Advice Please

Big_Lad_78

Good Evening,

Looking for a little bit of advice. I am absolutely fed up of being in debt and have had enough.

Both my wife and I have decent jobs and we have a nice house and a good lifestyle, but some really poor mismanagement by us has led to our finances getting out of control.

We currently owe
Aprox - £5k unsecured loan, £20k credit cards, and aprox £23k unsecured loan from our previous mortgage.

We collectively earn aprox £4,000 a month but never seem to have any money as we paying out aprox £1800 in debt, then with mortgage, food and childcare we are left with very little each month.

I know ours is not the biggest problem in the world but it really does get us down, also most of the forums and advice is aimed at folks with much higher debt and no way of paying it back. We are also expecting our second child soon and really don't know how we will cope...struggling to put any cash away for mat leave.

Just looking for some advice about the best way forwards with this. We are absolutely aware that we have been very silly and need to suck it up. Just looking for the best way to get us debt free. Much appreciated BL.

enthusiasticsaver

If you have got to the point where you cannot make minimum payments and the debt is on high interest and increasing either due to interest payments or you still using cards you may need to consider a DMP. Speak to stepchange, a free debt charity.

Otherwise it is budgeting and cutting expenditure. That means cutting back on stuff which is not necessary. Saving for things instead of buying on credit and tackling the debts one at a time, starting with the most expensive.

glennstar

Big_Lad_78 wrote: »

Both my wife and I have decent jobs and we have a nice house and a good lifestyle, but some really poor mismanagement by us has led to our finances getting out of control.
:
We collectively earn approx £4,000 a month but never seem to have any money as we paying out approx £1800 in debt, then with mortgage, food and childcare we are left with very little each month.

These two statements are incongruous and probably lie at the root of your issues. Stop labouring under the misapprehension that you are earning good salaries. You have a good lifestyle because you a spending beyond your means. Paying half your [net] income on servicing your debt for more than a very small number of months is a very bad place to be.

On a constructive front, consolidate into a low cost alternative, if at all possible... and for god's sake stop spending money you haven't got!!

Nebulous2

You need to try to pay more towards the capital, not the interest. If you're paying £1800 towards your debt a month it should be going down. Or are you dipping back into the credit cards again by the end of the month?

What are the interest rates? Can you shift any debt to lower rates or even 0%?

With a new baby you're going to have to make some difficult decisions, so might as well start now. Look to hammer down expenses. Go from 2 cars to 1 or sell a dear one and buy a cheaper one cash. Move to cheaper mobiles, sky, broadband. Stop eating out, shop in cheaper supermarkets etc. You get the picture. It won't feel good for a start but it works.

Try the debt free forum on here. They'll get you to put up a statement of affairs and will make suggestions as to how to save money.

lindens

get yourself over to the debt free part of this forum, read up the sticky threads, maybe read some debt free diaries. And definitely do a SOA

Pixie5740

This is the link to the statement of affairs: http://www.stoozing.com/calculator/soa.php

You might also find the snowball calculator helpful as well: http://www.whatsthecost.com/snowball.aspx

DCFC79

lindens wrote: »

get yourself over to the debt free part of this forum, read up the sticky threads, maybe read some debt free diaries. And definitely do a SOA

You need to cut down on your spending and by doing an SOA as advised you will see where the money is going.

Big_Lad_78

Thanks so much for the advice, really appreciate it. We are very aware that we need to sort things out, just not sure the best way to do this. Will have s read through all the links. Thanks again.