Just need to get on with it!!

kimwp

warren80 said:

Yes, we do have the 'spare' money now that we are both earning more. In terms of entertainment, i was thinking about days out, the odd coffee. I have a read thing about still being able to do stuff with the kids, although I know that this needs to be budgeted for and as low cost as possible. 

I didn't mention before but we need some serious work doing on our kitchen and bathroom. Not just for cosmetic reasons but because they ( particularly the kitchen) are faling apart.

The great news is you have a lot to throw at your debt and the brilliant news is that you've realised this and proven that you can take steps to become debt-free.

A few points about your budget that I think haven't been covered

- Your energy bill is high. There will be loads of ways to reduce this if you aren't doing so already - block up drafts, keep doors closed in the extremes of heat (hot and cold outside), wear jumpers and thick socks, minimise baths and shorten showers are a few.

- Regarding days out and the odd coffee - it's your choice to spend money on these or get out of debt (and worry) earlier. It would be hard to be on your wage and have no fun at all, but set a limit for these by adding up all the costs of what you would like to do a year and seeing if you are happy with that not going to debt. Why don't you take it as a family challenge to spend no more than £150 pounds a month on family entertainment - that would be easily swallowed by a trip to an entertainment park or give change from dozens of days out to much cheaper and free destinations and being outside is both cheap and good for you.

- I think you might need to think about the amount you have put for presents - is 600 enough to cover Christmas, Valentines, anniversaries, birthdays, kid's birthdays, kid's friends' birthdays? Personally I think we should do away with a lot of present giving (and am pretty successful at it) but if your wife wants to keep up appearances, this is something you need to think about in advance.

- I agree with nothing towards the holiday fund until your debt is significantly smaller - you can sell it to your family/friends as having staycations to protect the environment and teaching your children how to be bored and inventive as all the TED talks suggest is good for them

Regarding the diy, do you have some breathing space from covid for others not to see your kitchen/bathroom? I would put this off as long as possible personally - buy the appliances and make do with eg a table and a sideboard from gumtree for prep and storage. It's really as above, up to you what to save each month for this, knowing that is not driving the debt down.

Otherwise, set the debt DD's to the minimum and hurl what extra you can at them, starting from the highest interest account, do the balance transfers when they become available and make financial sense and watch the big number shrink - good luck

warby68

That's a chunky amount of debt and some at quite high rates. As you say it makes you highly vulnerable to any bumps in the road which affect income and as you have a family it would be difficult. The good thing is you have a decent chunk of house equity and a smallish mortgage so you are well placed once the unsecured debt is reduced or ideally gone.
I think you need to shelve any renovation work for a while as the debts are so high you are at considerable risk. Find a 'get by' option for the kitchen and bathroom and see where you are in say 2 years. That might have to be the 'pain' while you deal with past overspending.
You can really blitz this debt with no real hardship in your budget other than possibly the regret that you can't benefit from your higher income for a while. Once your debt is much lower and you're back to getting 0% deals you might be able to slow down the pace a bit and allocate some income elsewhere. 
PS One question, you mentioned 'lightbulb' in Sept with debt £65k at that point and that you've been dealing with it since then but the debt is now over £70kin your SoA. Was that just inaccurate in September or are we missing something?
Good luck.

enthusiasticsaver

Most overdrafts are 40% now so I would use the whole £1500  monthly surplus towards debt for a year to try and get that £70k down to a more sustainable figure and start with the overdraft. Now is not the time to be spending on home improvements when you have that amount of debt. Presumably you have been making do for a while so another year should be doable. Even with £1500 a month towards debt you will still be left with around £50k so this is going to be a long haul but presumably years of overspending got you here so getting out of it will take a while. 

ryanm8655

Why are the energy bills so high? Assume you live in a castle or something? Ha.

Good work on owning the situation, it’s never easy. You can make some cracking progress with your income.

I’d personally target the highest interest debts first and then look to take advantage of 0% deals as the balance comes down. Once everything is on 0% it makes such a difference!

Lookafterthepennies2020

I would go for the very account first as you will have this cleared in less than 2 months then tackle the aqua.  You have a decent amount to throw at the debt each month and whilst it obviously makes sense to go for the high interest accounts first, I follow the Dave Ramsey method.  If you aren't familiar with DR he is definitely worth a Google but this involves keeping a small emergency savings fund and then snowballing your lowest balances (excluding 0%) as when your in it for the long haul sometimes it can be more motivating to see the accounts closing and the progress being made that way. Whatever you decide, you have started, so well done to you both for facing up to your situation.

I would recommend keeping the entertainment budget for the family also, yes it could go towards the debt but if knowing you have that amount to enjoy some family time keeps you on track for the duration, imo it's better than 6 months without it and quitting x 

Babybelles

@warren80 just popping in to say good luck. You’ve worked out what you owe & completed the SOA so you are on your way to sorting out these debts. 

I agree with others on paying off Aqua & Very first. At least then you will have tackled two high interested rates & have two less debts to worry about. 

I also agree with leaving the home improvements a little longer. If this is your ‘forever’ home then doing renovations on the cheap & to ‘make do’ might not benefit you in the long term. I’d concentrate on paying off your debts & this time next year you’ll be in a much better position to start making plans to renovate, & get the house looking the way you want it. 

This is the consequence of building debt, it takes a while to clear & stops you being able to do the things you want/need. I’m trying to pay off debt myself so understand the frustrations. You can do it though & you will! Good luck 👍🏻

warby68

Jut reread my post, when I said 'get by' option for the kitchen and bathroom I meant minimal urgent repairs and nailing things back together not a cheap makeover.
I notice you haven't been back yet OP, hope everythings ok and you aren't overwhelmed. 

warren80

Hi Folks, Sorry for being such a rubbish poster! It's been a crazy couple of weeks juggling work and home schooling etc. 
thanks for all of the posts. It appears that I have made a mistake on my SOA. Our debts are actually just below 60K. I need to look at the balances I have entered. I have checked credit reports and it someting like £58900 so still but less badder!

I agree that we can't spend lots of money of home improvements. My FIL is a carpenter and general handy man and he has offered to give our kitchen a budget makeover as a joint 40th present! He is the only person who know that we have money issues, although he doesn't know the extent. I was brought up in a house that always needed a bit of TLC and lived in horrendous uni houses so I am not too fussed about making do, however it gets my wife down. Our bathroom is tiny and the toilet is separate. We are going to save until we can afford a cheap white suite that FIL will fit! 

There is another option of the table for us. My FIL has spoken to my wife and has said that we would always be welcome to move in with them. My in laws live in a 5 bedroom house so we would essentially have our own bedrooms, bathroom and sitting room. The idea would be that we would be able to pay off our debts and quickly save a big deposit for a new house BUT BUT BUT - I don't want to do it. I am worried about getting off the ladder and also the questions that people would ask about why we have moved back in with the parents at the age of 40!! I appreciate the gesture though. 

I am going to make an effort to post more regularly! Hope everyone is safe and well 

ladyholly

Have you thought of moving into in laws and letting your house. Extra income to throw at debts and you stay on property ladder. 

warren80

ladyholly said:

Have you thought of moving into in laws and letting your house. Extra income to throw at debts and you stay on property ladder. 

Yes, it's something that we could do, although we would need to do some work to the house first to make it rentable so that would involve some outlay. I guess it's my stupid male pride but I can't help but worry about not having my 'own home'. I also don't want to deal with the inevitable "what's happened" questions. That might sound daft but it's how my mind works