Boyfriend's debt

Jessticulate

Just to be clear, this is definitely not a should we break up post, me and my other half are definitely a team, just after some pointers on how best to deal with our situation!

I've been in a relationship for almost two and a half years, my partner has grumbled a couple of times about how he keeps spending more than he earns, and I also knew he had a loan that he mostly took out to buy a car after he decided he would rather have his own instead of sacrificing some of his salary for a company car.

I found out a couple of weeks ago the real details behind his loan, and overspending on credit cards he has:
About £9000 On one credit card
About £8500 On another credit card
As well as about £18,000 with his loan that I knew about

For full disclosure I have almost £3000 in tax credit debt also

So between us our debts add up to almost £36,000 this is alot to take in! The only debts i have ever had have been benefit debts, which always seem to happen no matter how careful you are to give them the right information, I've been overpaid several times, it's annoying, but I always manage to get it sorted out, and it's not like credit card debt where you get charged interest too!

My partner does have a reasonably well paying job, and I work too, but only do 27 hours a week on minimum wage. I didn't understand how he had been spending more than he earns when he makes good money, but now I have read up on how credit card debt works I can see how the money disappears! He seems reluctant to sort it out and I feel that even though the debt affects both of us, I have very little control in wether it gets sorted out or not! I am currently not able to get a different job, and I'm not a big spender, so I can't cut down my own expenses an awful lot, I rarely spend money on myself, but I can cut down a little on shopping costs as this is my responsibility in our house.

I have explained how it affects me, and he talked briefly about looking into balance transfer credit cards, but he hasn't taken it futhur! How do I let him know that I need him to make it priority number one without making him feel bad, or should I give him more time? I don't want him to go back to hiding it again! It's not like life has been simple recently, we have both had alot on our plate, and we still do. He knows it needs sorting, and we have the means to sort it, even if it will be a bit painful for a while. I want to support him, but there really is only so much I can do, it's not my debt and I am already reasonably careful with my own spending.

Hope you guys can give me some pointers, this is all pretty new to me, I have no experience with this sort of debt!

Willing2Learn

Okay, it is good that you are both talking about addressing the debt and that want to do this as a team.

I suggest you do a joint Statement of Affairs (SOA) so that you have it on paper your exact financial circumstances. Have you any idea of the respective credit limits on the two cards, as this will determine the likelihood of being eligible for Balance Transfer cards. (Also what are their APRs?)

Edit: For the best advice from MSEers it would be good if you could post up your joint SOA

Jessticulate

Number of Adults in household: 2
Number of Children in household: 2
Number of cars owned: 1

My salary - £930
Partners salary - £2550
Child benefit/child maintenance - £279.09
Total - £3759.09

Monthly Outgoings:

Rent - £975
Council Tax - £128.39
Water - £38
Gas/electric- £76
Netflix and Amazon - £14.57
Phone - £23.99 (mine) £32 (his)
Food - around £325, including cleaning stuff, and lunches for work and school
Petrol - about £200 - other half has a long commute!
Car insurance/ tax/ mot £95.40
Home Insurance - £7.14
Internet - £23.50
Childcare - £175 average (depending on holiday childcare, summer holidays coming up soon!)

Total: £2,113.99 (obviously these are just the basics and any direct debits, doesn't account for things like school uniform, school trips, clothes and stuff like that!)


For credit cards currently the information I have is what he sent me via screenshots, this is the information I got from the screenshots

American express
Remaining statement balance- £8500
Avalible credit - £4169
Total balance - £9039

Barclaycard
Account balance - £8543.80
Avalible - £7936.20

For the personal loan I can see that there is £18,314.68 still to pay, I know he pays £383.57 a month towards this, and I can see from his screenshot the Apr on this is 6.4%

Still trying to figure out what it all means, I only got my first credit card about 6 months ago aged 29 and have been too scared to use it, even though it was just supposed to be for building my credit score!

stripeyfox

Hi

For what it's worth I'd say that firstly he needs to get his head out of the sand and you need to tackle this head on, together. You've already hinted intentionally or not at the problem - your budget (like many I have done over the years) takes money in - mortgage, bills, loans etc = on paper at least a reasonable amount left. So the budgeting is out of control. It's all the other things which is (and has been) consuming your money - which is why you've racked up large credit card debt.

When I sat down with my wife and worked out what we were actually spending on "other stuff" it became obvious why we'd been gradually sinking further and further into debt.

I started logging everything we spent and putting it in categories (food, treats, school trip, take away etc) and that is where the problems were.

There may be things you can do to reduce the debt (not an expert - but plenty of others are) but fundamentally you need to budget - properly to address the overspend.

Good luck

EDIT: People will tell you that you're spending too much on food but personally £325 is pretty good - but are you sure that's what you spend - that's why you need to log everything for a month or two to get a real figure

We are family of two adults and two kids and my shopping bill is way more than that - and I wouldn't consider us extravagant - but probably could trim it a bit!!

Willing2Learn

Thanks Jessticulate. I'm sorry, but your SOA is incomplete. It says that you have £1,646 available every month when you obviously do not. I hope this is not coming across as nit-picky.

For this to work, every £ of income has to accounted for within the SOA. So, if for example you spend £288 a year on school uniforms, then you would need to enter £24/month in your SOA for the school uniform budget category. And every other category needs to be completed too.

From the credit card figures you have provided, it would appear there is some headroom of credit available. I suggest your partner looks at eligibility checkers to see what promotional 0% APR Balance Transfer cards might be available. Have a look at the link below for a selection of some of the best deals currently available. You may find it beneficial for the two of you to keep a spending diary as this will help you to identify where your money is going. Also check your bank and credit card statements as that will also help to identify expenditure.

https://www.moneysavingexpert.com/credit-cards/balance-transfer-credit-cards/

Jessticulate

Fair enough willing2learn! It's tricky and fiddly on my phone, when I can next get computer access I will full it out properly!

I don't know the ins and outs, but my partner said he made around £800 worth of payments across his two credit cards that pretty much covered the minimum he could pay this month.

Stripey - My partner readily accepts that most of the debt was due to him overspending before we were together, and some is down to the fact we have moved house twice in the past 9 month's. First one was voluntary, then the landlord put the house on the market after six months! I'm not saying that you are wrong that our budget needs some work, but for the most part I am pretty thrifty. I have had to stick to a strict budget for years before I met my other half out if nessecity. But my other half is always buying this that and the other, and I'm sure he spends as if he thinks he has more money. And that's a tricky thing to navigate, especially as he already knows he overspends, and admits as much!

FootyFanDan

Hey,

Well done for trying to tackle this and wanting to sort it out. I would echo the people saying to track and log every penny spent even the littlest amount, I did this recently and it is an eye opener and showed me how quickly the odd £4 here and there soon mounts up.

Good luck with sorting this, i would suggest when you get chance to read some of the diaries on here and see how people have managed to totally transform how they budget. Its important to remember that its a journey and not a quick fix and there will be bumps and sacrifices but if in the end you achieve what you want it will be so worth it

theoretica

It is so easy to get into the habit of spending - one trick that helps is not thinking about the individual item, but about the habit over the year. He can clearly afford a take out coffee - £2.75 isn't much. But a coffee every working day adds up to £715 over the year - not good at all!

MallyGirl

A spending diary for a month - where you both write down absolutely every penny that gets spent - is really useful. That is where the coffee, newspaper, etc show up. As theoretica says it is often the multitude of little things that don't seem to matter individually but in total can make a big difference.

bargainbetty

I'm going to give you one other piece of advice, bearing in mind that your BF really doesn't appear to be ready or willing to address his issues.

Under no circumstances whatsoever should you even consider moving any of the debt into your name, even if the interest rats are better. This is his debt from before you were there - do not take it on.

Sorry, but we've seen one too many stories on here of people doing that for a loved one and getting stuck with the lot.

Give him the tools to fix his problems. Support him. Help him to find ways to save. Do NOT take on his debts.

Best of luck

Candyapple

Jessticulate wrote: »

I have explained how it affects me, and he talked briefly about looking into balance transfer credit cards, but he hasn't taken it futhur!

Your partner earns £40k.

He is in £35k worth of debt.

No lender is going to give him a balance transfer card as he would fail on affordability so you can forget about that idea.

Your partner needs to pull his head out of the sand and face his problems head on. He is going to have to do this the old fashioned way.

1. Sell anything of value
2. Increase salary with main job or work overtime / get second part-time job
3. Make and stick to a proper budget and cut out any unnecessary spending/make sacrifices e.g. get rid of Netflix/Amazon
3. Snowball debts: http://www.whatsthecost.com/snowball.aspx

Jessticulate wrote: »

How do I let him know that I need him to make it priority number one without making him feel bad, or should I give him more time?

Why not sit him down and go through the snowball calculator with him? This will show him the effects of exactly how long it will take him to pay to clear his debts and how much interest he will pay the longer he leaves it. Hopefully it will wake him up and the reality will sink in. Then focus his mind that he could use that money instead to go on a nice family holiday or whatever else he is into etc.