Credit card debt has spiralled

kimwp

Smashingitnow said:

Couple of points.

If you can for just two consecutive months make some decent repayments...ie payments of £1k plus for 2 to 3 months then in my experience you will get 0% balance transfer offers from your existing cards. This will save you thousands over the course of the year.

Secondly, this could very very quickly spiral totally out of control. Interest rates could rise again...you're closer than you think to being in a real mess.

In the next 2 to 3 months how can you make a dent in this...then you turn the tide...the interest free offers come and the debt goes down.

If you don't then you're going to be spending 600 a month every month to the banks in interest alone that would make a huge difference to your kids lives.

Not trying to scare you but you're at that sort of tipping point where it can become unmanageable quite quickly.

I'm not really sure this is helpful. They don't have £1k plus spare every month. And he's taking the action he can to get it under control. If interest rates go up to the point that the debt is unmanageable, there are other routes he can take to manage the situation.

BlueManc10

NeverendingDMP said:

Apologies if you have already checked but have you been on all the benefit calculators to see if you are entitled to a tiny bit of u credit, tax free childcare etc. It's soo soo hard paying that much childcare and very de motivating I know. Every little bit you manage to pay off will make it easier. Try and work together on it otherwise everything you try and do  and every tiny saving you manage could be undone in five minutes because your partner is unaware. Pennies make pounds eventually it will.come.down it you keep trying. And maybe you will be better when free childcare starts when eldest is 3. Good luck

Thanks for this. I have checked this and we do get all we are entitled to. As you say, once the childcare situation improves and I get the payrise I'm after this should then free up some more cash to throw at it. 

BlueManc10

Thanks for all your comments all. Some real good advice in here. I think I'm going to look to tackle it using the snowball method someone mentioned as each balance isn't astronomical, and it seems more manageable to tackle in this way. 

I'm going to cut up all said cards (however will write down the card numbers should I need them for any balance transfer offers etc). If I start tackling the smaller amounts in the short term and then once the childcare situation improves and my missus is back and work and my wage goes up I feel like I can get a handle on it. In addition if I could just get it down to half of where it is now I feel like it would be so much less of a worry. 

NeverendingDMP

BlueManc10 said:

Thanks for all your comments all. Some real good advice in here. I think I'm going to look to tackle it using the snowball method someone mentioned as each balance isn't astronomical, and it seems more manageable to tackle in this way. 

I'm going to cut up all said cards (however will write down the card numbers should I need them for any balance transfer offers etc). If I start tackling the smaller amounts in the short term and then once the childcare situation improves and my missus is back and work and my wage goes up I feel like I can get a handle on it. In addition if I could just get it down to half of where it is now I feel like it would be so much less of a worry. 

I think that's the key. Work really hard to get it to a point where you can decide to leave d debits at a manageable level and just ride it out or can alternate between spendy months and having a let's pay X amount off. Hopefully the payrise comes through as that would give you some wiggle room.kn the budget. Definitely keep trying to reduce it though. It will get more expensive as the kids get older. Childcare will reduce yes but shoes once they are walking, endless party invites if you choose to accept will all add up.

kimwp

I agree that you shouldn't wait until the free childcare - it's only 15 hours that's available to everyone, it's only per term time week and it's only the literal hours so there will be charges for food etc, plus as Neverending says, other child related costs will be increasing.

I did a quick calc and £500 a month towards the debt and then savings would get you in the region of having £80,000 by the time the newest is 18 - that would be an amazing freedom pot for your kids. I don't think you should be aiming for half off the debt, I think you should be aiming higher, particularly with £75k income from two people. Once it's a habit, you won't even have to think about it.

BlueManc10

kimwp said:

I agree that you shouldn't wait until the free childcare - it's only 15 hours that's available to everyone, it's only per term time week and it's only the literal hours so there will be charges for food etc, plus as Neverending says, other child related costs will be increasing.

I did a quick calc and £500 a month towards the debt and then savings would get you in the region of having £80,000 by the time the newest is 18 - that would be an amazing freedom pot for your kids. I don't think you should be aiming for half off the debt, I think you should be aiming higher, particularly with £75k income from two people. Once it's a habit, you won't even have to think about it.

Agreed. When I say half it I mean short term. While kids are in nursery and missus on maternity etc. I won't stop there but to get halfway in a year or two would then set me up to hit the rest when possible. Thanks for the calculation and I will definitely work towards this. I'll get you a beer with the £80k 

Emmia

If you go down the 0% route, make sure you close the cards (not just cut them up) that you clear with the balance transfer. If the cards are there "unused" the temptation will remain to use them if things get tight...

kimwp

BlueManc10 said:

kimwp said:

I agree that you shouldn't wait until the free childcare - it's only 15 hours that's available to everyone, it's only per term time week and it's only the literal hours so there will be charges for food etc, plus as Neverending says, other child related costs will be increasing.

I did a quick calc and £500 a month towards the debt and then savings would get you in the region of having £80,000 by the time the newest is 18 - that would be an amazing freedom pot for your kids. I don't think you should be aiming for half off the debt, I think you should be aiming higher, particularly with £75k income from two people. Once it's a habit, you won't even have to think about it.

Agreed. When I say half it I mean short term. While kids are in nursery and missus on maternity etc. I won't stop there but to get halfway in a year or two would then set me up to hit the rest when possible. Thanks for the calculation and I will definitely work towards this. I'll get you a beer with the £80k 

I see! That sounds like a great short term target, and I look forward to my beer 😄

If you are finding you need help staying motivated, lots of people find that keeping a diary in the diary section on here is helpful - you can set targets for yourself etc. 

foxgloves

When you are snowballing (we also used this method to get rid of our debt), don't overlook the benefit of small aggregate gains. Lots of small savings on everyday things really do add up. That includes savings from shopping around for better prices, dropping brands for own label - all the usual stuff - but also from not spending. For instance, snacks from home & a flask of coffee would save us over £12, working on local cafe prices here. All such small gains free up extra money to throw at your debt. It cuts out the little bits of frittering....which also add up.
F

annetheman

Hello, just chipping in with support for the snowball and avalanche method.

I started by debt clearance in September 2022 (details in signature) and had very similar incoming and outgoing amounts in my SOA as well as debt amount. On that income, using the snowball method, I tracked clearance at March 2024 - not bad when you can see the end point!

I'm coming into an increase in income (as you say you are also), so can bring that forward to December 2023. 

Just some encouragement to let you know it is doable and you will find tonnes of inspiration, encouragement, helpful tips and support in the Debt Free Diaries subforum, as it's not always easy.

Start today, be disciplined, be honest with you partner and stay focused; you'll get there!