Getting free of debt

Oh2befree

I’m a newbie to posting but Years ago read these forums religiously, and managed to get almost debt free). Que another baby and then a house move, which took everything we had saved and then some to get into a habitable state, and the debts went from around £3k at the point of moving house to almost £20k overnight. They’ve crept up further since just through poor budgeting and living beyond our means. We’ve now ran out of 0% options and my credit rating is rubbish! (from the amount of credit rather than anything like defaults etc so should improve fairly rapidly I hope once I clear some debt).

The debt is spread over cc’s and loans and consists of:

Santander cc - £4165
Tesco cc - £1516
Virgin cc - £4073
MBNA cc - £2007 (0%)
Sainsburys £1900 (0%)
Aqua cc £600

Next directory - £1687

Shawbrook loan £8500 (ends July 2023)

Total cc’s - £14,261
Total debt - £24,448

This morning I learned that as the direct debit for virgin cc was rejected by my bank I’ve lost the 0% offer. They weren’t willing to reinstate the offer even though I told them I’d pay over the phone (it was 2 weeks ago) and I’ve paid on time every other time and so that’s a four grand balance which will now incur interest.

I sobbed when I got off the phone from virgin this morning. Things are tight enough as it is without this extra expense each month but then I listened to some angry music on my phone on the way to catch the train (I’ve been away working and am heading home) and have decided I can either continue to bury my head in the sand as I have been doing, or I can tackle this head on!

I joined the grocery challenge on the OS board the week before last in a bit of a half hearted effort to do something but the call this morning has been the kick up the backside that I need!!

I’ll do another post with the figures and my plan because I’m typing on my phone on a bouncy train and don’t want to lose a huge post.

O2B

Oh2befree

So the way DH and I manage our finances is that his salary goes into one account and that's where all of the household bills come out of and my salary goes into another and that should be for groceries, petrol, savings, and everything else we need. I've set out below the things I currently pay for etc:

In: "£1940 (includes child benefit)

Out:
next £85
Sains cc £40
Tesco cc £62 (this month)
MBNA £25
DW gym £32 (going to cancel this ASAP)
Mob phones x 2 £50
Shawbrook £220
Virgin £125 (new payment after losing 0% (was only £40))
Overdraft charges x2 £60
Aqua £32
Sons lunch money £50
Dog walker £120
petrol/groceries/kids clubs etc £600

This should leave £440 ish for overpayments but because the figures above don't include birthday gifts, clothing, etc then we rarely have this left over.

For petrol/groceries etc we try to withdraw £150 per week and use cash only (The reality is though that we always end up going over budget and dipping into the rest of the months money). This is for the following:-
£40 DH's petrol
£20 my petrol (no option to save on either as we both need our cars)
£6 sons bus fares (he only gets the bus one way but its too far for him to walk home)
£5 DD's breakfast club (unavoidable as we need her to go so we can get to work on time)
£10 DS's music lesson
£4 DS's air cadets
£1.50 DD after school club
£63.50 for groceries (inc cleaning and toiletries) and anything else we need.

I cant throw the surplus money we have at the debts (even if I could find it) before January simply because of some prior commitments we already have and then of course Christmas. I will try to put £50 aside each month however to start building an emergency fund.

I have opened a basic bank account with no o/d for the monthly grocery/petrol money to sit in in the hope we can make it last. This is going to be my first target.

The debts/money situation has really affected my mental health and has taken me from a bubbly happy going person to a withdrawn shadow of my former self. I'm constantly worried and I've definitely lost my spark. I need to get that back but for the last couple of years I've definitely just buried my head in the sand and haven't faced up to this issue. I need to start with baby steps therefore so am going to set achievable monthly targets to start with. This month (so between now and payday on 20th October) I want tohave:-

1. Stayed within budget
2. Fully set up my new basic account
3. Sent an email to virgin appealing the decision (nothing to lose)
4. Go through my account and cancel any standing orders for things I don't need (I'm sure I'm paying for 3 different weight loss programmes and using none of them :eek: )

I'm going to target the aqua card first I think. Its the smallest and the best thing to do first surely is reduce the number of creditors.

O2B

Socajam

I would be !!!!ed if you cancel my gym which is beneficial to my well being and still continue to pay a dog walker 120 pounds - something is wrong here.

You need to cancel Christmas, sit the children down, explain that this year it is will be tight and they only will be given one Christmas present.
Give them the option of choosing one, no more. You and your husband are adults and got yourself into this mess, no Christmas press whatsoever - leave his gym as it and get rid of the dog walker or reduce it somehow.
Tell your family the same no presents for adults only children and set a figure, maybe 10 -15 pounds.

ceb1995

Oh2befree wrote: »

So the way DH and I manage our finances is that his salary goes into one account and that's where all of the household bills come out of and my salary goes into another and that should be for groceries, petrol, savings, and everything else we need. I've set out below the things I currently pay for etc:

In: "£1940 (includes child benefit)

Out:
next £85
Sains cc £40
Tesco cc £62 (this month)
MBNA £25
DW gym £32 (going to cancel this ASAP)
Mob phones x 2 £50
Shawbrook £220
Virgin £125 (new payment after losing 0% (was only £40))
Overdraft charges x2 £60
Aqua £32
Sons lunch money £50
Dog walker £120
petrol/groceries/kids clubs etc £600

This should leave £440 ish for overpayments but because the figures above don't include birthday gifts, clothing, etc then we rarely have this left over.

For petrol/groceries etc we try to withdraw £150 per week and use cash only (The reality is though that we always end up going over budget and dipping into the rest of the months money). This is for the following:-
£40 DH's petrol
£20 my petrol (no option to save on either as we both need our cars)
£6 sons bus fares (he only gets the bus one way but its too far for him to walk home)
£5 DD's breakfast club (unavoidable as we need her to go so we can get to work on time)
£10 DS's music lesson
£4 DS's air cadets
£1.50 DD after school club
£63.50 for groceries (inc cleaning and toiletries) and anything else we need.

I cant throw the surplus money we have at the debts (even if I could find it) before January simply because of some prior commitments we already have and then of course Christmas. I will try to put £50 aside each month however to start building an emergency fund.

I have opened a basic bank account with no o/d for the monthly grocery/petrol money to sit in in the hope we can make it last. This is going to be my first target.

The debts/money situation has really affected my mental health and has taken me from a bubbly happy going person to a withdrawn shadow of my former self. I'm constantly worried and I've definitely lost my spark. I need to get that back but for the last couple of years I've definitely just buried my head in the sand and haven't faced up to this issue. I need to start with baby steps therefore so am going to set achievable monthly targets to start with. This month (so between now and payday on 20th October) I want tohave:-

1. Stayed within budget
2. Fully set up my new basic account
3. Sent an email to virgin appealing the decision (nothing to lose)
4. Go through my account and cancel any standing orders for things I don't need (I'm sure I'm paying for 3 different weight loss programmes and using none of them :eek: )

I'm going to target the aqua card first I think. Its the smallest and the best thing to do first surely is reduce the number of creditors.

O2B

could you switch your son to packed lunches?

Oh2befree

Socajam wrote: »

I would be !!!!ed if you cancel my gym which is beneficial to my well being and still continue to pay a dog walker 120 pounds - something is wrong here.

You need to cancel Christmas, sit the children down, explain that this year it is will be tight and they only will be given one Christmas present.
Give them the option of choosing one, no more. You and your husband are adults and got yourself into this mess, no Christmas press whatsoever - leave his gym as it and get rid of the dog walker or reduce it somehow.
Tell your family the same no presents for adults only children and set a figure, maybe 10 -15 pounds.

Thanks for the reply. I work full time hence the dog walker. Re the gym, there's plenty of free exercise which I prefer, like running and walking (dog) so I have no issue whatsoever about cancelling the membership.

O2B

Oh2befree

.
Ive already made some progress on my list as well as adding a couple of extras. I'm finding reading these boards again has really motivated me. Update re the list (existing tasks completed are crossed out. Additional ones I have added/achieved are in red):

This month (so between now and payday on 20th October) I want tohave:-

1. Stayed within budget
2.[STRIKE] Fully set up my new basic account[/STRIKE]
3. Sent an email to virgin appealing the decision (nothing to lose)
4. [STRIKE]Go through my account and cancel any standing orders for things I don't need (I'm sure I'm paying for 3 different weight loss programmes and using none of them[/STRIKE] :eek: )
5. Joined the 1 debt vs 100 days challenge (going for Aqua)
6. Cancelled some other subscriptions I found lurking in my iTunes account


.

O2B

Karonher

Socajam wrote: »

I would be !!!!ed if you cancel my gym which is beneficial to my well being and still continue to pay a dog walker 120 pounds - something is wrong here.

You need to cancel Christmas, sit the children down, explain that this year it is will be tight and they only will be given one Christmas present.
Give them the option of choosing one, no more. You and your husband are adults and got yourself into this mess, no Christmas press whatsoever - leave his gym as it and get rid of the dog walker or reduce it somehow.
Tell your family the same no presents for adults only children and set a figure, maybe 10 -15 pounds.

Its DW gym not DH's - it is the OP who uses it.

Louoffofsparkle

Should both of you be left with about the same amount of money left over at the end of each month? Just making sure that you are both on the same page.

Change your son to packed lunches even a few days a week and that will make a difference.
The mobiles are they still in contract or can you change to sim only? And use Cashback sites for this.

Oh2befree

I haven’t logged in for a couple of weeks as I haven’t managed to make any real inroads into the debts over and above the usual payments however I have been sorting things out to help on the debt front. I’ve:

1. Gone through the bills account and through cancelling some things and switching others have managed to save around £100 (this can’t go towards the debts though as the bills amount to more that DH’s salary and so we were managing that with a mix of the overdraft plus feeding that account from mine each month), it’s reduced the deficit though so that’s progress.

2. Negotiated a pay rise with work of around £100-£200 per month which I should hopefully start to get in November.

3. Listed 7 things on ebay (so far today) if which 3 already have bids and the rest have watchers. This will go towards the debt.

I’m sure there are more but I just can’t think at the minute!

I’m finding it really stressful at the minute tbh. It just feels like it will never be over. DH is getting stressed too and that doesn’t help because I worry about him feeling down about money and that makes me feel down too if that makes sense.

The debts I want gone ASAP are aqua, Tesco and Next. I just think it will feel much less chaotic then and hopefully once the balances start reducing I might get some offers to transfer the higher balances on to and save on interest. My payments at the minute are just getting swallowed up.

O2B

stingey

I think you've had a great start to facing the situation.

For me most of the stress I faced was a mixture of feeling 'trapped' in a cycle of debt and also resistance at having to implement a new and more frugal lifestyle. But I can say there's nothing like that feeling when you begin to see the balances coming down.

Looking at your posts it seems like you want everything gone now. Have you tried snowballing the debt? http://www.whatsthecost.com/snowball.aspx It will take time, but it will be the most cost effecient way.

It's good being realistic about your situation, but try to look at the positives of what your doing to keep you from getting stressed. How much debt have you paid off this month? Even if it's £5, it's still £5 less you owe and off your balance. It all begins to add up.

You're not alone in this. Good luck