Rescuing myself from drowning even deeper -

RWMJPMC86

I've only just found the Forum and so wish I had done sooner, 

Overview - Married couple, moved into our 'forever' home in Feb 2020, Lockdown began March 2020, Baby 2 born June 2020, and heads in the sand from then until around March 2022.

So turns out we had been spending and spending and spending, without stopping to think, I've always had a terrible relationship with money - from hiding in the kitchen when the Provident man came as a kid, to house move after house move due to evictions and debt collectors banging on the door, though I swore my kids would never live that life I've been feeling precariously close.

So - here goes - 

Mortgage £160k (up to date, Fixed rate until Jan 2025)
Help2Buy - £42k (still 0% until Feb 2025)
Car - £9800 (up to date and 0% finance deal)

Here's the problems - the interest on the credit cards and loans took us over our income each month and so, in March this year, we set up a DMP with Stepchange (I did not know to not jump into this - but it is done now and no point dwelling on it)

We have a total of £43,375 debt via loans and credit cards - 
£36,580 of which is on the DMP, currently being repaid at £250 a month. 
The remainder on a 0% card at £120/month.

Total Gross income £60,750.

Monthly Outgoings - 
Mortgage £698
Council Tax - £215
Groceries - £350
Nursery - £950
WrapAround Childminder - £160
Gas/Elec - £137 (fixed rate until Oct 2023)
Water - £42
BT (covers Internet and TV) - £40
TV Licence - £13.43
Insurances (Pet, home life and Car) £124
Vodafone - 2 x £15
Sainsburys Credit Card - £120
Car Repayment - £112
Daily savings (School Uniform, Xmas, Birthdays, Repairs etc) £50
Childrens Savings - £40 (2 x £20)
DMP - £258


After a few months now on the DMP I'm seeing balances reduce, and though it's going to be a long old slog (StepChange saying just over 10 years but we should be out of nursery fees this time next year) I am starting to imagine a life without this debt hanging over us. 

I guess I'm here for a sounding board, and having looked at everyone's progress some motivation to see that we WILL get there and we WILL change things moving forward, I just hate that we even got here in the first place.


So thankyou MSE Debt Free Wannabes, and hopefully, one day, I'll be able to be one of you too 

foxgloves

Good luck with your debt-free mission. I honestly don't think there is any greater life-skill we can learn, than living within our means. I wouldn't go back to my bad old overspending ways, that's for sure.
F

Squirrelz92

Heyyy, welcome to the DFW board and congrats on starting your new diary!
Have bookmarked you and eager to follow your journey. I bet you will be glad to see the back of those nursery fees next year! Childcare costs are crippling  

RWMJPMC86

Thanks @squirrelz the childcare fees are what have sent everything under I think, we budgeted for a childminder but couldn't find one with space so have had to send him to a nursery and it just knocked everything out of sync.

Little win this week - no top up shops, so nothing really saved as we never budgeted for those - but it means that there's still some money in the bank and no needless spending so far. This mindset change is hard after so many years of frivolous spending.

[Deleted User]

You're right, the mindset change is soooooo hard.

Once we've had our 'lightbulb' moment where we see our life draining away infront of our eyes and life too hard to face any more we're at the point of mindset changing.

Debt is such hard work, really, really, really hard work and a lot of people can't cope with it, it takes huge strength and steely determination.
If you possess that you'll be just fine.

Cut out the luxuries and the frivolities, plough through your debt, when you've paid all that you owe you'll be in a far superior place and have such pride in yourself you won't believe it.

RWMJPMC86

thankyou @[Deleted User] - 15 years in debt and it's always just seemed so......normal, until it wasn't.

I'm working on £4k a year which gives the 10 year target for consumer debt to be paid off - I've set up a spreadsheet with 120 squares, and each £333 paid I colour a square, the aim being that I can knock a minimum of 2.5 years off in time.

The intention I have is to continue the DMP at £258 a month, building a small buffer of Emergency Fund and then anything over and above I'll pop in an offer pot, when there's enough, any of the debts which go to collectors - I want to offer settlements, hoping of 50-75% of the balances (this seems realistic going by others I've read on here) So I may be able to only repay back 75% of our total due balance! Only time will tell I guess.

[Deleted User]

Good plans there.
Yes, with your hard work and possible goodwill gestures by creditors you might reach your goal ahead of time.

@fatbelly and @sourcrates will probably see this now and they're some of the most valuable members to you with this.

Elisheba

Good luck with it @RWMJPMC86!  I've found it helps to think of it as a challenge, and see how you can beat yourself as being frugal and putting a bit aside from month to month.  It can feel like a real slog at times, so its good to find what enjoyment you can out of the process.  The real trick is to get into a mindful spending mindset and find the balance between enjoying life and getting yourself out of the red.

[Deleted User]

I agree that being frugal can actually give you a bit of a buzz .... you can see how much you're saving by doing it  😋

And, as you see the numbers getting smaller - and then totally gone, you get a satisfied/smug feeling when you know that people around you are still trying to impress with their loaned/borrowed/owed lifestyle and you're living clear of debt.

SaverRate

Can you reduce the Vodafone phone contracts if your not tied into a contract? 
Your insurances work our at £1488.00 a year. Can this be reduced by shopping around? 

You dont show anything for petrol/diesel? 

Is vehicle service/repairs included in daily savings or does this need to be allowed for? 

RWMJPMC86

thanks @SaverRate I have dropped both Vodafone contracts to £10 month each - Very happy with that and just shows what picking up the phone can do, thank you!

The insurances I shop around at each renewal so cheapest this year they are made up of Life - £39.76 Car £33.14 Pet £21.17 and Home (contents and buildings) £24.28 so not sure I could reduce costs.

Car has a 3 year service plan in place, Father in law does new brakes and tyres too (hes good like that) so other incidentals are in the daily savings.

Fuel fluctuates, but around £15 a week I need to account for there thankyou for highlighting that!