Help and Advice Needed.

floss2

Oh, and Ebay anything that isn't nailed down or living..... and pay the money off your debts.

BTW, is your wife fully aware of the debt that you are in? Are the cards / loans in joint names?

RAS

Lavajelly

Based on your profile, I assume you have already consolidated at least once and you are in an even worse mess now than when you started?Given the sort of APRs you are paying, this view seems to be shared by your creditors. Even with your high income, you are spending more than you can afford.

If you are paying minimum payments on these sort of rates, you are not going to reduce your debts.

The answer is not another consolidation loan, secured or unsecured as the latter could easily end up as a charging order. In addition, you will just end up living your existing lifestyle and running up more debt (that is what happens to 85% of people who consolidate).

You need to cut your spending a lot and pay off your most expensive debts quickly.

lavajelly011 wrote: »

Essentials

Abbey - Mortgage £1702
Council Tax £222
Water £34
TV licence £12
Electricity £138 - even if you have no other fuel source, this is very high. Check you have not got a large ballance at the supplier and check the deals on here, then move via quidco. And wear a jumper and buy a hottie.
Train Travel £120 if this gets you to work. Is there any sort of deal you can do with your employer re season tickets etc?

Includes some essentials

Groceries, Clothing, Household Expenses £1300 How many in the household?

This is extortionate. And you need to sit down and work out exactly what you are spending this huge sum on. Use your CC bills to get some sort of grip on it (how much in supermarkets, how much on clothes, how much on restaurants etc), but you BOTH need to start keeping a spending diary, listing every last farthing that you spend.

Stop spending on clothes and cut the going out drastically now.

Things you can do without or reduce

Life Insurance £49.4 - check if this is the best price you can get and use www.quidco.com to change
Unit Trust Purchase- Kids Saving Acc £110 - stop this - you cannot afford it. Once your finaces are sorted you will be able to afford much larger svings for them.
life Insurance £35.57 ditto the other insurance
Mobile Phone 1 £49.09 PAYG or cut the package to a minimum
Sky Digital £48 - get rid and go freeview
Mobile phone 2 £50- PAYG or cut the package to a minimum
Telephone £75- Gee - how much? Reduce your usage.

Things you can cut

Petrol £200 - reduce your mileage unless it is to work
Child Minder/Carer £450 - have you checked that you are using any free hours for over 3s
Cleaner £80 - reduce this

Current Debts

With all of the lower rate cards, what is the maximum? do you have any spare capacity to transfer, one way or another, any of the money on the higher rate cards to lower rate ones. Pay the supermarket on the lower rate card and then pay off the same amount into your higher rate card for example. Then reduce the limit on the more expensive card.


Wife Credit Card Barclays £82 Bal £4100 Pay 82 Rate 20%

This is the one that you should be paying off ASAP

My Barclay Card £78 Bal £3485 Month Pay £78 Interest Rate 19.9%

And then this

Smile Credit Card £228 Balance £12,500 Pay £255 Int Rate 18% - pay the extra off the cards above

MBNA - £282 Bal £15,826 Mnth Pay £282.63 Int Rate 17.5%

Egg Card £125 Bal £6254 Pay £127 Int Rate 16.9%

Northern Rock – Loan £167.6 Bal £15,500 Payment £145 Rate 10% payment does not seem to cover the loan ????

Egg Loan £350 Bal £19,000 Month Pay £350 Int Rate 7.66%

Halifax CC £145.49 Balance £10,044 Payment £200 Rate 5.5% Why are you paying extra off this? any spare money needs to go to Barclaycard

Morgan Stanley Credit card £73 Bal £3500 Pay 75 Rate 0% Sept 2008

Total Expenses £6206.15

Total Loans 90,209

Income
My Salary £4533
Wife Salary £1700
Child Benefit £102
Total Income £6335

Excess £128.85


I have not included holidays, car insurance and home insurance in here As I get an annual bonus of about £20 000 (gross) which I use to pay in a lump sum once a year.


Other car costs (finance, repairs, MOT etc)?

Make a list of your annual expenses and allocate this against your monthly income

Any ideas and is there salvation? Only if you both get it into your heads that you can sort it now if and only if your reduce your spending

[FONT=&quot]Thanks[/FONT]

Since you have been spending loads, do you have anything that you can sell - e-bay I suspect rather than car boot?

lavajelly011

The problem is that I have no idea how much I should be spending on food clothing etc as there has always been money around. Half of the debt is because I used to have a small Internet business that I ran in the evenings. It was a nice little earner and netted about £1,200 a month. Unfortunately as I have a high stress daytime job and my little business got hit by the floods it effected my health which lead to relationship issues and I could not carry on the business. I therefore had to close it out and due to our losses from the floods I had to put in allot of cash.
I do agree with the comments that my lifestyle was/is quite high but I cant believe I could spend less than £1300 running the house although I will have to learn how to.

saffronflowers

Can I just say that as we are a fearsome DFW bunch that we must not lose sight that LJ is one of us even if his income and outgoings are larger than the majority here, maybe if we just moved the commar to the left we could be a little bit more empathetic!!!

LJ - as much as it might seem a really scary thing to go DFW it is increadibly rewarding, when you realise what you can get for less money, if you do decide to go dfw, you will quietly smile at your colleques or carry on living beyonds their means when you have managed to get them under your belt. Just think when you have your first fantabulous holiday that you have saved for how sweet will that be - tis making me smile just thinking about it.

Remeber a Porsche Cayeene is just a Toureg in disguise, Volvo v50 is a ford focus etc.

Sfx

floss2

Can you utilise your children's savings? Once the debts are paid you can easily replace them on your income and at £110 a month, even if you've only been saving a year that is £1320 straight off your wife's Barclaycard. When you have cleared all your debts, that is what you will have EXTRA every month - that is what you are paying just on servicing your credit.

lavajelly011

What? I have to give up the Porsche? :-)

saffronflowers

Yup!!! well only if you have one!!! But for goodness sake dont buy a vw camper till you are solvent - that is a real money spinner!!!!

Come on LJ sit down with the Mrs and go through all the spending - get out thouse credit card statements and bank staments!!!! You dont have to live like a pauper but just be money savvy

You do realise that Primada/Primarche are the lables to be seen in these days!!! How could you not love a whole new outfit fot £15 and that is a real blow out!

SFx

lavajelly011

Im inspired - Who are Primada/Primarche and where should I know them from?

saffronflowers

Primark!!!!!!!!!!!!!!!!!!! tis the new couture!!!

SFx

splishsplash

Hi LJ,
Well done for reaching your lightbulb moment:T

I don't know if the link has already been posted, but it case it hasn't, here is the snowball and other debt costing tool link:
http://www.whatsthecost.com/default.aspx

I suggest you enter the various permutations you're considering, and play around with it a bit. For instance, JUST the secured loan of 40k over 15 years at 7.1% will really cost you £65,280, and actually, it will be a lot more than that if the interest rate goes up by a significant amount. Not only that, you'll be stuck with it for FIFTEEN years!!! That's a lifetime!

You don't mention whether your wife is as aware of your predicament as you are. It's going to be almost impossible to deal quickly with this all by yourself. You might think about showing her your posts here to help her come to terms with the idea of reining in slightly.

I would also suggest you NEED to track your spending as a family, even for a couple of weeks. You would be amazed how much money you can save just by becoming aware of the 'drains'.

No matter what your income, you've expanded your lifestyle beyond it to the tune of £90.000, and unless you really absorb that fact, you won't fix this easily. If you've been lurking here for a while (as I have), you will already have noticed the recurring theme of debt, consolidation, more debt, DEEP trouble... and the dire (and very wise) warnings against consolidation.

So use whatever motivation you can to help you put this behind you. At present, you cannot afford either holidays or £1300pm grocery shopping. It may come as a shock to realise that, but sadly, it is true.
You may be able to afford both again in a couple of years, but not now.

Best of luck, you can do this, but get your family on board. It will be good for them to learn financial awareness too.