Becoming obsessed....

EssexOstrich

Hi,
I'm another long term lurker who, thanks to the ongoing lockdown and weird period of enforced self-reflection, has finally decided to do something about my mahoosive debts.
I've had credit cards for as long as I can remember (I'm 44), I've never missed a payment and I am affording the payments, (which almost feels worse because whilst that's happening, it's easier to ignore) but I've got lazy with the interest rates and minimum payments , I've stupidly failed to shut down credit cards when I've transferred high interest balances to loans and then continued to run up more balances having convinced myself I'll pay it off this time, and have now found myself with £30000 on a combination of credit cards and loans with absolutely nothing to show for it except some lovely holiday pics. I couldn't even tell you what I spent at least half of that money on! To make matters worse, I'm lucky enough to not have a mortgage, I'm just a serial over-spender and use it as a kind of therapy/consolation to make up for other areas of life.

I used to work for a credit card company so have a decent knowledge of debt, interest rates, balance transfers etc., There's really no excuses, I'm just lazy and have buried my head in the sand for the longest time. I tried at the beginning of the year to take out a mortgage against the value of our house in order to consolidate everything to one monthly payment on one interest rate, which would have been about 8% LTV, but the bank said no although didn't provide a reason. So here I am. I'm hoping to use this as a diary to hold myself accountable and keep me focused on avoiding any additional debt as well as paying down what I owe. It wont be a short term thing unfortunately, I have 2 kids in uni which is everso slightly crippling, but I hope to be debt free in 5 years max. 

The thing which I'm expecting some judgement on is that my OH doesn't know. I know the advice will be to tell him and share the problem. He is really quite frugal, none of the overspend is his, he has his own loan for a car which isn't included in the above, he's a hard worker, he has health issues and to tell him would cause him a huge amount of stress and anxiety, which for as long as I feel able to cope with the situation, isn't worth it.

This time spent indoors has made me realise how much money I waste and I have a fair bit of salary left with only a few days to go until payday (whereas I'd normally have none) so I've started by making some additional payments today which has already made me feel a bit more in control. I've also transferred a hefty credit card bill at standard rate interest to a low interest loan. I realise I could possibly have got 0% but I'm not trusting of myself enough yet to know I'll pay it off or transfer it timely enough. I was paying £131 against a £6800 balance and getting £105 interest every month, what an idiot!!    I've even closed the credit card down this time! Even these 2 small things have made a big difference to my mindset.

Anyway, thanks to everyone who has shared stories, experiences and tips, hoping I can be one of you one day

EssexOstrich

So.... before I procrastinate a bit more I'll shame myself with my debt balances

Loan1: £6000 (3.9%) - arranged today to pay off a credit card balance which was at 16.9%
Loan2: £3227.28 (6%) - starting value £7500 for 60 months, 21 months remaining.
Loan3: £2592.47 (6.9) - starting value £3000 for 60 months, 43 remaining.
CC1: £9196.90 - combination of 0% and LOB offers around 4.9%.  £266.81 on 19.9% interest. 
CC2: £2820.06 - 0% until November, go to rate 15.9%
CC3: £2705.36 - 21.7%. Whoops.
CC4: £2338.03 - 0% due to expire in Feb. Go to rate 20.9%
CC5: £556.59 - 16.9%
Storecard1: £234.61 - no idea of APR but paid off in full today.
Very: £225.07 (BNPL - no interest if paid by May and July)
Paypal Credit: £157.75 - paid in full today
Overdraft £2000

Total £31852.73

So I've cleared the storecard and Paypal balances today regardless of APR's to make me feel like there's less to manage. Crazy method, sorry! I'll try and arrange a 0% CC for CC3 although don't feel very hopeful. The loans will just tick over for the duration but they are manageable and I'm happy that I know where I stand with them and am no longer paying silly interest on the credit card for Loan 1. If I can afford to make overpayments they will come off the CC's first I think.

Although I've paid a fair bit today I wouldn't usually have it available, it has helped that the kids are home from uni so I'm not having to subsidise them. Future overpayments will definitely be smaller for the time being, but any extra payment will be more than what I've been doing for the last decade

**Updated 25/04/2020 with correct balances as of 19/04/20

x_raphael_xx

Welcome EssexOstrich,

Well done for taking the first step. Could you post your SOA? https://www.stoozing.com/soa.php

Whether you tell your OH or not is up to you, as long as keeping the debt a secret isn't harming either of you

Seasidegal58

Hi there @EssexOstrich - Wow!  It was with a good dose of deja vu that I've read your posts!  You could have been me back in 2016 all the way down to the amount of debt as well !  The only difference is that I did not have a OH that I was keeping my debt a secret from - but I did fervently want to keep the debt a secret from my immediate family and friends - all through embarrassment!  There have been a few of us over the years who have kept their debt secrets to themselves. 

As  @x_raphael_xx has said, posting a SOA is a good thing as there will be a few people who will be glad to give you advice.   I found the folks on here wonderful when I began my debt free diary. 

I've subscribed and look forward to following your journey. 😀

EssexOstrich

Hi, thanks so much for the welcome!

Raphael, thanks for the advice. I’ll work on my SOA and post it as soon as poss.

Seasidegal, wow you’ve cleared yours, how fantastic well done! How long did it take? I’ll try and find your diary, still finding my way around. On the secrecy side of things I’m the opposite, I don’t have much family but my brothers and my friends know, although only a conservative figure as I told them long before I dared to look at the figures. My OH wouldn’t be unsupportive but he would worry endlessly and try to work even harder than he already does. I want to fix it myself, or at least be in a much better place before I add it to his shoulders. Hope that makes sense

foxgloves

Hi EssexOstrich, 
Just popping on to say it is definitely not too late to tackle those debts. I had my big lightbulb moment re debt when I was about the same age as you. As I've said in my own dfw diary, despite us both earning decent salaries at the time, we had debts of around £35K. At the age of 46, I paid off the last of them (not including the mortgage). Yes, since then, we have taken out a modest loan to help us buy a car, but unlike our past selves, we saved up a good deposit, borrowed sensibly & overpaid to reduce both the term & interest. Reading about your spending was like deja vu for me. We were in that posirion because we were profligate with money. We never budgeted & overspent our income every single month. Our answer was to consolidate debts, never to stop spending. But once we'd decided to change our irresponsible wasteful behaviour, there was no stopping us. It CAN be done.
Good luck!
F

EssexOstrich

Hi Foxgloves,

Thanks so much for your reply and reassurance, it’s good to know that not only have people got themselves out of similar positions, but that they’ve also got in to them in the first place!

we both earn decent enough salaries, we’re not well off by any means but should definitely have more money than we do! I think the problem if I very much live to my salary and anything big, like holidays, emergencies, etc, I don’t budget for, I just merrily stick it on a card with and promise I’ll pay it off. Definitely time to readjust. I think I’m most cared about seeing how much I spend on takeaways, eating out, lunches and coffees!!

Thanks for the support and well done to you on how far you’ve come!

foxgloves

Yes, EssexOstrich, those particular money leakages were an eye-opener to us too. We calculated that we were spending £2000 a year just on buying lunches on work days. Making packed lunches on an evening (one of us washed up after dinner, the other made lunches) was an absolute no-brainer. Yes, it's a common misconception that putting 'extras' on credit cards is 'living to your salary'. Of course these days  I know it isnt. Holidays, car services, festival tickets, etc, etc, are not emergencies. Or new boots or a fantastic deal at a favourite cosmetics counter. All those things need to be included in our budgets. If the money for them isn't there (i. e saved for), then they don't happen. It took me from the age of 19 to my 40s to realise this, but once I'd grasped it, I was up & away.
Wish I'd discovered the empowerment of budgeting earlier, but better late than never!
F

another_casualty

Howdy! 

Well done for realising that you were burying your head in the sand for sometime . Ignoring the financial mess that everyone and their dog 🐕will be in so to speak after the corona situation is sorted I would like to advise you never to use your home as equity and borrow from that . From experience , it never works and is very stressful knowing that you would in effect have a mortgage on your home when you have actually cleared it . I had a mortgage and did that about 3 times and for me it was like having 2 mortgages . Also I would say that the reason that you got ( thankfully imho) declined a loan on your home is because of the word "affordability" which lenders use a lot over the last decade or so where before they were chucking loans at us left, right and centre. 

I doubt if there would be a demand for holidays for some time which may be a blessing .
Is your and your other half's job quite secure when things pick up? 

I hope that things work out ,and sorry for your situation regarding your other half and whether to involve him or not. I won't advise there but hopefully whatever happens is for the best .
Best of luck 

doingitanyway

I agree with AC. Well done for facing up to the situation, starting a diary and committing to getting it sorted.

EssexOstrich

Hi guys,

Thank you for the welcome and the support. I agree it’s a blessing. We’ve had no mortgage for a while, lucky enough to have bought our home when they were cheap and affordable.  I’m glad it didn’t work out, I was looking at a 15 year mortgage which would’ve been nuts.

As for holidays days we had already decided to forego one this year, luckily we weren’t able to sort dates for all 5 of us otherwise we’d no doubt be looking at a few grand extra in the total amount!

My job is secure and I’m still working full hours on full pay. My husband is self-employed and has been working where social distancing allows. He’s not earning anywhere near his normal income but he’s hoping to get the grant for self-employed which will make up the difference in due course and maybe help towards the afore-mentioned expense.

Possibly not the best time to stick my head up but there’s no going back now!