My life in debt

deux_x_mdeux_x_m Forumite
37 Posts
Third Anniversary 10 Posts
Here’s the thing – I’m 44 and I’ve been in debt my whole adult life.
After my parents split up when I was 10 my mum had very little money. To this day I still hate tinned meatballs and cheap sausages. Anyway I went to uni and suddenly had financial independence, well a student loan and overdraft but it was money available to me which I had never had before, and I swapped food for beer and having a good time.
That was it. I left with a huge overdraft and a large debt to the Student Loans Company. In my first job I paid off the loan but the overdraft stayed. A loan paid that off but it was soon spent again and so it started. That was 23 years ago.
The stupid thing is, it never really mattered. I always was able to get money and the debts were always serviceable. They just got bigger and bigger. Holidays, a wedding, cars, kids, a mortgage – all were weren’t a problem. Then a couple of years ago it semi-dawned on me that I actually owed other people this money and that it was real. At some point I had to pay it back.
My wife also had some credit card debts and the joint account was nearly £4000 overdrawn. I read the posts on this website and with YNAB and with getting cheaper deals on the mortgage and utilities, and cutting back on pretty much everything the joint account is gradually sorting itself out, as are her debts, but really we’ve only been playing at it and my own debt levels have barely changed. This will change and we are both committed to sorting it out.
What really brought things into stark reality was that two of my credit cards finished their 0% deals. Suddenly my monthly payments have massively increased. I rang MBNA to see if they could help with the interest rates but they said they couldn’t, suggesting that I contact Step Change and go on a DMP.
I created a spreadsheet with everything on it and currently I am paying out £93 a month more than I have available. I also went on the Step Change website. They too suggested that a DMP may be the best way forward. However this is something that could impact on my job, at the minimum I would have to declare it, which I’m not keen on doing.
It’s so frustrating. Due to sticking my head in the sand for so long I am in this ridiculous position. I have a decent job, a nice house and great family life. What I don’t have is any money!
My total debt is just over £49000 – terrifying. I’ll break it down once I’ve checked my spreadsheet/statements – but I do have a plan.
Sorry for rambling on, but I thought writing this down would help me by seeing my situation and thoughts in black and white. It is a strangely cathartic experience.


  • deux_x_mdeux_x_m Forumite
    37 Posts
    Third Anniversary 10 Posts
    Here it is !!!8211; as of today I am in debt to the tune of £49311.52
    Natwest loan - £4959.17 £401.76 per month !!!8211; ends Feb 2019
    Barclaycard c/c - £4942.72 £106.71 min pymt last statement
    Barclaycard c/c - £10619.94 £240.20 min pymt last statement
    MBNA c/c - £17026.46 £291.20 min pymt last statement
    Fluid c/c - £7514.10 £212.07 min pymt last statement
    Natwest o/d - £4249.13 £67.25 interest last month

    Not great. The interest rates vary and I!!!8217;ll set that down another time as some of the cards have different amounts at different rates. There has been no spending on any of the credit cards since before Christmas.

    The options I have considered and discarded so far:
    Remortgage and consolidate. I don!!!8217;t really want to do this unless I have to. My mortgage is on a 1.19% fixed rate and has 18 years to run. It is less than half the value of the house but were I to borrow more money this would last the length of the mortgage and I want it gone way before that if possible. It would also impact on my wife !!!8211; this is my fault and I will sort it out.
    IVA. Again this would likely involve the mortgage issues above.
    DMP. This is appealing, but I would at least have to declare it at work and it could possibly have more severe consequences. If I don!!!8217;t have a job then I am in a worse position.
    Borrow money from relatives. Not going to happen. While it may be possible and would probably be interest free, again this is my problem and I don!!!8217;t want to put them in that position.

    My plan. Today I sold my motorbike. I love that bike. I should be getting £4000 in cash at the weekend. Of this I am going to use £1000 to buy a cheaper 125cc bike. The motorbike is my only form of transport and I need it to get to and from the train station etc. A smaller bike is more economical to run and service. Its not what I want, but getting what I want is why I am in this position.
    The £3000 will go straight into my current account and reduce the interest. There is an almost total ban on overtime at work, but I should still be able to do 5-10 hours a month. This and the reduced interest should mean that my monthly payments don!!!8217;t exceed the money I have to service them.
    After the June payment to my loan the balance will be £3095. I!!!8217;m going to pay this off. I appreciate that I would in effect be swapping a loan debt for an overdraft one, and that the interest rate would be worse, but in my head the loan has been a millstone for 5 years. I think that paying even one debt off in full will give me a mental boost. It would also free up £401 a month.
    The £401 no longer used for the loan would then all go towards the highest rate credit card !!!8211; Fluid at 25.9%. From there it will be snowballing each debt based on the highest interest rates.
    Its not the most complicate plan but it seems a huge task at the moment. I!!!8217;m going to take one step at a time and keep at it. If I don!!!8217;t do it now it will never end and I won!!!8217;t be able to live the life I want and the life I want to give my kids.
  • fatrabfatrab Forumite
    1.2K Posts
    Hi and welcome to the forum. You are in the right place for good advice.

    Start by completing an SOA, it'll give you and us a very clear picture of where you stand and more importantly where you might be able to make significant improvements.

    Format it for MSE and then copy & paste it here. Be as brutally honest as possible.

    £49000 isn't anywhere near the highest figures I've seen on here and my own debts were higher than that a few years ago so be reassured it can be done.

    Whichever path becomes the right one for you to take I wish you the very best.
    You can have results or excuses, but not both.
    Challenge - be 14 Stone BY XMAS!

  • edited 8 February 2018 at 8:48AM
    fatrabfatrab Forumite
    1.2K Posts
    edited 8 February 2018 at 8:48AM
    Also, I can absolutely relate to you're feelings towards debt. I'm 43 and been in debt since I was 18. I was Mr Splash-cash when I was younger and I'm paying for it now. Cars, nights out and holidays were my downfall.

    My wife and I just had a baby and I don't want him growing up surrounded by debts and the stress it causes, my goal is to be debt free by the time he goes to school.
    You can have results or excuses, but not both.
    Challenge - be 14 Stone BY XMAS!

  • Morning deux x welcome to the boards and good luck on your debt free journey.
    My first port of call would be telephone all credit cards explain your struggling to make the payments and see if they can suspend/ put account on hold for 3 months. They might try to help so worth making the call and if they did divert all funds into loan I'd make that number 1 priority to pay off.
  • enjoyyourshoesenjoyyourshoes Forumite
    1.1K Posts
    Seventh Anniversary 1,000 Posts Combo Breaker
    Review all of your costs (both of you) and agree:-

    Only spend on NEEDS not WANTS
    Reduce all 'service/utility' cost
    start cooking from scratch
    cancel any subscription tv, phones, extended warranties etc

    start selling stuff yo have accumulated
    Prioritise your debt repayments by APR

    Throw as much against the debts as you humanly can

    can you get another job on top of the existing one?

    good luck
    Debt is a symptom, solve the problem.
  • beanieloubeanielou Forumite
    83.6K Posts
    Part of the Furniture 10,000 Posts Mortgage-free Glee! Name Dropper
    Happy shiny new diary :)
    Wishing you well on your journey.
    Lou~ Debt free Wanabe No 55 DF 03/03/14.
    **Credit card debt free 30/06/10~**
    MFW. Finally mortgage free February 2021****
    "A large income is the best recipe for happiness I ever heard of" Jane Austen in Mansfield Park.
    ***Fall down seven times,stand up eight*** ~~Japanese proverb.
    It starts with you, it starts from now. *** It is ok to be me.***
    ***Keep plodding***
    Out of debt, out of danger. ***Be the difference.***
  • redofromstartredofromstart Forumite
    3.4K Posts
    Fifth Anniversary 1,000 Posts Photogenic Name Dropper
    Happy new diary, and good luck with your journey.
  • deux_x_mdeux_x_m Forumite
    37 Posts
    Third Anniversary 10 Posts
    Thanks all. The comments are really appreciated. I didn't realise I had written quite so much last night! Reading back tonight really helped me get my thoughts straight, instead of a constant churn of emotions and what ifs.

    I did sit down and do a SOA with my wife at the weekend. Pretty much everything is as cheap as we can get it, but there is quite a lot of room for improvement in the food budget. I'm not going to post it here as that is for us - this diary is for me and my personal debts. I hope that makes sense.
    I have read so many SOAs on here and the advice is brilliant (and copied to ours). I know people can give advice on our circumstances but at this stage this is how I want it.

    I've updated my spreadtsheet and am becoming a bit obsessed with it. If all goes to plan and I appreciate that is a big if, but I am determined, I should be free in April 2022.
  • deux_x_mdeux_x_m Forumite
    37 Posts
    Third Anniversary 10 Posts
    beloved motorbike is now someone else's. On the plus side I've paid £3000 into my bank account. I've been looking at different ways to use it.

    My options:
    - Pay off £3000 of my Fluid c/c. This is the highest interest rate (25.9%)
    - Leave it where it is, reducing my overdraft (19.9%)
    - Pay a lump sum against my loan (9.9%). This would either reduce the payment to £163.27 per month or keep the payment the same but bring the end date to July
    - Stick to my original plan, leave it where it is until July when I'll use it to pay off the balance of my loan

    I think I'm going to stick with my plan. I know that from an overall view point I should hit the highest interest first, but I want to rid myself of one debt. The loan is one of the lowest amounts and the one I pay the most to each month.

    As a bonus I got one of the interest rates wrong on my spreadsheet and paid £98 off against my MBNA card as opposed to interest!
  • NeverendingDMPNeverendingDMP Forumite
    1.3K Posts
    Fifth Anniversary 1,000 Posts Name Dropper
    Hello and welcome. Im fairly new to mse world myself but am also someone who learnt debt was okay as a student and then never un learnt it until it was too late. I understand why you want to clear your overdraft first. Our overdrafts were the smallest of our debts but with some careful budgeting and both of us swapping bank accounts for the cash back we paid ours off. I'm not sure on current offers but we got £250 each last year when we swapped. My partner was offered interest free overdraft for 6 months as well. (He wasn't listed on the DMP at the time so could still get lots of credit unfortunately. ) it might be an option if you want to avoid the dmp route if only to give you a temp reduction in overdraft fees. I'm also now in a thread were everyone sets there own challenge for the monthly food shop. Currently in February grocery challenge 2018. Our budget is now extremely tight so I personally have found this a motivator to try and figure out how to feed us all for 390 a month x
    Jan 18 Joint debt 35,213 - Thankfully it's now less Jan 18 Mortgage 77224 now 71889E fund 100
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