Credit Card Debt - Girlfriend Doesn't Know.. 13 March 2018 at 2:02AM in Debt free diaries 10 replies 789 views

Plutonomics

Hi all,

Hesitated for a while before posting here, but have read other people's stories and found a lot were getting good advice and support, or even just using it themselves to keep track. So this is my first post, hopefully to be updated in due course with more pleasant figures.

I have recently looked at my finances, this was long overdue as I have been overspending for a long time and not planning for the future. I have been with my girlfriend around 10 months now, however I haven't really talked to her about my finances. I have an alright job but nothing special, earning around £25,000p.a. I am over 30 and still at home, so obviously she is really keen for me/us to get space of our own. I would love to get a mortgage and buy a place but think that would be a bad idea, or maybe not even possible, in my current situation.

At the moment I have got £11,600 in debt outstanding, this is £11,300 on three credit cards and £300 overdraft. This is all interest free and I currently have a good credit rating, most of the debt is interest free till October 2020. I had a shock when I looked at my available credit, I have 7 cards and 2 current accounts open which in total have limits of £53,300 :eek: In the last 10 months I believe my debt has gone up by around £1,000, mostly due to going on several holidays, however I can't be certain as I wasn't keeping track. I have one card I use when abroad fee free then the other three I don't currently use.

On the asset side I have got a Help to Buy ISA with £4,000 in (saving £150 a month, though in recent months I have pulled some back), and I have a share scheme with work which I put £130 into. Unfortunately the Share scheme won't give me a benefit until around two years when it matures, they currently predict this should be worth around £7,700 at current share prices. My car is probably worth around £2,500 but apart from that I have no other property worth mentioning.

My plan is currently to gradually get these numbers changed, hopefully without telling my girlfriend how much debt I am actually in . I won't go into into too much detail about my budget here, I'm sure I would get told off for silly overspends on nights out, meals, hotels and holidays, but will use this to keep track, maybe updating in a month or two to see where I am. Wish me luck!

moneyonmymindsam

Hi , Welcome to the forum

No one will tell you off here that's for sure and you will find this a really wonderful place of support. Sometimes we all need a silly night out.:rotfl:

If you do decide to do an SOA there are people (a lot smarter than me lol ) that will be able to help you with suggestions to reduce the spending.

Maybe it is a good idea to tell your GF then you can get on board together and you may well have a chance to chuck some more money at your debts? but obvs your decision.

Good Luck on your debt free journey and my only piece of advice is to stick with it.

:beer:

Mnd

My only advice is to update this far more regularly than once a month, either good or bad
You will get so much help and inspiration from posting frequently

Poppy1984

Tell her, I tried to do what you're doing now in a relatively new relationship and I felt so much pressure. Especially as it sounds as though the two of you have been enjoying holidays and nights out to suddenly pull in the purse strings without explanation puts a lot of pressure on.
You don't have to say exactly what the cost of the debt is. I just said I had debts I wanted to get control of and start paying down, he's been very supportive and it's so much easier now he knows.
Good luck I think you'll find she will be happy you were honest and if she's keen for you to get s place together it will be good to have her on board when you tighten your budget.

enthusiasticsaver

Well done in addressing this now. If you think at some point in the future you will want to buy a house, get married or even have kids then clearing your debt is the best thing you can do along with learning how to save and be more selective in where you spend your money.

The usual things people waste money are mobile phone contracts, buying lunches out instead of taking a packed lunch from home, constant small supermarket shops instead of meal planning and alcohol/cigarettes. Thankfully you don't seem to have been sucked into the expensive car deals many people can't seem to resist.

All your debt is also on 0% for about 30 months which if you are living with parents suggests this can be cleared by then. You know your overspends are on holidays so learn to save for them. I would suggest you use a spending app tracker to record your spends.

Good luck. I would also encourage you to upload an soa and update your diary regularly. It really helps focus the mind.

Poor_Single_lady

Welcome to the forum. You are in a really good position if you can manage to make adjustments.

Maybe you could say to your girlfriend that you want to seriously work towards living together and your lifestyle will need to adjust.

As a homeowner honestly I think your lifestyle sounds amazing! And ok whilst living at home but probably wouldn't be sustainable with a mortgage.

So maybe you need to tell her that things need to change. But if you are worried about declaring all the debt then maybe don't do specific numbers.

Some of my debt is from spending too much In
Past relationships when really i should have just said no.

Best of luck with clearing it.

enthusiasticsaver

Also you don't need 7 cards and if you are not careful with your money having access to that much credit is dangerous. Aim to close at least half of them. Remember also that one of the things mortgage lenders look at is percentage of credit used against available credit so maxing cards out is a bad idea. I would suggest you aim to keep the one you have had longest with maybe one spare. Ideally you should be paying the credit cards off in full each month once they are clear. This shows a well managed budget.

Plutonomics

What a great response, only day 1 and already have a lot of good suggestions. When I get home from work I will have a look at an SOA, guess it will help me see exactly where money is going too.

Enthusiastic saver, I did call to cancel one of my cards yesterday, a Barclays card with no balance and a limit of £10,100. I probably haven't used the card in a year or two. When I spoke to the lady she managed to convince me to keep it said "Are you sure? There is a a good limit on there and a current offer of 12 months interest free on purchases? This will activate from the date you buy anything on the card", somehow made it sound appealing even though I know I won't use it. I will have to call back and stick to my guns. I am wary of cancelling too many cards for the reason you mention. At the moment lenders can see I am using around 25% of available credit and am not spending too wildly, I want to close some but keep this ratio low.

One-step-at-a-time

Dealing with it now is a good move. I would definitely get rid of a couple and lower some limits! One of the reasons I got into as much trouble as I did was the amount of credit available to me - £43,000, and at my worst I was using £38,000. Not a good place to be at all (and I had NO debt until I was 35).

Plutonomics

I can't believe I started this under 2 years ago! Reading back through my original post and the replies, it seems like such an easily manageable position! Not sure how common this is, but I haven't stuck to any of my plans around paying the debt down within my interest free period. This will be a long post, mostly just for me to keep track, get a few tips, but mainly (fingers crossed), to look back on in due course and see how much my situation has improved.

Since my original post, and following people's advice, I told my girlfriend about my level of debt. She was surprised, but very understanding and it definitely helped to cut down some of the frivolous spending. However... I haven't been too sensible and still pushed ahead with life plans, even more quickly than I expected. Since my original post I have: got engaged, married abroad, arranged a spouse Visa for my (now) wife, bought a house (with mortgage) and furnished it. It's been an expensive two years! Overspending and fitting so many things in during this time has really tested my budget, as a result I have actually gained additional debt. I have been in my house around 10 months and it has been a bit of a shock to the system paying the associated bills and expenses. My wife has a low income and helps where she can, however, in general our finances are separate with me covering the majority of expenses. There is some good news in that in January I managed to secure a promotion in work, which is what inspired me to log all my debts again here, re-baseline, and try to keep better track this time as I pay them off.

So, where am I now? My current total unsecured debt is around £23,000. The debts are made up of 4 credit cards and 1 loan. The cards have a combined balance of £12,840. These are on 0% interest untill September, October, November and December of this year. Then the personal loan is £10,000 at 3.9%. I do have an additional credit card for day to day spending, but this is cleared in full each month (current balance is around £800). On top of this I have a secured mortgage of approx £89,000. 

My income has increased to around £35,000 gross annually, as of last month, so I am hoping to see some benefits from this over the next few months, with hopefully a further small pay rise in April. I have no real money saved, just a little still set aside from the loan but this is earmarked to pay for work on the house.  My Share plan matured last month and I am hoping to hang on to these if possible for dividend income. These are currently worth approx. £7,000, and I imagine I will need to sell some of these come September to reduce credit balances if I am unable to transfer everything to a new 0% deal. I still have the same car, which I'd guess is worth maybe £1,800 now and that is about it on the asset front. I think the value of the house may have increased a little, to maybe around £105,000, so potentially there is a little equity there.

So there we are, a mammoth post! If you made it this far then well done, you are a real trooper and deserve a medal. I will update as there are any changes, and this time I definitely won't come back in two years with doubled debt again!

MidsHollie

I was going to suggest you don't move out of (I assume) your parents, until you had dealt with budgeting and your debt, but I see you already did! I'm a newbie at this debt busting thing, but I'd recommend having a single focus (debt busting) before you start thinking about saving and investing. Why not consider selling the shares now and pay that £7000 off your debt, bringing it down to about £16000. Do an SOA and a budget (and stick to it like glue) and I'm sure you could bring your debt to close to £10000 by the end of the year. I bet that would feel amazing. Since I started this debt journey, I've loved listening to Dave Ramsey (a preachy, no BS American) - he suggests that your income is your 'biggest wealth building tool', so by paying off debt you effectively increase your income and can start to invest more effectively. 

Good luck!