How much? A wake up call

tlc678910

Hi,
I wondered if it were possible now you have begun to broach your situation with your wife could you both set aside time to review all of the outgoings from your joint account.

Can you go through every commitment and get the best deal on your mortgage, insurance, utilities etc etc (use cash back websites such as quidco as well), cancel subscriptions, paid tv, gym memberships etc.

If you can reduce your joint commitments you could reduce your direct debit to the joint account and move towards having sufficient money to live on after your debt repayments.

Good luck
Tlc

rockm87

tlc678910 wrote: »

Hi,
I wondered if it were possible now you have begun to broach your situation with your wife could you both set aside time to review all of the outgoings from your joint account.

Can you go through every commitment and get the best deal on your mortgage, insurance, utilities etc etc (use cash back websites such as quidco as well), cancel subscriptions, paid tv, gym memberships etc.

If you can reduce your joint commitments you could reduce your direct debit to the joint account and move towards having sufficient money to live on after your debt repayments.

Good luck
Tlc

As well as this...you need a joint goal....what are you aiming for as a couple?

Mortgage free home, a second home somewhere you love, early retirement, or be able to travel whenever you wish...

It's good to dream ,and get inspired it spurs you on your journey, even if you feel the goals are out of reach it can help you align with your wife what you want from your life together, and what being debt free can do for you together.

It keeps you focused.

hiddenshadow

Well done with the phone and the spare change!

Seconding TLC's recommendation to go over your spending and see if/where you can save. I've just done that this month and just by switching energy provider, life insurance, and home insurance we're going to save over £40/mo (for the same services!). You might find other areas you can save as well - food spend, entertainment, etc.

Good luck with the personal cutbacks - smoking/coffee/lunch should make a good impact. Re: going out with friends, can you still go but not drink (or drink less)? Or would your friends be open to doing something else less expensive (meeting at someone's house perhaps)? Seems a shame to miss out on time with friends due to cost.

andyfromotley

Hi Glawster,

its really difficult to advise without an SOA.

However if you only have 1k per month and repayments of £960 how are you financing smoking, nights out, coffees etc? I assume this means that you are actually adding to your debt every month?

So some general points.

Drive down your monthly house costs relentlessly. Gas, electric, food, insurance, EVERYTHING. Reduce reduce reduce.

As you have been doing try to get everything on as low an interest rate as possible. This will make a huge difference. CC's on the full rate, paying the minimum can take decades to clear! (over 40 years in some cases)

Stop adding to your debt. You must get your spending under control.

Throw every spare penny at the debt. It wasnt built up overnight and it wont disappear overnight either. Get set for the long haul.

Do not even consider taking equity out of your house until you have absolutely got your spending under control, otherwise you will build up the debt again and risk losing your home.

Do everything you can to boost your income.

It may be that some debt solutions (a DMP for example may be acceptable to your employers) Look into this and speak to one of the debt charities.

Please try to post an SOA. Good luck Andy

patanne

I'm a bit concerned here that you have used your increased debt to get your joint finances out of debt and that if you don't treat all your finances at the same time then your joint finances are going to suffer to pay off your debt. I think you need to get ALL the household expenditure under control (& do an SOA). It is unfair to your wife to let her think that the family debts are not a problem just because the joint ones are sorted.

You don't necessarily need to tell her the extent of the problem, just that there is a problem.

Glawster

Hi Patanne - thanks for your concern. I have spoken to my wife and told her that my debts are significant and that I need to get a handle on them. I haven't gone into full details for several reasons - I don't think it's fair to go into details about her without her knowledge on a public forum but she has a lot going on at the moment.
She now knows I owe a lot of money, and rightly or wrongly we are leaving it at that.
These debts are mine and from stupidity and wilful ignorance. There are some legitimate reasons for some of the spending, but not for most. I will get rid of these debts.
Our joint finances have always been seperate from our individual money. She has always wanted it this way and I agreed. We each pay in to joint account and that covers all the bills, food and kids expense. This has a surplus that is paying off the overdraft on the joint account. We have agreed to sit down tomorrow and go through our joint expenses and see what better deals we can find, and then review this continually. We haven't done this since earlier in the year.

I have spent the last couple of days going through my finance and thinking about how I got here, and how to get out of it. The answer is simple - as andyfromotley identified. I am spending far more than I have.
I wrote down my general expenditure and it is shocking:
- I take £10 out on the way into work and buy a packet of cigarettes. That's £5 (smoking 10 a day Monday to Friday - don't smoke at weekends). A Tesco meal deal at lunch time is another £3, plus a bar of chocolate at 60p. A bottle of Coke or water on the way home with the change means that the £10 has gone - every day. That's £50 a week, over £200 a month! This can be cut completely straight away.
- Weekend spending. I barely see my kids during the week so like to do stuff at the weekend - this normally ends up at Pizza Express for lunch, the cinema and Nandos, Costa etc. This is easily another £200 per month. There is so much around where I live to do for free that this is crazy. Again this is going to stop, and any budgeted meal out is surely going to be that more special if it is only once every couple of months?
- Nights out. I don't go out that much any more but when I do it tends to be excessive and expensive, with no regard to how much money I am spending. No excuses, but that it what happened. £100+ spend without a thought and just a hangover to show. Again this is quick and easy to stop. I have one works drink between now and the end of the year - Christmas lunch which is already paid for - I intend to take £20 and once that is spent then I will go home, or stay and drink water.

These are just the main instances of stupid, thoughtless spending that led me to where I am now. There are others.

p00hsticks

Glawster wrote: »

- I take £10 out on the way into work and buy a packet of cigarettes. That's £5 (smoking 10 a day Monday to Friday - don't smoke at weekends).

I suggest you join the 'Stoptober' campaign which started yesterday to quit smoking - there's a lot of support out there as part of it and it is provides a good excuse for why you are quitting if anyone asks.

Best of luck with it - if you can go weekends without smoking then it should hopefully be easier to give up completely

hiddenshadow

Glawster wrote:

I take £10 out on the way into work and buy a packet of cigarettes. That's £5 (smoking 10 a day Monday to Friday - don't smoke at weekends). A Tesco meal deal at lunch time is another £3, plus a bar of chocolate at 60p. A bottle of Coke or water on the way home with the change means that the £10 has gone - every day. That's £50 a week, over £200 a month! This can be cut completely straight away.

Good plan. DH likes to buy potatoes at Tesco and have them for lunch at work - easy to have a potato, a tin of beans, and bring in some grated cheese and you've got a quick/cheap lunch. Even if you make a sandwich at home and get a larger bag of crisps to parcel out over the week you should be able to save a lot.

- Weekend spending. I barely see my kids during the week so like to do stuff at the weekend - this normally ends up at Pizza Express for lunch, the cinema and Nandos, Costa etc. This is easily another £200 per month. There is so much around where I live to do for free that this is crazy. Again this is going to stop, and any budgeted meal out is surely going to be that more special if it is only once every couple of months?

Definitely. Also, look out for vouchers/offers for the things you're doing now if you want them as an occasional treat. We've got about £20 in Tesco Clubcard vouchers that could turn into £80 worth of dining at Pizza Express, there are usually 2-for-1 cinema tickets available, etc. Double-win if you reduce the frequency of treats out as well as their cost.

Also, from observing my little brothers, kids really enjoy cooking, so if that's something you might be interested in that could be a fun (and frugal) way to have a special meal.

- Nights out. I don't go out that much any more but when I do it tends to be excessive and expensive, with no regard to how much money I am spending. No excuses, but that it what happened. £100+ spend without a thought and just a hangover to show. Again this is quick and easy to stop. I have one works drink between now and the end of the year - Christmas lunch which is already paid for - I intend to take £20 and once that is spent then I will go home, or stay and drink water.

Once you get things under control I'd recommend a dedicated budget for this. If you set aside £10/week towards nights out you could go out guilt-free every other month (if you wanted - I don't drink so that I won't have the hangover!).

These are just the main instances of stupid, thoughtless spending that led me to where I am now. There are others.

You'll identify more as you go - the key part is getting yourself on stable ground to begin with, e.g. spending less than you earn. Then you can start chipping away at your debts, and if you're like a lot of MSEers, that will become its own reward and you'll find more things you're willing (possibly even eager) to cut back on in order to make the debt go faster.

Good start! :T

Chrysanthemum5

Didn't want to read and run so wishing you lots of luck. Stick around and keep us all updated. This isn't forever you will do it x

tiger_eyes

Glawster wrote: »

These are just the main instances of stupid, thoughtless spending that led me to where I am now. There are others.

Great job figuring out where the money is going. I can imagine it must be frustrating to realise that so much money has trickled away over the years, but looking at it from another perspective, if your debt was increasing by £10,000 a year, say, you've saved yourself a further £10,000 of debt by having that realisation this year instead of next year. (Actually if my logic is correct you've saved a lot more, since not only will you not be overspending this year, you'll also be paying down debt and reducing the interest burden.) It's kind of like a payday when you think about it. Kerching!