£67,031.92 is a frightening number indeed....

enthusiasticsaver

I would echo the Christmas comments.

Including the Tesco loan in your remortgage is effectively turning unsecured debt into secured which is definitely a no no and I am sure you have read on this forum and know from your own experience that debt consolidation does not work.

Even if reducing the rate makes it more affordable that is only because you are repaying it over a much longer period which makes it more expensive. Also, while you have started to try and control your over spending with the best will in the world you are still struggling to stay in budget so there is no guarantee you will not continue to build up unsecured debt again having been lulled into a false sense of security thinking you have repaid debt when you have not. You will then end up with a larger mortgage just as interest rates may rise and just as much unsecured debt which will compound your debt problems.

I would strongly advise against this.

astrantia59

Long time lurker on the thread. Treading, your thread is understandably focussed on reducing your debt over time which is understandable but it does not exist in isolation. You have made changes since your LBM. Your SOA makes it clear that your unsecured debt together with your mortgage is greater than the value of your home. I know you want to do the best for your family but the reality is you are massively over committed in terms of debt.
If for any reason your OH loses his earning capacity your entire financial situation falls apart.
I'm sorry to sound negative I think you do need to consider this

The_Arrowmaker

Lots of brilliant advice about Christmas which The Arrowmakers will be taking on board. I too find it hard to resist spending too much to make things 'perfect' at Christmas for my children but I do understand my deep-seated reasons for doing this and fortunately now I actually save for the event beforehand. We have also agreed as a family to ban presents for adults which has been a relief all round. Other families I know prefer to do a secret Santa (for a fiver). Perhaps that's something you could suggest as a fun alternative.

A couple of other thoughts, TOPM. First, you are very good at juggling your SOA to make the numbers balance on paper, but the reality is often very different. You've not been able to save enough for Christmas, but I suspect your SOA never actually reflected how much you needed to save in order to have the Christmas you want. The first year of budgeting can be the hardest, but in 2018 you will have a year's worth of figures to work with and you may have to make some difficult decisions about what in your budget is going to have to give.

Which brings me to my second point which are actually the words of Martin Lewis, not me: "Don't plan the perfect Christmas. That's a dangerous mindset. Instead first work out your budget, and let your financial situation rule. Then ask yourself: "What's the best Christmas I can have on the money I've got?" Remember it is just one day. Far better to have a slightly less expensive Christmas than a financially frantic New Year".

I couldn't put it better.

In fact, he applies the same principles for all our spending:

He says that people ask him "How do I get the shiny new car / glamorous holiday / amazing Christmas / designer clothes I want on my paltry salary? It's thinking this way that leads people to constant overspend, because you're totally ignoring the financial reality. Instead the real question's: On my paltry salary, what’s the best lifestyle I can possibly have? You have to start letting your finances rule your lifestyle, not vice-versa."

I'm not actually sure if you want to press the reset button. However, if you do and are simply struggling to do so, you may find inspiration from the Frugalwoods website. This family live a lovely, simple, uncluttered life in an absolutely stunning home, eating good food, doing the things they want to do, but at the same time spending very little (or at least, spending according to very clear priorities, and most importantly, within their means). You may not agree with everything they say (personally I'd draw the line at getting my DH to cut my hair:rotfl::rotfl:). But they show that living frugally doesn't have to mean hair-shirts and tat and you might find it helpful.

Treadingonplaymobil

So many responses! My answer isn't wildly different, but everyone raises interesting points and you've all made a huge effort to post in depth ideas, so i'll deal with them in turn...

Sea_Shell wrote: »

Hi there. I've been reading your diary from the start, and i know that you don't want to admit to family/friends that you have this level of debt, for whatever personal reasons you have.

However, by not letting them in and keeping them in the dark, this seems to be keeping you pinned in a "keeping up appearances" circle.

This appears to be most noticeable with your need/want to buy for so many (adults) at Christmas, as i guess this is what you've always done, regardless of if you can afford it or not.

Personally, i would feel hurt if, say, my sister had this level of debt, and didn't tell me, and was still buying me presents etc. I'd much rather she didn't, and put the money towards the debt.

Could you not all (adults) agree that you'll just be buying for the kids this year....or would that "let your cat out of the bag?"

The reason we buy for so many adults is because they are hugely generous with us and our DC at Christmas and throughout the year. It would be unthinkable to me to not show my gratitude in some way. There is absolutely no pressure on this front and they would happily have nothing, but I feel it's a fair way to express our gratitude to them all for everything they do and give to the DCs.

Cumbria_lass wrote: »

TOPM , I read what you say about Christmas and see myself. Our family have always had new pjs at Xmas eve , we always had a chippy tea as well. My own daughter still has new pjs off me for Christmas Eve ! She does the same for her two. Christmas is my biggest spend now with the 2 DGC . However I have cut down now with friends and believe it or not they were relieved to break the present buying habit. Could you be brave enough to ask the question about maybe only buying for children and not adults ? You may be surprised by the answer .
As you said you have already cut costs for Christmas, so I think you need to put some money away every month and try not to touch it , hard I know . This will be my first Christmas in many years that haven't gone on cc . Good luck with it all.

The aim is definitely to improve on the savings next year - we've got better and better at it this year, but it's too little too late for this Christmas. As I said before, not buying for the adults is more or less unthinkable for me - they are hugely generous (and would be regardless of whether I bought for them) and I want to show my gratitude and appreciation for them.

crunch_time wrote: »

In my extended family we have a 'only but for the kids' rule. It works really well.

Christmas is the only time I really try and stick to a budget as I hate hate hate the pressure of trying to have the 'best' Christmas ever so it's like I deliberately revolt against it.

I totally agreee with you on the 'not buying tat for stockings' rule. I've always ended up with things they haven't ever played with again!! Last year I tried to stick to a 'useful for £1' theme and it seemed to work as they used everything I bought.

Husband and I haven't bought anything for each other for years!! Last year we filled our stockings with secondhand books and underwear!! Ha ha!!

I'm hoping to only spend £200-£250 on Christmas this year including decorations and food!! We are planning frugal but meaningful activities and traditions instead.

I've found changing my focus to this has helped massively!!

Best of luck!
Crunchy xx

I love the idea of 'useful for £1'! I don't think I'd manage it for a whole stocking, but it's a great place to start. Any inspiration here much appreciated.

Treadingonplaymobil

Busy_Mee1 wrote: »

I am sure I don't need to tell you that your lifestyle is completely above and beyond what is the "norm" for most families. It is also completely above and beyond anything that you can afford, which is why you have such high debt.

I think you need to have a good soul search about why you have such high expectations for the lifestyle that you need to provide for your family. Is it appearances, as Sea Shell has suggested or is there something more deep seated ? This spending all seems to be about you, and the very high standards you apply to quality and aesthetics, rather than anything about what your children actually need.

The Christmas stockings are a good example ....children all around the country get tat in their Christmas stocking and love it. This doesn't conform to your standards so you spend £75 each instead - your kids would would just be as happy with £10 worth of well chosen "tat"in their stockings.

I don't mean to be harsh but I think you need to try and understand what is driving your high expectations and spending, to be able to tackle it.

You have made some changes to your lifestyle where you have found it acceptable to your standards - for example home baking and cooking, but you do need to go further to tackle this debt and that means you will have to change your mindset about other things.

This is all meant with good intentions as I worry that your finances are so precarious that it could be disasterous for your family if you don't change.

I honestly don't know (or care) what is the norm for most families, I'm only concerned with my own family and what works for us. If we're going to get into 'needs' then obviously none of us need anything more than a roof over our heads and food, but in terms of priorities beyond that point, I do think there's a huge value in children learning about having good quality items and looking after them, and having a nice quality environment. I'm sure in the short term they would be happy with £10 of tat, but (a) I hate the tears and tantrums when it breaks on day 2, (b) I hate the waste of that - I'd rather spend nothing or just buy one thing if the alternative is a tenners worth of tat and (c) the DC get huge use and enjoyment out of everything in their stockings, and things like, say, crafty stuff save me buying it throughout the year.

I don't personally feel that we have a current need to 'go further' to tackle the debt - it is reducing, and will continue to reduce, and for a first year effort in a situation as precarious as ours, that's ok with me. We could easily choose to default on the debt, pay nothing for a few months and have vastly reduced payments thereafter, but we are choosing a different path as it aligns with our longer term plans. If that stops working for some reason, we still have a perfectly viable DMP option to go for.

Verbatim wrote: »

I was wondering what sort of things go in the dcs stockings?

I have a list (unsurprisingly!). DC1's stocking, for example: 7 books (mixture of fact, fiction and activity books, and an Oxford dictionary), torch for camping, pez sweets, magic expanding flannel thing, board game, lego set, wind up toy, chocolate coins, new underwear, mug, rub off transfer set, maths set. That came to £75 (DC2'2 was £80, DC3's was £55), the biggest expenses were the books (around £35 on books, but they were carefully chosen and are still well used), the board game and the lego set.

Suffolk_lass wrote: »

My Son's advent calendar is (yes, at nearly 26, he still asks for it!) a pennant on a piece of wooden doweling (a thin wooden rod) with a piece of cord as the hanger (with old curtain tie-back tassels on the ends of the rod), and all the pockets are simple patches with a number on them, randomly over the pennant. I put the occasional pound coin, a note saying do a chore (tidy your bedroom is an old favourite), a promise or two (I will take you to the beach, to watch a film etc), future events, bits of sweets and a note to look somewhere for a little thing (pencil, eraser, gel pen etc). I remember putting a Harry Potter phone cover in the dishwasher one year for Christmas Eve and he was so thrilled. He still references it! - worth the effort!

Love this!

Treadingonplaymobil

reality_check wrote: »

Your advert calander sounds lovely, but expensive and time consuming...money and time is what you don't have. Maybe this year you could do a £1 chocolate advent calander and introduce the naughty Elfs? Not sure if your kids have had them previously.

My daughter is studying primary teaching and is on placement right now, she has a gift box for 2 winners each week where she went to the £1 shop and bought presents to put in it, I was so shocked at what she got! Loads of craft things, a foil art set, metalic water colour pencils and also a few things that I personally would describe as tat but I know when they get it they will love it at the time. Trust me I have older children and you can't get away with a frugal Christmas forever, but your kids are young enough you should embrace places like the £1 shop before they give you lists with items starting at £75 each!

Good luck with it all xx

p.s I don't know if you buy a tree but for the last 2 years I have bought the Ikea tree at £25 and you get a £20 voucher to spend in store in January. Much cheaper than the farm I used to go to and spend a fortune!!!

The DCs are already talking about the advent calendar - I couldn't bear not to do it, it's become such a tradition, especially for eldest DC. Our nearest Ikea is over 100 miles away, unfortunately, which would probably negate the benefits! Really good idea about checking the pound shop, will add that to my list for this month.

enthusiasticsaver wrote: »

I would echo the Christmas comments.

Including the Tesco loan in your remortgage is effectively turning unsecured debt into secured which is definitely a no no and I am sure you have read on this forum and know from your own experience that debt consolidation does not work.

Even if reducing the rate makes it more affordable that is only because you are repaying it over a much longer period which makes it more expensive. Also, while you have started to try and control your over spending with the best will in the world you are still struggling to stay in budget so there is no guarantee you will not continue to build up unsecured debt again having been lulled into a false sense of security thinking you have repaid debt when you have not. You will then end up with a larger mortgage just as interest rates may rise and just as much unsecured debt which will compound your debt problems.

I would strongly advise against this.

I get the theory, and if we didn't need the good credit rating I would go for a DMP over the securing of unsecured debt, but the fact is (as everyone points out), our budget has no wiggle room (and indeed, frequently fails to balance in any way), and actually if lowering our payments means we pay more overall over a longer term, that's still the best option for us. I don't think there is even the tiniest danger of building up more debt - never again, it's been horrifically stressful, and the main cause (the double whammy of me not earning and paying for childcare) has been eliminated entirely. I still have the HUGE incentive of the extension - the only reason for doing all this the hard way is to make that manageable, and building up debt again would completely scupper that, and I consider it a huge priority to give the DCs some space from each other as they enter teenage years.

astrantia59 wrote: »

Long time lurker on the thread. Treading, your thread is understandably focussed on reducing your debt over time which is understandable but it does not exist in isolation. You have made changes since your LBM. Your SOA makes it clear that your unsecured debt together with your mortgage is greater than the value of your home. I know you want to do the best for your family but the reality is you are massively over committed in terms of debt.
If for any reason your OH loses his earning capacity your entire financial situation falls apart.
I'm sorry to sound negative I think you do need to consider this

DH and I have discussed this, and frankly the whole situation will fall apart so spectacularly if, eg DH is unable to work or do childcare so I can work in full time employment, that saving the odd extra bit isn't going to make a difference on that front for a long time to come. The 'wrong' attitude with debt repayment, but one we've made our peace with (knowing our tendency to lose the will to repay debt and spend madly when we try to over-restrict).

Hiddenidenity

Thank you for the idea on the advent calender, Going to have to make something this year. I think they'd love one.

We all have different budgets and ways to celebrate Xmas. As long as it's right for you and it makes you all happy then stick with it. Obviously on your new budget not the old one

redofromstart

Hi TOPM, have you ever looked at 'the book people' for books for the stockings? I found it really useful when my boys were smaller.

I was brought up (by a very frugal mother) that books were essential, not optional

For me, you have made your decision of what you want to do and now it is about how you can best buy within that, so keeping an eye on Amazon for the lego sets dropping, etc and I am sure you already do that.

On the family gifts have you looked at oatcakes? My experience of making things was that by the time I had made things pretty it actually cost more than I had expected, cellophane and ribbons and so on but then I found ikea did some really useful stuff very cheaply that I could build on. Good recipe here and you may find other ideas on that site. When I made them I used value oats, and whizzed half in the blender rather than go out and buy more stuff.

Treadingonplaymobil

The_Arrowmaker wrote: »

Lots of brilliant advice about Christmas which The Arrowmakers will be taking on board. I too find it hard to resist spending too much to make things 'perfect' at Christmas for my children but I do understand my deep-seated reasons for doing this and fortunately now I actually save for the event beforehand. We have also agreed as a family to ban presents for adults which has been a relief all round. Other families I know prefer to do a secret Santa (for a fiver). Perhaps that's something you could suggest as a fun alternative.

A couple of other thoughts, TOPM. First, you are very good at juggling your SOA to make the numbers balance on paper, but the reality is often very different. You've not been able to save enough for Christmas, but I suspect your SOA never actually reflected how much you needed to save in order to have the Christmas you want. The first year of budgeting can be the hardest, but in 2018 you will have a year's worth of figures to work with and you may have to make some difficult decisions about what in your budget is going to have to give.

Which brings me to my second point which are actually the words of Martin Lewis, not me: "Don't plan the perfect Christmas. That's a dangerous mindset. Instead first work out your budget, and let your financial situation rule. Then ask yourself: "What's the best Christmas I can have on the money I've got?" Remember it is just one day. Far better to have a slightly less expensive Christmas than a financially frantic New Year".

I couldn't put it better.

In fact, he applies the same principles for all our spending:

He says that people ask him "How do I get the shiny new car / glamorous holiday / amazing Christmas / designer clothes I want on my paltry salary? It's thinking this way that leads people to constant overspend, because you're totally ignoring the financial reality. Instead the real question's: On my paltry salary, what’s the best lifestyle I can possibly have? You have to start letting your finances rule your lifestyle, not vice-versa."

I'm not actually sure if you want to press the reset button. However, if you do and are simply struggling to do so, you may find inspiration from the Frugalwoods website. This family live a lovely, simple, uncluttered life in an absolutely stunning home, eating good food, doing the things they want to do, but at the same time spending very little (or at least, spending according to very clear priorities, and most importantly, within their means). You may not agree with everything they say (personally I'd draw the line at getting my DH to cut my hair:rotfl::rotfl:). But they show that living frugally doesn't have to mean hair-shirts and tat and you might find it helpful.

Having a look at the frugalwoods website, thanks for that suggestion.

I do get it about finances dictating one's situation, although I suspect that precisely no-one on here would agree :cool: . For us it's been about balancing making faster headway towards DFD with having a life that we enjoy, and I'm not actually unhappy with how we're managing that at the moment. If the net repayment for the year is zero, I will obviously reconsider this stance!

Treadingonplaymobil

Hiddenidenity wrote: »

Thank you for the idea on the advent calender, Going to have to make something this year. I think they'd love one.

We all have different budgets and ways to celebrate Xmas. As long as it's right for you and it makes you all happy then stick with it. Obviously on your new budget not the old one

Yeah, I think the days of £2.5k Christmases are behind us for good .

redofromstart wrote: »

Hi TOPM, have you ever looked at 'the book people' for books for the stockings? I found it really useful when my boys were smaller.

I was brought up (by a very frugal mother) that books were essential, not optional

For me, you have made your decision of what you want to do and now it is about how you can best buy within that, so keeping an eye on Amazon for the lego sets dropping, etc and I am sure you already do that.

On the family gifts have you looked at oatcakes? My experience of making things was that by the time I had made things pretty it actually cost more than I had expected, cellophane and ribbons and so on but then I found ikea did some really useful stuff very cheaply that I could build on. Good recipe here and you may find other ideas on that site. When I made them I used value oats, and whizzed half in the blender rather than go out and buy more stuff.

One of the reasons I need to plan advent (and gifts for the DCs) is so that I can keep an eye out for offers etc, so the sooner I do that the better. Great idea on the oatcakes! I think I made them once before (and then probably paired them with horrendously expensive cheese in the gift hamper, thus negating the benefit!). I think my mum has used the book people, will have a look.