My debt is out of control please help

peaceandfreedom

damsidebear wrote: »

I'm frustrated feeling guilty and sad as I've been here before and ended up in trust deed over 3 years and vowed never to put myself in this position again as I had really bad depression due to my money problems but here I am again struggling to manage day by day and scared it effects me mentally again, I'm already sitting some nights crying just thinking about it.

It's my own fault no one elses and I can't believe I've did it again.

As someone who has done similar things, clearing debt then building it up again, I know how you feel. But the thing is, it's done now. It is better to accept reality rather than battle against it. Also, stop beating yourself up about it. I also do a nice line in self-criticism and I can tell you, it doesn't help. Tell yourself you will never do this again and then stop agonising over it all.

You have done the hardest bit and accepted that action needs to be taken. I know that 62 months seems a long stretch but with a concerted effort, you can reduce that time. I think you have decided that life is going to be miserable and hard from now on, but it doesn't need to be that way. Instead you can:

• Feel happy that you are doing something to improve your financial situation.
• Learn to enjoy things that are free/cheap. There are many such things - browse around the boards for ideas.
• Don't try to keep up with others around you (you know, people with their new kitchens and new cars and several holidays a year) - chances are a lot of them can't afford what they're doing either.
• Celebrate your little victories and your new-found frugality.
• Save a few quid in your budget for a treat or two to keep you going.
• Have a discretionary spending budget for you to spend on what you like every month - it'll have to be small but it's nice to have a 'luxury' budget.

In the past few years, I have learned to live completely within my means. I have paid back lots of my debt and also saved a little stash for emergencies. I have done this by a) cutting up all credit cards other than the 0% balance transfer ones b) using spending/budgeting software called You Need a Budget (YNAB) - I highly recommend it c) NEVER spending money that I don't actually already have - this was a major departure for me, I can tell you.

Shortly after embarking on my new approach to finances, I felt completely in control, even though I was earning peanuts and had a lot of debt. It's a good feeling. I became obsessive in my use of YNAB and can still happily spend hours tweaking it.

One way or another, you are going to have to pay off your debts - you might as tell take a positive approach to it and attack it with gusto, determined to enjoy the journey.

EssexHebridean

Brilliant advice - but I have one more bit for you. Think hard about why, above in this thread, you've asked how long it would take after a DMP to rebuild your "Credit rating" - you don't want to be here again, right, so why are you worrying about that?

My suggestion would be to discard the worry about that altogether at the moment - it's just one more thing you don't need to fret about. Set yourself a realistic budget, and work out which ONE debt needs tackling first - usually the one on the highest APR but actually, if you have a couple of tiny ones, psychologically for you it may be better to target those first as then the over all "number of debts" comes down. Then switch to the high APR's. celebrate your small victories, come up with a plan to put something against debt every day in some way - whether that's by listing something on eBay or doing a survey online for money.

Smodlet

Road tax £10 per month? Is that right? TBH, I've only just found out not everyone pays the same road tax (Smodlets and cars? Unmixy things)

Your gas/electricity does not look high to me for five people. £40 for one mobile is way too high, is it for more?

Really just wanted to wish you luck and tell you you are in the best place, damsidebear... also wanted to hang with Sanctioned Parts List again, one cool dude. :cool::cool::cool:

Edited to add: And EH, of course!

Seriously, OP, the very last thing you should be thinking about is your credit rating. You should be thinking about becoming debt-free, especially if it is affecting your mental health, as you seem to indicate. I don't suppose your family would fit into this flat you have so you could save on rent? Nah, thought not... at least you have a flat...

dirtycredit

One way or another, you are going to have to pay off your debts - you might as tell take a positive approach to it and attack it with gusto, determined to enjoy the journey.

Great post Peace & Freedom!

You can't finish if you don't start!

DC x

damsidebear

peaceandfreedom wrote: »

As someone who has done similar things, clearing debt then building it up again, I know how you feel. But the thing is, it's done now. It is better to accept reality rather than battle against it. Also, stop beating yourself up about it. I also do a nice line in self-criticism and I can tell you, it doesn't help. Tell yourself you will never do this again and then stop agonising over it all.

You have done the hardest bit and accepted that action needs to be taken. I know that 62 months seems a long stretch but with a concerted effort, you can reduce that time. I think you have decided that life is going to be miserable and hard from now on, but it doesn't need to be that way. Instead you can:

• Feel happy that you are doing something to improve your financial situation.
• Learn to enjoy things that are free/cheap. There are many such things - browse around the boards for ideas.
• Don't try to keep up with others around you (you know, people with their new kitchens and new cars and several holidays a year) - chances are a lot of them can't afford what they're doing either.
• Celebrate your little victories and your new-found frugality.
• Save a few quid in your budget for a treat or two to keep you going.
• Have a discretionary spending budget for you to spend on what you like every month - it'll have to be small but it's nice to have a 'luxury' budget.

In the past few years, I have learned to live completely within my means. I have paid back lots of my debt and also saved a little stash for emergencies. I have done this by a) cutting up all credit cards other than the 0% balance transfer ones b) using spending/budgeting software called You Need a Budget (YNAB) - I highly recommend it c) NEVER spending money that I don't actually already have - this was a major departure for me, I can tell you.

Shortly after embarking on my new approach to finances, I felt completely in control, even though I was earning peanuts and had a lot of debt. It's a good feeling. I became obsessive in my use of YNAB and can still happily spend hours tweaking it.

One way or another, you are going to have to pay off your debts - you might as tell take a positive approach to it and attack it with gusto, determined to enjoy the journey.

Just reading through your post makes me feel more positive so I thank you for that.

I will take your advice and I'll have a look at YNAB, thank you.

damsidebear

Smodlet wrote: »

Road tax £10 per month? Is that right? TBH, I've only just found out not everyone pays the same road tax (Smodlets and cars? Unmixy things)

Your gas/electricity does not look high to me for five people. £40 for one mobile is way too high, is it for more?

Really just wanted to wish you luck and tell you you are in the best place, damsidebear... also wanted to hang with Sanctioned Parts List again, one cool dude. :cool::cool::cool:

Edited to add: And EH, of course!

Seriously, OP, the very last thing you should be thinking about is your credit rating. You should be thinking about becoming debt-free, especially if it is affecting your mental health, as you seem to indicate. I don't suppose your family would fit into this flat you have so you could save on rent? Nah, thought not... at least you have a flat...

Hi thanks for you kind words, I suppose my worry about my.credit rating was/is a knee jerk reaction and at the moment I have a budget in place and I'll just need to do with it and I appreciate through time the debt.with reduce slowly but surly.

danidav88

Hi

I have been reading through your post and I can identify on so many levels.

In 2013 my husband and I got into a similar situation. We had spent years doing a balancing act and borrowing from peter to pay paul :mad: We realised that we couldn't carry on like that and contacted Payplan.

They were so nice and understanding and didn't seemed shocked when I listed creditor after creditor. We started off with £60,000 approx and now in 2016 we are down to £17,000 approx. I know we pay quite a large chunk to our debts but it's definitely worth it. I don't actually know where we would be without Payplan, probably homeless with nothing. I know it sounds drastic but it could have happened.

I think what I am trying to say is, stay strong, work through it with your wife and you will get there.

We are looking to have everything paid off in Sept 2017 but we are hoping earlier if we get overtime etc. So compared to 2013 we are in such a better place

Keep you chin up
Danidav88

Keedie

Hi Damsidebear,

You are most definitely not alone in your stress about your finances or the fact that you have been repeating previous behaviour patterns :grouphug:. I have been there many times over, and I have accumulated and repaid a total of about £40,000 in debt in the last 10 years:eek::eek:. I clear a chunk, then I rack up more debts. I have effectively spent a house deposit and I have nothing to show for it, just stuff I don't need that is cluttering up my house, or holidays to cheer myself up, that were effectively short lived.:wall:

I too suffer from depression, and this has led to these cycles of overspending then getting anxious and guilty, and becoming so ill that I've been unable to work . Reaching out for help and making changes gives you a sense of power even when the situation feels absolutely dire, and I agree with the advice that you have been given by others. I just have a few things to add:

* Join the Debt Free Wannabe Challenge called Payment a Day (PaD), and I have included the link. This has helped me to transform my mindset and I have made payments almost every day, that I would have wasted on nonsense. https://forums.moneysavingexpert.com/discussion/5475033

* Calculate what 1% of the debt to each creditor is, and colour them in for each 1% that you have repaid. I have created a spreadsheet which shows the amount owed to each creditor, and it calculates the percentage that I have repaid to date, and I colour in the squares. I make little payments as part of the PaD challenge, and this allows me to combine the two bits. My spreadsheet also shows the amount in a percentage that I have repaid overall. This helps me to update my signature daily. I have got into the routine of making a payment, sometimes simply by rounding down my bank account to the nearest £5, and using the £1.89 or £2.96 or whatever, to pay one of my debts. I then update my spreadsheet, and use the new balance and percentage repaid to update my signature. It has improved my confidence no end, and by making a PaD almost everyday I have cleared over £900 of debt in one month.:T:T

* As I am often really struggling emotionally, which affects my ability to do more economical things like cook a meal instead of getting take away, I had to think of which debt triggers the most unease, as this will reduce the depression. I realised that it wasn't the debt with the largest APR, or lots of small ones to reduce the creditors, it was the amount of money that I owed my dad. He is a pensioner and it sickened me that my finances were so bad I had to turn to him for a bailout. What I owe him is the least amount for all my creditors but it is the one that keeps me awake at night. So every time I clear my purse, I put the coins in a tin that needs to opened with a tin opener, and then every few months I open it, bank it and make a payment to reduce what I owe him. And I also have a regular standing order, and this has helped me, I don't feel so ashamed when I see him, and I feel better about myself.:cool:

* Shift the Goalpost. It's not psychologically healthy to think of the amount of debt you have now, and the amount of months or years that you have left to repay it. Yes it is good to have a goal, but don't think of how many years you have left to go, think of how many days/week/months since you faced reality, that you have made smarter decisions and chipped away at your debt. On the 02/07/2017, it will be one year since I joined MSE and started taking my debt seriously. On that date, I will look at how much I have repaid, and update my goal date in my signature. :j I am hoping to get to 25% repaid and down to 4 creditors...

* Enjoy a more frugal but not deprived existence. I have been paying more attention to different ways to stretch the little money that I have, and I have been reading the Sneaky ways to save the pennies thread https://forums.moneysavingexpert.com/discussion/826963 I act as if I have spent my normal way, but use the difference between my old spending habits and my new spending habits and put that difference in my money tin. So for example, if I would normally a 5 pack of Twix in Tescos for say £2, but instead I buy the Lidl own brand equivalent for say £1.09, I will put the 91p in my tin, or as much of it as I can. This way, I am accumulating money instead of frittering it away.

Sorry this is such a long post, but I hope that it helps.

Keedie
xx

Sanctioned_Parts_List

damsidebear wrote: »

So I've done my first 'snowballing' months payment and it's a chore and it's effecting me not just financially but emotionally and mentally, I'm not sure how I'm meant to get through the rest of the month never mind the next 61 months.
If i did try the debt management route which I believe would take me roughly 24 months to clear my debts how long after that would it take to revive my credit rating? I am really at a loss here.

As others have said, since you can meet your contractual minimum payments, the debt management route might not be best for you - although one fee-paying company did try to hard-sell me such a plan when I reached peak-debt and had the temerity to use a "credit-matching" service from a well known credit reference company to try to consolidate into "one affordable monthly payment." (Since learned on here that consolidation is more often than not a Bad Idea.)

But it gets better. The early months are hard. You feel every cutback you make, and see your monthly repayment disappear into this giant void with barely a "splosh" at the bottom! It does gets better, and soon.

It gets better because while the first couple of months are a shock to the system, the third month just isn't. Can't explain - something about human adaptability.

It gets better because after a few months, your credit rating improves and those 0% offers start to become attainable.

It gets better because when you strip a lot of the extraneous "stuff" from life, you suddenly discover you have more time. More time with family and friends, more time outdoors, or more time to find other opportunities. A friend of mine is part way through his debt-free journey (not a member of these boards that I know, but as we all hide behind pseudonyms, ya nary can tell) and spends about 10-15 hours per week on micro-job sites, modifying drawings or doing little bits of programming for anything from £5 to £50 for a couple of hours work. Does that from his sofa while Eastenders is on.

Extra £50/week into the kitty for filling idle time, anyone? (OK £30/week, remember to save for tax)

In the end there's a good chance it'll take less time than the snowball calculator currently predicts, especially as you'll be increasingly able to move debts to 0%. And especially if you can bring your wife on board. Being able to work together and support each other is many times more effective than doing it alone.

It occurred to me that my post reads like a late '90s pop song, but I don't want to mention it, because it gives me bad d:reams

Also @Smodlet... only when the air conditioning's working ^v^

EssexHebridean

^^^^^

BRILLIANT post Sanctioned Parts List! :T:T:T:money: