£45k debt - how?

boxofpaws

There have been some great answers, thank you.

Spends
Frankly I can't face looking through previous statements, I'm just going to have to record spends from now on.

Presents
Will limit to birthdays and Christmas.

Overdrafts
Joint account is now paid off! Hurray! However, I have just found out the husband has a secret one -boo. £600. I have told him to pay it out of the sudden surplus in the joint account and NOT to take another one without me knowing. It was for Christmas apparently. So no more overdraft fees.

Credit cards and loans.
I've got the husband to get his card balances. Shock horror, our 0% deals have ended. But surprisingly, the balances are about £5k lower than I thought, so that's good news. We have £26k credit card debt, with available credit up to £40k. Most of the cards are showing 0% offers but I need to have a think about how to shuffle them. Currently we have 7 cards and I (clearly) find this unmanageable. I'd like to get it down to 5. If I post the details, can you advise what to do please?

boxofpaws

Mortgage
We are 3.5 years into a 5 year fixed deal. I sincerely believe we wouldn't be offered a mortgage if we applied right now because of our ridiculous situation. In fact the prospect of remortgaging next year is what has spurred me to face the issue. We LOVE our house and don't want to lose it.

Lastly, the husband
Fully on board with tackling this. He's offered to sell his motorbike. I don't think we need to, we can just do this by wasting less, not sell our potentially appreciating assets (it's a future classic:cool:). Anyway we have that as a last resort but it's good to know he's down with the plan. Which is to not lose the house.

Boxofpaws

boxofpaws

foxgloves wrote: »

I think you've got into debt for pretty much the same reasonn we did. We were on a good joint income (though not as good as yours) & so we spent what we liked, borrowing when supplies of money ran short & we still wanted to spend. Having lived most of my adult life like that......I didn't get a grip till my early 40s.....I know how much I have come to value being solvent, budgeting & living within my means. I would not go back to the donestic financial chaos you describe.
A food spend of £400 for 2 people is huge. We spend between £200 & £250 a month on groceries, which includes all our food, basic toiletries, cat food & cleaning products. As you say you cook from scratch, you should be able to reduce this by up to half & free up a good wodge of cash for debt repayment.
Clothes is too high. Do you really need £100 of new clothes a month? If you look through your wardrobes, you may well be able to commit to a year of essentials (i.e undies) & thus free up another decent hit of cash for debt clearance.
Presents. You can't afford £100 a month while you have those debts. Giving £1200 a year away isn't viable. You owe a lot, so you are effectively handing out someone else's money. Can you reduce present spending to a sensible agreed budget & stop the cash leaks for stepchildren's crises? Perhaps you can help them in other practical ways. My parents bailed me out financially several times & I was so grateful at the time, but with hindsight, it delayed me taking financial responsibilty for myself. I was working, so I could have saved up a modest emergency fund (say £500) to help with car services/repairs etc. It was easier to accept chunks of money from my parents when I had a tight month.
Those are the areas which jump out at me. If you also like to eat out, visit coffee shops, order in take-aways, then that's another area where you can save significant money. You earn a good income. Plan for a couple of frugal years & chuck every £1 saved at your debts. You will be happier for it. Our own income has now halved due to redundancy (public sector 'austerity' cuts) but we have more 'spare' cash now, simply because after 25 years of silly spending, I finally learned to budget....& I love it!
Good luck!
F

I want that!:)

Lovin_It

boxofpaws wrote: »

Mortgage
We are 3.5 years into a 5 year fixed deal. I sincerely believe we wouldn't be offered a mortgage if we applied right now because of our ridiculous situation. In fact the prospect of remortgaging next year is what has spurred me to face the issue. We LOVE our house and don't want to lose it.

Boxofpaws

From the looks of it you're currently paying 5% - this is higher than the SVR most likely, so I wouldn't be worried about being "offered a mortgage" at the end of the fix. You just stay put if necessary - you've got the mortgage for life, unless you stop paying it.

That said try to remortgage to a lower rate, small differences in interest rates add up to a lot when compounded over 25 years.

Ellieseleven

Hello Boxofpaws,

Just throwing in my two pennyworth;)

Firstly no one will judge you on here, things happen, sometimes intentionally and sometimes not. It's how you tackle your situation and find a way out;)

I find myself after 6 years and 6 months, just seven weeks away from being debtfree. My total debt was just over 46k:eek::eek::eek:

I have learnt to budget for everything and that is the key;) we have a realistic budget in place and we stick to it (I do use YNAB as well as other spreadsheets). We allow ourselves treats from time to time and I set mini milestones (which are easily reachable) along the way to keep myself motivated and on track.

We save for the things we need and we try to build an emergency fund (have had to raid it several times along the way:().

Its not all been plain sailing but if you want something enough, you will strive towards that goal:)

I wish you well with your debt-busting

Ellie xx

boxofpaws

Lovin_It wrote: »

From the looks of it you're currently paying 5% - this is higher than the SVR most likely, so I wouldn't be worried about being "offered a mortgage" at the end of the fix. You just stay put if necessary - you've got the mortgage for life, unless you stop paying it.

That said try to remortgage to a lower rate, small differences in interest rates add up to a lot when compounded over 25 years.

That's reassuring. I feel like I need to get all the debt back in control before I reapply. Maybe it's psychological. Is that madness? Will it show up on my credit score if we apply but because of our debt, there are no better deals?

Luckily our credit score is excellent, I don't want to jeopardise that.

Finally, the mortgage risk is the thing that has got the husband on board. If we got a new mortgage and he felt we were in a more comfortable position, he might lose focus.

boxofpaws

I meant to say, there have been some brilliant pieces of advice, which I will slowly start to introduce but the one thing I will start doing now is something loveyourshoes said, work out when the quarterly and annual bills are coming and budget. Car services always catch us out as do car and home insurance renewals, and vaccination etc at the vet. Last vaccinations cost me £500 because the tiny cat needed her teeth out, which, of course, went on a credit card...

boxofpaws

Jobs done today


1. Cancelled the Halifax credit card so we cant spend any more on it - the balance was huge and we were paying interest
2. Did some credit card shuffling to put everything onto 0% deals.
3. After I had maxed out what deals I had, husband applied for a Tesco card. It has a £12k limit with a 0.65% transfer deal! I wish I had waited and let him put more stuff on that.


Anyway, by the time all the BTs go through (my Lloyds one isn't guaranteed to go through but if it doesn't, we have the new Tesco card to fall back on), we should have all £28k of credit card on 0% deals on just 4 cards (I'll update that figure when it has all gone through).


4 cards! That's so much more manageable - I'm so happy.

boxofpaws

Another job done, almost by accident. I called the supermarket to register my displeasure at being sent food that goes out of date really quickly. They have kindly refunded £12 to my account as a gesture.

It doesn't help with the food freshness, I might just have to think differently about the frequency of deliveries. I'll eat the food they have sent even if it's out of date though and the £12 is useful.

I feel very MSE!

boxofpaws

Happy Sunday afternoon everyone,


I have opened a new bank account this morning, to squirrel away money for the big bills that normally catch us out.


I am feeling really motivated and positive so thanks again to everyone. I am going to start a diary where I can set my goals and log my progress.


I wish I had done this three years ago.


Boxofpaws