21 and in debt

Sheffieldtom

Hi, I'm new to this

Over the past few years and being very social, I have spent quite a bit on holidays and generally going outwith my friends and girlfriend. Last year to pay for a last minute holiday I took out a payday loan, only about £100. Soon this built up, I was paying back more and borrowing more, etc etc. I took out a loan to pay these off, but because my wages went on paying back the payday loan I used the bank loan to live off and spent that. Then took out two credit cards to pay the other loans off and lived well beyond my means with those. I recently entered a DMP and the amount is around £2400. Plus the two credit cards adding up to £3500. Taking the total to around 6k. I am only 21 and am feeling really low, all my friends and peers are enjoying life to the full and I can't see this getting better. I can't borrow anymore thankfully due to the DMP giving me such a bad credit score. I feel like approaching my grandparents and parents to help me pay it off, and help me start a fresh, but I'm ashamed and embarrassed, no one knows about any of this. I recently told my girlfriend which I feel is a good step but the hardest part is telling my family. What would be the best way to do this and does anybody have any advice for me?

Thanks
Tom

MrsTinks

Post up your SOA - there is a sticky at the top of the page.

My best piece of advice?

Don't ask your family to fix your mistake - own it and learn from it. You NEED to feel the pain or you won't learn anything. This will teach you to budget and it's a lesson you can take with you for the rest of your life - a lesson it sounds like your friends might not learn for a long time yet and their lesson might be MUCH bigger because they dug their holes so much deeper. If this hurts now for a few years but stops you ending up where many of us are or were then consider yourself lucky. Many of us wish we had learnt at 21 what we know now

Sheffieldtom

I'm not sure what an SOA is.

I am paying it back myself but I'm starting to now find it difficult. It's affecting my health, my relationships with my friends and girlfriend. I just want to own up to my mistakes, get some help and start a fresh.

SpekySquarehead

Tom, a few things.

Firstly, you've done something which a lot of people don't do - get help. The fact you're here and asking the right questions is a good sign. There are many people who would bury their head in the sand for years and it would get worse and worse.

Secondly, although you're only 21, again given the above point I make, try and take it as a positive you're not 40 and wishing you'd done it sooner.

I'm 27 and I managed to clear my debt whilst still living a social life and going the occasional holiday. Without doubt I put my success in becoming debt free (and having £1k of savings in the space of 12 months) down to using a website called YNAB. You get a free 32 day trial and there after it's £4 a month - pennies in the grand scheme of things. Google it and try it.

Lastly, you've came to the right place. A lot of like minded people who have been in a similair situatiuon and came out the other side. An SOA is a Statement of Affairs. It's lets you see where you spend most and what can be cut back. Here's a link to one; http://www.stoozing.com/calculator/soa.php

Good luck and you can do this.

phoenixx

Sheffieldtom wrote: »

Hi, I'm new to this

Over the past few years and being very social, I have spent quite a bit on holidays and generally going outwith my friends and girlfriend. Last year to pay for a last minute holiday I took out a payday loan, only about £100. Soon this built up, I was paying back more and borrowing more, etc etc. I took out a loan to pay these off, but because my wages went on paying back the payday loan I used the bank loan to live off and spent that. Then took out two credit cards to pay the other loans off and lived well beyond my means with those. I recently entered a DMP and the amount is around £2400. Plus the two credit cards adding up to £3500. Taking the total to around 6k. I am only 21 and am feeling really low, all my friends and peers are enjoying life to the full and I can't see this getting better. I can't borrow anymore thankfully due to the DMP giving me such a bad credit score. I feel like approaching my grandparents and parents to help me pay it off, and help me start a fresh, but I'm ashamed and embarrassed, no one knows about any of this. I recently told my girlfriend which I feel is a good step but the hardest part is telling my family. What would be the best way to do this and does anybody have any advice for me?

Thanks
Tom

Hi Tom and welcome. You should be proud of yourself for facing up to your difficulties and doing something sbout them. I wish I had had my head screwed on at 21 to do something about my debts. As it was, mine were over 95k before I took proper action.Debt is a major problem for many people and I bet not all your friends and peers are quite as financially carefree as they may first appear. Head on over to the DMP Mutual Support thread for loads of support and good advice. Since finding it I have never felt alone with my debt.
In terms of telling your family - great step to confide in your girlfriend. If/when you tell your family depends on your relationship with them. They may well help you to pay it off but then you will miss the incredibly important learning curve offered by dealing with your DMP yourself. It is very empowering to face it yourself and you will learn strategies for life. If you tell your parents, I recommend a matter of fact approach. Explain that you made some poor financial decisions in the past but you are now dealing with them. If my daughters came to me and said this I would be very keen to support them (not financial obviously as in a DMP myself) and impressed by their maturity and honesty.

Warmest wishes for the future - you have nothing to be ashamed or embarrassed about.

Phoenixx x

sourcrates

Hi Tom,

I think you'll find that's how debt problems started for most of us, when I was your age banks were chucking money at me, and I was taking it, without a thought about how I'd pay it all back.

20 odd years later I had debts of almost £200.000 (inc mortgage) after consolidating time after time, you don't want to be like me Tom, trust me.

Follow the Satement of affairs link in post 4, and we'll have a look see shall we !!

Karonher

It's good that you are taking responsibility and I agree about not getting parents or grandparents to pay it off but would your girlfriend pay any of it with you?

You mention going out a lot with her but did she pay her way or have you paid for everything? She may not want to take on a lot but could chip in some.

foxgloves

Hi Tom,
New Year coming up, so a brilliant time for a new start with your approach to money. I first got into debt as a student. I moved from a small rural town to a big vibrant city & after just 2 terms solvent, the debts began to mount up. I was 19. Now here's the thing. You are asking for help at age 21. I carried on living beyond my means & failing to budget until my 40s, when we finally got a grip & started paying down our 30K of debts. We live in a greedy capitalist society where financial companies are queuing up to lend us money to live the kind of lifestyles we want & this has resulted in many of us losing all sense of the difference between a 'want' & a 'need'. Over Christmas, I expect thrre are peopke who sadly have had to take out a small payday loan to put food on the table. That's a need. A payday loan for a holiday is not. The most important thing for me was finally realising that the money I earned each month was my money. There wasn't any more. If I needed to put a purchase on a credit card, loan or overdraft, that's someone else's money, not mine. I say this not in judgement as I have been in a similar position as you, as a perpetual overspender. I think you should confide in your girlfriend as there may be some support there such as thinking of stuff you can do which is low spend or no spend. I don't think you should ask your parents or grandparents for a loan. Why should they pick up the tab for your lack of financial control? This is not an enormous level of debt. Maybe you could post up an SOA & some of the debt-slaying boffins on here might be able to see some areas for cut backs. I'm sure a year of concentrating on purchasing pretty much only essentials will make a good start on knocking this behaviour on the head while you are young. Wish I'd done that as was 46 when our debts had finally gone. Make 2017 your year for developing a sensible adult relationship with money.
Best of luck!

enthusiasticsaver

A DMP seems a bit drastic for a relatively low amount of debt. £6k is not huge. Are you on a very low income and unable to meet minimum payments? Budgeting is the key to staying out of debt once repaid. Stop using credit cards and withdraw a weekly amount of cash for food, entertainment. Also cut outgoings to the bone.

I don't think you should ask your parents or grandparents for financial help. This will be tough but you spent the money and if it is too easy to sort out i.e. Via money from family you will get into debt again in the futuure. No magic pill sadly. Only way to stay out of debt is to either increase income or cut outgoings. Is a second job an option?

Sam29

Dont be so hard on yourself. It could be a lot worse. 6k is not a huge amount and you are still young so can easily get your credit rating back to a good level (assuming you want more debt in future). Its a very tricky balance to use credit wisely without it turning into a problem.

If i was you i would focus on those debts which charge the highest interest rates and focus on paying these back. Credit companies need you to stay on their books so dont make it easy to pay back. If you can switch to zero percent thats great but if not just chuck ever spare quid at your debt and you will be amazed how much you waste day to day and how much you can reduce your debts. The interest rate is the key not the final total.

By the way debt is a massive HIDDEN problem in society so when you say your friends and peers are all living life to the full you wont ever know if they can actually afford it. You are doing the right thing facing up to a problem at an early age. There are no quick fixes but just pay a bit more each month. Work overtime. Work 2 jobs whatever it takes to get back on track. Good luck

sickasachip13

Hey,
Well done you for grappling with this. Like the others, I'd agree that I wish I'd bloody learned about debt a lot younger than I did. I went from debt at 19, paying shedloads of interest and accumulating more, got to 40 owing £40k plus student loans, made redundant and everything went bellyup quite quickly. I've now paid most of this off but I regret all the money I paid the banks for all those years - it would have mounted up to probably hundreds of thousands of pounds.
I can see how it would be a real downer having to grapple with it too. I tend to disagree a little with the other posters - you're feeling the pain and you've been trying to sort it out - I have a son your age and I would want him to tell me if he was in debt. Then it would be my decision as to whether to help him out. TBH, if I had the money, I'd probably be inclined to pay some of it off for him and let him owe me the money instead. I'd let him pay some of it off himself. If you tell your parents then it's their decision whether they would want to help. Also, even if they don't choose to help financially, they can give you moral support and encouragement - or get your groceries in every now and then to soften the burden.
If you were my son, I'd be proud of you facing the challenge and taking it on.
Well done,
SAAC13 x