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Getting myself out of this mess!
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wingingit99
Posts: 11 Forumite

I tried to start a diary last year, but never fully committed to it and continued to spend on credit cards.
My debt hasn't gone up, but also isn't going down, so I'm stuck owing 31k unsecured and despite paying a large chunk of my wage each month towards debt repayments my situation isn't improving.
I've never been great at budgeting and have had credit cards, overdrafts, loans etc since I was 18. I've realised that I rely heavily on having the option of credit available and will worry about paying for things later. It's started to really get me down and I don't want to spend the next 30+ years paying off debts!
So this year will be the year that I really get a grip on the debt situation. I've sought advice from StepChange and the recommendation is a DMP, I'm not going to rush into it though and will spend the next month or so getting organised.
This week I am sorting out a separate current account to have my wage paid into, and I've cancelled all payments to unsecured loans, credit cards etc. I am also going to contact the companies I owe to let them know I'm having difficulty and that I'm seeking advice.
I will get several defaults on my credit file, which I've always avoided, but I think taking away the option of getting more easy credit is the only way to get out of this mess! Then I need to learn how to stick to a budget so it doesn't happen again.
I will try to update weekly, and add my budget etc as I get it all together.
My debt hasn't gone up, but also isn't going down, so I'm stuck owing 31k unsecured and despite paying a large chunk of my wage each month towards debt repayments my situation isn't improving.
I've never been great at budgeting and have had credit cards, overdrafts, loans etc since I was 18. I've realised that I rely heavily on having the option of credit available and will worry about paying for things later. It's started to really get me down and I don't want to spend the next 30+ years paying off debts!
So this year will be the year that I really get a grip on the debt situation. I've sought advice from StepChange and the recommendation is a DMP, I'm not going to rush into it though and will spend the next month or so getting organised.
This week I am sorting out a separate current account to have my wage paid into, and I've cancelled all payments to unsecured loans, credit cards etc. I am also going to contact the companies I owe to let them know I'm having difficulty and that I'm seeking advice.
I will get several defaults on my credit file, which I've always avoided, but I think taking away the option of getting more easy credit is the only way to get out of this mess! Then I need to learn how to stick to a budget so it doesn't happen again.
I will try to update weekly, and add my budget etc as I get it all together.
Starting debt £31412, Remaining debt £31425, Emergency fund - £487 / £1000
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Comments
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Sounds like a definite light bulb moment to me. Well done and good luck with it. There is plenty of support on here and if you have a crack at a Statement of Account and posting it up, people far more knowledgeable than I will be along to help you identify areas where you can make some savings and focus your efforts.1
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A DMP is the obvious solution if you are not getting anywhere with repaying the debt, cannot afford minimums and are paying interest on the debt. The advantage of it is that the budget allows for you to live and takes away the availability of credit so you are in fact forced to live within your income. Doing a statement of account will help us see whether it is the best option for you but I assume you have been through everything with stepchange anyway. You need to start saving for emergencies while you are waiting for the debts to default.I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
The 365 Day 1p Challenge 2025 #1 £667.95/£301.35
Save £12k in 2025 #1 £12000/£80001 -
It turns out I already have an old current account that I haven't used for years with no overdraft, so that makes transferring everything across fairly easy.
I've applied for breathing space, which gives me 60 days to get a bit of an emergency fund together. No plan to enter a DMP until I have a decent amount to get me through.
Luckily my mortgage deal is on a cheap rate for the next 3 years, but I will need to think long term for big one off expenses. We only have 1 TV which is developing a life of it's own, randomly switches off and the volume doesn't change anymore! That's not essential though (but when you can't afford to go out there's not much else to do!) and I can probably pick one up second hand if needed. My boiler is nearly 15 years old, so when it does finally break it will need to be replaced. There are also a couple of other bits in the house that could break in the next few years.
I genuinely don't know how much I spend, which seems ridiculous! Obviously more than I earn though!
Once I've been paid this month I'm going to keep a record of everything that goes out and create an accurate SOA from that.
I am going to push to get the credit cards etc defaulted ASAP, which feels strange having always paid the minimums. In reality though if I keep them open I'm just going to keep going round in circles.
Starting to feel a bit more positive about everything, it took me 18 years to get into this mess, so I know it can't be fixed over night. However in 4-5 years the debts should be gone and in 6-7 years my credit will look better if I ever do decide to move house.
Starting debt £31412, Remaining debt £31425, Emergency fund - £487 / £1000
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So I thought I'd share a little bit more about my situation.
I'm a single parent to a 5 year old and work full time. I'm hoping to get my divorce completed this year, but there won't be any financial settlement and our arrangements are all sorted.
I own my home, with a mortgage which is fairly cheap each month, the house needs a lot doing to it though. While I'm clearing the debts I'm only doing essential / emergency repairs and maintenance. I haven't started my DMP yet but believe if things crop up I can amend it to pay for essential repairs etc.
I also have a gorgeous, but very old and stinky uninsured dog, so again may end up with vets bills. Due to existing health conditions insurance would be £100+ / month.
It feels quite liberating to know that, this month my wage will actually be used to pay for food, bills etc and not spent on debt repayments. I definitely need to reassess my relationship with money, treating myself to cope with negative experiences, being overly generous and having credit so easily available has over the years led to a spiral of debt and lack of accountability.
I've been so scared of getting a poor credit rating, but now I've realised that I don't actually want the credit!
I've made a rough budget for the next couple of months, while I get an emergency fund started, there will be loads of things to trim / cut, but at least I have something to start with. There will need to be a few small treats along the way, but these will be planned in.
I 100% intend to pay off the debts, after all I did spend the money, but I can only pay back what I can afford each month so they can have what's left after everything else.
Reading other diaries and searching this forum has been so useful in helping me get my head around everything.
Have a great Tuesday!
Starting debt £31412, Remaining debt £31425, Emergency fund - £487 / £1000
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Well done on sorting out the DMP and most people do say it is a relief to finally have a plan and know the debt will be coming down. Within your budget make sure you save for emergency repairs to house etc although the DMP can be adjusted if needs be further down the line. Nothing wrong with the odd treat but just make sure you budget for them. Save what you can while waiting for the cards/loans etc to default.I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
The 365 Day 1p Challenge 2025 #1 £667.95/£301.35
Save £12k in 2025 #1 £12000/£80001 -
Completed my first budget friendly food shop yesterday. I wasn't too strict and still got a bottle of wine and a colouring book for my little one, but managed to knock £20 off last weeks total without making too many changes, which was really encouraging. I've made a conscious choice to take things really slowly. I know that if I'm too tight with everything initially I will then blow it later on by treating myself!
I have still been using my credit card for food shopping etc this week, but on Tuesday when I get paid it will be chopped up and taken off the apps / phone etc. That will be the first really big step. I will then use my Monzo card for all day to day expenses and I've set up pots for groceries, petrol etc.
I did buy a few clothes online this week, my mum is going to give me the money for my birthday so I don't feel guilty about that. I thought I'd better get a practical gift as my clothes shopping budget will not be huge.
One of my old friends is coming to stay next weekend, so my challenge is to think of some ways we can still go out / have fun but do it on the cheap!
Strangely I'm actually looking forward to tracking everything next month and getting a better understanding of exactly where all the money goes!
Starting debt £31412, Remaining debt £31425, Emergency fund - £487 / £1000
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It's the day after pay day, and for the first time in years I actually have money in my bank account left to buy food etc for the month, makes such a change to paying all the minimums and then using credit to get through the month.
A little part of me does feel bad for not paying the credit cards etc, but I am starting to see the way forward.
I've cleared my current account overdraft and removed the option from my account and paid off my very account in full, so that's two positive steps.
Starting debt £31412, Remaining debt £31425, Emergency fund - £487 / £1000
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It's the end of the month for me. I get paid on Mon.
It's not been a perfect first month, I'm £125 over my budget!!! This means I have less in my emergency fund than planned, however I'm not in any more debt, and I can see exactly where the money has gone. It was always going to be a rough budget as I just guessed how much I would need! I need to meal plan a little more and have a small budget for going out / entertainment, as the odd drink here and there really does add up!
I set up Monzo pots for groceries, petrol money etc which was really helpful.
It's my first month of not paying anything, so I've got a while to go before the defaults start. I'm one month into the governments breathing space, but starting to worry a little bit about how much interest they will add once it's up.
It's also the first month of not using any new credit, so that feels good
Still over £31k to pay off (because I've not started yet!), but I'm starting to feel in control of it and no longer stressing about price rises etc, as in the future I can adjust the DMP to adapt to this.
I did pay off my very account and my £500 overdraft, so actually have made some progress. I hadn't planned on including these in the DMP.
Next month I need to put more into the car maintenance account, as the MOT and service is due in May, and I would usually just put it on a credit card. I'm considering taking out a service plan where I pay monthly for next year, but need to look into is a bit more.
Starting debt £31412, Remaining debt £31425, Emergency fund - £487 / £1000
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Try setting up a spreadsheet and enter everything in the relevant columns. Certainly details where the money goes!Now a gainfully employed bassist again - WooHoo!1
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Well done on your progress. Don't forget that you are not spending more than you earn if the level of debt is not increasing. Somehow you have been able to tread water but you, quite rightly, know that you want to do better than that, if not just for yourself but to set a great example for your child as well.
fyi - I've been looking into Olio and thought you might find it helpful if there's a group near you. Free food essentially, as i understand, it which would otherwise be dumped in a bin somewhere. So perfectly good for you and contributed from stores, manufacturers and individuals. Apparently you access it via an app. Community fridges are also gaining in popularity - not sure how you find out about those but there may be something on NextDoor or similar groups.
Also don't overlook the kindness of strangers. Again NextDoor often has requests for things that others might respond to. I had both a toaster and a hoover I no longer needed and individuals had posted asking if anyone had something suitable. I was about to take these 2 to the charity shop and this was just as easy for me. So a new to you TV might be a possibility. After all - if you don't ask, you don't get!!I’m a Forum Ambassador and I support the Forum Team on Debt Free Wannabe, Old Style Money Saving and Pensions boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
Click on this link for a Statement of Accounts that can be posted on the DebtFree Wannabe board: https://lemonfool.co.uk/financecalculators/soa.php
Check your state pension on: Check your State Pension forecast - GOV.UK
"Never retract, never explain, never apologise; get things done and let them howl.” Nellie McClung
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