First Steps to Solvency

Sarahwithlove

alt80 said:

@warby68 I have yes. Don’t think 100+ in the right conditions is actually dangerous personally but the cops don’t like it. As for writing the car off, it crossed my mind seeing how hard I could push it as it was going anyway and I didn’t take it out - don’t want to hurt someone. Couldn’t forgive myself for that. 

Lol I’ve got nearly four years to win you over ha 29/2/24 next leap year. 

@Purplelady65 I wasn’t being rude it was a joke and I think warby took it that way tbh.

Yeah I am a bit angry about the tiers - not just me think a lot of people are. Not raging about it and dealing with the anger in a constructive way not doing self destructive stuff. Actually am speaking to someone about it as believe it or not I feel a lot better generally when not on the edge all the time. Didn’t used to have a massive issue with anger, had a few problems but this the most sustained bout of it. Tbh it’s not nice realising there’s years of payback and no easy way to be financially comfortable. I’ve constantly been on edge since I faced up to the numbers just trying to deal with it. Have times where complete panic takes over - wtaf happens if the markets do tank/ 2008 all over again banks calling in loans (happened then no one to say it can’t happen again). Realising I have little resilience and no chance of being able to pick up the forced sales without freely available finance isn’t nice. Spent a long time thinking everything ok but it isn’t not by a long way.

@getmore4less I know I’ve wasted a lot of money or all sorts of things. Cars to an extent yes. If I could have my time again I wouldn’t have bought any of my current cars or the ftype. Not much I can do now about it.

@Sarahwithlove thank you I like that suggestion. Find it hard to work out what I consider as debt tbh ... where does it stop for me lol. Acknowledging more than the cards is overwhelming but definitely part of the problem. 

If the cards are what you are aiming to pay off first then start with 1% of the original total of the cards. Then see how much you have paid so far and what 1% will be going forward 

getmore4less

alt80 said:

@getmore4less just don’t like her bringing it up suppose it seems like a criticism from her.

Probably more a gental reminder than criticism, you do seem to forget the priorities, if you are sharing some of your house and car thoughts with her like you are on here you need the check. 

Your head is running ahead and I suspect the wife is looking for a bit of restraint to show you can think things through more thoroughly and consider the needs of your family. 

It's not easy, I looked back at the early posts on this thread and there is plenty of progress for 2 months, the debts and budgets are working, personal relationships are getting there, there a revived focus on the need to build the business.

Purplelady65

I appreciate that facing up to the amount of debt you are in is stressful particularly with all the uncertainty around Covid and the economy. It’s not easy to look at the figures and wonder how they’ve got so high. I know as I’ve been there myself. I met my husband at uni and we both had the same attitude to money and spending which was to enjoy ourselves and not let a lack of money stop us doing what we enjoyed with a large part of our income going on socialising, music events and holidays / travel. So we were in continuous debt from being students. This overspending just became a way of life and tbh didn’t really bother either of us. Our highest level of debt on loans and credit cards was £59k in 2009 (I’ve just checked my spreadsheet!). We had always ‘kicked the can down the road’ thinking we’d pay everything off in the future when we had more spare money. As we both had good incomes and had never missed a single payment on anything we had easy access to credit. We paid interest on the loans but used to move the credit card balances from one 0% card to another so only ever paid the balance transfer fee which would make it around 1-1.5% interest pa. I’d always assumed we would have a secure income until we retired as we were both public sector workers. Then in 2010 a merger with another organisation and the start of austerity resulted in quite a lot of redundancies and made me realise I didn’t have the guaranteed income that I thought I had. Seeing colleagues lose their jobs and having to compete for my own was probably the start of my LBM as in 2010 there weren’t many well paid jobs around for people to move to. It was from around then that we started to rein the spending in and be a bit more aware as to where all the money was going. Just not overspending every month was an achievement let alone reduce the debt. I think maybe you’re putting a lot of pressure on yourself to clear the debts ASAP but if you’ve been overspending large amounts every month for years then just not overspending each month is a massive achievement in itself. I’d maybe be careful that the budget you set isn’t so strict that eventually you’ll tire of it and start over spending big time again. Two things that I’ve found really useful are 1) You Need A Budget (YNAB) which has really helped to see where all the money goes as we didn’t really keep any tabs on our spending. 2) Each of us has a separate bank account for spending money. So all our income goes into a joint bank account and then we each have £250 every month to spend on what we like. I think you are really making progress but your expectations are very high. Something to reflect on - You can climb a mountain but you don’t need to beat yourself with a stick while you do it. 

alt80

Late one from me. Spent the evening working whilst wife and son decorated the tree – needs must unfortunately. After that I’ve sat and worked out the cards. 

 

December looking better than I thought – have been avoiding this but actually made me smile when I saw it:

Dec-20	Balance	Mins	Additional
Barclaycard	£  6,660.00	£ 170.00
M&S	£  3,540.00	£  80.00	£    225.00
Sainsburys	£  6,850.00	£ 200.00
MBNA	£ 11,740.00	£ 330.00
	£ 28,790.00

 

Under £29k by the end of the month! Words cannot say how pleased I am to see that. 

 

Also spent some time forgetting about the sales and forecasting the debt free dates of the cards and what I’d have towards the Range Rover balloon using the following scenarios: 1. Keeping everything as is and 2. Getting rid of the BMW in February and not replacing it (or replacing it with a car through business and I mean a cheap car eg electric Mini wife found – can make something THAT cheap work without docking my income accordingly).

 

	As Is	No BMW
Cards	Feb-23	Aug-22
Range Rover	£ 15,470.00	£ 32,015.00

 

I’ve also worked out I have £1250 on variables per month so food, drinks, entertainment, fuel (personal), eating out, clothes etc. 

 

The following has been accounted for in savings ‘pots’:

£2000/a emergency fund

£2000/a holiday fund

£1000/a occasions fund

£1500/a towards Range Rover balloon – yeah know this is a bit pathetic but does give me an extra £4875 at the end of the term meaning less to refinance on RR than above.

 

This is accounting for absolutely £0 in sales and £0 increase in current income.

 

Have started to go through the PGs accounting for the income left at the end of the month currently and ½ sinking funds to offset against overall gearing. Doesn’t relate to the personal at all but works out at the same number of years I forecast before 7.5. Doesn’t account for any profits from flips which I want to throw straight back in. It’s possible I could wipe the PGs entirely from projected profit on block/ new project if I sell for projected.

 

Needed to do the figures. Feel like there’s a long slog ahead but a lot better for working things out properly not forecasting off sales of second hand goods I may or may not ever see anything from. 

 

I need to do this now. Get on and try to smash the above targets but I’ve at least got something to work towards actually feel that was worth staying up for tbh. 

Looking at that best option for mortgage fix seems 5 yrs at 1.4% - really not going to be moving with the above going on I don’t think and don’t think I’m going to get a better rate in two years than 1.4%!

Need to go to bed now so no response to replies but thanks gives me stuff to think about again ha.

ryanm8655

alt80 said:

Late one from me. Spent the evening working whilst wife and son decorated the tree – needs must unfortunately. After that I’ve sat and worked out the cards. 

 

December looking better than I thought – have been avoiding this but actually made me smile when I saw it:

Dec-20	Balance	Mins	Additional
Barclaycard	£  6,660.00	£ 170.00
M&S	£  3,540.00	£  80.00	£    225.00
Sainsburys	£  6,850.00	£ 200.00
MBNA	£ 11,740.00	£ 330.00
	£ 28,790.00

 

Under £29k by the end of the month! Words cannot say how pleased I am to see that. 

 

Also spent some time forgetting about the sales and forecasting the debt free dates of the cards and what I’d have towards the Range Rover balloon using the following scenarios: 1. Keeping everything as is and 2. Getting rid of the BMW in February and not replacing it (or replacing it with a car through business and I mean a cheap car eg electric Mini wife found – can make something THAT cheap work without docking my income accordingly).

 

	As Is	No BMW
Cards	Feb-23	Aug-22
Range Rover	£ 15,470.00	£ 32,015.00

 

I’ve also worked out I have £1250 on variables per month so food, drinks, entertainment, fuel (personal), eating out, clothes etc. 

 

The following has been accounted for in savings ‘pots’:

£2000/a emergency fund

£2000/a holiday fund

£1000/a occasions fund

£1500/a towards Range Rover balloon – yeah know this is a bit pathetic but does give me an extra £4875 at the end of the term meaning less to refinance on RR than above.

 

This is accounting for absolutely £0 in sales and £0 increase in current income.

 

Have started to go through the PGs accounting for the income left at the end of the month currently and ½ sinking funds to offset against overall gearing. Doesn’t relate to the personal at all but works out at the same number of years I forecast before 7.5. Doesn’t account for any profits from flips which I want to throw straight back in. It’s possible I could wipe the PGs entirely from projected profit on block/ new project if I sell for projected.

 

Needed to do the figures. Feel like there’s a long slog ahead but a lot better for working things out properly not forecasting off sales of second hand goods I may or may not ever see anything from. 

 

I need to do this now. Get on and try to smash the above targets but I’ve at least got something to work towards actually feel that was worth staying up for tbh. 

Looking at that best option for mortgage fix seems 5 yrs at 1.4% - really not going to be moving with the above going on I don’t think and don’t think I’m going to get a better rate in two years than 1.4%!

Need to go to bed now so no response to replies but thanks gives me stuff to think about again ha.

Good work chap.

What a difference getting rid of the BMW makes...

I found it makes such a difference sitting down and doing this. Reality kicks in and you feel a little bit more in control with the full picture.

Have you set the card payments up to fix the payments to the minimums? Otherwise you’ll find the payments decline each month.

getmore4less

Smashing it.
Post  No.1
Total unsecured debts..........40000.....985...

The stuff sales might not deliver the same going forward. but they have made that £1kpm go a lot further and taken months off the target date.

You are also putting aside enough to get out of the credit cycle on regular spends that will be a massive change for you one you see the results that you can pay the bills when they come in.

(or replacing it with a car through business and I mean a cheap car eg electric Mini wife found – can make something THAT cheap work without docking my income accordingly).

That's even better than I thought which is very good, there will be an opportunity to reduce the subsidy on company miles and reduce the costs of some person along with that.
KInd of agree the Mini may not be the practical option, if you want a badge the MG is getting reasonable reviews.

There are some out there on electricity tariffs where they get paid to charge their cars sometimes.

Res mortgage 1.4% is  good as long as the fees are not too high, going for a 5y fix puts the house move/refinance to one side which may be a good signal you can let that go for a while, a 2y fix  would project a different message.

If you put the PG on a similar schedule that would be an incentive, shorter than the 7.5 years just letting it sort itself out and still give some options to grow rather than smashing them quicker.

Good to see that you are finding this a lot easier in the head with the number crunched worth the effort and if you keep on top with regular review they get easy to update.

It puts you back in control of the spend daemons.

RelievedSheff

Things are looking up for you. Well done on getting it all down on paper. You are smashing those cards 👍

Willowtree222

Can't imagine that was easy at first to motivate yourself to do it, but your post sounds so much more positive as you acknowledge what you have achieved.
I think it's great you're also considering the mini. It's a complete change of yesterday's view.
I used to do the 1% and have a jar with cut up paper with 1 written on. Everyone I paid off 1% I'd move it across. I'm very visual so it helped me to see the money moving the right way. 
Mortgage wise, it's probably the best time to fix for longer. Although the market is uncertain, I doubt you'll get a better rate too in 2 years. 5 years will also give you an aim for your debt. You're at 7.5 years now with no sales or income so might be a possibility. 
Have a lovely weekend. 

alt80

Looking at the figures I can’t keep the BMW. Not great. Realised it’s time to take a step away from the cars / car people delete and block time. Don’t want to be reminded of it tbh not going to help me I’ve not got a sports car and won’t have for years or ever again. Probably decide I can’t be bothered after a few years without one and don’t want to be some old guy with a sports car either haha. Not gonna lie I’d rather not even bother with another car than have a rubbish second car but we’ll see because having one car doesn’t feel right either.

Got £6k worth of stuff for sale. When things do sell they’ll come off the balances. If it goes or we find some more stuff and £6k is a final figure it brings the cards being clear forward about 6 months and able to meet the RR balloon in full with BMW gone.

Don’t mind dealing with the figures in the moment - it’s just numbers but when I step back just find the guilt, worthlessness and feelings of hopelessness return. I hate living to a budget. Prior to this I didn’t so think it’s possibly just getting used to a different way of life but just leaves me thinking we’re living like this because I’m not good enough. Also working out £2900/m going out on various payments just about kills me. If I could live to this budget indefinitely £2900/m net would be more like £45k gross maybe more idk haven’t properly worked it back but that’s a decent wage going out in repayments. 5 years keeping it retained and putting into property its an additional 10 easily. Not even counting flipping some, refinancing after adding value and potential ability to be buying forced sales etc. Etc. Instead I’m stuck with a load of debt for stupid stuff. Complete idiocy lol.

Went to bed last night really bad nights sleep just don’t want to be in this mess and know how I’ve got here but can’t get by the shame. I know how the numbers work, I just never looked. Incredibly angry with myself about it. Spent my business life planning to get it right, doing everything I can to provide a good working environment and sustainable business where staff feel they have secure employment but my personal life has always been a mess. I can’t get by how much I hate myself for it tbh. Spent some time finishing the tree with wife and son this morning step back and the only thought running through my head I don’t deserve to have a family, nice home etc. I hate the spending but it’s all that temporarily halts the stuff going on in my head. This is why I can’t cope with it and avoid the figures just self destructive stuff in a different way I know.

Keeping up with the exercise. I am enjoying that and cost free lol.

A bit panicked about variable day to day spends needing to be £1250/m to make this work. Wife reckons that’s easy, people just about running households on that sort of money etc. True but I look at it and whilst we’re sticking to it at the moment we’re not really going anywhere / doing much. Tbf day to day it’s fine just no JL binges or extravagant one off presents etc concerned I’m going to fail on that front at some point and let the side down. 

@ryanm8655 yes I’ve set the figures to avoid the DDs adjusting. The mins are my mins lol. As one clears, I’m changing the direct debit onto the next one. Already done it with the BC that’s now gone. Don’t feel it because it was going out anyway.

@getmore4less / @relievedsheff / @nicnak thanks only reason it’s where it is right now are sales. Cutting right back too tbf but only smashing it through selling stuff. 

Already seen the effects of getting out of the credit cycle with paying RR insurance upfront (accounted for that and £1k/a in maintenance low now as in warranty. Also £500/a in servicing). Nice to have one less DD going out and paying interest on insurance payments is 100 stupid. I am pleased to not have my world on credit tbh.

Looking at the figures it’s going to be impossible to move for five years and wife hates the idea of releasing equity for more property. She hates the idea of moving house too I’m talking massive sobbing fit lol, she used to think about moving somewhere semi rural but she doesn’t want that anymore either - a lot of that was about schools. Currently she thinks we need to get the debts gone and plough the money into paying this place off - can’t go back from owning it outright with no PGs. I do kind of get that wouldn’t have much stress if that was the case. Living as we are probably realistic in 10/12 years idk not worked it out but maybe she’s got the right idea.  

Willowtree222

Firstly you are worthy. Even with all this your family are around. You're also spending more quality time with them

You might have blow outs. I stopped short of saying will but if you don't find a balance then there is a chance you could. It happens, and you just pick up the pieces. Look at a balance that works so you can avoid these as those lows seem to take over your mindset and trigger other things  

Yes, your spending got you in this position along with most other people on here, including me. The difference is, you realised it, are facing it head on, and are now not only tackling it, changing your ways and decision making. The progress on cars alone is phenomenal. 

You can and will get out of this if you keep going. Slow and steady is what's needed. Sometimes it's about the journey too. If you 'won' the money to pay it off you wouldn't have learnt how to stop spending or how to budget. You'd end up right back in this position. 
You're learning a new way of life. It's not what you want, but you'll get there and then you can hopefully avoid the same situation again so you can start to live more of the life you want without getting into debt. 
A lot of people reach an older age before having their light Bulb moment. Then they're unable to spend their retirement in relative comfort.