Not sure what to do and struggling a lot.

Studentcase

I'm 27 and really down in the dumps about my financial situation. The constant yoyoing of my finance is really depressing and demotivating. I live with my mum and can't get out of debt even when I pay no rent. I have to keep buying things such as personal items or takeaways to keep myself from completely losing the plot about it all.

Currently, as it stands I have around £500 I'm paying out monthly on debt and £445 for car hp finance, tax, and insurance, and get paid £1.9k monthly. I have a lot of high-interest borrowing and a stupid hp car finance I took out at 23.9% apr as I needed a car for work but no one would finance me with my credit history, and subprime lenders would only finance a car less than a certain number of years old. As per usual, I rationalized to myself that I may as well get a car I like if I'm going to be paying for it every month for 5 years.

My other costs are a gym membership and a phone contract, I cook dinner for my mum and myself 3-4 nights a week, and I pay for all my own food. Sometimes I will just repeatedly buy takeout instead of cooking at home as my mum always argues with me about using the kitchen and watches over my shoulder to make sure I'm not making a mess so I eat out to avoid an argument. My mental condition is pretty severe now that I rarely go outside in fear of seeing someone I know, so I'd rather get takeaway sometimes than have to go to the supermarket. So the rest of my money basically goes on food, fuel, and just random stuff to numb myself.

I really just wanna move out and move to another town/city and live alone so I can just concentrate on myself alone but can't afford it. The despair I feel about not being able to move out perpetuates a vicious cycle of spending and gratification meaning I just can't get out of debt. Every month I try and get myself together, go for a week, and then by week 2 I'm skint again. Getting out of debt is such a slow process I can't keep my brain on track long enough to see it through.

Debts I have currently are;

£1342 to Lowell from credit agreements I defaulted on whilst at university

£1500 to Aqua

£1000 overdraft to Monzo

£539 to Monzo Flex

£2000 student overdraft to Natwest

£500 loan to credit spring, took out recently as my car needed some work for its MOT this month

£600 roughly left on my phone contract

£14722 left on the car.

The plan would seem simple, set a budget and keep spending low but I just can't seem to do it. I cant also get rid of the car because it's locked into a finance agreement. I could use the voluntary termination clause but that would require having paid 50% of the contract which I'm not at yet. I can't sell the car to motorway or webuyanycar as there would be a £2000 shortfall which I couldn't cover. Ideally, I want to try my best to keep up and pay down the debt as normal as I have already had one CCJ put onto my credit file back in 2019 but now I don't have a missing or late payment marker on my credit file since the end of 2019 and I don't want to mess that up as my credit file has slowly improved ver the years. Not sure what to do.

EssexHebridean

Our normal suggested first step is to complete a Statement of Affairs (SOA) via the link in my signature below - however, in your case, I think a GP visit sounds like it might be in order - buying takeaway to avoid having to go out is potentially unhealthy on all sorts of levels and it's clear and obvious that there are some mental health  issues that you could do with having a chat through with someone, I think its fair to say? 

Purely on the finances side of things - theoretically from what you've said after car expenses and debt payments are paid out, it sounds like you *should* still have in the region of £900 "spare" each month? That's a lot of money to be spending each month on the usual candidates of food, fuel and things like gym membership etc - so I suspect that the reference you already have made to "buying things to numb yourself" is probably key here. Straight question - do those things you might have bought actually solve any of your problems? Or do they just end up creating more guilt for you for having spent the money on them? If the answer to that is the second category, then that might be something you can use as a reminder that "stuff" isn't a solution to the  issues, indeed it can actually make things worse, so use that as an incentive to step away from hitting the "buy now" button. 

Once you have done the SOA, then that should show you what your real monthly surplus should be. It will also make you think about budgeting for things like car maintenance for example - and an emergency fund which will kick in and help when the car fund isn't *quite* enough. 

Depending on the amount you have as surplus then I'd get shot of the Credit Spring account first, just clear it off. Then turn attention to the various overdrafts as those will be a huge red flag on your credit file. list everything in order of interest rates and target the most expensive debt first - just paying a little above the minimum on the others. Then once one has gone, you divert all your spare money to the next one on the list. With a fair surplus - which it looks lie you have - you can make a surprising amount of impact quite fast. Obviously keep paying the car finance as usual.

Personally when working out the amount needed for your car maintenance fund I would include enough in there to pay your insurance upfront too - as you pay extra for monthly instalments this is an easy win to save money. 

The key to being able to get yourself moved out and living independently is getting the debt gone and also learning to live to a budget - so take control of that and see it as the first step forwards. 

RAS

I agree with EH about talking to someone about the problems you are facing. It's all too easy to get into a spiral where you are deeply unhappy, can't see a way out, think "why bother", then do something to take your mind off the problems and....... Do go and talk to your GP.

On a very practical note, do you have access to freezer space? If so, when you are cooking for mum, make two extra portions and freeze them, separately. Then you've got something at home on another day when you are not feeling great about cooking, that can go in the microwave and be taken to your room if necessary.

If you like pasta, consider cooking extra portions. It's actually healthier for you if cooked, cooled and re-heated. Check out places like the BBC website for very easy sauces like wilted greens, a bit of pesto or some chopped herbs, soft cheese, and maybe a chopped tomato  or nuts or seeds for contrast. Also good for making pasta salads for lunch. Not exactly cooking but a decent meal.

And start now setting up a small "budgeting account" into which you pay a fixed sum each month for things like MOT and car costs. Fix a standing order for shortly after you are paid and don't touch it. It's not a saving account, it's there for when something urgent goes wrong and helps you avoid clear spring.

DrEskimo

Studentcase said:

I'm 27 and really down in the dumps about my financial situation. The constant yoyoing of my finance is really depressing and demotivating. I live with my mum and can't get out of debt even when I pay no rent. I have to keep buying things such as personal items or takeaways to keep myself from completely losing the plot about it all.

Currently, as it stands I have around £500 I'm paying out monthly on debt and £445 for car hp finance, tax, and insurance, and get paid £1.9k monthly. I have a lot of high-interest borrowing and a stupid hp car finance I took out at 23.9% apr as I needed a car for work but no one would finance me with my credit history, and subprime lenders would only finance a car less than a certain number of years old. As per usual, I rationalized to myself that I may as well get a car I like if I'm going to be paying for it every month for 5 years.

My other costs are a gym membership and a phone contract, I cook dinner for my mum and myself 3-4 nights a week, and I pay for all my own food. Sometimes I will just repeatedly buy takeout instead of cooking at home as my mum always argues with me about using the kitchen and watches over my shoulder to make sure I'm not making a mess so I eat out to avoid an argument. My mental condition is pretty severe now that I rarely go outside in fear of seeing someone I know, so I'd rather get takeaway sometimes than have to go to the supermarket. So the rest of my money basically goes on food, fuel, and just random stuff to numb myself.

I really just wanna move out and move to another town/city and live alone so I can just concentrate on myself alone but can't afford it. The despair I feel about not being able to move out perpetuates a vicious cycle of spending and gratification meaning I just can't get out of debt. Every month I try and get myself together, go for a week, and then by week 2 I'm skint again. Getting out of debt is such a slow process I can't keep my brain on track long enough to see it through.

Debts I have currently are;

£1342 to Lowell from credit agreements I defaulted on whilst at university

£1500 to Aqua

£1000 overdraft to Monzo

£539 to Monzo Flex

£2000 student overdraft to Natwest

£500 loan to credit spring, took out recently as my car needed some work for its MOT this month

£600 roughly left on my phone contract

£14722 left on the car.

The plan would seem simple, set a budget and keep spending low but I just can't seem to do it. I cant also get rid of the car because it's locked into a finance agreement. I could use the voluntary termination clause but that would require having paid 50% of the contract which I'm not at yet. I can't sell the car to motorway or webuyanycar as there would be a £2000 shortfall which I couldn't cover. Ideally, I want to try my best to keep up and pay down the debt as normal as I have already had one CCJ put onto my credit file back in 2019 but now I don't have a missing or late payment marker on my credit file since the end of 2019 and I don't want to mess that up as my credit file has slowly improved ver the years. Not sure what to do.

You are not locked in, you are free to settle the loan anytime you like.

I think you are far better off selling the car to an online broker or any garage/dealer that will buy it from you, even at a shortfall. Ring around and try and get the best possible price. Any local garage will buy a car from you and settle outstanding finance, not just online brokers. Try to minimise the shortfall as much as possible, then look to refinance any shortfall.

Turning £14,722 worth of debt at 23% APR to just £2,000 at a much lower APR will put you in a much better situation in terms of overall debt and monthly outgoings.

The two questions left are how you can borrow the shortfall (assuming you can't find somewhere willing to pay the remaining settlement figure), and sourcing a replacement cheap run around car for work.

IMO getting rid of the car is the priority. As you say it was a silly financial decision and you will just keep running yourself into the ground unless you get rid of it.

Then you can tackle some of the other issues, such as takeaways and your relationship with your mum, which will help you set goals which you can work towards. You may find setting a reasonable saving target over a set period of time with a specific aim will help you stay consistent and motivated.

Studentcase

Hello, thank you for your reply. I acknowledge that I need to see a mental health professional. However, I don't think my past experience with the NHS was very helpful. They provided me with a counselor who seemed like they lacked experience, and the sessions only covered basic topics that I had already read about in self-help books. I think that I require a therapist who specializes in treating intense shame and is skilled in psychoanalysis and talk therapy. Unfortunately, to access such a therapist, I need to pay, which I am unable to afford currently. I think even the counselor assigned to me by the NHS knew that they wouldn't be able to help me adequately.

I have been clinically depressed for many years now, and my intense feelings of shame about everything have become disabling, causing me to avoid going outside. However, I try to cope with it as best I can. My plan is to improve my financial situation and then pay for private therapy.

Regarding the random things I buy, it is mainly food that I order frequently. I feel embarrassed to admit it, but I sometimes order breakfast and dinner multiple days in a row, which can cost up to £30 a day. My mother sleeps in the room next to the kitchen, and I don't want to wake her up in the morning, so I order food instead. I skip lunch as I work all day, and then I order food in the evening before going to bed. Food helps me feel better temporarily whenever I'm feeling down, but in the long run, it only worsens my problems. Although I know everything I'm doing is wrong, it feels like a compulsion that I can't control. I barely spend money on anything else, which is incredibly sad.

In terms of cooking, I never used to cook before. I used to get take-out for breakfast and dinner every single day. This habit got me into my current situation since I didn't know how to cook. My mother wouldn't allow me in the kitchen, and any attempts I made at cooking resulted in terrible-tasting food, so I would just order delivery instead. Recently, I decided to learn how to cook and started using Hello Fresh. It's cheaper than eating out, and I prepare 6 meals a week for myself, with one night off from cooking. Well, I used to have 6 by making two portions for myself by ordering three meals but now since my mother likes the meals too I give one meal to her. Following the recipes has helped me become competent at cooking, which is a positive change. But even though it's cheaper than take out it is still relatively expensive. It's just so convenient as all the recipes taste so good, aren't too unhealthy, and are all portioned which removes the fuss of measuring stuff out, and there is no waste left over, which is a dream for a novice cook like me.

Studentcase

DrEskimo said:

Studentcase said:

I'm 27 and really down in the dumps about my financial situation. The constant yoyoing of my finance is really depressing and demotivating. I live with my mum and can't get out of debt even when I pay no rent. I have to keep buying things such as personal items or takeaways to keep myself from completely losing the plot about it all.

Currently, as it stands I have around £500 I'm paying out monthly on debt and £445 for car hp finance, tax, and insurance, and get paid £1.9k monthly. I have a lot of high-interest borrowing and a stupid hp car finance I took out at 23.9% apr as I needed a car for work but no one would finance me with my credit history, and subprime lenders would only finance a car less than a certain number of years old. As per usual, I rationalized to myself that I may as well get a car I like if I'm going to be paying for it every month for 5 years.

My other costs are a gym membership and a phone contract, I cook dinner for my mum and myself 3-4 nights a week, and I pay for all my own food. Sometimes I will just repeatedly buy takeout instead of cooking at home as my mum always argues with me about using the kitchen and watches over my shoulder to make sure I'm not making a mess so I eat out to avoid an argument. My mental condition is pretty severe now that I rarely go outside in fear of seeing someone I know, so I'd rather get takeaway sometimes than have to go to the supermarket. So the rest of my money basically goes on food, fuel, and just random stuff to numb myself.

I really just wanna move out and move to another town/city and live alone so I can just concentrate on myself alone but can't afford it. The despair I feel about not being able to move out perpetuates a vicious cycle of spending and gratification meaning I just can't get out of debt. Every month I try and get myself together, go for a week, and then by week 2 I'm skint again. Getting out of debt is such a slow process I can't keep my brain on track long enough to see it through.

Debts I have currently are;

£1342 to Lowell from credit agreements I defaulted on whilst at university

£1500 to Aqua

£1000 overdraft to Monzo

£539 to Monzo Flex

£2000 student overdraft to Natwest

£500 loan to credit spring, took out recently as my car needed some work for its MOT this month

£600 roughly left on my phone contract

£14722 left on the car.

The plan would seem simple, set a budget and keep spending low but I just can't seem to do it. I cant also get rid of the car because it's locked into a finance agreement. I could use the voluntary termination clause but that would require having paid 50% of the contract which I'm not at yet. I can't sell the car to motorway or webuyanycar as there would be a £2000 shortfall which I couldn't cover. Ideally, I want to try my best to keep up and pay down the debt as normal as I have already had one CCJ put onto my credit file back in 2019 but now I don't have a missing or late payment marker on my credit file since the end of 2019 and I don't want to mess that up as my credit file has slowly improved ver the years. Not sure what to do.

You are not locked in, you are free to settle the loan anytime you like.

I think you are far better off selling the car to an online broker or any garage/dealer that will buy it from you, even at a shortfall. Ring around and try and get the best possible price. Any local garage will buy a car from you and settle outstanding finance, not just online brokers. Try to minimise the shortfall as much as possible, then look to refinance any shortfall.

Turning £14,722 worth of debt at 23% APR to just £2,000 at a much lower APR will put you in a much better situation in terms of overall debt and monthly outgoings.

The two questions left are how you can borrow the shortfall (assuming you can't find somewhere willing to pay the remaining settlement figure), and sourcing a replacement cheap run around car for work.

IMO getting rid of the car is the priority. As you say it was a silly financial decision and you will just keep running yourself into the ground unless you get rid of it.

Then you can tackle some of the other issues, such as takeaways and your relationship with your mum, which will help you set goals which you can work towards. You may find setting a reasonable saving target over a set period of time with a specific aim will help you stay consistent and motivated.

To settle the car right now would be just shy of £10k. I did some quotes with Motorway who quoted me 7.5k to take the car so that's a 2.5k shortfall which I have no way of covering. No lender will lend to me in my current situation. I would also need to raise another amount of cash for a car that can reliably commute sometimes up to 100 miles for some work situations, and I would need the car right now which is another amount of cash that I can't raise quickly enough. Add the fact that buying a used car that isn't a complete pup is an absolute mind field for someone like me who doesn't know much about them. Right now I don't see it as an option as I need my car immensely.

fatbelly

Studentcase said:

The plan would seem simple, set a budget and keep spending low but I just can't seem to do it. I cant also get rid of the car because it's locked into a finance agreement. I could use the voluntary termination clause but that would require having paid 50% of the contract which I'm not at yet. I can't sell the car to motorway or webuyanycar as there would be a £2000 shortfall which I couldn't cover. Ideally, I want to try my best to keep up and pay down the debt as normal as I have already had one CCJ put onto my credit file back in 2019 but now I don't have a missing or late payment marker on my credit file since the end of 2019 and I don't want to mess that up as my credit file has slowly improved ver the years. Not sure what to do.

That's a common misunderstanding.

Under the consumer credit act if you voluntarily terminate a hp agreement, you liability is limited to 50%. So you are free to terminate earlier than the 50% point and in most cases that is a more sensible thing to do than allow the lender to terminate, if you are about to start missing payments.

That would leave you with just another non-priority debt.

If your strategy was e.g. a Debt Relief Order then owing 29k is no different to owing 5k as up to 30k can be covered.

I agree with the others about professional help. Many people are greatly helped by medication when 'talking therapies' have not worked.


I also think you should post a statement of affairs.

sourcrates

In none of your posts have you actually stated what your income is, unless I have missed it ?

As others have pointed out, your car is the elephant in the room, its costing you far more than you can afford.
And I disagree with your assessment of used cars, there are plenty of reliable used older cars out there, many for a grand or under, that will serve you perfectly well, it just takes some common sense decision making to find a good one.

Lots of new cars have faults with electronic gizmo`s fitted to them, failed sensors are a common culprit, and anything with a screen instead of a dashboard, your asking for future potential trouble, older vehicles without such technology are much easier to live with, and cheaper.

How far off the halfway point are you with your car payments ?

If you had reached half way, you could VT it, and the shortfall debt just becomes another non priority debt you can repay as funds allow, save up and buy something cheap for work.

EssexHebridean

OK - so the cooking thing, you get the recipe details with the Hello Fresh meals - yes? So grab those out, and lay them out so you can see them, then choose 1 that you really enjoyed, and write a shopping list for the ingredients for that one meal. You'll find that some of the ingredients when bought fresh will do additional meals too - so although initially the cost of ingredients for a single meal might seem quite high, it works out less so over time as you start to build up stores of particular ingredients in your storecupboard. If you can cook two portions at a time and freeze one for later then even better. You're already used to cooking, so now get used to shopping too - planning meals and buying what you need is far cheaper than the subscription box models, and definitely cheaper (and often healthier and tastier too!) than takeaway.

Breakfasts are easy - and you definitely don't need to be having something "cooked" in the traditional sense every day. Think cereal and milk, granola with yogurt, yogurt and fruit, porridge, toast and jam/butter/marmalade/peanut butter... Porridge if you like it is a doddle to learn to cook too - 40g oats, 220 ml milk, pop into a pan together and cook on a medium to low heat until it's thickened to a texture you like. Top with a handful of mixed berries and a drizzle of maple syrup, or cook with a handful of mixed dried fruit stirred in and top with some mixed nuts, or grate over some dark chocolate and add a dollop of peanut butter in the middle, or just have it plain with a sprinkle of (sorry Scottish folk) sugar... I bought a bag of cheapo porridge oats on saturday and from memory I think it cost me 70p for a kilo. That is 25 breakfasts. Even by the time you count in the milk and your chosen toppings that's still tasty cheap breakfasts. (And stick the pan in water as soon as you've served the porridge by the way - makes washing up miles easier!)

I hear you on the car - and can understand the logic behind hanging onto it for the time being too. It's all well and good saying to terminate it, but if you can make the payments currently, and don't have anything saved to replace it with, it leaves you stranded in terms of work doesn't it. If the sums work, there might be a case for keeping it for now until you start to get a handle on the other debts, then you might be able to make savings towards a replacement runaround so you're ready to go when you decide to terminate the finance and hand back the car. 

RAS

If you can't cook in the mornings, check out overnight oats. Almost as cheap and only need to be grabbed from the fridge.

And check out the lunch pots, stacked meals in jars that just need hot water or a microwave.

And look at the BBC budget weekly recipe selections. They have several for singles and families. You could a family of four shopping list based on chicken thighs or mince and freeze half.  Then next week try another combination, freeze half and supplement with one frozen meal?

katsu

How about you book some therapy early in the month? Then you've less money to spend on the take aways etc? 

I think it's great if you can tell yourself that you do have money for therapy, and can pay for it up front each month? 

You'd be no worse off than you are now, financially, and maybe it will help you feel better in the long run?