I feel like I've ruined my life!!

R89

Hi,

I've been a lurker on these forums for quite a few years on and off but I've still got myself in to an awful situation and don't know how to fix things.

I'm 26 & Married with 2 kids and I've got debts totaling £28,772.80 spread over 4 credit cards., luckily £25k is on 0% but only for another 6 months. When the 0% period ends I really don't know what I will do because my payments will go through the roof.

The worst part about my debt is that I have nothing to show for it, it has accumulated from overspending each week for the last 5 years or so and I'm so embarrassed and ashamed by it.

I'm hoping by writing this post it will release some of the worries and stress that has built up and I'm also hoping to start a blog in the diaries section .

Hopefully all the brilliant threads and advice on this forum will allow me to turn my life around and pull me out of this huge hole I have dug. I have started using YNAB and also done a detailed spreadsheet of my ins & outs so I know where I can cut back etc.

Thanks

HappyMJ

You've got 2 kids to show for it. Unfortunately kids cost money and we want to give them everything they want...rather than just what they need. This of course costs money. Maybe once your kids get older and want less then you can get back on top of the debt and start paying it off quicker.

To get 0% rates you must have good credit so keep paying the minimum's and try and make as many overpayments you can and in six months time you should be able to get another 0% credit card and close the one about to charge interest down.

Lemonsqueezer78

Personally I would not suggest waiting till the kids are older to try and get this under control, nor would I just make some overpayments and just hope for the best, in terms of getting some other 0% offers.

Both of those would seem to me to be quite risky strategies (sorry MJ) and far from guaranteed in terms of future offers. Getting someone to give the OP enough credit to move a large enough chunk of that over to a new 0% deal seems unlikely in my view - and even if a new deals were to come up, moving that amount around is likely to incur pretty hefty BT fees.

OP, as you have taken a step here I would start by posting up a statement of affairs, which you can do here: http://www.stoozing.com/calculator/soa.php

The first thing you need to do is start to get control of your finances, understand what you currently spend per month and why you are overspending regularly and try to get this under control AND build up as much of a financial buffer as you can.

It may be worth creating a version of your SOA with current debts at the current APRs, and then a new version with your debts at the interest rates they will be when your 0% runs out, just to see what position that is really going to leave you in.

People on here can comment on and make suggestions about how you can improve your monthly expenditure which may prepare you better for when your current offer expires.

If other 0% offers do come up that you can use, then great - however, in the meantime you could contact an organisation like stepchange for some advice about your options. In terms of contacting creditors and/or re-structuring your debts I think it will depend on what your current SOA looks like and how that reads.

enthusiasticsaver

You are certainly not alone, on this forum alone there are people with your level of debt and at 26 it is a little premature to say you have ruined your life. Good idea to start looking for cutbacks. Does your husband/wife know the level of debt you have? Depending on the interest rate on your card you will be saving a few thousand by £25k being on 0%. Make a concentrated effort for the next 6 months to really make a dent in that £28k debt and hopefully another 0% deal will come along. Budget and look at where every penny goes. This can be turned around.

Lemonsqueezer78

Yep - just to second enthusiaticsaver - you definitely have NOT ruined your life.

You've made a mistake... the same mistake a lot of people do. And those people, when they realise there is a problem and seek help as you have and make the necessary changes (as you will) recover from this, get sorted and move forward with their lives, as better and more savvy people.

There is ALWAYS a solution. It may not be an overnight magic-wand-waving solution... but there is always solution.

foxgloves

Hello,
You haven't ruined your life. You're only 26, & you have realised that you are on a path to nowhere if you continue spending money you don't have. That means you can now start to turn things around. it won't be quick. It won't be easy, but it will mean you will be moving in the right direction instead of deeper into the financial poo. I first got into debt aged 19. I didn't make any serious attempt to take control of my money until I was in my 40s. You too could be like me, but the difference is that you have realised much earlier that you are headed for disaster so can call a halt to your irresponsible, risky behaviour right now!
The only real winners with credit cards are the banks. Consumer credit started because once big companies had sold their stuff to everyone who could afford to buy it, they knew their profits would slow down so consumer credit was born! A way of selling stuff to people who can't afford to buy it. You can see my mantra for debt-busting in my signature....basically if it has to go on a credit card, loan, overdraft, etc, then I obviously can't afford it because that's me using someone else's money, not my own. A big thing for me to learn was that the money coming into my bank account each month is my money. There isn't any more. My life therefore has to be organised so that it costs LESS than the amount I've got coming in. That allows for putting a bit away into an emergency fund each month so that I can deal with disasters without borrowing money. That's what budgeting is. I always spent more than I earned & never budgeted. I now LOVE doing a monthly budget because it makes me feel in control & I no longer get those horrible panicky moments where I think my cards will be refused in the supermarket or at the cashpoint.
So, as has already been suggested, sit down & do a SOA. Get it posted on here, & there may well be some quick-wins for cutbacks.
The best thing is that you have realised how badly you need to change your money habits because nobody can do that bit for you.
Good luck,
f x

chester81

Well done for taking the first steps. I know how hard it is. I had my LBM last autumn. I am 9 years older than you and was 40K in debt.

Can you give us some info regarding your income etc as this makes it easier to offer suggestions.

You really haven't ruined your life but I know that it probably feels that way at the moment. With the help and support of this site you will soon start to feel more positive.

sourcrates

Hi,

You have two choices for tackling this.

(1) You stop overspending, cut up the cards, throw everything you have at the debts.

If that's not enough to solve the problem, then :

(2) There are 4 debt solutions laid down in statute by parliament.
In order of severity, they are :

Bankrupcy
Individual voluntery arrangement
Debt relief order
Debt management plan

Go to National Debtlines website, check out each option, and see which, if any, suits your situation.

12_month_challenge

Hi

You are certainly not alone, check out my signature there's proof right there

Please don't think you have ruined your life. Its a small hiccup and you CAN put it right.

Have you looked at the snowball calculator ? You put your CC totals etc in and it will calculate the best way to pay them and how long it will take
http://www.whatsthecost.com/snowball.aspx

I have been using it and its been a Godsend for me
Just by not using CCs any more and budgeting you can get yourself free again

christaitfife

Absolute nonsense - you have in no way ruined your life. You have been silly with money, but money is just money... you can and will fix it.

I recommend you contact a debt charity sooner rather than later and get a plan together on how you are going to fix it. Just face up to the challenge and get on with it... you can do it!

Maximum_Saving

I think that you have stopped over spending and are carefully managing with a new budget. You now have the challenge of paying back the debts on the credit cards. It is excellent that you have one zero percent interest credit card however this deal is ending in 6 months. Try very hard before it ends to get another similar deal.

Have a look at Dave Ramsey on You Tube. He suggests a wonderful way to snowball debts. List your credit card debts from smallest balance to the largest balance. Pay the minimum payment on each credit card debt then pay off the smallest debt as quickly as you can. When paid off the lowest balance of debt you can try to pay off the next biggest balance.

Dave Ramsey says that will pay off debt. Good luck.