Help advice needed

Cal1983

Hello I'm looking for some advice with no judgement  

I've always been bad with money grew up in a single parent household whenever we got money it was spent on good things because we could never afford them but I seem to have developed this into adult hood.  I've been in debt in the past and got out of it any many ways... allowing it to default mostly so never had a good credit record. My ex partner also took out debt in my name and didn't pay it which made it worse. 

Fast forward a good few years. I'm a single parent with a really good job but working full time I still really struggle and don't get a lot of time with my kids. Often having to take extra work too for extra money. I managed to get a mortgage with a great deal of difficulty due to my history but had to put in every penny I had. I cleared all my debt in the process too. 

Now 9 months since mortgage. I went a bit crazy fixing things in house etc, living off credit card as things got tighter with the gas electricity rise along with everything else. I've got around 20k debt between loans and credit cards. My house value is around 200k maybe more and my mortgage balance is 150k. 

I'm struggling to keep up with payments month to month. It's split over so many cards etc with high interest. I'm at a stage I've no money left over to live. I'm really scared. Especially with cost of living continuing to rise. 

What is my best way to target this debt? I know i should avoid debt management where possible as ideally I want to be able to remortgage on to a better rate in 2 years as I'm on a high interest rate at present. 

I feel like such an idiot. 

katsu

Don't be scared. You'll get help here. 

20k of debt in 9 months on house and living suggests to me a great place to start would be by working out where you are currently over spending. 

There's an SOA template that is used here. You might want to see if you can have this thread moved from debt free diaries to Debt Free Wannabee's main area so you get more responses. 

If you can share your spending then you'll get ideas on how to reduce it. 

You might feel better if you can accept that rather than focusing on wanting to find a cheaper mortgage in 2 years, the best thing is to get a handle on reducing the debt and being able to live now?  Can you let the future be the future and focus on working out a new budget that helps you make ends meet and has some room to cope with increasing inflation?  

Did you buy anything for the house that you can sell? 

Do you have anything else in the house you can sell to get that debt down a bit? 

Are you getting the correct money from your ex for the children? 

Good luck. You'll get great ideas and help here.

Cal1983

Thank you for your reply.

Since making this post I've had a read through the forum and made some realisations

1. My spending has been out of control ( got over excited at finally having our own house)

2. The debt needs to be cleared by repayment not by consolidating into loan and definitely not into the mortgage 

3. My spending habit has to change and i need to learn from it as it is a pattern

4. I'm definitely one of those who has consolidated In the past then re spent no one has every pointed this out to me. It's such a trap! That's part of how the debt accumulated 

So later today I will post my SOA.

I'm definitely not getting enough maintenance from my ex. He went self employed so it's very hard to prove. I'm going to compose a text later to explain that with cost of living I need him to have a look at increasing payments  

To be fair when I think about it there I did still have debt when I took the mortgage so it hasn't all just happened but its got out of control quickly. Kept telling myself it was for the house! I needed appliances etc so essential things I can't sell  

BadBookkeeper

Good luck on your journey.  Your SOA will give you a good idea of your living expenses, but also give you exact figures for your debt.  AlSo list your debts & which card or loan company they are with and also what interest rate you are paying and when any deals will end.  Some cards charge a higher minimum payment percentage than others too so although may take longer to pay off, this could free up money monthly to give you breathing space moving balances around.  You could save a chunk of monthly payments by shuffling the card balances if that makes sense by having them on lower interest rates too. 

foxgloves

Hello @Cal1983, Your worry & concern about the state of your finances comes across strongly in your post & it sounds to.me as though you are well ready to change your destructive spending habits. I say 'destructive' because while it's very easy to over-spend one's income, there is no situation which is improved by accumulating consumer debt. It catches up with everyone in the end. I've been very honest in my own diary about my past spendy life & so while we are now completely debt-free, I have been there & speak without judgement.
One very positive point in your post is that you realise the horrible trap of consolidation loans (we had 3 of those.....)& so won't be tempted by that as an attempted remedy.
If as @katsu suggests, you work on posting an SOA up here (if you intend to keep a DFW diary) or on the general dfw board, you might find that new eyes on the situation might see a few little ways forward. An SOA should be as accurate as possible reflection of your financial situation now, not what you think you ought to be spending. 
When I realised our attitude to money had to change, I'd never done regular budgeting so that was my first move....I just use an A4 notebook & a pencil (use what works for you), as well as a strategy for paying everything back. We owed around £35k at its worst. I began by cutting back enough gradually to scale back my overdraft a bit each month. When that had gone (I'd had it for about 24 years!), a large proportion of my salary no longer disappeared straight down a black hole each month & I was able to start targeting other debts using the snowball method. I threw every spare bit of money, however small, into overpaying those. Two toiletries bought in the £1 shop instead of paying £2.99 somewhere else? In my eyes that was another £4 paid across & a teensy bit more debt gone. £14 made selling a few bits online? Ditto. Lots & lots of small overpayments do add up, though it makes for a gradual process, I know.
My debt also expanded when I bought a house. And again when we bought one together. It's not unusual, but as you're now finding, pay-back time comes to us all in the end. You probably do all or some of these but our debt-busting staples were budgeting effectively, meal planning, batch cooking, being much more conscious of the difference between 'wants' & 'needs', saving for things instead of buying them instantly on credit, cutting take-aways to about 4 a year, selling unwanted stuff on eBay, doing surveys to earn extra bits & bobs, selling a few hand crafted items, etc, etc. This is a long post so I'll leave it there.....Overall, it does sound as though (like us) you have made the link between debt & insecurity, & that should provide motivation. Wishing you a positive journey & outcome.There is a lot of support on these boards because so many of us have been there.
F

Cal1983

So here we go.  Embarassed to post this! its worse than i thought

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]

Number of adults in household........... 1

Number of children in household......... 2

Number of cars owned.................... 1[b]

Monthly Income Details[/b]

Monthly income after tax................ 2900

Partners monthly income after tax....... 0

Benefits................................ 157

Other income............................ 325[b]

Total monthly income.................... 3382[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 865

Secured/HP loan repayments.............. 234

Rent.................................... 0

Management charge (leasehold property).. 15

Council tax............................. 139.1

Electricity............................. 125

Gas..................................... 75

Oil..................................... 0

Water rates............................. 0

Telephone (land line)................... 19

Mobile phone............................ 60

TV Licence.............................. 0

Satellite/Cable TV...................... 0

Internet Services....................... 32

Groceries etc. ......................... 400

Clothing................................ 60

Petrol/diesel........................... 80

Road tax................................ 5

Car Insurance........................... 46

Car maintenance (including MOT)......... 40

Car parking............................. 0

Other travel............................ 0

Childcare/nursery....................... 0

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 20

Pet insurance/vet bills................. 28

Buildings insurance..................... 6

Contents insurance...................... 6

Life assurance ......................... 34.01

Other insurance......................... 0

Presents (birthday, christmas etc)...... 40

Haircuts................................ 20

Entertainment........................... 50

Holiday................................. 0

Emergency fund.......................... 10

Professional fees....................... 30

Trade Union............................. 22[b]

Total monthly expenses.................. 2461.11[/b]

[b]

Assets[/b]

Cash.................................... 0

House value (Gross)..................... 200000

Shares and bonds........................ 0

Car(s).................................. 9000

Other assets............................ 0[b]

Total Assets............................ 209000[/b]

[b]

Secured & HP Debts[/b]

Description....................Debt......Monthly...APR

Mortgage...................... 152327...(865)......5.39

Hire Purchase (HP) debt ...... 9502.....(234)......7.7[b]

Total secured & HP debts...... 161829....-.........-   [/b]

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

Capital One....................131.39....5.........30.34

Capital One....................387.35....22.56.....34

Zopa...........................487.32....5.........33.9

Inland Revenue.................1000......15........0

Currys.........................500.......25.94.....24

Studio.........................292.......18........30

Next...........................390.......20........29.9

Very...........................440.......15........44.9

Monzo..........................500.......10........0

Credit Union...................13500.....443.......19.6

Hitachi Finance................1744......40........0

Paypal.........................650.......15........18.9

Klarna.........................588.......14........18.9

118 credit card................1998......136.......29.6

Fluid..........................1674......30........30.34

Vanquis........................806.......16.28.....33[b]

Total unsecured debts..........25088.06..830.78....-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 3,382

Expenses (including HP & secured debts). 2,461.11

Available for debt repayments........... 920.89

Monthly UNsecured debt repayments....... 830.78[b]

Amount left after debt repayments....... 90.11[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 209,000

Total HP & Secured debt................. -161,829

Total Unsecured debt.................... -25,088.06[b]

Net Assets.............................. 22,082.94[/b]

[i]Created using the SOA calculator at www.stoozing.com. 

Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

Cal1983

Also just to note there are months I do get paid more and I am due a salary increase in October.  The problem is it takes me into higher tax bracket so will be also paying more tax 

stymied

It’s great that you have a surplus to start reducing your debts and have your house to motivate you.

Do you have to pay fees for your overdraft?

Will the Inland Revenue bill be recurring this year i.e. do you need to include it in your monthly budget?

Zopa, Very, Fluid & Vanquist are concerning because they look to be going UP! even if you pay the minimum monthly amounts.

Do you think you can definitely stick to your SOA budget including starting to build up pots for the annual expenses? Presents and entertainment look tight especially if you have any kids activities like dancing or school trips to account for but you have some wiggle room in groceries and maybe clothing. Are you in a contract with your mobile?

adben12

Just wishing you luck on your debt busting journey. 

Cal1983

stymied said:

It’s great that you have a surplus to start reducing your debts and have your house to motivate you.

Do you have to pay fees for your overdraft?

Will the Inland Revenue bill be recurring this year i.e. do you need to include it in your monthly budget?

Zopa, Very, Fluid & Vanquist are concerning because they look to be going UP! even if you pay the minimum monthly amounts.

Do you think you can definitely stick to your SOA budget including starting to build up pots for the annual expenses? Presents and entertainment look tight especially if you have any kids activities like dancing or school trips to account for but you have some wiggle room in groceries and maybe clothing. Are you in a contract with your mobile?

Thanks for the reply. I think the credit cards look like that for now as some are on 0percent balance transfer or a portion are and the payment is 1% + months interest so payments will likely increase.  I'm thinking of prioritising very as although payment is small at present it's high interest so money is going into a black hole? 

The mobile phones are on contract for me and kids unfortunately. I'm not bothered about having a new phone so as soon as any are up I'll just get cheap sims. 

Inland revenue was an overpayment of tax credits which is really annoying as I kept it super up to date but their system still miscalculated and over paid me. Tried to fight it at the time but they just said pay a minimum amount so that will go on for a while. 

My kids don't really have any regular clubs/commitments as we have never been able to stick to it with my shifts they just do things ad hoc when we can afford.  

FootyFanDan

just popping in to wish you the very best of luck on your journey. It does seem from your posts the situation has really hit home and you sound positive about tackling it which is always a good start.