Time to deal with this...

Hi all,

I'm new here, been reading the boards for a few weeks now and after putting my figures and spreadsheets together, I've decided to make my own diary :D

Situation: Self employed (own a small business with 1 business partner and 1 employee), have been on a good income for the past few years (around £47k). Everything was flipped upside down January 2019 when work from our main client dried up as they were reviewing their supplier terms. I also became pregnant at this time, my plan was to save as much as I could to support myself through mat leave as my SMP would be very low. Work never really picked back up throughout the year and I got closer to my due date and my savings were all going on paying my bills. I was using my credit cards a lot (stupidly) thinking it was okay because business would pick up soon. I confess that I am a shopoholic and I shop to cure boredom, but this is something I'm working on in my mind- I must keep reminding myself that shopping only brings temporary joy.
Thankfully, the outlook for business looks positive as we have just signed a new agreement with our big client. I'm hopeful 2020 will be a good year.
But now, I really need to deal with this mess I've gotten myself into. My baby is 4 months old now and I want to bring her up to respect money, by doing that I feel like I need to stop spending and start paying off this debt.
I've never defaulted and have an excellent credit rating, although my low income is impacting on how I can borrow.

So here it is:
Credit card debt:
AMEX- 22.9% MBNA- 20.93% Barclaycard- 18.27% Natwest- 6.684%
£3,452.51 £14,929.39 £3,678.08 £2,026.72

Other Bills:
Car Insurance £79
Pet Insurance £29.05
C/Tax £155
Car finance £358.69
Water £40.80
Tv License £12.83

If there is anything you think is missing, it's because my husband pays for it (I haven't done an SOA for this reason, it didn't make sense). We have totally separate finances. He owns our house outright. Husband knows I am planning on being frugal and paying off debts but I mainly keep this to myself.

Income wise, it's difficult for me to say as I'm self employed, so the amount fluctuates depending on how well we can afford to pay ourselves (which has not been well this year)! The business has no debt.
On average at the moment, I'm getting anything between £600- £1400 a month. I've not taken home any more than £1400 at the most as a monthly salary all year.

I have just under £4k in my current account and £1300 in our daughters savings. I keep the £4k in my account rather than savings as I don't know what my salary will be month to month and I may need to top it up to cover bills.

My plan so far:
For expenses, my husband gives me cash to cover the food shop. i'm trying to use this money wisely rather than daily Waitrose and M&S shops which is what I usually do and have just dished it out into 4 envelopes with £65 each in them. I am going to meal plan and shop at Lidl.

All credit cards are cut up. MBNA is the only provider I have spoken to and they have temporarily frozen the interest while I work out a plan. They advised me to speak to Business Debt Line, but trying to get through to them is like getting blood from a stone. I was on hold for an hour and have emailed twice but haven't spoken to anyone yet. I've emailed Stepchange too incase they can help advise.

In terms of repayments, I'm guessing I should tackle the MBNA card first. I've gone down to minimum payments on my direct debits with Barclaycard and Natwest while I figure all of this out. It's just so difficult to make a solid plan when I never know what my monthly income will be. Any suggestions?

I plan on finishing my mat leave early so that I can get a second job to help pay this off. I'm going to spend the next couple of days ebaying. I could definitely raise a fair bit with all the cr*p around the house I don't use.

If you're still here, thanks for reading! Hopefully this will be the start of a new chapter for me, I feel more determined than ever to change my stupid ways and have a better future.

Replies

  • savingholmessavingholmes Forumite
    23.2K Posts
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Forumite
    You can do this.

    I am going to suggest something you may consider radical

    I think rather than outside agencies - the starting point should be to go to your husband. You just had a child together after all - he knew you were self-employed and that you would have very little income during this maternity leave period. Sit down together and come up with a joint plan where you are both pulling in the same direction

    Of all the studies done on millionaires - they got to where they did as they did their finances jointly. You are married - I don't get why you have his and her finances. The marriage vows I said were for richer for poorer in sickness and in health - all my worldly goods I thee endow...

    All the best
    Target 1) Prioritise health & social connection 2) Write regularly 42,993/70,000 words Book 2 and 10,787/70,000 Priestess book 3a) Get to £10K EF/Savings Now £4,573 3b) £1.6K Savings for DD Car (Achieved) 4) MFW starting at £201999 Nov 21 with 264 249 payments to go. Now £192,304 5) Mortgage neutral progress via pension £1,887 invested since Nov 21 6) Declutter 7) Invest in fun and frolics - and not just future self! 8) CC Debt free April 22 (now stay that way!!)
  • Thanks for replying! Not radical at all, a perfectly reasonable suggestion which I thought people may suggest...

    He would help me in a heart beat, if I told him. He already does a lot in terms of what he pays for. But I feel my debt should be my problem only. It’s my fault after all. I think I’d like to try on my own first before I go to him. I know if worst comes to worst, he would be there for me.
  • charlies_tribecharlies_tribe Forumite
    1.3K Posts
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    Forumite
    Hi and welcome.
    My first thought would have been DH to but that's because since our first DD was born all the money has been ours and all debts are ours too even though most are in DH name.

    For wages could you choose an amount to work with, say £800 pay all Bill's , min payments etc and rest to debts and then anything over the 800 could be put to one side to cover the months you don't earn the 'set' amount.
    LBM in April 17 - £14998/£33554 (44.6%) paid.
    [email protected] June 18 = £9935/£76350 paid.
    Total debt @june 18 £102311 now £84972
    GC Jan £40.99/£500 2021 declutter 85/2021 items 0/20 bags clothes
  • First week has gone pretty well.

    As far as spending goes, I’ve spent the following:

    £12 baby cinema (for next week- need to do these things with DD to keep me sane, but bonus is you get free coffee and cake)
    £45 pet food (should last around 6-8 weeks, my dog is on a veterinary diet so can’t go for a cheaper option)
    £38 weekly food shop (very pleased with this, meal planned for the week for breakfast, lunches and dinners). I’ve budgeted £65 per week for food. There were only a few things I couldn’t get in Lidl, so I can get those from Sainsbury’s later in the week but should only be around the £5 mark.
    £14 parking (this one caught me off guard, central London!)

    I don’t think I’ll need to spend anything else this week. I have a Pilates class which is part of a course paid for a while back, baby cinema and a trip to WB studios which was also paid for a while back.

    I took on board the advice on here and did end up speaking to my husband about the debt and letting him know how much it was. He’s being very supportive in helping me out while I clear this.

    I’ve sorted out a spreadsheet to track the credit card payments and spoke to MBNA again as I can’t get through to Business Debt line (so bloody frustrating), but they can’t give legal advice so they’ve frozen the interest for another 30 days while I try to speak to someone at BDL.

    I’ve cleared £200 off of my AMEX and £350 off of my MBNA this month and left the other two on minimum payments for now.
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