Drowning in debt - please help!

sammy115

its not all doom and gloom though. You have more coming in than going out from the look of your SOA. What I am interested in is your overspend for the last few years which has led you to the extent of the debt you are now in.

I think it is important to keep a spending diary, it makes you much more aware of what you are spending on a daily basis and will keep you focused.

Read 'the millionaire next door'. It may give you a different take on keeping up with the jones's.

I understand the feeling of overwhelming.. I used to think we are in so much debt what difference will a bit more make.. I struggle on a daily basis.

good luck

weeg

Hello. You really do sound as though you're determined to do this.:T So well done for that.

The only thing I have to add is as well as your spending diary (which I found absolutely brilliant) would be to suggest a TV diary. Weird, i know, but bear with me here.

You pay £53/month for sky. Try and get the whole family to keep track for a month of what they watch and for how long. Ignoring anything that is on freeview, do a sum to see how much sky only channels cost per hour watched. If it's low great, keep it. If it's only football maybe OH can go to the pub/ friends house? If it's mostly movies you can get free trials top dvd clubs. Either way you and OH will at least know if you get good value for money.

I applied similar logic to a lot of things, and once you assign a cost/ enjoyment value it's enlightening to see what you can live without. (ie I dumped hiring dvds and going out as often, in favour of a cinema subscription and dinner party rota as it turns out a lot of friends are economising too)

orton7

Hi Pooky, thanks for your support. Blimey, £250,000 for a house in Kent - where?? But it's certainly food for thought.

ltm07

Hi again orton7,re the food. We have found that buying supermarket's own brands (the brands between top brands & economy brands)has significantly reduced our food bill. Almost every supermarket's own brand tastes just as good as the top brands in my opinion(& i'm a fussy eater ). We now buy economy lemonade,tinned tomatoes,beans etc,but there are some economy foods that we don't enjoy,so there's no point buying those foods. It's all about trial & error. I persuaded my Mum to buy supermarket's own brands & she bought Sainsbury's wheat biscuits & put them in a tupperware box as she said my Dad wouldn't eat them if he knew they weren't proper weetabix! He's eaten them day in day out for months now & my Mum's only forking out half the price! I don't know what others think,but i guess alot of it is psychological (i.e. people think it can't be as good if it isn't top brand,but i have found that there's very little difference in taste,but a big difference in price)! By doing this you will easily cut your food bill by at least £200. Also people have said to have a look on the Old Style board, something we've still to do aswell.

solventguy

orton7 wrote: »

Help, Im at the end of my tether and can't see a way out of our debt problems! We have been living beyond our means for years....But it seems that we are in so much debt that another few quid won't make much difference to the total debt.

Ahh, but it does.

From your SOA (which is very clear), you appear to have roughly £104K of debt, not counting your mortgage.

So, one thing to think about is how much that debt is costing you a month - just in interest. My guess is that it might be about £1,500 a month, just for the interest. That enough for a nice holiday - every month.

So your priority must be to whittle this down. Every pound you pay over the interest charges reduces this. Everything on your outgoings list must be examined. You must declare war on this debt+interest and focus everything on reducing it. Meals out, holidays, savings, groceries must be cut back and the savings applied to reducing the amount. Just think to yourself, every time you cut back on something you are giving yourself more money to spend later by reducing your interest.

I read a great article today, "Every Penny Counts", in the New York Times about the power of savings:
http://www.nytimes.com/2007/07/29/realestate/29cov.html

Although it deals with savings for a flat, it's relevant to your situation in the focus on one goal - in your case, debt reduction.

I wish you the best of luck!

ltm07

A very interesting read solventguy. O.K. on a smaller scale but this article reminds me of when my Uncle & Aunty gave up smoking 40 a day each,put the money in a whisky bottle,banked it now & again & within 3 years bought themselves a brand new car for 11k! We are finding that by cutting out on little things like newspapers,Sky etc,that we are getting back on our feet alot easier than we thought we would.

jo1972

Just wanted to say welcome to MSE :wave: you sound very determined to do this, I hope that your OH is equally as determined! Saving money becomes extremely addictive, to the point of annoying to some :rotfl:

Good luck! I shall keep my eye on this thread with interest!

Jo.

MrsTinks

It CAN be done
Ok keep sky for now - I agree OHs can be fickle folk and sometimes you will get their co-operation a lot easier by allowing them their little treats. And £54 is not a lot compared to some of your other outgoings.
The car... if you can manage without this... FANTASTIC - this would make your lives a lot easier I think
Cut the luxuries as already mentioned - the £400 for holidays a month, the £200 meals out, £100 savings, £40 papers and so on... it will quickly add up!
As for childrens birthdays and presents etc - 40 parties a year... how do they have time to do school work? No seriously though, cut down on the amount of parties they go to. Maybe 10-15 a year each? This will also be good for them to learn to choose and decide on where they want to go the most and possibly seeing the value fo friends
A simple "sorry we can't make it, already have plans, so sorry..." will be enough Don't worry about telling people you have debt - most of the time people will more than likely not question you And relatives with kids etc and being generous - why not use the grabbits boards and vouchers board? Argos not long ago had a £40 car set reduced to £10... keep an eye out for bargains! And apart from that just explain you are trying to change you spending habits to teach your children how to respect the planet/money/budgets etc etc etc OR tell them you are trying to reduce your retirement age... tell them with a smile and a bit of a laugh and I bet they will be envious of you possibly being able to retire younger than them... and if you keep up the regime once the debt is gone... well there is NO reason you can't retire young

Bestthingsinlifearefree

Hi Orton,

In regard to Sky we reduced our package by me giving up the sports channels and Mrs Best giving up the movies. It halved out subscription costs and we never even missed them. So rather than cancel the whole thing why not get rid of the channels you don't watch?

Is it possible to list the individual credit card debts and interest rates?

Have a search on here for snow balling i.e the technique of paying of higher interest rates debt first.

Could you get any zero % interest rate card and move the debt on to lower interest rates ? So you pay less interest and pay the debt off quicker.

A couple of key general points.

1)You need to get into the mentality of EVERY POUND counts, every pound not spent is another pound closer to getting debt free.

2)Keep a spending diary so you monitor every pound spent.

3) The problem is not your income but your SPENDING.

I would not sell the house at the moment because that would not change
your spending behaviour.

You need to get your partner 100% on board with this. Get him to read this thread.

Keep posting. keep positive. View it as an exciting new project and journey to get debt free.:beer:

Good luck !!

Best,

Jo.G

Well done on taking the first step. We too are struggling and I am trying to sort out our debts, which arent really that bad. Overdrafts are our downfall. I hope your OH is supportive and takes to MS. My other half agrees in principle but isnt very good with the reality! Good Luck.