First Steps to Solvency

RelievedSheff

As others have already said, no one wants to see you fail. Everyone here is on their own debt management journey and are here to help each other. 

Some people just need more help than others.

ladyholly

Well done on paying more off your CC and resisting the temptation to pay  money which would lead to o/d.

I think your diary is the only one I have ever mentioned to my d/h and that is not because I want you to fail ( and I am sure no one else does) but because of my frustration that  you are so set in trying to maintain the lifestyle (i.e. cars and houses)  which has got you into difficulties that you dont always take on board the help people are trying to give you. Yes I know you have got rid of one but the others are costing a lot of money which you dont have at present.  Have you ever heard the expression "all fur coat and no knickers"? If you havent I will explain later.

DayDreamerandGeneralWaster

Just to echo that no one wants to see you fail. Unless by fail you mean get rid if the expensive cars. Everyone here has been giving up their time to offer you advice. Don't get angry when it's not what you want to hear. 

Just a thought but in time there will be other cars when you are in a stronger financial position. Won't you enjoy them more when they don't come with the worry of how to pay the debt back?

ryanm8655

RelievedSheff said:

As others have already said, no one wants to see you fail. Everyone here is on their own debt management journey and are here to help each other. 

Some people just need more help than others.

Yes - exactly this.

Though I do think a lot of the car chat is procrastination.

@alt80 is early in the journey, it’ll take time for everything to sink in/gradually breakdown those barriers.

I think some of the comments on both sides are touching nerves.

But one thing that helped me is thinking about things in proportion to my income, not what you’re spending. You’ve been living an £11/12k per month lifestyle on £7k, that includes the cars. There’s a lot that’s got to give just to get back in line with income.

In fairness to OP, there’s nothing they can do about the other cars right now, they’ve got rid of one, which was a sensible move. The first step is learning to live to a budget and avoiding accumulating more debt.

Yes it’s frustrating hearing grand plans of bigger houses and more cars. It’s also a bit deluded given the current situation but if it helps the OP avoid spending in the short term and motivates them to get on track early on then no harm done. As long as when they’ve progressed in a few months time they then start to realise these things. I didn’t mention this in my own diary at the time (though did confess it recently) but early on I was thinking I’d reward myself at the end of my journey by buying a nice watch (omega/Rolex sort of watch) and I even thought about doing so when I hit particular milestones. If I said that in my diary people would think I had a screw loose. But once I hit/got closer to those milestones I re-evaluated. I won’t be buying a watch when I am debt free. Granted it’s more modest than thinking about bigger houses and more expensive cars but the point is it can be a means to an end while you transition to a new mindset and lifestyle. It makes you feel pretty !!!!!! facing the reality and a little bit of fantasy down the line can help you cope.

For now any car plans are way down the line. Hopefully by the time they get there they’ll be in a better place financially and have an improved mindset. Small steps. Step 1 learn to live to your budget and overcome the urge to splurge.

@alt80 - one thing to consider when saying “I earn the money so I pick the cars, if my wife wants a say in what she drives she can earn her own money”. If ever you did divorce, this isn’t what the judge would be saying and you’d be kissing goodbye to the current house and cars, let alone the ones you dream of.

Narola1976

I am the last person who should be commenting and advising you here seeing as I have an awful lot of debt with just a fraction of your income. Like you my debt has been acquired with having too many wants and expensive tastes and feeling like I work so hard and I “deserve” this and why can’t I have want I want now! Buying things to make me feel better or to  make me feel like a better mum but then when the bill comes feeling sick, but repeating this cycle year on year. Having flickering LBM’s over the years that went out as quickly as it came. And the truth is I still wish I could have what I want now, but I want something more now. I want to not pay half my income on debt, I want the financial freedom to be able to see my family more than every 5 or 6 years, I want to be able to go out for that meal or finally go abroad. I think it comes down to what you want most. And until you want financial freedom more than the debt (and this includes the cars) I think you may struggle to make the changes needed for a sustained period. My debt free date is 2 years 11 months from now. I could have been debt free now if my LBM hadn’t flickered out when I got fed up of not having what I want now, or not proper changes to my spending habits but I wasn’t ready to sacrifice a little bit of comfort for a period of discomfort. One of the things that I envy about you is that given your income and the extravagant expenses, just making those initial painful sacrifices for a short time, will mean you can get out of debt relatively fast. I don’t just mean the cars, also groceries, entertainment etc. My grocery budget for this month is £150 for 3 adults. It’s hard, but doable. I am not suggesting you do the same, our incomes are vastly different, but you could half your grocery budget for example and still eat well. Yes, I have had to cut out so much, but I want to be debt free so that I can spend more on groceries one day. Trust me I have not lost my desire for nice things, I just want to be able to pay for it without paying for it forever and a day. I do not judge you, I think you are trying to make changes. I just think you should do the math. Sit down and work out if you took the advice people here have given, plus a significant reduction in general expenses, when your DFD would be. I use a snowball app called Debt Payoff Planner, and this has really helped me to focus. When I saw that I would be debt free in 3 years, if I just did sacrifice for a little while, so not many meals out, coffees, holidays etc, it gave me the impetus to get started and it helps me to keep going. I am only at the start of my journey. I use YNAB budgeting system and it has transformed my life and approach to finance. But one day, I created a pretend debt free budget to see what my financial life would be like and it was a revelation. If I was debt free right now, I could go visit my mum every month - she lives in a country far away. I could buy that lovely fragrance or pair of shoes etc cash and not feel the pinch. I could replace the awful old carpet in my home without batting an eyelid. My tastes haven’t changed, but my desire for a stress free life and financial freedom is worth more to me now and so I am willing to pay the price for the next 3 years, so I can have the rest of my life. And while my tastes haven’t changed exactly, my approach to having things now, without saving for them, has. It has to, otherwise I will back where I started. I guess the question is what is a debt free life worth to you? How much sacrifice are you willing to make to get there? Only you can answer that question, only you can decide if you want to make really tough changes now, for a sustained but time limited period. Short Term pain for Long Term gain is the name of the game. Maybe you are happy to take the scenic route, happy to stretch out the journey while having what you want more or less. That is your decision, and it could work. I just hope you don’t run out of road before the journey ends. That is my biggest fear for myself, so I am really going for it because I do not know what’s around the corner and I want to be as prepared as I can be. Good luck.

theoretica

No-one wants to see you fail, but I think many of us have a different idea of success from yours, so there are things you see as achievements which we don't value.  I see credit cards and financing both as debt, of slightly different flavour, they are both spending tomorrow's money yesterday.  I hugely value personal financial security, as immune as possible from investments or work.  So my view of success has a lot more money in savings and a lot less spending and leverage than your present one does.

alt80

I don’t care for the whole ‘financial freedom’, ‘live modest & retire’ type mentality. Not my thing. Always going to want more and have admitted my appetite for spending is never satisfied - definitely a mindset problem as I sit here thinking about what I could go out and buy - not going to though. £35 of entertainment spent and not looking like either wife or I are spending anything tomorrow (I’m going to see my sister and she’s going to her parents’ both cook so no spends). 

Do want to get rid of credit card debt - it’s ridiculous to be juggling cards around all the time. That’s something I really want to leave behind altogether and the point of this. Do need to sort the mindset to not clear the cards and build them again agreed. I’m not bothered about having cars on finance but tbf I think it would be better for me to have one on finance at a time if they’re 6 figure cars and buying new. I suppose I have anticipated my income climbing at a rate it hasn’t. Without putting the business into a precarious position I can’t take a 5 figure/m income and sustainability in business comes first for me want that to be around long after I’ve gone so in a roundabout way I do get the whole investing for the future type thinking just not in my personal life. That said I do want a more sustainable way of life - not living beyond my means. Less stress. Would rather achieve that with a bigger income but going to have to find peace with what it is right now. Not afraid of leverage which a lot on here seem to be but agree my personal finances are just a mess nothing wise in a lot of my choices there. Currently willing a small £150 sale to take the Barclaycard to £7k - I have a bit of an ocd about round figures. Mental I know haha.

The wife car thing. I’ve been wishing for years wife would wake up one day and tell me she’d found some drive from somewhere and make a success of herself. Care about her very much but struggle with the respect side. @ryanm8655 Quite aware divorce would be disastrous- I’d probably keep my house and that be about it. Be lucky if I drove a 15 year old RR in that scenario lol. Before anyone tries to say she’s been instrumental to my ability to earn income, not really I had the business before I had the wife and can cook. I read your diary and think you’ve got your whole life ahead. IIRC you’re not actually that much younger than me but many options no ties.

@warby68 you’re assuming I take everything out of my BTL - I don’t there are good levels of reserves and a willingness to chip away at the LTVs to get to the point of no PGs but not at the expense of growth. Growth first pay second. I too have a commercial investment completely separate tied to other business. Neither are really relevant to paying down this personal card debt unless my strategy was to liquidate or take more each month which it isn’t. Tbf I probably deserved a bit of flack for the 7 figs comment.

@getmore4less no that’s just finance costs haven’t counted insurance / tax / petrol / servicing. Don’t really want to if I’m honest - any point in this really?

My focus on the BTL is growth. I think @enthusiasticsaver got the 80%LTV figure from the fact I’m looking for another property if the right deal comes and should be able to find an 80% deal - no doubt I’ll pay for it in rates though haha. Can find a deposit from retained. 

Could I take more from the BTL undoubtedly- just not really helpful when I’m aiming for growth as you’ve pointed out before the amount I am taking out isn’t helpful either really just can’t make it work on the money I see from the other business.

RelievedSheff

You say you don't care for the financial freedom yet openly admit that during lock down when  you had taken payment holidays you felt a lot happier and less stressed.

Does that not tell you something?

ryanm8655

alt80 said:

I don’t care for the whole ‘financial freedom’, ‘live modest & retire’ type mentality. Not my thing. Always going to want more and have admitted my appetite for spending is never satisfied - definitely a mindset problem as I sit here thinking about what I could go out and buy - not going to though. £35 of entertainment spent and not looking like either wife or I are spending anything tomorrow (I’m going to see my sister and she’s going to her parents’ both cook so no spends). 

Do want to get rid of credit card debt - it’s ridiculous to be juggling cards around all the time. That’s something I really want to leave behind altogether and the point of this. Do need to sort the mindset to not clear the cards and build them again agreed. I’m not bothered about having cars on finance but tbf I think it would be better for me to have one on finance at a time if they’re 6 figure cars and buying new. I suppose I have anticipated my income climbing at a rate it hasn’t. Without putting the business into a precarious position I can’t take a 5 figure/m income and sustainability in business comes first for me want that to be around long after I’ve gone so in a roundabout way I do get the whole investing for the future type thinking just not in my personal life. That said I do want a more sustainable way of life - not living beyond my means. Less stress. Would rather achieve that with a bigger income but going to have to find peace with what it is right now. Not afraid of leverage which a lot on here seem to be but agree my personal finances are just a mess nothing wise in a lot of my choices there. Currently willing a small £150 sale to take the Barclaycard to £7k - I have a bit of an ocd about round figures. Mental I know haha.

The wife car thing. I’ve been wishing for years wife would wake up one day and tell me she’d found some drive from somewhere and make a success of herself. Care about her very much but struggle with the respect side. @ryanm8655 Quite aware divorce would be disastrous- I’d probably keep my house and that be about it. Be lucky if I drove a 15 year old RR in that scenario lol. Before anyone tries to say she’s been instrumental to my ability to earn income, not really I had the business before I had the wife and can cook. I read your diary and think you’ve got your whole life ahead. IIRC you’re not actually that much younger than me but many options no ties.

@warby68 you’re assuming I take everything out of my BTL - I don’t there are good levels of reserves and a willingness to chip away at the LTVs to get to the point of no PGs but not at the expense of growth. Growth first pay second. I too have a commercial investment completely separate tied to other business. Neither are really relevant to paying down this personal card debt unless my strategy was to liquidate or take more each month which it isn’t. Tbf I probably deserved a bit of flack for the 7 figs comment.

@getmore4less no that’s just finance costs haven’t counted insurance / tax / petrol / servicing. Don’t really want to if I’m honest - any point in this really?

My focus on the BTL is growth. I think @enthusiasticsaver got the 80%LTV figure from the fact I’m looking for another property if the right deal comes and should be able to find an 80% deal - no doubt I’ll pay for it in rates though haha. Can find a deposit from retained. 

Could I take more from the BTL undoubtedly- just not really helpful when I’m aiming for growth as you’ve pointed out before the amount I am taking out isn’t helpful either really just can’t make it work on the money I see from the other business.

I think the thing that hasn’t quite clicked is that the reason you are forced to juggle the cards is because of the expensive cars on finance. You spend a disproportionate amount of your income on your cars, regardless of what you earn. This is why people keep bleating on about the cars. Getting them on finance, while expensive, wouldn’t be a problem if you could afford it. I appreciate that is a difficult pill to swallow. If you were a single bloke it’d be fine but you have a family to support so your money doesn’t go anywhere near as far. I suspect that might be the thing you struggle to accept. Usually people are happy to make sacrifices for the ones they love but for you it’s a source of resentment. That’s not me judging either. I get it. It’s one reason I actually sort of like being single, I can do what I like without judgement. I know when I am eventually in a serious relationship I’ll have to compromise on certain things. 

And I’m early thirties rather than late, ha. Don’t wish my life away like that :P But yeah, have all sorts of decisions ahead. Used to want kids but having lived with younger cousins I’m not so sure

alt80

@RelievedSheff funny you should say that. Went for a walk with wife and son this afternoon actually had a really good discussion about AMs. She asked me why I want to ‘kill myself’ for it and why was I in a lot better mood generally over lockdown. All temptation gone. Didn’t matter what was on the drive. House mattered a lot tbf but I like where I live and so does she. 

I struggle to respect her but she’s not the one who’d sell her soul to the devil for a 7 figure house and an AM. Do I want financial freedom think it’s more I want some freedom from the BS in my head like needing AMs lol. Bit more financial freedom - no cards would be nice tbf not feeling like a complete d*ck for not being able to afford £100k toys would be nice. Can feel the pressure building whenever I look at the £100k+ toys - I need them and need to find a way to get them I’m like a drug addict tbh only it’s cars. What I really need to do is do the counselling and actually work at it, stop looking at cars and spend more time with family like this afternoon and morning. Better mood generally than detaching myself from them. Suppose I’m afraid I’ll lose any drive for earning if I stop being so addicted to spending money. I am so lucky my wife wants to still be with me after all the BS I’ve put us through over the years all spending related too.    

@ryanm8655 I see my family as a barrier to some of my goals and yes sometimes really resent being married with a kid yet I couldn’t walk away. Spent more or less all the time since leaving uni in a serious relationship half wonder if the craving for a single life sometimes is some sort of mid-life crisis setting in. All mindset related and leads me to spend then regret (or speak then regret haha).

Going to carry on with the counselling. The cars are less of a problem than when I had three and if I can get the cards gone I don’t they really are a problem at all especially if they get paid off over the longer term and not replaced on another ‘deal’ right away. Wife actually made a good point re AM - why do I want to pay in interest a deposit on another BTL? True and I’d never even seen that.