Please help me get my head around this.

System

pumpkin89 wrote: »

How would you achieve this? We have a largeish 3-bedroom house but there are only two of us living there, and we pay £150 per month on a very good tariff. I'm assuming the OP's home is similar as she has 2 children and says they have a "nice house".

£150 a month is a crazy amount for two.

pumpkin89

andydownes123 wrote: »

£150 a month is a crazy amount for two.

OK but that's not very helpful, is it? Some examples of ways to save energy would be better. Another poster has kindly directed me to the MSE Energy Saver Club.

enthusiasticsaver

What you should be doing is an accurate soa rather than just putting figures down you think look right. That means looking at your actual spends. You have budgeted £50 a month for a holiday so that is £600 a year. Last year you spent £7000. Are you really going to be able to go from this to £600? Is that for a weekend away over the year or are you taking up camping as I don't think £600 will get you far. Personally I would have a frugal year and not have an annual holiday next year but if you have any family dos you need to go to then write them down and budget individually.

Same goes for clothes, presents, entertainment. How much is a pair of shoes for your child or do you need school uniform? How much do you and your DH need to spend on work clothes? Actually working out how much you could reasonably get away with is better than just guesstimating. Will you shop at Primark or Matalan or is it M and S or wherever as that also makes a difference. Presents, work out how many people you need to buy for and set limits.


Entertainment should cover hobbies, subscriptions to gyms, cable tv if you have it and kids clubs/swimming lessons etc for your child. Actually work out how much you pay for each of these and if you feel you will feel very deprived if you don't have a takeaway each month or a date night or trip to cinema then build in a budget for that too.


Car maintenance should be saved monthly as should emergency fund money if you don't want to touch the cash you have. The object of this is never to put anything on credit. So if you know carpets need replacing or the boiler needs servicing then that needs a budget too.


Your diary is very similar to Dan's in that you have a huge disposable income but still ended up with very high debt. You say you have been wasting money so really thinking about why you do this would be the single most helpful thing you could do as I think it is your attitude to finance and money that needs changing above all.


I think the most helpful thing you could do even if you don't post it is to do an soa based on your actual spending over the last 3 months. That I think would give you the impetus to really change the way you live.

enthusiasticsaver

What yours and Dans story and many others on this forum is that leaving budgeting, working out finances etc needs to be done as a team when you live as a couple/family. There are so many people hiding debt from their partner and trying to deal with it alone and it is simply not possible unless both partners know the situation and are working towards the same goal. Many of us have partners who are either not interested or the sticking their head in the sand type (my own DH is one of these) but it is up to the other to force them to listen and the ostriches need to listen. I spent 10 minutes explaining to my DH this morning why I was closing a savings account down and reopening the very same account as the bonus interest had come to an end. He thought I was mad until I pointed out the difference in annual interest and that it was better in our pocket than the banks. I even broke it down into how many pints it would buy over the year in an effort to get him on board. Same goes for people paying credit card interest rather than moving to 0% deals.

secretdebt

Hey,

The way I read this, if you wanted to use that money you have sat there (my personal opinion is that you should - right off the bat you could save yourself c£250 in interest a month) you could be debt free in less than 2 years! That is with making total payments of less than £2.3k a month against your debts.

Obviously it all depends on when those 0% end - but on the face of it, with a little sacrifice you could be debt free in no time.

I am coming up to paying off around £50k myself and it will have taken me around 4 years. It has its ups and downs, but once you realise you shouldn't be spending money, then it should be fine. I am just getting impatient now and I just want the next 6-7 months to fly by. My debt repayments are over 50% of my take home pay and leaves me with next to nothing. I am sure I could have done a lot better too as I have had some spending splurges within that time too.

Best of luck with it, but in my opinion, it all comes down to how badly you want rid it - but I would use that cash up if it were me, as it will make an instant interest saving.

Cheers

theoretica

Do you have any potential for making a bit extra money? Perhaps selling things you previously splashed out on? This might be a good way of finding extra entertainment and holiday money.

Kilroy62

Hi

Been there and done that - was close on £170k in debt with wife two young children. Took 6 years to be sorted. You have covered most financial things already but some bits are not just financial.



Your Husbands job may be safe but plan for it not to be -When it is safe, look at the risk/value of transferring from unsecured to secured to reduce high % debt but do not endanger your home by securing more than you could pay if things turn down.
It may also be possible to do some soft searches for low % deals - explore this.

Practical planning is one thing - the doing can be harder especially over 5 years.

I can say that talking it through with my wife and both of us making agreed changes and working together to resolve it made it easier and brought us closer together. Make an additional effort to have little shared treats and time to enjoy living regularly. Make the changes and economies incrementally so as to accommodate them into your normal method of living. Making changes as big economies in one go can bring you down and when depressed can undermine your hard work and motivation. That is when things slip. Forgive each other for the occasional slips you will both make, but be honest when you do slip up. You might want to try also some economy challange's with the children so you do not feel pressured to buy high ticket goods as presents for a bit- a couple is fine but perhaps not every occasion.

Remember living is not just about debt or solvency. When you talk about the debts do it once a week/month - plan actions - put them into effect and then carry on living. Do not let them intrude or disrupt your daily life or the childrens.


I know how hard this can be so wish you all the best and good fortune

karencks

Just added up what we cleared in September... after interest etc, we managed to knock £1782 from our debt balance.

It's a drop in the ocean compared to our total debt figure, but it's a step in the right direction

fatbelly

karencks wrote: »

Just added up what we cleared in September... after interest etc, we managed to knock £1782 from our debt balance.

It's a drop in the ocean compared to our total debt figure, but it's a step in the right direction

Gets you debt free in under 3 years.

You ought to plan some sort of celebration for when you get there

Chrystal

karencks wrote: »

Just added up what we cleared in September... after interest etc, we managed to knock £1782 from our debt balance.

It's a drop in the ocean compared to our total debt figure, but it's a step in the right direction

Well done to you both.... At this rate you only have another 33 payments before you are debt free! :j
Hope you worked out some ways you can still get some pleasure out of living within your budget, and if so do you have any tips to help anyone else?