I'd suggest that what you need to do now is build a brand new relationship between you and money - because you simply cannot let things get the way they were again.

If it were me, I'd take these first few initial steps:

• Cut up ALL credit cards
• Use a budgeting tool to manage your incomings and outgoings (YNAB?)
• Learn about what you spend and where you spend it by tracking every penny
• Make compromises i.e. Instead of name brands, why not try own brands
• Separate your spending into envelopes if necessary - Week 1, Week 2, Groceries, Entertainment etc - When 1 is empty and you need to buy something, you need to sacrifice it from another envelope
• Take responsibility and be accountable for every £ you spend - do we NEED this, is it important, can we afford it

And see how you get on.

Good luck!

kxc798

Hello there and welcome!

From experience may I suggest that you cut up ALL of your credit cards too? Trust me on this, the temptation was too great for me when I had one for emergencies. I now have one account and an online savings account. The main account has a debit card, the savings account has nothing so I cannot easily use it. Also, do you have any storecards such as Next or Monsoon? Most of my debt came from there - I can't even claim it was used on emergency buys.

I wish you well on your journey - you will be extremely well supported on here, I promise you.

Good Luck!

TopCat1978

Thank you both. I really appreciate the advice.

I am just worried that if we have an emergency in the early days and we need it then we won't be able to, I was thinking of storing the one at my inlaws and then won't be able to use it without the fifth degree.

Re separating everything out, we have one joint account where my salary goes into and two personal accounts. DH has a small overdraft limit £50 but mine is £1500 limit which is a temptation. I am thinking of either closing the account or asking for a reduction in the overdraft limit. Will they think I'm mad?

At the moment I don't have any of my money - anything I buy goes on cards / joint account. So would like to have 'my money' so I don't feel guilty for having my hair done, even though I only have a dry cut! On the other hand it would be nice to have a fresh start with a new account, but I've had this one since I was 11 (15 years!)

I like the envelope idea, I had done a budget on excel and also included annual costs (such as car tax, £600 for car mot and service) and added those into how much we need a month in the joint account. I then plan to leave £250 extra in the account to roll up and never be touched except for emergencies.

I would then like to have two accounts, one for food and petrol. Budgeted £500 for 2 adults and 2 boys! Petrol costs me £100 per month. Then I can control and we can only use the money in the account. The other account would be for treats or saving depending on the month.

Also DH is self employed. I have asked he transfer £500 into the joint account towards bills. This forms part of my budget above.

He can some months earn £4k but other months nothing so this seemed sensible so we had a reasonable level income. Anything he has above this will stay in his account up to a level to give him a working balance for the business. At the moment he uses a credit card to buy materials and gets paid but we are not strict to pay it off the credit card straight away so I don't want him using it again.

I have just been into our town to play skittles and walked home passed all the shops. Glancing in the windows, lovely handbags and clothes were catching my eye and I just told myself that I don't need it, to walk away which I did. Previously I would have gone back in at the weekend and bought. Not a massive thing for some but for me it felt good.

So my plans from today's thoughts:

look at bank accounts to keep things separate.
Review my budget in case I have missed anything
Look into an online tracker for costs so I don't miss anything

Xx

belleandthebudget

Hi Topcat, good luck! Walking past temptation is definitely something to be proud of.

I would say definitely get them to close or lower your overdraft amount. The fact that you're hesitant to keep it shows that it's likely to be easily abused. I don't think the bank will bat an eyelid if you ask them to lower/remove it and if they do, who cares? It's your account!

giblet1979

Hey topcat,

Just wanted to say good luck and well done for avoiding temptation. It is definitely a whole new approach that's needed, and it sounds like you're well on the way. The support on here is fantastic, so please keep posting through the good and the 'not so good'.

I'd definitely ask for the overdraft to be reduced significantly (too much temptation) and be 'really' careful with the credit cards, because our minds are good at thinking 'emergency' when there are other ways to sort a problem, and then it is a slippery slope!

I'll look forward to hearing more x

TopCat1978

Thank you Belleandthebudget. Felt good and made me think 'I can do this, I will do this'. I will definitely reduce the od facility on the account so I am not tempted as I don't want to have to be credit checked etc. I think we would be ok because we have never missed any payments or been over our overdraft limits but still.

Thanks giblet1979, I will keep posting, partly to keep me sane and focused and for help and advice.

Today's god thing, spent £3.97 in Morrison's on fruit and veg. Went to the sandwich van which comes to the office and didn't buy anything. Was only going to buy a sausage roll for £1.25 but already had lunch and it would have been a waste. So saved myself £1.25.

Small steps!

TopCat1978

Well today has been ok. I have spent a grand total of £5.17 on groceries today, fruit and veg and an emergency tin of spaghetti! Feeling ok and in a good place.

Looking forward to having the remortgage funds come through to be able to pay all the cards off. I am then going to put them all in a pile and cut them up one by one with DH when the boys are in bed. I am excited about that - is that strange?

I have also decided to try and get on top of the household filing and maybe move it to a more convenient place than the spare room.

Things I have learnt today:
I have good will power
I have a good friend who will be with me for the journey and me for her.
Not wasting money gives me a good feeling

Downside today:
I have a Next VIP slot for tomorrow and although I don't need anything I love Next clothes and I am really tempted. I know I shouldn't and I probably wont which will give me a good feeling but still............

giblet1979

I'd imagine it would be very difficult to say 'no' if you're there at NEXT, and you're thinking 'well I'm just about to pay stuff off so....' etc etc.

Definitely better to stay away I think!

I'm sure it'll be a great feeling to cut those cards up; never again! x

belleandthebudget

Great news about cutting up the cards - that will feel so liberating!

I agree with giblet - cancel the appointment for today. It's not worth the temptation.

TopCat1978

Thank you both, well I didn't spend anything at on the Next VIP sale. Felt really good and I was so proud of myself.

I did spend £8.49 in Morrisons this morning as I had a 'tight incident' on the way to work!

I have been chasing up the remortgage as I am so keen to get this sorted to pay everything off. I have balanced all the accounts to ensure that I know the approx. balances when the funds come through.

I also sat down with DH and ran through the budget with him again last night and also been nagging him to get his invoices done as that is quite a lot which I can't wait to get into the savings.

Feeling very positive tonight :j