A year to change my life...

Lesina

I have never been one to forward plan, never been one to think of the relationship between actions and consequences and never really spent much time thinking about what I would do when I got older. 'Older' seemed a long way off & I can remember watching those shiny ads on the telly when I was in my teens back in the 80's promoting pension plans. There was one that I recall with two blokes in a gym, one boasting he was on track to retire at 50 and I remember thinking that 50 was an unfeasible distance away and I didn't have to worry about it. I am worried now.

In my working life, I have amassed & repaid an huge amount of debt. Always getting to the end of one loan and piling in another. I have done it all... remortgaged, second mortgaged, interest only mortgage, personal loan after personal loan, credit cards, charge cards, store cards, consolidation etc. etc. etc..... You name it & I have borrowed it.. and I was so cavalier about it all... my favourite 'joke' was to remark that of course I was a spendthrift, my only formal financial education was in Home Economics, when they taught us how to write cheques and as for savings.. pensions, ISA's, investments... well, they were for sad people, planners, boring types who didn't live the mad spontaneous existence I had. I had absolutely no respect for money. I wish I could say I have a lot to show for it... but in reality I don't. I have a small house ( interest only) and a mid range car and while I have had some amazing holidays... I have very few material possessions... but by god, I do have debt. I have so much debt I don't actually want to think about it all... so what I am going to think about is the £48,522.28 of unsecured debt that I have. There is also the cars and the second charge on the house but I am going to be a bit Scarlet O'Hara about those and think about them tomorrow. If there was ever an example of the dangers of easy credit... well that's me...

To my shame, I have always 'earned well' and we should be in a much much better position financially, if I wasn't an utter lunatic around money. We have a household gross income of just over £100,000 per year... but have no savings, no pensions just debt and that bloke in the gym? Well he doesn't seem that smug anymore. I am embarrassed about the position I am in. Utterly mortified and now I want to sort it out.

I need to be realistic though I know myself ( and my family) well enough to realize that we are not the types to embrace extreme frugality. I am in the frame of mind now to be much more frugal but at the moment, they would be resistant to getting rid of some of their 'creature comforts'; but I also know that by adopting better spending habits, curbing the impulsive purchases, such as the pony I bought for my grandchild on a whim...:eek: I can pay this down fairly quickly and then get on with planning for a more secure future.

My ultimate aim is to get out of debt within 2 years and then apply for a repayment mortgage on the house that I can clear within 10 years.

There are other things I want to do, longer term things but while I will keep them in sight, sorting out this mess is the main focus.

Changing my relationship with money is going to be a challenge, hence a year to change my life... I will struggle, I know I will but I believe that if I can get through 12 months of renewed habits, better choices and less impulses, I will reset my mind for the rest of my life.

I aim to post frequently, mainly as a thought dump but also to track progress...

Willing2Learn

Hello Lesina and welcome to the forum :hello:

I just dropped by to wish you well on your debt-busting path. Have you thought yet about a planned route to take you forward along your journey? Are you going to snowball, or will you go for some type of DMP? You may find it helpful and useful to start with creating a financial statement, in the form of an SOA (Statement of Affairs). You could then post your SOA up in your diary thread for advice, support and guidance. You may also find it beneficial to start a spending diary too, so that you can work out where every penny is going.

GeorgianaCavendish

Welcome to the DFW boards and good luck!

I am similar to you in that I can’t cut my living expenses to be bone as I’ll just end up blowing loads of money (well, credit) in a spending splurge. The good news is that there are likely to be a number of relatively easy wins that you can make right away. Switching utility suppliers, trying a different supermarket, checking the interest rates of all your debts and switching to 0% where possible.

Good luck!

Lesina

Ah, thank you to both of you for the welcome. I have to admit that this is all very daunting and on the morning of day two, I am feeling very overwhelmed by it all. It appears I have absolutely no control over my bank account. Even with the super formulated spreadsheet that I created which meticulously details my income and expenditure and recording every thing we have spent so far this month... I have woken up this morning to see that I am over drawn.:(
I had calculated that I would have £74 until the next cash injection on Wednesday of £1000 - I am actually £101 in the red... and I have no idea how. :mad: So that is a charge on my account.

Actually I do know why. I have spent to much to early in the month, had I not made those purchases, I wouldn't now be in this situation.. so that is a bit of a LBM... but I am struggling with my habitual response of 'well chuck that, this system doesn't work... lets just give it up'... it is that mentality that has caused me the problems in the first place... so I will knuckle down, persevere and keep working on this until I do 2 things...

1) Get a handle on my spending & 2) understand exactly what is happening.

I am not brave enough to put up an SOA... until the family are on board & I can make some real changes there, it reads like a horror script :eek: and I know with the best will in the world, I will be judged and at the moment this is all so raw that I cant face that

Also my credit rating which over the years has veered wildly between 'utterly shocking, hide your money from this woman ... to wow, excellent - have a big loan' is currently hovering around... ' well, its OK I suppose' so at this moment I don't want to go searching for interest only deals.
I am also terrified that if I do, my stupid brain will go YAY! Money.... go buy something. Lord what a mess. What an absolute horror of a mess.

However, we have food in the fridge, everyone has everything they need to get through the next few days so we will be ok on that front. So I will just keep assessing the situation and looking forward.

I am so so so bloody STUPID! :mad::):mad:

enthusiasticsaver

Your situation is not unusual but usually the penny drops much earlier so you have almost a lifetime of presumably uncontrolled spending to reverse. I think the fact you have a high income is why you have put this off so long. How old are you?

Maybe a good start before a soa is a spending diary to focus on what and where you are spending? You also need your family on board. I am interested in why you have decided to tackle this now and what was your parents attitude to money while you were growing up.

Good luck in getting yourself into a better financial position. Also don't beat yourself up too much and remember being sensible with money doesn't mean no more fun. I am one of those "boring" people who is a planner and saver and we travel, do lots of fun things but perhaps not as spontaneously as you

warby68

Take your time, its going to take a while to turn this oil tanker around

Try not to panic - relish your new mindset a bit rather than fearing it and feeling stupid. Its what's going to help you reset your finances.

I understand if you're not ready for full disclosure but feel free to throw out 'examples' of what you're doing for advice as you go.

It seems actually doing the spending diary and revisiting everything you spend on and deciding whether its essential, nice to have or can go in your mind is going to be useful and calm down the panic. Then its a discussion with the significant others - it really won't work very well if you try to do it in secret or don't find some common ground or goals.

How old you and partner if applicable are, how reliable and sources of your income, size of mortgage and expiry date, number of dependants all might and a breakdown of your debts/interest rates might all be useful pieces of information for people to help you without disclosing too many dark secrets.

Lesina

Thought I would drop by and answer some of the questions asked by the lovely folk who have replied to my musings/rant...

I am interested in why you have decided to tackle this now and what was your parents attitude to money while you were growing up

.
So, it has been on my mind for ages, really quite a long time but having been on holiday recently, I realised that if I continued the way I was, I would never achieve my dream of buying a small property abroad. Being realistic, I still may never achieve it but I am going to get closer to it if I can get rid of this mess and get a plan together. I really don't want to live in the SE of England for ever. Too busy & too stressful. I am hoping that Bill Gates is right when he said “Most people overestimate what they can do in one year and underestimate what they can do in ten years" and that I can get to where I want to be by the time I am 60. It seems inconceivable that I will be 60.
My parents were always always always stressed about money. Big family, not a great income. Belfast in the 70's & 80's was a pretty deprived place. So money was always tight and I was always aware that there wasn't a lot of it... I hated it. I still feel slightly sick when I think about poverty.. and I have a number of 'triggers' that will make me react to it. Bizzarely one of them is fun fairs... I hate them... which I why I would never go to Blackpool but will spend thousands going to Orlando...

how reliable and sources of your income, size of mortgage and expiry date, number of dependants

So I have a senior level management position in a fairly 'recession proof' industry if such a thing exists. I also have a part time consultancy role with another organisation which is secure probably for the next 3 years. Between them I realise a gross salary of £81,000 - and my OH earns approx £25,000 a year . I have a 20 year old and a 4 year old at home as well.. and two cats and a dog ..

Have you thought yet about a planned route to take you forward along your journey? Are you going to snowball,

I am planning to Snowball. I don't want to go down the route of a DMP. I got myself into this mess and I will get myself out of it... I have used the 'Whats the Cost' website to get an idea of what can be achieved. I am aiming to get rid of the £48K by Jan 2022. Then turn my attention to the cars..

Its a mess, but writing this is helping me keep focused... this is my first NSD in forever... so small victories....

Thanks all for stopping by.... I do really appreciate it.

Lesina

Bit of a meh day, still tracking my spending. Had a NSD yesterday which was a bit of chane but had to buy some fuel and food today. Unfortunately, due to the miscalculation on the bank account and going into an unauthorized overdraft, I did have to put both these spends on CC.
However I am being paid £1000 tomorrow from my second job so I will repay that spend back immediately. I am also tracking the CC input as a income input on my spreadsheet and then the pay back as an adhoc spend in my spending diary... I need to make sure I know EXACTLY what I am spending over the month... but it is all very trying.
Before the month is out I need to pay the Gas bill as I want to move from BG to a cheaper provider and get the car MOT'd.
My debt snowballing will start in August once I get paid from the full time job...
Have managed not to spend any money at all when at work - taking in my packed lunches and drinking instant coffee and water.
I need to tackle the OH about the Sky TV and broadband package... well over £120 per month. Which is just silly really.
Baby steps ... tiny baby steps,

Willing2Learn

Talking of baby steps...have you looked at any of the Dave Ramsey videos (for a bit of inspiration) or read any of his articles?

Lesina

Hi there willing - yes, I have been reading on his website. It seems very sensible way to approach things, I do want to get the Emergency Fund in place as quickly as possible. I am trying to be as structured as possible as I know from previous experience, without structure it will all go a bit Pete Tong.:rotfl:

One-step-at-a-time

Welcome and good luck! I have every confidence that you will be able to turn this thing around. As others have said, there are quick wins to be had, and in time, panic and overwhelm becomes determination and mini-celebrations of progress.

I'm a huge, huge fan of structure - spreadsheets, daily account checking, forecasting expenses 12-18 months ahead to minimise the risk of nasty surprises... this has allowed us to factor in enough fun that it hasn't felt too painful.

For what it's worth, I never did post my SOA here - I decided that I would rather address it privately, as once everything was laid out it was glaringly obvious where the money leaks and areas for improvement were. (I am currently very close to the repayment halfway point, having started with debt around the level of our gross household income).

I'll subscribe to this thread so that I can drop in to cheer you on!