I've done it again....

[Deleted User]

Others are right, we've all been through dodgy times in our financial life, it's hard to turn things around and definitely not easy 😯 
Breaking habits is even harder and the breaking the spending habit is the worst, once done and settled into it's a different ballgame altogether and you become averse in spending on anything other than necessities. 
I too favour keeping several, separate, accounts for monies.

enthusiasticsaver

I think if you have had issues with getting into debt before it would be sensible not to use credit on a daily basis. By all means if at some point you want a mortgage take out a credit card and use it for the odd large purchase and pay it off in full but if you use it for daily expenses you normalise it. Credit is not necessary to live. Budget on payday, save in pots for holidays and other things but you have to get out of the habit (and this is what it is) of impulse buying and spending without thinking whether you have the money or not. 

It is perfectly possible to live live without a credit card.

kimwp

Another point - I think it would be a good idea if you set a regular reflection session - perhaps a diary on here.

ryanm8655

enthusiasticsaver said:

I think if you have had issues with getting into debt before it would be sensible not to use credit on a daily basis. By all means if at some point you want a mortgage take out a credit card and use it for the odd large purchase and pay it off in full but if you use it for daily expenses you normalise it. Credit is not necessary to live. Budget on payday, save in pots for holidays and other things but you have to get out of the habit (and this is what it is) of impulse buying and spending without thinking whether you have the money or not. 

It is perfectly possible to live live without a credit card.

Yes, another great piece of advice...get rid of the credit cards...probably the singles best bit of advice you could get. You can’t cover spend without them.

Given that you say you often underestimate how much you’re spending/overestimate how much you have left then I’d really recommend completing an SOA: https://www.lemonfool.co.uk/financecalculators/soa.php

Post it here based on your spending as per bank statements/credit card statements, you may find this an eyeopener.

I used to be the same, spending without thinking and I’d never check my bank account/credit card until they stopped letting me spend.

I didn’t have a very structured upbringing and I’ve carried that into adulthood, including my finances. So I can completely relate to your comments around budgeting. I hated the idea of it and my goal was always to earn enough that I didn’t need to but the more I earned the more I wasted. I’ve been surprised how much the structure has helped my mental health now that I’ve embraced it.

Do you have a lifetime ISA? I’ve set one up to save a deposit. I only pay in £5 a week at the moment (plan to increase this soon to reach the £4K allowance by April) but even that is a psychological boost. Rather than clearing debt feeling like a punishment for past irresponsibility, it’s about the positive step of saving for a house.

Having a diary on here for a bit of accountability also helps.

TuxedoCat

I have a strange relationship with money, I always felt it was something you had to struggle with as I grew up with my parents getting debt collector calls and being told not to answer the phone!

I also feel ever since being in debt, and maybe even before, that I am maybe afraid to use my own money...like I would rather use a credit card and say I’ll pay it when I get paid and then see it’s a small balance and just pay a small amount instead so that I still have my own money.

I have two credit cards now, one has a limit of £250 and one with £1000 and I deliberately lost the pin of the larger one as I want to use them to repair my credit. I still see the old patterns I had though when I make these lower payments and have had to force myself to pay more and overcome that fear of using my money...

I was always so afraid of defaults too so put off DMP for years if I had done it when I realised there was a huge problem I would be 3/4 years into it and possibly debt free but mistakes are life lessons that help us grow, you can do it but don’t beat yourself up. 

Newstart3

TuxedoCat said:

I have a strange relationship with money, I always felt it was something you had to struggle with as I grew up with my parents getting debt collector calls and being told not to answer the phone!

I also feel ever since being in debt, and maybe even before, that I am maybe afraid to use my own money...like I would rather use a credit card and say I’ll pay it when I get paid and then see it’s a small balance and just pay a small amount instead so that I still have my own money.

I have two credit cards now, one has a limit of £250 and one with £1000 and I deliberately lost the pin of the larger one as I want to use them to repair my credit. I still see the old patterns I had though when I make these lower payments and have had to force myself to pay more and overcome that fear of using my money...

I was always so afraid of defaults too so put off DMP for years if I had done it when I realised there was a huge problem I would be 3/4 years into it and possibly debt free but mistakes are life lessons that help us grow, you can do it but don’t beat yourself up. 

I think you have just hit the nail on the head.  My parents didn’t have debt but they didn’t have money either. I always had rubbish clothes & didn’t get much money to do things with my friends. I think it was a shock when I started working & actually had money to spend, but it was gone in no time. 

I had a credit card when I was 18 & have pretty much been in debt on & off since then. I would run up a debt on a credit card, then use my own money. I suppose this gave me some sort of sense of security.  I’m 33 now & you would think I’d have learned from my previous mistakes. 

I like the idea of little pots of money & I’ll do a SOA. 

Thanks for your advice & it’s nice to know I’m not alone in this, because I was seriously starting to think something was wrong with me 

monetxchange

I'd agree on the getting rid of all credit cards forever. There's a weird thing that people try and tell themselves after debt clearing, that having credit cards and paying them off in full is purely for their credit rating - when actually I think it's more of a safety net of knowing they could blow some money they didn't have if they really wanted to. This is the exact reason why I don't use credit cards. I know I can't be trusted not to run them up, even after years of not using them. It's like being a recovering addict really - you can't ever just have "one" if you've had a problem with spending before.

Well done on taking the first step. Getting your finances organised isn't fun, but it really does take the pressure off once it's all done. You know how to debt clear. I don't think it's that you're bad with money necessarily, just that you've chosen to put your head in the sand and spend away for so long that anything else seems strange. Not a criticism - I'm speaking very much from my own experience too! This forum is a great place to get the money education many of us didn't get in school or from families. Good luck!

Newstart3

ryanm8655 said:

enthusiasticsaver said:

I think if you have had issues with getting into debt before it would be sensible not to use credit on a daily basis. By all means if at some point you want a mortgage take out a credit card and use it for the odd large purchase and pay it off in full but if you use it for daily expenses you normalise it. Credit is not necessary to live. Budget on payday, save in pots for holidays and other things but you have to get out of the habit (and this is what it is) of impulse buying and spending without thinking whether you have the money or not. 

It is perfectly possible to live live without a credit card.

Yes, another great piece of advice...get rid of the credit cards...probably the singles best bit of advice you could get. You can’t cover spend without them.

Given that you say you often underestimate how much you’re spending/overestimate how much you have left then I’d really recommend completing an SOA: https://www.lemonfool.co.uk/financecalculators/soa.php

Post it here based on your spending as per bank statements/credit card statements, you may find this an eyeopener.

I used to be the same, spending without thinking and I’d never check my bank account/credit card until they stopped letting me spend.

I didn’t have a very structured upbringing and I’ve carried that into adulthood, including my finances. So I can completely relate to your comments around budgeting. I hated the idea of it and my goal was always to earn enough that I didn’t need to but the more I earned the more I wasted. I’ve been surprised how much the structure has helped my mental health now that I’ve embraced it.

Do you have a lifetime ISA? I’ve set one up to save a deposit. I only pay in £5 a week at the moment (plan to increase this soon to reach the £4K allowance by April) but even that is a psychological boost. Rather than clearing debt feeling like a punishment for past irresponsibility, it’s about the positive step of saving for a house.

Having a diary on here for a bit of accountability also helps.

Structure wasn't much of a feature in my upbringing either, my mother is a barely function alcoholic and my dad was always at work.  I wasn't neglected, I just wasn't very high up on her list of priorities.  Unfortunately, she's either drunk or hungover so she's not very approachable.  I've never spoken to them about my money problems. 

The credit cards have always felt like a security blanket, but I'm clearly not responsible enough to use them properly.  But if I budgeted properly and had some savings to fall back on then, it really cancels out the need for them.  I've paid two cards off this month, so I'm going to cancel them today.

I'll work on a SOA now and post it shortly.  I've recently switched from shopping at Morrisons/ Tesco to Aldi, so I'm hoping the grocery bills come down.  On that point, can you tell me what the middle aisle in Aldi is all about?? lol 

I do have an ISA but at the moment it only has £750 in there.  I'm hoping to start saving more when the debt is gone and I have some more disposable income.

Newstart3

Statement of Affairs & Personal Balance Sheet

Summary

Monthly Budget Summary	Amount(£)
Total monthly income	2,090
Monthly expenses (incl. HP & secured loans)	872.52
Available for debt repayments	1,217.48
UNsecured debt repayments	593
Amount left after debt repayments	624.48

Personal Balance Sheet Summary	Amount(£)
Total Assets (things you own)	20,750
Total Secured & HP Debt	-0
Total Unsecured Debt	-15,396.46
Net Assets	5,353.54

Household Information

Number of adults in household	2
Number of children in household	1
Number of cars owned	2

Income, Expense, Debt & Asset Details

Income	Amount(£)
Monthly income after tax	2090
Partners monthly income	0
Benefits	0
Other income	0
Total monthly income	2090

Expenses	Amount(£)
Mortgage	0
Secured/HP loan payments	0
Rent	0
Management charge (leasehold property)	0
Council tax	0
Electricity	0
Gas	0
Oil	0
Water Rates	0
Telephone (land line)	0
Mobile phone	70
TV Licence	0
Satellite/Cable TV	50
Internet services	0
Groceries etc.	250
Clothing	20
Petrol/diesel	60
Road tax	12.68
Car Insurance	46.91
Car maintenance (including MOT)	28.89
Car Parking	0
Other travel	0
Childcare/nursery	0
Other child related expenses	0
Medical (prescriptions, dentists, opticians etc.)	20
Pet Insurance/Vet bills	17.05
Buildings Insurance	0
Contents Insurance	0
Life Assurance	0
Other Insurance	18
Presents (birthday, christmas etc.)	30
Haircuts	20
Entertainment	100
Holiday	0
Emergency Fund	0
Netflix	8.99
Cigarettes	120
Total monthly expenses	872.52

Secured & HP Debt Description	Debt(£)	Monthly(£)	APR(%)
Mortgage	0	(0)	0
Secured & HP Debt totals	0	-	-

Unsecured Debt Description	Debt(£)	Monthly(£)	APR(%)
Bank Loan (Car)	10780.2	350	0
Tesco Credit Card	2318.13	100	0
Fluid	1142.2	73	0
Barclaycard	144.2	10	0
Next	1011.73	60	0
Unsecured Debt totals	15396.46	593	-

Asset Description	Value (£)
Cash	750
House Value (Gross)	0
Shares and bonds	0
Car(s)	20000
Other assets (e.g. endowments, jewellery etc)	0
Total Assets	20750

Couple of things to point out here, my partner owns a business and it pays the mortgage.  He covers the council tax/ bills and I buy the majority of the food, which also includes his daughter who is here half the week. He was furloughed for the last three months which explains why the debt has got progressively worse.  Thankfully he's started back at work but his income has been reduced.  We don't really combine finances (although he has mentioned a joint account a few times) But I'd rather wait until the defaults/ CCJ/ Debt is gone.  

Newstart3

monetxchange said:

I'd agree on the getting rid of all credit cards forever. There's a weird thing that people try and tell themselves after debt clearing, that having credit cards and paying them off in full is purely for their credit rating - when actually I think it's more of a safety net of knowing they could blow some money they didn't have if they really wanted to. This is the exact reason why I don't use credit cards. I know I can't be trusted not to run them up, even after years of not using them. It's like being a recovering addict really - you can't ever just have "one" if you've had a problem with spending before.

Well done on taking the first step. Getting your finances organised isn't fun, but it really does take the pressure off once it's all done. You know how to debt clear. I don't think it's that you're bad with money necessarily, just that you've chosen to put your head in the sand and spend away for so long that anything else seems strange. Not a criticism - I'm speaking very much from my own experience too! This forum is a great place to get the money education many of us didn't get in school or from families. Good luck!

I think you are absolutely right, it's a bit like being a gambling addict and still having gambling sites on your phone.  It's too convenient with internet shopping now or having a big blow out when I've been feeling low.  I actually have a few expensive things I don't use, so I'm going to put these on ebay and use the money to pay off some of the debt.  

I initially just used the credit card to pay for my fuel every month, then pay in full.  I've looked back on my statements and I think the problem or trigger was using the credit card to pay for meals and expenses whilst travelling for work.  I'd get my expenses paid back the following month, but rather than use it to repay the debt, I'd treat it like extra cash.  Hopefully having some savings to fall back on, should help with these unexpected bills. 

Thanks, your input has been really helpful