Advice on debt and spending

AGSmith33

Hi, so I’m not really sure where to begin, so I apologise in advice for the long post. 

So I’m 34 and have 2 yr old twin girls, me and my husband have a house with a mortgage. 

My husband earns a decent salary, I earn the most out of the both of us and my job I can easily pick up extra shifts that pay very well. 

I do have a large amount of debt about £25k plus a car on finance and our joint mortgage. With my work I currently pay slightly more towards our bills etc and I also pay for my husbands car finance. But I feel I am not really getting anywhere with the debt as I pay some off I end up spending more. I’m fortunate that I am able to pay for everything but I work a lot of hours and if I could choose I’d like to work less hours and have more time with my children. I’ve written so many budgets and plans but I end up just buying things, or it goes well for a month and then I go make a big purchase. A part of it is I work so much that I feel like I want something back for that as if not why am I missing this time with my children. But I’ve got into a cycle. 

How do I change my behaviour with money? ive even started trying to find financial coaches but that’s just going to make me spend more. I just don’t know how ti change my behaviour for the better. Or do I need to just suck it up and sort myself out? Sorry for how pathetic the above may sound. 

Helen1982uk

Hi, I don't post much, but I've been in your shoes and that feeling of guilt is massive. If you've not been there, it's difficult to understand. Firstly, depending how old your kids are, you could try spending time with them instead of just buying them stuff. If you have the meerkats, try cinema on Tuesday/Wednesday for cheaper. Or perhaps a board game or something. Or a movie. It helps a bit with the guilt if you can find the time. Alternatively, my recent find is looking for stuff on vinted or eBay, etc, rather than buying brand new. And when they're finished with it, sell it on.

I totally get the comfort spending thing. I'm still a bit partial to it myself. But I now peruse the second hand sites or charity shops for a fix if I'm desperate, but you need to find something else to do when you're feeling that way inclined. 

Singlespeeder

It might be worth actually analysing exactly what you fritter money on. I'd get 3 months of bank statements and several different coloured highlighter pens and go through your spending line by line, categorising the spends by colour. It's quite an eye opener.
Then do an honest Statement of Affairs formatted for MSE.. link will be a sticky at the top of the forum...

DrEskimo

You suggest you want to see the fruits of your labour, but what stands out to me is the two cars on finance. Are these expensive cars? If so are you overlooking those as luxury items? It's really common to see people overstretch themselves on cars and wonder why they have so little left each month.

They incur high running costs to use, have ongoing servicing and maintenance costs and (generally) depreciate like lead balloons. Adding interest charges on top through financing just increases the costs even further. As such, keeping the costs down by restricting yourself to only paying with cash, and not spending more than 50% of your income is a good way to ensure you don't overstretch yourself on cars and reduce costs.

As above, an accurate SOA based on actual spending over the last year will help you identify where money is going, and I suspect if you were to get rid of the car payments, your surplus income would look much much healthier.

EssexHebridean

Hello - well done for acknowledging there is an issue and looking to find a way forwards with dealing with it. I agree with those saying that an SOA will help you get a budget in place as a good solid starting point - it will also identify where you're not currently budgeting for thigs that might come along and trip you up. 

Talking of identification - a key thing might be to work out when you are spending, why, and on what - so are there particularly times that trigger you ending up frittering, what are the emotions behind it if it is an emotional driver at work here, and what "stuff" do you tend to buy when that mood strikes.  Does the "Money Mantra"  that Martin suggests help perhaps - "Do I need it? Can I afford it?  Have I checked if it's cheaper anywhere else?" The first of those might draw a straight no - in which case that should be the trigger to walk away/close the browser. If the answer is "Yes" - I'd insert an additional line of questioning - "Do I have another thing that I could use instead?" - sometimes that might be easy enough and again, prompt a "walk away". "Can I afford it" - well, bluntly, with 25k of debt the answer there is probably no, isn't it - and that is where the really hard decision comes in - is the thing you're buying actually vital, can you just manage without it? the final "is it cheaper" is a time-buyer. Often people find wen they walk away to research prices the urge to buy dissipates naturally anyway - so this could be a good strategy.

The cars may possibly be a financial black hole for you - but without seeing how the SOA stacks up it's not really possible to say. what I will say though is don't fall into the common traps of assuming that "everyone uses finance to buy cars" - they don't. Also that you "need" a certain level of car - to one extent - right number of seats, a good level of safety, suitable for your sort of driving - you do, but that car doesn't need to be brand new, or to have a particular badge on the bonnet, or to be a thing that few others have...It's four wheels, needs to be reliable (and often buying at a few years old means that any issues/recalls have already been sorted) and to get you from A > B - particularly when you're in debt it's a tool, nothing more. 

fatbelly

The mortgage is the important debt and the cost of that will be going up, sooner or later.

So an soa and working together as a family at this is going to be important

https://www.lemonfool.co.uk/financecalculators/soa.php

Cars are always going to be a major expense, which is why we have a dedicated board on the forums. You may want to start asking there. If the cars are on HP/conditional sale you do have a get out free option within the Consumer Credit Act once you have paid 50% of the agreement. Getting out earlier will leave a debt but in many cases that is still a good option, rather than continue to pour money into a depreciating asset.

AGSmith33

So I have had a go at the SOA it is for my income and expenses only. So any joint bills I have halved. 

Brie

AGSmith33 said:

So I have had a go at the SOA it is for my income and expenses only. So any joint bills I have halved. 

Advice from CAB etc as well as here I believe is that it's best to do a SOA for the household to get a true picture of the situation.  If you split bills instead of showing everything that might hide/reduce what is actually would otherwise be an obvious problem point.

For me a few years back with significantly more debt than you have I kept a spreadsheet with my credit card balances and the amounts to be paid over the coming months which I updated regularly.  I printed a copy and kept it in my back pocket at all times.  That way when I was thinking about frittering money (aka not buying things like essential groceries) it would make me pause.  It also helped me manage moving money between cards when there was a 0% offer and to ensure I didn't pay interest for the majority of it.  

And well done for addressing the issue - that's a big first step.

EssexHebridean

I think it would be fair to say that your best way of approaching this is likely to be as a team, with your husband. Clearly you're both in debt as you refer to paying his car finance - but household expenses like that need to be viewed as a joint concern, not "mine and his". There's no point in your scrimping to try to clear debts if he's still spending as before. 

You have a house together. You have children together. On this issue, you need to work together.

Singlespeeder

AGSmith33 said:

So I have had a go at the SOA it is for my income and expenses only. So any joint bills I have halved. 

Next step is to post it (formatted for MSE) on here .... 

enthusiasticsaver

Analysing where you are spending is the first step by going through bank statements.  Doing an soa is a  good first step so you can actually see what your financial position is.  Ideally doing it jointly would work best unless you keep your finances totally separate. 

Changing your mentality towards spending behaviour is crucial.  I totally get the feeling that you work hard so you feel you deserve to buy stuff.  However each time you pay on credit you  are borrowing from your future self.  The fact you have £25k of debt shows you are overspending in comparison to your income and unless you get a grip on that you will eventually fall into a debt spiral. You could say that each £1k you have borrowed is time you have lost with your twins because you are having to work longer hours to cover the debt repayments.  

There are lots of things you can do to stop the spending.  

Cut the credit cards up and remove them from websites, apple pay and anything that makes it easy to spend.  

Set a budget and stick to it.  Use a spending diary to record everything you have spent. 

Make a plan as to how to manage your money.  A lot of bank accounts have saving pots or budget snapshot tools.  Keep essential spends for food, bills and essential fuel separate from discretionary spends. 

Set up savings pots for holidays, christmas and car maintenance etc. 

Save up for emergencies  so you do not need to rely on credit. 

Start up a debt free diary on here to get support and keep  yourself accountable.