Third-Life Crisis

Goingroundincircles

Just read this and it really rang true for me. Going to remember this when I'm struggling with enjoying life vs our massive debt.
http://www.huffingtonpost.com/cassie-jahn/should-you-live-in-the-mo_b_9294418.html

enthusiasticsaver

Interesting blog and yes I can imagine it does resonate with you. I hope you will manage to get the balance right of getting to grips with paying down the debt with still managing to have fun but at that level as TOPM says it is a bit of a trudge and takes a lot of adjusting to. The thing is though unless you have some wonderful inheritance around the corner it is not going to get any easier to deal with if you leave it a few years longer and in fact will make it even harder so dealing with it now is pressing.

Lots of positives in your post and yes £90k to repay (once you include interest) is a shocking figure and one a lot of people would choose to ignore so you are being brave in facing it. The fact you are now setting a budget is good and starting up an emergency savings account a great start. Hopefully over time you will be less inclined to turn to the credit card when you have an unexpected expense and this will help you live within your income.

Focus on paying off highest interest charging debts first and hopefully as the debt reduces you will find it easier to get 0% deals. Well done on the Tesco one. I would focus on the Lloyds CC and the MBNA 2 if you are able to (are you able to allocate to the individual deals as I guess they are all on one card?)

Goingroundincircles

Focus on paying off highest interest charging debts first and hopefully as the debt reduces you will find it easier to get 0% deals. Well done on the Tesco one. I would focus on the Lloyds CC and the MBNA 2 if you are able to (are you able to allocate to the individual deals as I guess they are all on one card?)

They are all separate MBNA cards, but most of our cards have X amount at 0% and X amount on a high interest rate. When I make a payment I'm not sure if which it goes too.


Well this morning I have balanced our August budget. Most of the money we owe my mum is because she kindly lent us my other half's wages in advance for July. He's self employed and we were always relying on people paying invoices super quick so we could use them that month - a recipe for disaster! Now we save all the money earn in July ready for August for example, so we know what we have to budget with in August. It seems to be working really well.

Some other good things:
- We managed not use our credit cards in July :T for the first time in forever. I didn't even use all of my 'spending money' budget so that covered overspending in other areas.
- Have sorted through the cupboards to see what food/toiletries we have so we don't go buying things we don't need.
- Have listed the land rover for sale.
- I've signed up to loads more opinion sites this week and made £20 over the last couple of days.

Things to do:
- List some things on eBay/Facebook from clearing out the spare room.
- Better meal planning so I actually buy enough food for the week and don't have to nip into the shop for anything during the week.
- Open a separate account for the emergency fund, preferably one without really easy access
- Start studying the AAT qualification materials that I bought AGES ago so that I can do bookkeeping in my spare time (ironic I know).

Generally feeling quite positive today after a couple of wobbles this week. Here's to a no credit card August... :beer:

Magpie100

Glad you are feeling positive, but I think you will need to look at your SOA again. Having £0 in for clothes is not realistic in the long-term which is what you are looking at here. I would suggest you allocate some of your huge 'entertainment' budget here.

On which note - I understand what you are saying when you say you can't cut it down completely, but you have a huge amount of debt and a self-employed OH with presumably a variable income. I do feel like you are one unexpected life event away from it all coming crashing down. You need an emergency fund as a priority. I would also not be happy about having outstanding debts to your parents while you are spending so much on 'entertainment'.

I am sure you can do this, but you do need to challenge everything you have thought up to now about spending. It won't be an easy or slow process, but if you don't things will only get worse. Good luck!

enthusiasticsaver

Goingroundincircles wrote: »

They are all separate MBNA cards, but most of our cards have X amount at 0% and X amount on a high interest rate. When I make a payment I'm not sure if which it goes too.


Well this morning I have balanced our August budget. Most of the money we owe my mum is because she kindly lent us my other half's wages in advance for July. He's self employed and we were always relying on people paying invoices super quick so we could use them that month - a recipe for disaster! Now we save all the money earn in July ready for August for example, so we know what we have to budget with in August. It seems to be working really well.

Some other good things:
- We managed not use our credit cards in July :T for the first time in forever. I didn't even use all of my 'spending money' budget so that covered overspending in other areas.
- Have sorted through the cupboards to see what food/toiletries we have so we don't go buying things we don't need.
- Have listed the land rover for sale.
- I've signed up to loads more opinion sites this week and made £20 over the last couple of days.

Things to do:
- List some things on eBay/Facebook from clearing out the spare room.
- Better meal planning so I actually buy enough food for the week and don't have to nip into the shop for anything during the week.
- Open a separate account for the emergency fund, preferably one without really easy access
- Start studying the AAT qualification materials that I bought AGES ago so that I can do bookkeeping in my spare time (ironic I know).

Generally feeling quite positive today after a couple of wobbles this week. Here's to a no credit card August... :beer:

Not using your credit card and not increasing the debt is the first challenge you set yourself when clearing debt so you have passed that challenge with flying colours. I think self employment can be an issue because you are so dependent on other people paying their bills promptly. Good idea to do as you have done and work off previous months money to allow some leeway.

Glad to see you are starting an emergency account. As your OH is self employed a good target to aim for is 3 months outgoing expenses eventually but £1000 initially.

It might be an idea to find out how MBNA allocate payments and if there is any way you can either set the payments against the interest charging part or the bit where the deal expires first.

enthusiasticsaver

Where do you allocate your personal spending money from in that soa? We each have an allowance for clothes/hair/hobbies etc but allocate it in our budget. I cannot see where you have allowed for that in yours except for the small amount for hair. Where is the rest coming from? Entertainment?

Goingroundincircles

I've redone my SOA with all the changes I've made this month, including moving £50 from entertainment to an emergency fund - I now have a £7 surplus. But basically the £400 entertainment is £200 each and must cover everything not budgeted for so holidays, days out, eating out, takeaways, hobbies, shopping etc etc. Hence why I don't think it's that high and if we cut any further at the moment we'll just be setting ourselves up for a fall.

So MBNA allocate payments to the higher interest balance first (if on a 0% offer it's the rate after the promotion has ended). So I'm guessing that's what I want? It looks as though all our cash purchases are at 23.9% and balance transfers will be 25.9% after the promotions have ended.

I'm assuming everyone is having roast for dinner tonight? I forgot parsnips and toilet paper in Aldi yesterday and have been to FIVE tesco express type shops today but all of them were out of parsnips!! I did raid the change pot and took cash out rather than a card so I couldn't be tempted to buy other things and ruin my food budget, but ended up buying strawberries

Goingroundincircles

Good news just in, new 0% card is enough to cover Lloyds and will save us £56 in interest a month :T:T

enthusiasticsaver

I think £200 each per month is a good idea. We do that and I always have money left every month. OH is not so good as he is always buying bits and pieces for his hobby especially now he is retired. I save my extra rather than put it back into household budget and it paid for a Dominican Republic holiday for me and my sister in February of this year.

Great news on the 0% card and yay for saving £56 per month in interest or around £600 - £650 over a year!! How long is the 0% for? I think I would still focus on the ones which are charging the most interest (MBNA?) and just pay minimums on the 0% ones with extra each month if you have it.

Magpie100

Ok, got it re the 'entertainment' budget. But - I am not sure that you just saying £200 each for such varied categories of spends is working for you. In fact, it can't be, because you have a lot of debt. I think if you broke that £200 in to all the categories it needs to cover you would find it isn't very much to go round - which is perhaps why there is so much debt on the cards. I'd suggest a spending diary at this point for a couple of months to help you see exactly where that money is going. You can't see where the problem overspends are with such a broad category, and if you can't see that you can't tackle it.