Need help not slipping further into debt.

mumtoomany

Hi Happy, I was wondering how you were going on after following your store cupboard thread. Others who are better at this than me will be along soon, but my two-pennyworth.
We (OH and I) have been where you are now, bought houses that should maybe have been condemned! and done this more than once. We've had times when we've lived on egg and chips for weeks at a time and sent cheques for utility bills, deliberately, unsigned to buy more time to pay. You can survive this, but it will be hard work.
Looking at your SOA, you don't even have enough to live on without the debts.
 First you need more money coming in; your children need to be pulling their weight. One day this house will be their inheritance, they need to be helping now. Any jobs they can get they need to take, even if only short term. If they are not working and not at uni can they claim any benefits? Are you and OH claiming all you can? Can anything be sold, ebay, facebook, etc. Every pound counts.
 Second you need to reduce spending. Electricity is huge. Go round turning everything off, remove light bulbs, (our multi-bulb fittings have 1 and 2 bulbs rather than 6). Never use any appliance unless full, washer/dishwasher. Tumble-drier, do not use. Don't heat any part of the house unless you have put on extra layers and then put on more layers. We once had ice on the inside of our bedroom windows that stayed for 8 days and nights. We slept in hats and tracksuits. 
 Groceries are high for this level of debt. Buy a sack of potatoes, sack of carrots(pony carrots), eat less or no meat. Join the grocery challenge on Old Style. Join Frugal living challenge. 
 Cut or ditch as much of the TV, satellite etc as you can. Mobile phone costs high, are you paying for the children's? Also other child related expenses, they need to pay for their own. Same with presents/Christmas, they are adults, they will understand. 
 After all this you should have freed up a little money, hopefully enough for the debts. If not I think you may need to look at a DMP. Others will advise on this.
 I hope I have not come across as harsh, I don't mean to. You can do this, we did, and now live in our forever home in the country. This is the fifth house that we have bought. 4 had no heating, 2 had no hot water. 2 had broken windows, the one we are in now had no bathroom or kitchen and a floor missing. Still has no carpets, not decorated, (some rooms need plaster) We will just take our time. Stay with this, and people will help in any way they can. Take care, good luck, mumtoomany.

Happy_Sloth

PurpleFairy26 said:

Well done for posting your SOA and getting a thread started on here. Some folks with more knowledge than me will be along soon but in the meantime can you provide some further info so we know the details:

you say 4 adults live in the house but only 2 incomes?
you have £400 for child related costs but show no dependants
have you made all payments up to now? 

Is this what you think you spend or did you go through bank statements to get the figures?
what is the APR on the debts? 

Are you in debt with your electric bill?
business expense - shouldn’t this be included with your business accounts?

Yes we have 2 dependant Young Adults in the house who are in university,  They are currently home but will be going back in September.  The £400 child related costs is actually the money we give them to top up their Student loans (£200 each) to help pay for accommodation/food etc (We aren't paying it right now cause they are home, but I put it in because when they go back i'll need to find it!)   We were higher earners last year so they both get minimum student loans, one it just about covers accommodation and the other it doesn't so we need to top up his accommodation and then give him money to live off. 

I use the yolt app so getting the figures was pretty easy  

The electric bill is a nightmare! we keep reducing it and then they put it back up...we aren't in debt with it... but it will go very high over the winter.   we pay combined gas/electric so I just took the figure we pay and guessed how much was gas v's electric if might be more gas tbh.  The house is a big Edwardian it costs a fortune to heat during the winter,  none of the heating is efficient and i'm sure the heat just goes out of the windows etc.  So I know we pay over the odd's. making the building alittle bit more thermal efficient is on the list of things to do but it doesn't even have radiators in every room so some rooms are heated with electric fires.    It';s a weird building heat wise … it's cold inside even in the summer we've been known to have a BBQ in the sunshine and come inside and stick the fire on because the living room is freezing. 

The business expenses.... accountancy fee is normally paid by the business but my business has ran out of cash so i'm currently pumping money into it just to keep it afloat.  But most of that is my Income protection insurance (about £100) … which ironically is supposed to cover me if I can't earn money in my business. It would cover my if I caught covid and was too sick to work but doesn't cover me for the crap related to no-one wanting my services because of covid.  That is a bill I have always paid, because my accountant said that it wasn't an allowable business expense for the business to pay for. 

Happy_Sloth

Fireflyaway said:

Looking at your outgoings, I'd say you could save a lot on groceries. I think you could get it down to £300. Your tv looks high as well. Are you paying extra for sports or movie channels etc? Then presents and Christmas could be cut back a bit. Mobile is also high but I'm guessing you are tied into a contract? I only pay £8 a month for mine! 
The obvious first step is no more borrowing. Sounds easy and obvious, but it's sometimes hard not to take the easy way and use credit. Master no more borrowing and it gets easier. Don't spend unless you have the cash saved up. 
Might be worth trying to get a small emergency fund together as well. I think most of us live close to the limit. The more you make, the more you spend! Especially in these uncertain times we all need to be prepared. Have you started to look for more work? There is quite a bit of temporary work about that could boost your income. 

Yeah the income I put down is a temporary job, I still haven't given up hope that I will be able to get my business back up and running at some point but till then I needed to pay the bills.. it's only till November but better than nothing.  

The TV is high because it's for 3 box's one in the living room and both boys have a box.  it was higher but we got rid of some channels and the box in our bedroom.  I could get rid of the boys boxes but they live in their rooms right now and i'm still trying to keep them in the dark about the finance's I just don't want to worry them. My youngest is stressing about Uni already as he's going for the first time in September and it's all up in the air... will he be given the grades he needs because exams where cancelled etc. Will class's go ahead... last thing I want is to add more stress to him about money.... I know I know … now is not the time for pride... but I just don't want them to know we are struggling. 

Phone wise … i'm paying for 5 … mine, husbands, 2 boys and business... most are on £10 a month, but 2 are higher and in contracts. 

Happy_Sloth

Grumpelstiltskin said:

Presents £150 a month, sorry but you can't afford this. Tell adults you are not doing presents this year and children, how many do you buy for? how old are they?

Tbh …. i'm not even thinking about presants atm... there was a box and it told me to fill it in so I just added a number... I have no idea if it's reasonable, we certainly aren't putting money aside i'll reach that bridge when I come to it.

Happy_Sloth

A few people have mentioned food … I put down £500 because that is our 'normal' food spend when times are goodish.... 
We really haven't had any money since about march when the pandemic kicked off … I've been spending about £100 a month since then, i'm lucky in that we have/had a good stockpile of food which we've been living off.   

I was in denial over the situation for a long time we got mortgage/loan breaks and I hoped things would go back to normal. So we have been living beyond our means for a while.  

However the breaks are all ending, things are not going back to normal and I've got to figure out a way of making this work until I can get my business running profitably again.  

YORKSHIRELASS

Hi, well done for posting.  First thoughts are that you can cut that grocery spend.  I have my 19 and 21 year old at home all the time at the moment and £75 a week is very achievable, cooking from scratch, meal-planning and cutting back on non-essentials.  £20 a month doesnt seem enough for maintenance for both cars, but £150 a month is way too much for presents.

I think you need to be brutally honest with yourself about the house.  How long are you going to be able to manage with the hot water/shower situation?  Do you have an idea about how much that will cost to put right, and what are you going to do if any more unexpected repair bills crop up?  Trying to squeeze even a small emergency fund out of the budget would be a big help.

Say to yourself that as of today you are not going to put anything else on credit unless it is a life or death emergency, even if that means living on beans on toast one week.  Its a really powerful feeling just being able to do that.

I understand not wanting to burden the boys with your financial worries, I am like that too, but you also have to be honest about your situation and for me that was the hardest thing to take on board.

Happy_Sloth

YORKSHIRELASS said:

Hi, well done for posting.  First thoughts are that you can cut that grocery spend.  I have my 19 and 21 year old at home all the time at the moment and £75 a week is very achievable, cooking from scratch, meal-planning and cutting back on non-essentials.  £20 a month doesnt seem enough for maintenance for both cars, but £150 a month is way too much for presents.

I think you need to be brutally honest with yourself about the house.  How long are you going to be able to manage with the hot water/shower situation?  Do you have an idea about how much that will cost to put right, and what are you going to do if any more unexpected repair bills crop up?  Trying to squeeze even a small emergency fund out of the budget would be a big help.

Say to yourself that as of today you are not going to put anything else on credit unless it is a life or death emergency, even if that means living on beans on toast one week.  Its a really powerful feeling just being able to do that.

I understand not wanting to burden the boys with your financial worries, I am like that too, but you also have to be honest about your situation and for me that was the hardest thing to take on board.

The car Maintenance is almost certainly not enough …. I needed a new battery just last week (3 months on the drive it was dead) and that cost £180 … sigh... but I didn't know what to even guess at. 

The prezzy's again I just had no-way of guessing.. I normally spend about £2000 total at Christmas on everyone, so that divided by 12 was £166 … and that doesn't account for easter, birthdays etc. .. so I figured cutting back £150 for both was £75 for birthdays, £75 for Christmas. 

My mum's birthday is in 12 days I normally spend £100+ on her .. usually a nice £30 prezzy and normally take her out for a meal that is normally £70 ish by the time I've paid for us 4 and her.  I know I can't afford it right now and I guess it's a small mercy that I don't need to explain to her why we aren't going this year as none of the restaurants are open haha.. My sister hit my up for £15 just yesterday for my aunt's birthday.. it's never ending and I just don't really want people to know i'm struggling. Most people thought it was a risk to set up my own business... I hate that they are right, I screwed my family. 

As for the water situation.... we've been doing it since December... haha … we've had a quote for £3000 to fix it all... bathroom needs completely re-tiling and new shower cubical that doesn't leak..   getting water into our hot water tank needs a pump because our water pressure is too low and we need the header tank bypassing because the tank is a health  hazard as we are cleaning our teeth in dirty water...  it's just a none starter...… so we fill the tank manually each morning and we have a rota for the bath haha.... it's stupid. 

Queen_of_the_Hive

Hi Sloth, 

I well and truly feel for you as I have experienced the stress of money worries renovating a house, redundancy and in Covid I too have lost my job as well - in fact I started receiving job seekers allowance this week which doesn't make me feel comfortable but with the situation at the moment it is my best option. My kids are a lot younger than yours but I really would think strongly about letting your kids know a bit about your financial situation as although its hard, it may be better than you think. My eldest is 7 and I am trying to instill in him the concepts of money, budgeting etc from young and I have had conversations with him at times that have been awkward and have explained that because of my situation I can't pay for x or y and I have to say it has taken the pressure off as mum trying to do her best. 

Debt free section of MSE is really good, lots of support and well done for posting - if you can take some time reading through some of the diaries as you will find all sorts of ideas which may work for you. I personally find keeping a spending spreadsheet really useful so can see income and outgoings and it is reviewed daily (my partner thinks i'm a bit obsessed), with the house have you put together a priority list of what needs to be done and in what order? With the energy - I am assuming they are taking money in direct debt as estimated. Change this to actual and provide meter readings - the money is better in your account than theirs. 

sharpe106

Happy_Sloth said:

Fireflyaway said:

n nothing.  

The TV is high because it's for 3 box's one in the living room and both boys have a box.  it was higher but we got rid of some channels and the box in our bedroom.  I could get rid of the boys boxes but they live in their rooms right now and i'm still trying to keep them in the dark about the finance's I just don't want to worry them. My youngest is stressing about Uni already as he's going for the first time in September and it's all up in the air... will he be given the grades he needs because exams where cancelled etc. Will class's go ahead... last thing I want is to add more stress to him about money.... I know I know … now is not the time for pride... but I just don't want them to know we are struggling. 

 

You have made a good step addressing that you have an issue, but unfortunately unless you tell your sons your problems all your hard work will be for nothing. Without reducing what you spend on them you will not be able to make a dent into what you owe. They are both adults it could also be a valuable lesson for them in the future. Let’s also be honest as they are both university students they must have figured out that having to carry water upstairs to fill the tank for a bath is not normal, so they must already know you have some financial issues. Have the conservation with them it might be hard but without them helping you will never be able to clear your debts until your business picks back up and your partner goes back to work.

[Deleted User]

I know you are trying to save money, but I am going to suggest you buy something.

Rather than filling the header tank buy a portable camping shower like ones of these: https://campfiremag.co.uk/camping-shower/

Then each person can fill the water resovior themselves in just one trip and then stand in the bath to have a shower.