Small Steps Out Of Massive Debt!

GeorgianaCavendish

117pauline wrote: »

It sounds like you are really ready to make some changes.

You mention that you have been putting things on your credit card to keep up with others. Perhaps you could look at it that when you finish paying off your debt, then you will be able to!

I am a firm believer in writing down spends each day. As I have a chronic illness I record a lot of information and suddenly realised I always over spent when I met a particular friend. Also there were certain situations that involved money spent on "nothing at all".

How is your OH dealing with this situation? I hope he is supportive

Good luck for February. Get your budget ready and go for it!

Hi Pauline, thank for your post That is a really good way of looking at it and a good incentive to tackle the debt! I hope that if I get in the habit of not spending so much then once debt is paid off I can transfer that skill to saving money for a house deposit.

I am going to start writing things down, looking through my bank statements has been a series of shocking revelations about how much I actually spend on those "nothing" purchases. I think writing it down and reviewing daily/weekly would lead to a lot of little LBMs and hopefully I could correct things.

OH is very supportive. He also has debts (nowhere near as much as me on credit cards but has 50K in student loans) and has agreed with my budget plans and needing to spend less money. He is much better than I am about not spending money "needlessly" BUT I have to say he is also good at "forgetting" things that need to be bought, e.g. birthday & Christmas presents for family - looking back at my December statements, I did all the shopping for nieces and nephews etc. But he has agreed with my budget plan & the need to budget for presents each month, so we can do this equally going forward.

littleskintdragon

Hi just read your thread and wanted to say good luck there's such good advice on here.

Disco_Dolly

Welcome, I've just read through your diary! Absolutely love your username. Your first post really resonated with me, that was exactly me looking at credit limits and available credit as targets. Everything went on credit cards and I thought so little about spending, I've carried debt for years but always thought I'll deal with it later when I am better paid etc. I felt like I was fighting a losing battle at the start but this forum really is fantastic, I find that I only fall off the debt-busting wagon when I stop posting here, stick with it. I've started using YNAB for budgeting as all the little spends get me and I wanted to be able to see where I go wrong and I find YNAB keeps me from spending as I am sticking to what I have budgeted. I am useless keeping track with pen & paper and also at spreadsheets so having the app on my phone helps me. Not for everyone, but working for me at the moment.

Best of luck with your journey, you sound so positive. Have subscribed

enthusiasticsaver

GeorgianaCavendish wrote: »

GC's Shameful Spending (January)

Net Income £2848.95

Household Expenses (this is my half of shared bills, except groceries which I pay in full & OH pays all car related expenses)
Rent £ 575.00
Council Tax £ 44.50
Electric £ 12.50
Water £ 33.50
Internet £ 13.98
TV Licence £ 6.06
Home Insurance £ 9.27
Groceries £ 140.00 (this is my best guesstimate)

Travel Costs £180.00 (tube & bus fares only)
Mobile Phone £ 47.50 (includes £20 pm for handset, will reduce to £27.50 from April)
Taxis £38.50 (taxi back from friends house)
Coffee/Lunch £ 114.15 (disgusted at this - all the days I was "too busy" to make lunch. plus 2 lunches out with colleagues)

HSBC Loan £370.00
HSBC Card £ 70.00
Barclaycard £270.00
MBNA £250.00
Furniture £86.00
Catalog £40.00

Gym £42.00
Magazine Sub £14.66
Cinema Sub £16.90
Book Club £10.49
Spotify £ 4.99
Audible £ 7.99

Counselling £220 (I know this is a lot of money but I really need this)

One off purchases because I didn't budget for them last year (these all went on credit card)
Travel Insurance - £79 (paid annually 1st Jan 2017 by credit card)
Anti Virus Software - £90 (paid annually 1st Jan 2017 by credit card)
Gifts - £200 (3 x big birthdays in Jan, paid on credit card)

I make that spending for January £2967 so a shortfall of £118 and I think that groceries bill is probably higher than £140 if it is for 2 people unless your partner pays some too.

A few things - with that amount of debt will you be doing holidays and if not why pay £79 travel insurance?

I don't think we have ever paid £90 for anti virus software. You can often get it cheaper in PC world or on amazon then just renewing automatically even if you get cover for more than 1 pc.

£200 for 3 birthday presents also seems like a lot when you have so much debt outstanding. Paying almost £100 a month for subscriptions (£1200 per year) seems like a lot too. Can any of those be ditched? Is the counselling weekly and if so, can it be reduced to fortnightly?

All of your debt is on really high interest rates so if you only pay minimum payments it is really expensive and will take you years if not decades to repay. Can any be moved on to 0%?

As you have discovered in the past debt consolidation does not work. The only way to reduce debt is to spend less than your income. A spending diary is a good idea and thinking about every penny you spend and whether it is really needed. I would recommend you start an emergency fund and cut the credit cards up.

GeorgianaCavendish

littleskintdragon wrote: »

Hi just read your thread and wanted to say good luck there's such good advice on here.

Thank you so much! I'm so grateful for all the advice on this thread, I'm feeling positive about change instead of overwhelmed and trapped.

GeorgianaCavendish

Disco_Dolly wrote: »

Welcome, I've just read through your diary! Absolutely love your username. Your first post really resonated with me, that was exactly me looking at credit limits and available credit as targets. Everything went on credit cards and I thought so little about spending, I've carried debt for years but always thought I'll deal with it later when I am better paid etc. I felt like I was fighting a losing battle at the start but this forum really is fantastic, I find that I only fall off the debt-busting wagon when I stop posting here, stick with it. I've started using YNAB for budgeting as all the little spends get me and I wanted to be able to see where I go wrong and I find YNAB keeps me from spending as I am sticking to what I have budgeted. I am useless keeping track with pen & paper and also at spreadsheets so having the app on my phone helps me. Not for everyone, but working for me at the moment.

Best of luck with your journey, you sound so positive. Have subscribed

Thank you so much! I had a go on YNAB and also tried OnTrees and am leaning towards OnTrees even though the budgeting isn't as good. I'm using Notes on my phone to track spending at the moment but will play around with different budgeting tools over the next week to see what I like best.

I didn't realise I could subscribe to threads (still learning!) so will do that now

GeorgianaCavendish

enthusiasticsaver wrote: »

I make that spending for January £2967 so a shortfall of £118 and I think that groceries bill is probably higher than £140 if it is for 2 people unless your partner pays some too.

A few things - with that amount of debt will you be doing holidays and if not why pay £79 travel insurance?

I don't think we have ever paid £90 for anti virus software. You can often get it cheaper in PC world or on amazon then just renewing automatically even if you get cover for more than 1 pc.

£200 for 3 birthday presents also seems like a lot when you have so much debt outstanding. Paying almost £100 a month for subscriptions (£1200 per year) seems like a lot too. Can any of those be ditched? Is the counselling weekly and if so, can it be reduced to fortnightly?

All of your debt is on really high interest rates so if you only pay minimum payments it is really expensive and will take you years if not decades to repay. Can any be moved on to 0%?

As you have discovered in the past debt consolidation does not work. The only way to reduce debt is to spend less than your income. A spending diary is a good idea and thinking about every penny you spend and whether it is really needed. I would recommend you start an emergency fund and cut the credit cards up.

Thanks so much for your advice, I really appreciate it.

The credit card expenses this month were a prime example of my bad planning and not budgeting. I didn't look around for better deals and got caught with automatic renewals. I will look into whether I can cancel the anti-virus software and find a cheaper alternative (in any case will cancel the auto-renewal). One holiday is already booked and mostly paid for and we have a wedding abroad later this year so I do need the travel insurance.

The gift amounts can definitely be reduced. I am terrible at overspending on buying presents but it is ridiculous to add to my debt for the sake of buying presents. I'm going to put a monetary limit per gift for 2017 and will budget for this even in all months (not wait until the birthday month then panic buy), if the budgeted amount is unaffordable then I will revise this.

Subscriptions can definitely be reduced, I am going to cancel Audible, Spotify and the Book Club. I will see if there is a cheaper way of doing my magazine subscription, or I can ask for a subscription as a birthday gift (although birthday is not until August so that will be a bit of a wait).

Groceries really were £140, but probably cheaper than usual because I did a bulk buy of cleaning products and washing powder at beginning of December when Wilkos had them on offer. I also think that some of the grocery money was covered by the "lunch and coffee" spending, so I'm not counting on getting all that back.

The only expense that I cannot cut back on is counselling. A really horrendous thing happened to me about 18 months ago and I struggled to cope since then (not excusing the spending, but I am definitely an emotional shopper, so this didn't help). I honestly can't imagine cutting back the counselling at this stage, I had 4 weeks of fortnightly sessions in December due to bank holidays, reduced schedules etc, and it was awful. Obviously, I very much hope that I won't be attending counselling for the rest of my life, but at this stage I don't feel that it is an area that I can cut back on. But as suggested up thread, I will find out if my therapist can offer me any reduction in fees.

ada-or-ardor

If you're comparing budgeting apps, I use and recommend GoodBudg3t - it's based on the old envelope system so you can allocate different amounts to each envelope every month, so if you know you have presents to buy or a lot of friends to catch up with, you know you need to rein in spending elsewhere. It's great because you can see your envelopes dwindling through the month so it makes you (well, me!!) More conscious of what I'm spending and forces me to assess those discretionary spends. It's free version gives you up to 10 envelopes (plenty of you group categories should you need too), and it syncs to the desktop version but the app is great too, so I track my spends as soon as they're made - very easy! It doesn't sync with your bank account but I love it, it was exactly what I was looking for. What I'm doing with it at the moment is tagging my transactions with #unexpected if it's something that wasn't in my budget, so that at the end of the month I can see what amount I spend that I hadn't planned, with a view to budgeting for this on a monthly basis going forward!

Well done on cancelling a couple of things - £18 over the year is over £200 so not to be sniffed at!!! :-)

And I so agree on C0sta, and Pr3t personally - why do they burn their coffee!?!? They're meant to be professionals!!! :rotfl:

Ada

ada-or-ardor

Cross-posted - I hope you find peace about your horrendous situation eventually. You sound like a very resilient person to me.

Ada

GeorgianaCavendish

Thank you Ada, I really appreciate it Here's hoping that it is onwards and upwards in 2017!

I will have a look at GoodBudg3t too, the more apps I can play with the more chance I have of finding one that works for me. I do like the idea of just tracking the #unexpected or #whydidibuythatburntcoffee?! purchases for a month to see if I can identify areas to scrap, save, or budget for.