The Mental Debt Struggle...

abaka

I completely understand the mental health stuff.  I’ve had bouts of depression and funnily enough my depression will see me have big spending sprees on my latest fad. Usually between my movie prop collections or clothes.  Sometimes watches as well🤦‍♂️

Keedie

It's so hard isn't it @abaka? I remember when I had a severe chronic fatigue syndrome flare up that coincided with a major depressive episode and I convinced myself that if I just worked out, I'd no longer be on crutches and sometimes bed bound. So I racked up my Argos card and brought a treadmill and cross trainer! The thrill of the purchase is always crippled by the guilt once the high wears off. It's very impressive that you're selling your movie prop collections as a way of addressing your debt. I have clutter, but nothing of value really, it's mainly just papers and clothes I don't really want let alone anyone else!  . I've been trying to convince my son to part with his old trainers, he even has the boxes which will increase the resale value, and he can use that money to save some and treat himself for his upcoming birthday.

LittleMissDetermined

@abaka and @Keedie I'm signing up to the depression/trauma spenders gang!  It took me so long to realise what was happening (and a load of money) too.  But now we have recognised it, hopefully we can stop it happening again.
LMD x

Keedie

Welcome aboard @LittleMissDetermined! 

I shudder to think how much I have frittered away over the years by not realising the link between mental health/trauma and spending. And I've also wasted money between realising the link and now trying to sever the link, as I'm trying to learn new coping mechanisms and battling the budget and learning how to adult properly. And yes, hopefully by being more aware of it, we can stop it happening again and if that should fail, we bounce back quicker.

You've all really inspired me, so I'm very grateful. I've been going through the MSE Budget Planner article, https://www.moneysavingexpert.com/banking/budget-planning/#planner, and I can already see exactly why I've got to this point. There's so many aspects and categories of spending that I've never really given much thought! I saw that there's also a spreadsheet, but it looks a bit scary...  . 

I'm going to attempt my SOA now, and then go back over the budgeting article to see how to really cut it all down and budget properly. I can already see that my income isn't bad, I just have atrocious habits and I'm servicing high repayments. So there's some harsh reality checks coming my way... oh dear  .

Keedie

Statement of Affairs and Personal Balance Sheet

Household Information

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

Number of children in household......... 1

Number of cars owned.................... 1

Monthly Income Details

Monthly income after tax................ 1206.89

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

Benefits................................ 968.43 (PIP, Universal credit and child benefit)

Other income............................ 533 (self employment and care work)

Total monthly income.................... 2708.32

Monthly Expense Details

Mortgage................................ 0

Secured/HP loan repayments.............. 0

Rent.................................... 560

Management charge (leasehold property).. 0

Council tax............................. 81

Electricity............................. 81.43

Gas..................................... 81.43

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

Water rates............................. 41.36

Telephone (land line)................... 0

Mobile phone............................ 53.31

TV Licence.............................. 13.37

Satellite/Cable TV...................... 9.99

Internet Services....................... 37.5

Groceries etc. ......................... 300

Clothing................................ 0

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

Road tax................................ 11.37

Car Insurance........................... 83.33

Car maintenance (including MOT)......... 58.33

Car parking............................. 14.9

Other travel............................ 15 (Oyster top up or ad hoc parking)

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

Other child related expenses............ 25

Medical (prescriptions, dentist etc).... 10.81

Pet insurance/vet bills................. 0

Buildings insurance..................... 0

Contents insurance...................... 0

Life assurance ......................... 37.69

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

Presents (birthday, christmas etc)...... 50

Haircuts................................ 0

Entertainment........................... 45.44

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

Emergency fund.......................... 50

Charity................................. 26.88

Family Fund............................. 50 (my contribution towards shared family expenses with siblings)

Total monthly expenses.................. 1818.14

Assets

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

House value (Gross)..................... 0

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

Car(s).................................. 2000

Other assets............................ 0

Total Assets............................ 2000

No Secured nor Hire Purchase Debts

Unsecured Debts

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

Bank of Mum 1-Car..............450.......150.......0

Bank of Mum 2-Holiday..........300.......50........0

Barclaycard....................8770......263.2.....0

TUI............................2845.04...284.5.....0

Sky Mobile.....................1071.77...32.87.....0

MBNA...........................1144......25........0

Creation Finance...............1145......72.67.....0

Total unsecured debts..........15725.81..878.24....

Monthly Budget Summary

Total monthly income.................... 2,708.32

Expenses (including HP & secured debts). 1,818.14

Available for debt repayments........... 890.18

Monthly UNsecured debt repayments....... 878.2

Amount left after debt repayments....... 11.94

Personal Balance Sheet Summary

Total assets (things you own)........... 2,000

Total HP & Secured debt................. -0

Total Unsecured debt.................... -15,725.8

Net Assets.............................. -13,725.81

The fact that I have £11.94 left just shows that things are really amiss, as I've had to guesstimate for some things, but there's definitely a lot of work to be done in terms of better spending habits. Seeing it like this, makes me realise that I definitely can't afford to take on more debt as I'm barely able to meet the repayments now...  .

abaka

I have to admit the trauma of spending is weird.  I will admit last night sitting down and thinking. I’ve made decent progress…perhaps next month I can pay a little less on my debt and treat myself!!  I quickly shook out of that plan….but it shows just how easy it is to spend.  Although, previously, I would have spent and added to the debt rather than at least using my own money!!  

At least I’m thinking about buying than actually doing as I never thought about buying when I did buy…it was all impulse buys!! 

Keedie

Abaka I hear you! It's the impulse buying that really bites us isn't it? I'm always thinking of rewarding myself, and that's the mindset I need to try and get out of. I'm paying for a holiday I absolutely cannot afford, and althuough I'm looking forward to having that break in July 2023, I don't even know how I'll pay for the passports at the moment, or airport parking etc. So it's good that you shook yourself out of that mindset as it'll help you in the long run. Good luck with it all.

abaka

The only reason I did shake myself out of it is because it’s my wife’s birthday in October and I’ll likely be paying less of my debt that month…and we’re still hopeful of being able to afford a family holiday in September….I’ve 100% committed to ensuring that my debt won’t get in the way of family life as my wife and daughter should not suffer because of my poor decisions.

luckily my wife has a better control of debt so if she pays for a holiday on her card we will pay pay it back together in instalments.  If I’m going to pay less debt I’d rather it be for something that benefits my family.

I can treat myself once I’m debt free!! 

Keedie

That makes sense. It's my son's 16th in October and my birthday is the day after his, and I need to work out how I'll pay for that. I think I might try and reduce my monthly repayments in general, so that I have more of a surplus, and I need to get rid of non essential spending to free up some of my budget. I don't really have enough for things like eating out for family birthdays (this is something we do a lot as a family for celebrations), but I want to enjoy life whilst still being more responsible and eventually being debt free.

savingholmes

Looking at your budget at least you can see why things are tight. Are they all minimum payments or what you re actually paying? I wonder if you need to find a way to give yourself more of a buffer for in month unplanned spends - like school trips and the like. You have nothing in for clothes - but with a DS I don't know how realistic that is. You could potentially cut back on gifts. 

When my debt was at its highest - I tried the make £10 a day challenge to bring in extra cash - which I then used towards clothes, gifts and entertainment. I also tried to establish a £500-1000 emergency fund so that if the proverbial hit the fan like a microwave breaking etc I didn't have to reach for the CC etc. We did this by selling stuff to give us that improved 'starting' point. 

Hope that helps. It can be done. It's not easy though...

Groceries are my struggle - but have you tried Olio for free food. Also food banks could be an option. 

Your car budget is light given you say your car is only worth £2K - suggests its old and could need money spending on it. 

I would look at your debt repayment budget and see if that could be trimmed back by £100 or so - so that you aren't so close to the wire each month and feel like you can get solid progress rather than being 2 steps forward and one back etc. I also targeted the highest rate or smallest balance first to help get rid of a few and get the psychological feeling of progress.