high income high debt!

worriedDan

Well done for taking the plunge. Try to be as realistic as you can in your SOA. Don't worry if it takes a few attempts. I am still tweaking mine and we are 18mnths into our debt free journey.

natlie

Hi

Make a notes list of all your direct debits and the dates that they go out of your account - keep in on your phone, update it whenever payments change - keep a tabs on the total thats going out

Cancel all unnecessary things, unless you can afford them - gym, sky tv, etc

Make an excel list of all your debts and the amounts you owe, keep tracking this for motivation

Is your income high? YES, We take home £38,000 owe £26,668 and we meed all our monthly repayments with extras to pay it off faster, we live quite a frugal lifestyle

Nat

LoulaBelle

One thing I've noticed - you don't have anything for Contents Insurance is that because your buildings and contents insurance are combined in the Buildings Insurance figure?

AstroTurtle

Hang on, Hang on.

You can rejoice in the fact you have £2,000 per month to throw at your debt.

But let's all be realistic here. Your lightbulb moment isn't that you can afford to pay off your debt.

Your lightbulb moment needs to be how on earth with £2,000 per month spare now (Which would have been £3,200 before debt commitments) How on earth have you ended up spending the £3,200 PER MONTH spare money and then Spending £50,000 on top of that in debt. Figure out that problem at it's root cause and fix that and then the debt should fix itself.

LoulaBelle

I can see where you are going wrong - you sound like my husband 'but we earn a lot of money - we can afford it'...… no - you need to look at where you spent the money that got you into this mess in the first place and deal with it from there ……… I'm frugal - I can go into town and do what I need in under 30 minutes to save paying for parking ……. he will go into a coffee shop and pay £7 for a coffee

FTBuyerGlasgow

Optimizm, you are very fortunate to have such a good income, it is a reasonably good income in comparison to the average, despite what may be said in other replies.

I don't usually review SOA's but I couldn't help notice your mortgage repayments, your LTV appears to be 25% but your monthly payments seem a bit high, is your mortgage term ending in the next 5 years or so?

I'd never usually advocate this but because you have such good equity in your house you could consider lengthening your mortgage term to reduce monthly mortgage repayments and throw the money at your unsecured debts. You could shave a year off your debt repayments and then make mortgage overpayments once you are debt free. Only a suggestion though, I appreciate some people would rather be mortgage free with unsecured debts so may not be the way to go.

optimizm

AstroTurtle wrote: »

Hang on, Hang on.

You can rejoice in the fact you have £2,000 per month to throw at your debt.

But let's all be realistic here. Your lightbulb moment isn't that you can afford to pay off your debt.

Your lightbulb moment needs to be how on earth with £2,000 per month spare now (Which would have been £3,200 before debt commitments) How on earth have you ended up spending the £3,200 PER MONTH spare money and then Spending £50,000 on top of that in debt. Figure out that problem at it's root cause and fix that and then the debt should fix itself.

I totally agree. The reality is tat we have been overspending to for almost 2 decades.

We have made shockingly poor choices, going on very expensive holidays, buying expensive cars ( they have gone now), weekends aware, clothes, things for the house - our kitchen cost 10K when actually we could have spent a third of that etc etc.

We don't have a sob story - we haven;t been the victims of circumstances out of control, we have just spent loads too much money! I am big on accountability and I would hate it if I came across as lacking responsibility for the situation we are in.

In terms of our 'spare income'. UP until 10 months ago I was smoking 30-40 cigarettes per day. A health scare forced me to make some lifestyle changes and as a result I have not smoked since February. Looking back, I was spending at least £600 per month on cigarettes. We were also paying out in excess of £700 for childcare, This has reduced now to roughly £200 per month, so there is an additional £800 straight away!

We have both also had some success at work in the last 12 months. My take home pay is £350 more than it was 12 months ago and my wife's has increased by £150,I have also stopped financially supporting my 23 year old son as he has a full time now, having finished his studies. He is living with his girlfriend so I stopped the £300 per month that he was receiving.

We had this level of debt a year ago, however as you can see from above, our 'spare' income was much reduced. We both feel that we are at a stage where we have to sort out this debt. We absolutely cannot be in this same situation when we are 50 ( early 40's now).

optimizm

FTBuyerGlasgow wrote: »

Optimizm, you are very fortunate to have such a good income, it is a reasonably good income in comparison to the average, despite what may be said in other replies.

I don't usually review SOA's but I couldn't help notice your mortgage repayments, your LTV appears to be 25% but your monthly payments seem a bit high, is your mortgage term ending in the next 5 years or so?

I'd never usually advocate this but because you have such good equity in your house you could consider lengthening your mortgage term to reduce monthly mortgage repayments and throw the money at your unsecured debts. You could shave a year off your debt repayments and then make mortgage overpayments once you are debt free. Only a suggestion though, I appreciate some people would rather be mortgage free with unsecured debts so may not be the way to go.

Mortgage has 11 years left to run. We switched to a fixed rate recently, our payments before were £479 but we felt vulnerable with it being a variable rate.

Not sure if we would qualify for a new mortgage at the moment due to our debt levels.

bmthmark

optimizm wrote: »

If I lost my job then we wouldn't be able to manage. If my wife lost her job then we could pay everything but there wouldn't be much surplus.

I appreciate you posting, however I am nor sure that telling someone that they will be ;'knackered' is particularly useful or supportive.

I agree not exactly helpful. I'm sure most people would be 'knackered' if anyone were to be out of a job

dano17439

Yes to echo the comments here, your income is above average, but the amount of debt is far too high in relation


Still you've seen the problem before it get totally out of control. You now need a few years of being ultra sensible and no luxuries to get this debt down. Unfortunately as you've been living the lavish lifestyle for years and totally above your means, these cutbacks may be more difficult.


I wish you both luck anyway!