Drowning in debt - please help!

lemma1968

I think that you should be looking at at least:

SKY:- reducing the package - do you really need the full monty if you are working so hard and have kids? We have just done this following stern advice from MSE.

Endowment policy - is this attached to your mortgage or independent of it? You should look at maybe cashing it in if possible to get rid of your debt as the interest on the debt is bound to be higher than that being earned on the endowment.

Going Out: We don't now. We see it as a necessary sacrifice. Maybe on our wedding anniversary, or childs birthday but that is it.

Holidays: £400 pcm:eek: :eek: That has left me speechless. Thats £4,800 per year on holidays. What about your spending money on top or is that included? Even if it is....blimey!!!!

Papers: - gotta go. With Sky TV and going out all the time, when do you actually have time to read them?!!!!!

Childrens bank account: Don't raid it, just put other relatives gifts into it for the time being cos £1200 p.a. would make quite a dint into your attempts to get debt free when it comes to calculating your debt free date. You could use it to pay extra to your remortgage or Natwest Loan each month thereby reducing the terms and the interest.

£600 pcm on food: I'm an M&S food hall addict bit even I don't do that. Use Sainsbury's or Tescos and collect their points etc, it all adds up. Make a shopping list and stick to it. Only buy what you need each week. Set a weekly budget for it, take the cash out and leave your cards at home.

Re the insurances - DO NOT USE A BROKER. Look at the companies that you can buy through https://www.quidco.com. We did and our car insurance is likely to halve.

Realising the extent of your debt and wanting to do something about it is the first step. Good Luck with it.:rotfl:

normdeplume

If you're in the media, do you not get the papers at work? I'm in marketing and we have the papers daily in order to make ads out of them....

orton7

normdeplume wrote: »

If you're in the media, do you not get the papers at work? I'm in marketing and we have the papers daily in order to make ads out of them....

I'm freelance so I work from home. But could still cut down on the paper mountain that seems to accumulate in our house on a daily basis.....

hypno06

Just wanted to give another vote for the snowball site really - I think you will find it to be a fantastic motivator and by playing around with the figures you can see the light at the end of the tunnel get a little closer.

Good luck, and keep posting - you will get wonderful support here.

bonar

re your car MOT I took martin's tip on board this year and put my car into local council test centre and needless to say it passed and only cost just over £40.

Pooky

You could quite easily sell up and move and clear all of this - I'm in Kent, it's a 50min journey into central London via train. House prices here are dependant upon village or town location, a large victorian semi in town (5/6 beds) is around £350000. For £250000 you can have a village house with large gardens and gorgeous views. The schools are fantastic and you get to live by the sea! It's worth thinking about.

As for the rest of your spending, your food budget can be cut hugely, we're a family of 4 (2 adults, 2 kids who eat more than we do) and we have a budget of £250 per month - this includes the odd bottle of wine and all cleaning/laundry products, pet foods and some basic clothing items and all meals for all of us - packed lunches included.

We have friends that work in the city and earn more than I could ever dream of, we told them our situation and they know that we either do it our way (i.e. as cheap as possible) or not at all - good friends stick by you on issues like this.

Does your partner realise the extent of all of this? The kids savings have to go - what ever they have now will sit and earn interest and any they get from relatives will add to it, there really is no point in paying a fortune in interest on your CC for not clearing the balance and shoving the money into an account paying probably less than a 1/4 of the interest.

Hope it all works out for you.

Techno

If you need the papers could you look at an annual subscription? I get the telegraph for £1.50 per week at the mo (that's less than just the sunday paper)
Good luck in your quest

joeblack066

CLAPTON wrote: »

I think you might find it better to think about setting out a realistic plan to tackle the debts rather than just look at a few items.

So your (non mortgage) debts are about over 100,000

So appoaches :

are your joint incomes likely to rise significantly?

do you have any endowment policies or saving products that can be sold or will pay out over the next few years?

do you have any other savings (putting aside the kids money for now)?

How much is the house worth?

Depending upon the above and assuming that you have no real get out of jail cards then you need to think about reducing your spending by at least 12,000 a year to make any indent into the debts.

so thats about 1,000 a month:

holidays have to go : £400
savings for kids : £100
reduce groceries saving :£300
reduce meals out saving £100
reduce cloths saving £50
cut out newspapers save £40

totals 990

In my view it has to be as drastic as that ..unless there any hidden get out of jail cards elsewhere.

You have received some excellent advice on this thread, and I think that if you approach it from this point of view, and use the snowball calculator, you will start to see the light at the end of the tunnel. It will be so much better to be debt free parents as your kids get to their teen years, and you will have brought them up to live within their means, which is a great thing. Good luck, you WILL get there!

blackangeluk

Hi there and welcome to the board

I have read through all the posts and as normal everyone has been really helpful :T

When I had my LBM I didn't think I could cut back as much as I needed to, but I have managed to do it. It is hard when you are socialising with people who are living high lifestyles but I would bet my last dollar (if I had one!) that at least half of them are in debt too and not facing up to it. I feel that the more you earn very often the higher the debt. We haven't admitted out debt to friends, but our stock answer to invitations out are "we have a lot going out this month" and we suggest nights in etc I am far more relaxed when I socialise now as I can budget for it, rather than fret about how much we are spending.

Re the food bill, it can definately be reduced, I have shopped around at Aldis, Morrisons, Tescos and worked out where the bargains were. This week I managed £59 for a family of four and found a £10 off voucher on a discount site as well.

It really is a case of shopping around and getting bargains. Also thinking, do you need to do this/buy this etc. 99% of the time you probably don't.

I would also suggest a spending diary, seeing in writing everything you have spent money on during one week is amazing and definately a kick up in the bum when you realise how much you waste.

Also, have you got anything you can put on Ebay or Amazon, it is amazing the amount of money you can raise by getting rid of stuff you don't even use. I negotiated with my two children that I would sell their toys and they would get 1/4 of the cost it sold for, we do this now instead of putting money away for them. Certainly with DD she now looks after her toys better as she is looking for her return on them :rotfl: I raised enough on ebay by selling unused toys to pay for both children's birthdays this year.

There really is so much you can do and it is just taking that first step and facing up to it, so you have done the hardest thing. I am sure with some cutbacks you will be amazed at the progress you can make. Good luck!

angchris

hiya :hello: welcome to mse! you have recieved some fab advice from the lovely people on here, i hope it gives you something to think about. it is hard changing the lifestyle that you have been used to most of us have been there and done that. before you part with your hard earned money each month look at what you are buying and decide if its really needed this goes for everything...when you pick up that next top in town for the kids put it back untill they really have grown out of most of their clothes then look on ebay for cheaper things, i have bought some really nice things for my son new and mostly second hand (they all look used after a few washes anyway :rolleyes: )
expenses like groceries and meals out can easily be slashed by planning what you are going to eat and cooking it from scratch, have a peek at the moneysaving old style board for inspiration what they cant tell you about slow cookers/recipes/stardrops and microfibre clothes isnt worth knowing!:rotfl:
i don`t see why you should cut out your holiday, you both work hard and are entitled to a break away, why not try something like going on a eurocamp camping trip http://www.eurocamp.co.uk/index.cfm?fuseaction=campsites.resortOverview&ver=1&MasterCode=79
next year camping in a pre erected tent inclusive of ferry in july for 7 nights is just £406 at le brevedent in normandy im sure the kids would love it as they are at just the right age. no need to spend out on lots of expensive hols they don`t really appreciate them or remember them much later on in life anyway :rolleyes: kids all they are interested in is the pool! just pack a few throwaway bbq`s n buy the food you normally would anyway.:D
any chance of buying some hair clippers and doing oh`s and maybe kids hair? this will save you a few quid, i do my oh`s and my sons and im not bad at it even if i do say so myself :j
£150 is alot to be paying out each month on sport/activites/pocket money, i suggest to get them to chose their fav activity each and just have the 1 each.
good luck with trying to sort yourself out, keep us updated...angchris