Time to get a handle on this... and change my life for good!

BecomingMoneyConscious

Long time lurker here! I joined MSE last May when I thought I had my LBM, but in reality I just cried a bit over my long list of debts and how terrible the whole pandemic thing was making me feel, then went on spending every penny of my disposable income on take aways and unnecessary nonsense. 

I look back at all the progress I could have made last year especially as I was fortunate enough to be working from home, therefore earning my full wage and saving on transport and other costs. I have 3 friends and work colleagues who were able to buy new homes free of stamp duty because their finances were in good order, they could get together deposits quickly and the government introduced a great scheme. It was the first time I really burned with absolute envy at other people's lives and how stagnant mine has become in comparison. I have been battling the same cycle of debt since I was 19 (I am 30 now) and all my bad decisions haunt me.

A little bit about me:

I am a 30 y/o woman living in London with my boyfriend of 9+ years. I have essentially hid my debts from him and even my true salary due to pure shame. My hopes are to get my finances in a strong position before coming clean to him. I had been on a low income up until a couple years ago as I worked retail and customer service jobs whilst I returned to university with the hopes of getting on a grad scheme to better my earning prospects. I'm honored to be on a fantastic 3 year grad scheme at the end of which, if I'm successful, has a great promotion and pay upgrade. As of September 2019 I have been on an average salary of £28,000 which was then raised to £29,250 last year. Unfortunately when my salary jumped from around £19,000 up to £28,000 I got completely carried away.

Despite the extra money coming in, I was still relying on credit cards to get me through to payday whilst allowing myself every luxury. Like I literally went on 3 holidays and bought designer items all whilst my credit card utilisation was practically 99%. At one point I really thought about contacting a psychologist as I thought there simply had to be something wrong with me mentally - other people don't waste money they could use making their life better do they?! But then I took a harsh look in the mirror and asked myself what my goals were - I wrote them down for the first time ever. I put dates by each - get married in 2022, buy a house in 2023 (when my CCJ will drop off my credit file), have a baby in 2023. Then it really dawned on me that it could not be possible to do any of those things whilst my debts were this huge. That was my true Aha or 'LBM' moment and I have since become more determined than ever to just do this and sacrifice whatever it takes to turn my life around.

My debts:

Due to a CCJ from unpaid uni fees that went to debt collectors 5 years later (long story), I have the worst interest rates going. I am currently spending £918.60 per month on debt repayments, and I'm sure a huge proportion of that is just to cover interest rates:

Card 1: £995.03 - 56.11% (cut up) paying 75 pm
Card 2: £1,190.51 - 35.2% paying 40 pm
Card 3: £772.58 - 31.1% (cut up) paying 55 pm
Card 4: £469 - 30.34% paying 30 pm
Card 5: £456.20 - 29.6% paying 30 pm
Loan 1: £8,675.15 - 19.6% paying 400 pm
Loan 2: £5,000.16 - 35.9% paying 83.60 pm
Overdraft-like facility: £1,943.23 - 21.5% paying 105 pm
Debt Collection (CCJ): £2,756.73 - 0% paying 100 pm
Total: £19,761.57

I worked like a dog over the Christmas period - literally 12 hour shifts and only had a 3 day weekend, so racked up lots of overtime. So for the first time in my life I decided to do the right thing and chuck it at my debt instead of wasting it on another handbag or putting on even MORE weight! Hence I cleared a recurring overdraft facility I had of £1300 (89.7% interest!!) and 50% of CC 1. The shocking thing is Loan 1 was a consolidation loan which I took to pay off 2 other extremely high interest loans and CC 1. Unfortunately I then went onto use CC 1 again - hence why I have now cut it up. Loan 2 was a £2500 loan for an emergency situation but due to my bad credit rating they only offered it at 60 months and I can't up the minimum payment. I will however be saving extra each month to make partial settlements to ensure I'm not paying 100% interest(!!!), I will look to pay it off across 2 years, instead of 5.

Sorry for the long winded post! That pretty much covers everything for now. Looking forward to getting reading more debt diaries and getting to know everyone. Hopefully I will get support to help me on this journey  

Four_Seasons

Welcome. I will be cheering you on and following your journey. 

Honeysucklelou2

Well done for clearing the overdraft and cutting up the card.

Wishing  you all the best on your debt busting journey.

enthusiasticsaver

Don't beat yourself up too much. You are dealing with the debt now and 30 is not old so you have time to turn this around and you have a good job. Living in London is expensive and there are all sorts of expectations and temptations of a certain lifestyle. Normally I would recommend clearing debts on the highest rates first so CC1 in your case but the cards are all relatively low balances so I wonder if you should focus on clearing the smallest balances first to motivate you? I will subscribe to see you getting yourself in a much better place financially. Good luck. 

Legs21

Welcome and good luck on your journey. 

CreditCardJunkie

Most of us on here have been caught in that cycle so don't be feeling any shame or guilt! I actually found when I began opening up to friends about my debt, many were in the same situation! Have you worked on a budget? It took me a couple of attempts to clear my debt. It wasn't until I made a budget and stuck to it that the debt started to come down. At the beginning I wrote down every single spend and it was frightening what £8 here and £10 there added up to over the month!

elbree

Well done for biting the bullet and getting started, it takes a lot of guts to write it all down and post. I definitely echo the comments on budget and personally found that paying a few pounds a day, most days, was really motivating. As in 'Shall I spend 2.20 on a coffee? No, I'll pay that off my card RIGHT NOW'. Your loan is lower interest than the other debts so I'd leave that for now and concentrate on chipping away at higher ones. Good luck, we'll cheer you on! 

Aspiration

Great that you’re getting it all pulled together and clear on where you are.
Reality hit me last year the lack of control I had and I now have a spreadsheet running and I spend probably an hour a month checking in I’m on track. Lots of little check ins every couple of days.

Monzo has been a game changer for us and separating our bill money in one account and then other spending and Pots in Monzo has really simplified life. 

There’s lots of different ways people manage it but the one consistent thing is we all have to face in to it.

You've taken that brave step which is great!! Well Done, it gets easier from here.

Aspiration

AntoMac

Welcome to the Forum. You’re not the first or of course the last to get into money management difficulties. I got to £23k of credit cards, plus loan and mortgage. It kind of crept up on me. Down to ‘only’ about £7700 of credit card debt now. 

You can turn your situation around. One idea I like and very much adopt is @elbree suggesting pay small amounts off straight away, when you haven’t bought that takeaway coffee etc. Surprisingly how quickly those small savings can make a dent in the total debt.
Might also be worth tentatively talking to your boyfriend about your finances,even if you don’t quite feel up to telling him the full picture just yet. After all, hopefully you are going to be partners for life.  If my now wife had any financial problems when we met I would rather have known, so we could work together on them.
Anyway, only meant to post a line to say good luck with your diary

Rgib89

Welcome. 
I have just subscribed and will be following along. There is so many people out there in debt and you find not many people will talk about it. The great thing about this forum is there's so many people on here giving tips and advice.
Good luck 

astrocytic_kitten

Well done on posting, and good luck! I’ll be following to cheer you along.

Also echo what others have said, that lots of us have been in the same position. I got into a similar level of debt by also getting carried away after a huge salary jump. You’re younger than I was at my LBM, well done on facing up to it and making changes!