I want to get out of debt/stop compulsive spending

luelle

I’m useless with money. I’m addicted to shopping. I’m stupid with credit and I’m ready to stop.

I have tried to break down all necessary outgoings and debts, I know it’s a lot to ask but if someone could write me a plan, a budget, a suggestion, how to get myself out of this before it spirals.

Please.


All my debts:
TSB Loan: £7500 (Paying £421 a month, 22 months left)
Barclaycard Credit Card: £4500 (Paying whatever I can afford each month. Normally not much)
PayPal Credit: £1100 (Minimum payments every month. Interest piling on like crazy)
Very: £278 (Minimum payments every month, again interest is killing me)

All my monthly outgoings other than my debts:
Phone contract: £15
Fuel: £120
Parking permit: £35
Internet: £37
Food/Household Shopping: £70

A bit of background: Live with my boyfriend, he is manager at holiday resort and we are provided with live in accommodation. He pays £100 a month for rent (the resort covers council tax, gas, elec, literally everything else) He also pays for sky.

I try and create budget plans for myself, but then I’m pay too much off a debt and get myself in debt by using credit card to survive until the next payday. Please can someone help me. I feel like I’m losing grip on my spending

enjoyyourshoes

To rid self of debt:-

Stop spending on WANTS and only spend on NEEDS

(your phone is a WANT, not a NEED)

Then throw everything possible at your debt. Prioritise debt with highest APR first, be careful of 0% deal and post deal interest.

Can you sell the stuff you have purchased which has got you into debt?
Can you get better paid job or a second job?

Good luck

fatrab

Have you spoken to your partner? Could he perhaps help? Even if he pays off the Very account that would give you a little breathing space and a little spare cash to throw at Paypal?


Please do an SOA, it'll give us a clear idea of where you're actually at.


http://www.stoozing.com/calculator/soa.php


Best of luck

nkkingston

In order to create a good budget for the future, you need to take a look at your spending in the past. There are always areas where you're spending more than you think (I'm very skeptical you only spend £70 a month on food!) and vital expenses you forget because they're not monthly. Get hold of all of your bank statements for the last three months and go through them, categorising every single penny you spent. Also make a list of annual expenses (including birthdays and xmas) - now's a good time to do this because a lot of annual expenses pop up at this time of year.

Once you've done that, work out what are essentials, what keeps you sane, and what makes you feel guilty. Look at the guilty stuff first - you want to cut these out, but be aware some other costs will go up a bit (for example, cutting out takeaways will add a little to your grocery shop because you'll still need to eat, which you need to remember to account for later).

Look at what keeps you sane - these are categories you can reduce expenditure on in the short term, but if you cut them entirely you'll break at some point, massively overspend, and undo your good work. Ask yourself if they reflect your priorities. If you're spending loads on knick-knacks but actually you're rarely in the house, ask yourself why. Bargain with yourself - maybe you buy own brand cosmetics going forwards, or you spend nothing on them for three months and treat yourself to something fancy in the sale in month four.

Look at the essentials. Can you get any of them cheaper? Can you get cashback on any of them? What if you go sim only or payg on your phone?

Also have a think about money you're spending on the household, and whether that's fairly balanced between you and your bf. In a serious relationship, ideally the budgeting should be looked at as a household. Think of your incomes and outgoings as joint, and divvy out essential spending between you. Being a woman is more expensive than being a man and we tend to earn less, so 50:50 splits aren't usually the fairest way to do things. Have a think about what "fair" looks like to you as a couple, amd then make sure your budget reflects that - maybe you get less fun money because you agree your debts are yours alone, or maybe he helps pay off the debts because he's benefitted from them too. It's a very personal conversation to have, but it's really worth having.

Take action based on what you've learned, then look at your new budget.
- Do you have enough money to live off before debt repayments? If not, then you need to look for more income, cut down more things, and work with your boyfriend on the budget as a household.
- If you do have enough to cover life, do you also have enough to cover minimum debt repayments? Is so, then you have the skeleton of your budget, and you want to look at ways to bring in extra cash to build an emergency fund and pay debt off quicker (sell stuff on ebay, do online surveys, dogwalking - whatever helps).
- If you have more than enough to cover life and debt repayments, then rank your debts in order of interest, and put the extra cash (making sure you have enough left for minimums on the others) towards the highest interest debt.

Get a second bank account, and have your wage paid into that (look for one with a good sign up bonus, like TSB). Set up a standing order for enough money to cover all your essentials and debt repayments (and a little padding just in case) to the account they currently come out of so that that money disappears from your account the day after payday and you can't be tempted to touch it. Whenever you're tempted to spend on something you shouldn't, you'll be abler to see much more easily whether you can afford it. Cut up all credit cards, change your paypal setting so you can't oneclick anything, and close each credit and store card account as soon as it's paid off. Going forward, if the money isn't in your bank account, you're not spending it.

xiodene

What do you take home every month?
Very hard to help you budget of we don't have that info.

It might seem tough now, but it is doable.

January2015

xiodene wrote: »

What do you take home every month?
Very hard to help you budget of we don't have that info.

It might seem tough now, but it is doable.

Take home info on the other thread OP started earlier today.

a_silver_lining

I!!!8217;ve found having a spending app on my phone has helped a bit. I put spends into categories like !!!8216;eating out!!!8217;, !!!8216;food shopping!!!8217;, !!!8216;cat!!!8217; and log everything, even 42p for a bottle of water. I can then see a breakdown of my spending and hold back from going over budget. It!!!8217;s not always held me back, but I have walked away from spending after seeing the impact in my budget.

luelle

Hi all. Thanks for your help I’m just so confused.
I keep ignoring the threads I’ve created because I don’t understand what people are asking but that won’t help me and I want to change things.

Just going to write out what’s confusing me:

1) I am trying to create an SOA, but the thing is I do pay no rent, I do only spend about £70 a month on food shopping, the amount of money I need to spend a month outside my repayments is quite low. But to fill in an SOA, am I judging by old bank statements? Where I spend stupid amounts on clothes I don’t need, expensive dinners out I don’t need, all the things I’m trying to cut out? If I go back through my bank statements it’s just me being spending hundreds of pounds a month on crap I don’t need. I don’t want to include that because I want that to stop!!! And where someone was asking me about servicing my car, money for repairs.. I don’t! I haven’t ever budgeted for that. I’ve never had a budget I just spend spend spend and if I can’t afford it, I’ve borrowed it. So how do I know what to fill in on the SOA for car servicing/repairs, how do I know what to budget for birthdays? I’ve never done this and I feel so stupid not knowing how to do these things that it’s making me just ask for help and then give up cause I don’t know how to get it.
I’m so sorry I’m wasting everyone’s time with this but can someone just explain simply how I make this SOA? I appreciate no one can help me withoand one but I’m stuck. :cool:

elsien

The point of an SOA is to do a realistic budget than you can stick to, rather than a bit of wishful thinking.
You might not want to put the overspends down but there are still things missing from the list you have at the moment.
Haircuts, essential clothing, dentist/prescriptions social life, birthday and Christmas presents. Car parking, maintenance, mot.
That's why using the SOA on here is a good starting point. Just put in your best guess if you don't know. Check old bank statements and try to work out what you might want to spend in future. If it comes to more than you've got, have a think about what you need to cut down on. Then keep a spending diary for a month, every single cup of coffee or bar of chocolate Then revise the SOA to make it more accurate. I suspect you may be spending more than you think on day to day stuff - most of us do.
No one gets it right first time and it's not set in stone it's just a starting point for now. So for example if you're currently spending £50 a month on hair cuts but know you can get it for £20, put £20 down and stick to it. But if there's money going out (not just big ticket items) you need to know where it's going so you can do something about it.

enjoyyourshoes

To help you stop spending:-

1.0 You have done this already but will still say it- look at your spending history and see what crap you have purchased and see what crap is lying about the house.

2.0 Ask your self , is this a want or a need. If its a NEED it , buy it (if you can afford it). If its a WANT don't buy it.

3.0 Useful trick, if you want to buy something wait 24 hours and then think do i still need this. Most occasions you won't.

4.0 Don't go out shopping when you are down, this encourages you to spend, spend more and not be able to rationalise and compare competing emotions, you are less rational.

5.0 Think about 'what could have been' (or opportunity cost). What else can I use this money for., which leads onto:-

6.0 Have a clear purpose for your money (is it to pay off debts or have that life changing experience? (I always save for something experiential and life changing) Then you become more motivated towards that objective and less likely to fall off the waggon.

7.0 Agree with partner what the objective is (above) and have a joint plan to achieve this

8.0 Be ruthless with every purchasing decision and every contract you may have (extended warranties, subscription TV, BB, Mobile etc etc) Try to eradicate as many of these costs as you can.

9.0 Know where you are financial every single day. Reconcile your main bank account with all expenditures every day.

Save for known future costs(this is accruing) and account for this as a monthly cost against your bank account (this saving will pay for these future costs).You can do this by clearly identifying all future costs (car tax, MOT, Insurances, B'day, Xmas etc) , get an idea how much each of these will cost and when they are due. Calculate a monthly amount (accrual) to save to enable you to pay for these when they become due. (can do month by month cash flow to check out the assumptions)

Put this money somewhere safe (interest bearing account or similar)

10. 0 Spending is often psychological, so work out what triggers your spending and minimise these or/& have strategies to overcome these.

11.0 Put a great big picture up of what life will be like in the future (linked to the life objective you have set yourself earlier) and have this displayed somewhere prominent as a motivation.

12.0 Tell others of your goals and steps to achieve them, this commits you to getting there (MSE diaries are such an expression)

Good luck and don't be overfeed with everything, its small steps you have to take and some of those steps you have already taken, so good luck

Debt_suvivor

Spending money on crap - been there, makes you feel better for about 15 minutes then you feel guilty as hell.

I experienced it a lot with my bipolar. For me when I get paid I try to pay everything off straight away I need to, then whatever is left I instantly take out, no cards etc leave my house. I only spend notes and the whack of pile of change - £1/£2/50p go in a pot for food budget (seems daft but trust me I have a drop in wages this month and i already have it covered it in change pot!) 20p/10p go in my bag for work in case I have to get different bus/train home etc. 5p/2p/1p go in another- take some with me for food shopping when using self serve to round my balances down to quid mark.
Once the notes gone they have gone that!!!8217;s it! I usually like to a list each month what I really need (toiletries etc) and what I would like (new top). Never in my overdraft now, debts going down and credit rating flying up at the moment