The consequences of sticking your head in the sand….

SayonaraDebt

Dear all

Thank goodness for such a wonderful community. I am terrified and so very embarrassed. The guilt is overwhelming. I have never been in this situation as badly as now and need your help and encouragement.

I am currently living in my own and pay minimal expenses as my parents are so very kindly waiving rent as they want me to save for house deposit, so although I am not paying rent per se, I am paying service charge, utilities and Council Tax. I have been so reckless and stupid indeed as although I had been paying off a CC, with a considerable monthly payment, I was still charging too many items to the card still and mostly due to a holiday plus other expenses  I did not budget for properly,* I ended up overspending and got a frightening “You have used over 90pc off your credit limit” text the other night. It is a huge limit - 8500 - I do not know the exact amount I owe and although it sounds incredibly stupid still, I am too scared to look. I do need to look though at some point as my friend still owes me money for some of the holiday activities and meals I think and she said I need to them to our bill on a cash split app. *The holiday was spontaneous and I went to keep her company as she is going through a really really tough time plus the tests cost a lot more than anticipated but I know that we paid a competitive price still. 

I have had my head completely in the sand and assumed that as I was paying it off and charging relatively little - or so I thought - to it, that it was going down - in fact it had only reduced by 1.5k on the previous year. I was, in essence, treating it as ‘extra money’ which is ridiculous! This helped keep my main account in as good standing as possible, thus giving the illusion that a deposit was building, which it was, but this debt would pretty much cancel it out if paid in full now. My mum is always asking about the progress made and although I am honest, I do not give the full picture as they have helped me out with cc debt  before - although I was never ever at this point of almost maxing out the card -and I know how angry, hurt and disappointed they would be if they knew the truth given the sacrifices they have made.  They had cc debt too so weren’t too judgmental but still so so disappointed but they are where they are because they are now so sensible.  

Luckily I have some stocks which I can sell to offset this slightly and do a reset, so to speak, but I am reluctant to sell many more as they are climbing in price all the time. I have looked into doing this today and one will take a while (about a week) to land in the UK account. This will bring my balance up to the savings I had made, plus extra to chuck at the cc. 

I have already taken action to pay this cc off by:
getting a balance transfer at 0% for nearly three years - have been approved 
returning recently purchased items where possible 
claiming refunds for services by complaining
claiming back unclaimed med costs through work
cancelling some subscriptions and getting a refund for one billed on my cc today

I am keen to keep saving and pay off this stupid debt at the same time, so I guess the best strategy is to be absolutely ruthless with budgeting and not buying anything new now. I have a game plan, but would need help with a SOA. I would also like ideas for generating more cash. I have so many clothes/books/DVDs etc and would like some advice for the best way of making money/possible side hustle to boost income. 

Thank you for reading about my utter stupidity - it has been so good to get this off of my chest as I have not slept past few nights.

Thank you.

SayonaraDebt

* by balance up to savings, I refer to the account where savings are held, not cc

Sea_Shell

While your stock prices are high, isn't this the perfect time to "bank" those gains, sell them and pay off (down) the debt?

What's the interest rate on your CC?.  I'd be surprised if your stocks continue to grow by that amount over the next 12 months.

Those stocks may be down next month!

SayonaraDebt

the shares have increased 10x since I got them a few years ago…they have done very well out of the pandemic so I would like to keep hold of them just in case. 

Sea_Shell

Your decision, but "a bird in the hand is worth two in the bush" and all that.

Personally, I feel share prices are "frothy" at the moment...they may just go flat at the most inopportune moment.

Good luck. 

TheAble

It sounds like you need to implement a few good habits and eliminate this unnecessary spending.

The balance transfer can be a good thing but beware it is a double edged sword for the undisciplined. Thus, once it's gone through, ensure you close down the account you're transferring from so you're not tempted to rack up more debts.

I would add that while selling your stocks may seem like a no-brainer I wouldn't advocate it, irrespective of your view on future prices. The reason being - it's too easy a solution. Doing it the hard way helps you learn a few lessons in frugality and financial savvy which will hopefully stick with you your whole life.

EssexHebridean

Don't feel embarrassed - almost all of us who post here have been in debt ourselves at one time or another, so you're in excellent company! 

The stocks situation I can see both ways - but on the whole I think TheAble is on the right track. The best incentive to not get into debt again is to have been in debt, and to have worked your backside off to pay it off. I always say to folk in your position, remember that feeling you have right now - the feeling sick to see how much you owe, the embarrassment. Feels grim doesn't it? Now hang on to that feeling as a reminder of why you NEVER want to be there again, and that is as good an incentive to get things sorted as you will find. 

You've made a few good first steps, and I'm going to suggest that you also complete the Statement of Affairs (SOA) that we recommend to new DFW'ers - you'll find the link within the "pinned" posts at the top of the board. Fill it in honestly and accurately - it needs to reflect how things are right now - an SOA written while looking through rose tinted glasses around how you'd like things to look, or what you think we expect is no use to anyone, least of all you! Once you have it completed, post it into this thrad and we can take a look and see if we can spot any additional ways you can make savings which will help you to pay the debt down sooner. 

Andyjflet

Firstly welcome to the board and well done for acknowledging your debt. I skipped through most if it, I have read so many times the justifications of people saying "holiday was cheap" need a break, friend needed help etc etc......... 
You are in debt, you cant afford holidays or luxuries, get serious, cash in the stock and throw it at your debts, and then cut up the !£$%^^ credit cards, never borrow again.
Do right by your parents and throw everything you can then at the house deposit. 

sourcrates

Lets just get realistic for one moment.

Whilst it can be a shock to find you have run up £8500 in credit card debt, you are not exactly on the street, just yet.

You are living with mum an dad, and say you have stocks, shares and savings, that are equal or over the amount you owe, so your not really in debt at all are you, as you possess the means to clear it within a reasonable time frame.

Your strategy seems to be a sound one, and you should try not to use the card again, in fact I would agree with another posters remark, to "cut it up and throw it away".

I think you should try and sleep soundly tonight as you are not as deep in the mire as you previously thought you where.

We have people on these forums, far deeper in debt than this, who do not posses assets to clear their debt for them, so you should think yourself lucky if anything.

w66m

Sorry to hear this but congrats on posting here and starting to make a change. Do you just have one account or multiple credit card accounts? If multiple accounts get them listed out with details and we can work out a way to tackle them.