Ok - let's do it!

Forward_thinking

Hi there,

We are in a mess financially. We owe 40k and our spending seems to be coming out short of £1k each month. My partner is convinced that I shouldn't be spending any time on here trying to save a few pounds here and there. He claims it is simply tidying up in the teaspoon drawer!! He claims we simply need to make more money. He earns 110K on a good year and brings in about 7.5K a month net. But our outgoings are so high. I am also about to go back to work and am hoping to earn about 30K this year - but only time will tell.

Is it worth saving up the pennies when we are so much in debt? Or should I just get working all the hours I can?

I really want to do the most we possibly can to get back on track. I know we need to set a budget and have a good look at the overall picture. Would anyone be happy to give an objective view of where we are going wrong?

One of our main problems is that we are renting a house that is too expensive but can't leave as no-one will give us an alternative rental because we would fail the credit checks. It just seems a huge mess : (((

Tjh1412

If you post an SOA (I'm sure someone will post a link soon, I cant as on phone) then may be able to make suggestions on expenses etc

Forward_thinking

Thank you!!

sourcrates

Hi,

Wow £140,000 income between you, and 40k of debt, there should be no problems you shifting that on such a massive salary.

Could be, as you say, you may just need to stop overspending, if it's at all possible, and throw everything you can at the debts.

SOA calculator is here :

http://www.stoozing.com/calculator/soa.php

Just one point, you are normally only credit checked on public information, not your financial information, so renting should not present you any problems with a bad credit history, unless you have CCJ's or are bankrupt, or are otherwise insolvent, which you don't appear to be.

lynnejk

I personally think it's time you rattled the whole cutlery drawer

Forward_thinking

Thank you for your positive posts - a huge contrast to another forum I sometimes use!!! Sourcrates - I didn't mean credit history - I meant references. To get a tenancy they look at your finances and ability to pay which we would fail at the moment.

Really appreciate your responses. Somehow I feel more positive already just knowing that I'm not crazy thinking that not only do we need to earn more money but look at our spending.

Sanctioned_Parts_List

Forward_thinking wrote: »

To get a tenancy they look at your finances and ability to pay which we would fail at the moment.

It's been a while since I rented, but I don't recall any affordability checks, just a search against credit record. I know mortgage lending changed to require you to have squeaky-clean finances, but didn't think that had spread to tenancy yet :-/

Perhaps you need to find a more accommodating estate agent...

I think doing the SOA will be enlightening. Like others here, my first SOA (never published ) highlighted huge amounts of money that was simply being wasted with nothing to show for it.

Somehow I feel more positive already just knowing that I'm not crazy thinking that not only do we need to earn more money but look at our spending.

If anything, getting control of the outgoings is the more important of the two, because it's the only thing you truly control.

Pixie5740

Renting affordability checks are nowhere as onerous as mortgage affordability checks. When renting it's mostly just income and the public credit record that are checked plus references from previous landlords.

Its easy when you earn a lot to think that you don't really need to worry about what you're spending but that old saying, "if you take care of the pennies the pounds will take care of themselves," is really true.

Earning more is certainly one way to tackle debt but if you continue to haemorrhage money it won't really solve the problem.

Perhaps once your sees it all in black and white that might help him see the extent of the problem.

crazy_cat_lady

Thing is, I found that it didn't matter how much I earned. If I earned more then I just spent more. The only way to deal with debt is to spend less, earn more or both. I think the temptation to spend more if you have more coming in is a serious one. So I think you're right - you need to be looking at ways of making savings. Good luck with it all - the people on here will give plenty of honest advice - and good luck with getting your partner on board.

bugslet

I would seriously look at moving - it 's probably not as difficult as you think to do so. people on IVAs and DMPs manage to get tenancys, so it's worth trying.

LittleDutchgirl

Hi there
Can I echo what the others have said about working out where the money is going. If you don't get a grip on where the money is going then it is going to be really tough to clear £40K. Once you know where you are you can prioritise what you want to do to clear the debt. One of the things that I found the most shocking was how much I was paying in interest. Luckily my credit rating was OK so I bounced most of my debt onto 0% cards and made a plan to pay it off. I still had a generous budget for groceries, entertainment and gifts but that was my choice (even if it would have shocked many people on here). Lots of people love YNAB. I just became the spreadsheet queen with spreadsheets for pretty much everything.
Good luck
LDg