Admitting I have problem debt...

Sam_X_10

Thanks everyone. Feeling rather overwhelmed, guilty, upset - I'm annoyed at myself for letting it get to this. Especially as I struggled a few years ago with my wife spending on Credit Cards. I managed to get her situation sorted but I think at the detriment of mine by hiding it and pretending all is OK. 
I feel totally and utterly ashamed. 
I know things won't sort themselves out, so I need to be strict and get on with it. Easier said than done sometimes. I'll give the spreadsheet a go and take it from there. I guess I'm lucky in some respects that I currently earn enough to service the debts. Thanks again all. 

RAS

OK, Sam, give yourself some slack. You've tried to remedy the initial problem of your wife over-spending by transferring the spends to your accounts. 

Which suggests that you are both going to have to acknowledge that nice shiny things, expensive holidays and weekends away, whatever, are going to have to be off the table for a while. You'll now need to keep tabs as the viability of your joint finances depends on your wife also restraining her spending.

Set up a date night or half day once a month and go through the finances together. Agree the budget and try to make a little extra by selling anything you can to kick start the pay back. No major expenditure without full agreement on both sides. And really check that you never need to pay car-parking, for example.

You do need more in the car maintenance pot. And unless you both have good death in service benefits, at least reducing term life insurance to cover the mortgage.

I'd start by killing the Barclaycard, as getting one expensive debt off your list will be a boost.

You can then add in some allowance for holidays and entertainment. Do you both never grab a coffee or a pint with friends?

And finally, check whether you can hand the cars back sometime with no penalty? And think about whether you both need new shiny cars for work, or just for show?

You,are in for a long haul, so join the debt free diaries section for support and encouragement.

Singlespeeder

Sam, you're not alone finding yourself in this situation. The banks are certainly partly guilty for making so much credit so easily available.
As others wiser than me have said, you and your wife absolutely have to work as a team on this.
One of the most illuminating things I did when I was in your situation was to get the last maybe 6 months bank statements and a bunch of different coloured highlighters and go through them line by line categorising the spending. It's frightening seeing exactly how much you actually spend /fritter on things you don't realise. Often it's food shopping, you think you only spend £60 a week but in reality there's 4 booster shops each week doubling it. It also highlights payments you see every month but can't quite remember what they're for.... 
Cooking wiser, bulk cooking , no takeaways/meals out can make quite a difference.
Personally I'd immediately open a Starling or Monzo account and utilise their saving pots.
Get an Annuals pot. Work out all the things that you only pay for once a year, car insurance, TV licence, Mot, house insurance, breakdown cover, birthdays, christmas  ...maybe £1800 a year, divide that by 12 so £150 pcm, and try to put that away into an Annuals pot. You KNOW these things are going to occur so plan for them so they don't need to go on credit. 
Your SOA looks pretty tight already though see if you can reduce the TV package, stop buying clothes ( £1200 pa is a lot) , haircut every 6 weeks not 4 ...
Sell some stuff. That guitar you never actually play, the surfboard gathering dust, whatever you can, and pay it off the Barclaycard.
Cut up the credit cards.

It's actually pretty cathartic once you get into the swing of it.

Stay strong and work as a team

poppy10_2

Sam_X_10 said:

So that includes our WiFi amd landline too, sorry it's difficult to split 😔

Most people don't actually ever use their landlines these days. You can get wifi for much cheaper than you are paying - I'm paying an effective £30 per month for gigabit broadband (after a cashback deal). Cancel the Sky telly and you can save at lerast £50/month. You could also cut back on haircuts and clothing shopping. However with the level of debt you have it looks like a DMP will be needed to give you some breathing space

EssexHebridean

Sam_X_10 said:

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

Household Information[/b]

Number of adults in household........... 2

Number of children in household......... 0

Number of cars owned.................... 2[b]

Monthly Income Details[/b]

Monthly income after tax................ 2500

Partners monthly income after tax....... 1800

Benefits................................ 0

Other income............................ 0[b]

Total monthly income.................... 4300[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 550

Secured/HP loan repayments.............. 556 Car loan(s)? How long to run? Does this pay off the vehicle(s) in full or does there need to be additional planning for actual ownership?

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

Management charge (leasehold property).. 15 This is very low for a service charge - is there anything additional to this that needs budgeting in?

Council tax............................. 180 If you are paying this over 10 months, make sure the "spare" two months payment goes straight to debt to avoid it staying in the current account and getting frittered. otherwise you may do best to switch to payment over 12 months. 

Electricity............................. 80 Higher electricity than gas it relatively unusual - are these figures correct?

Gas..................................... 40 This is extremely low for gas - and your overall energy figure is pretty low - do double check that this is set at the right level to cover your year's spend allowing for the increase in prices since last winter. 

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

Water rates............................. 25 As this is metered (presumed from cost) you may be able to reduce but won't see the benefit for a while.

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

Mobile phone............................ 25

TV Licence.............................. 15 Why is this £15? Should be £13.xx in most cases?

Satellite/Cable TV...................... 80You should be able to reduce this - I've noted it covers broadband too. Have a look at the main MSE site for the best deals, and the price for a basic TV package (or go freeview for that) then use that information to haggle when your contract is next up.

Internet Services....................... 0 included above.

Groceries etc. ......................... 320 There is wiggle room here for sure - at least £50, and with careful shopping and meal planning, perhaps up to £90 or so.

Clothing................................ 100 Easy win here - take this down to just bare basics - "socks & pants" money. Wear what you have - you can't justify blowing £100 on new clothes each month when you owe so much elsewhere!

Petrol/diesel........................... 500 Right - this is MASSIVE. Why? Can it be dropped? Does what you are budgeting for maintenance seriously cover cars doing such high mileage? 

Road tax................................ 30 If you are paying this monthly you  need to start to set money aside to start doing it annually instead as there is a premium paid on monthly payments.

Car Insurance........................... 70

Car maintenance (including MOT)......... 20 As above - is this realistic? Depending on what deals your cars are on, remember it needs to include services, MoT tests, tyres, wiper blades, cleaning, even stuff like screenwash, plus a contingency for anything actually going wrong. We set aside £165 a month to cover our two cars although that takes account of insurance too - just over £100 relates to the maintenance aspect plus setting aside towards replacements when needed. 

Car parking............................. 0 Nothing, ever?

Other travel............................ 0 Nothing, ever?

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

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

Medical (prescriptions, dentist etc).... 50 What is this relating to and can it be done more economically?

Pet insurance/vet bills................. 30

Buildings insurance..................... 15

Contents insurance...................... 15 You may be able to get these more cheaply - shop around, but ensure you still have the right cover. 

Life assurance ......................... 0

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

Presents (birthday, christmas etc)...... 25 Is this actualy getting put aside? Only it's just before christmas and you're showing no cash savings which suggests not...

Haircuts................................ 60 This is a lot - £720 over a year might be OK for someone on a good wage with no debt - but you're on an average wage and have lots of debt. Start by leaving an additional week between appointments to your "normal"

Entertainment........................... 0 Nothing at all? No occasional trips out, personal spending money, quick coffee of magazine grabbed on the run?

Holiday................................. 0 You never go anywhere at all - not even trips to visit family?

Emergency fund.......................... 0 OK - contect here. You're spending £100 a month on clothes, and £60 a month on haircuts, but have literally not a penny set aside in case the fridge needs replacing. Time tio sort that out![b]

Total monthly expenses.................. 2801[/b]

[b]

Assets[/b]

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

House value (Gross)..................... 235000

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

Car(s).................................. 15000

Other assets............................ 1000[b]

Total Assets............................ 251000[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 120000...(550)......1.5 What does that deal end? Be prepared for a definite rise at the end - another good reason to get to grips with the debt.

Hire Purchase (HP) debt ...... 17000....(256)......0<

Hire Purchase..................10000....(300)......0[b]

Total secured & HP debts...... 147000....-.........-   [/b]

[b]Unsecured Debts[/b]

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

MBNA CC .......................6440......200.......30 

Halifax CC.....................5455......150.......30

MBNA CC........................1226......50........30

Wife Loan......................10000.....331.......6

HSBC Loan......................17428.....355.......6

Nationwide Loan................4216......258.......6

Virgin CC......................9700......100.......0

Barclaycard CC.................1076......50........30[b]

Total unsecured debts..........55541.....1494......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 4,300

Expenses (including HP & secured debts). 2,801

Available for debt repayments........... 1,499

Monthly UNsecured debt repayments....... 1,494[b]

Amount left after debt repayments....... 5[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 251,000

Total HP & Secured debt................. -147,000

Total Unsecured debt.................... -55,541[b]

Net Assets.............................. 48,459[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.

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

Well done on two counts - firstly for admitting the issue - that's often the hardest bit. Secondly for being so proactive on getting the SOA prepared and posted - that's a real help to allow people to see what you might be able to adjust. 

You'll see that I have made some notes against it in bold above - some of these will cross over with stuff others have said too but sometimes it helps to have everything in one place. 

For others reading who may be in similar situations to the OP - when you start getting offers CCs with a 30% + APR then that is a red flag that all isn't well. 

Right then - be grateful you can't get a consolidation loan - as others have said, it doesn't fix the problem, it just rolls it down the road a way, so that's good.  As for your wife, it sounds like she's been happy enough to enjoy the lifestyle that the spending has afforded, and she presumably knows how much income you have as a household, so she needs to start taking some responsibility and learning her way round your finances. She could have looked into things for herself, bluntly - she has chosen not to. Now you both need to accept that the lifestyle has to change, and probably change hard, and you need to work together to fix the problem.

I think you have a few steps to take initially:
A conversation between the two of you to start constructing a plan and make sure you are on the same page.
Building a workable household budget and ensuring that your income covers your outgoings.
Begin to  make savings where you can, and build an emergency fund. the EF is JUST for emergencies - NOT for someone fancying a new pair of shoes, or dipping into for a takeaway... ;-) 

Initially put aside £50 a month to the emergency fund - and at the end of the month, anything surplus over that can go to one of the high APR debts - personally I'd pick off Barclaycard first as that has the lowest balance. 

You need to stop using credit - once a few months have passed you will have enough in the EF to cover the most likely eventualities, so that in turn reduces the likelihood that something will happen that you can't cover. For any cards that you are absolutely 100% not using, set the monthly payment to just above the current minimum. This means that there is no risk of you missing a payment, and also that you have a solid, budgeted amount each month. Just paying the minimums means that payment will gradually drop over time, so you make less impact. You  must never spend on a card set up like that, though, and keep an eye for any changes to the required minimum. 

Martico

Another vote for hammering as best you can at the Barclaycard debt, as that's both high interest rate and "low" balance. 
I've also found that Barclaycard has been (for me at least) one of the cards that offers 0% balance transfer deals every now and then, so after that's been on a zero balance for a while, you may be able to get a transfer deal from one of your other high interest cards. Don't count on that, but it could come in handy down the line

Sncjw

Can you meal plan to bring down the food costs. My husband and I just have us two in the house and we can spend just 30-50 a week depending on what we have planned for the week and that's including taking lunches to work. 

Do you really need to spend £60 a month on hair cuts. Maybe find local college that does cheaper cuts if it's possible during working week.

Fuel is high cost are you filling when actually needed or just topping up on set days. Could you go longer without fuel or are you a Costco member and get cheaper fuel. 

If scrap the clothing unless you really really need it. 

Don't feel guiltym you are not the first and won't be the last. Just need to educate yourselves on money management. Also if your worried about keeping up with Joneses and what others think then I would let them bother you. You need to do what's best for your family. Alot of people get pressured by colleagues to spend on the lastest thing or get nice clothes all the time. Just a big assumption there 

kimwp

Sam_X_10 said:

Thanks everyone. Feeling rather overwhelmed, guilty, upset - I'm annoyed at myself for letting it get to this. Especially as I struggled a few years ago with my wife spending on Credit Cards. I managed to get her situation sorted but I think at the detriment of mine by hiding it and pretending all is OK. 
I feel totally and utterly ashamed. 
I know things won't sort themselves out, so I need to be strict and get on with it. Easier said than done sometimes. I'll give the spreadsheet a go and take it from there. I guess I'm lucky in some respects that I currently earn enough to service the debts. Thanks again all. 

Don't beat yourself up, instead use your current motivation to set out a sustainable plan. To be  sustainable, there needs to be room for fun (which doesn't need to cost lots) as well as digging away at the debt. A money overhaul is a really good opportunity for figuring out what you value and want to spend money on rather than just spending by default or on a whim.

enthusiasticsaver

What is the £1000 other asset? 

As EH says you need emergency savings.

While you have just enough to service your debts there is literally no leeway in your soa for savings or debt overpayments. You also have almost £15k of that debt on 30% interest which is a massive red flag that credit card companies see you as high risk and over committed. You need to sort this out jointly. That means a tough few years while you get on top of it. Do you really need two expensive cars and why such high mileage? 

Martico

I'd also agree that if you can sell anything / get a bit of extra work, then it would help to kickstart the debt reduction. 
As it is, with high interest rates on a lot of the debt, it'll be two steps forward one step back for quite a while.