140k Unsecured debt - advice

Martico

ldn83 said:

Also inflation is projected to come right down this year and hopefully so will our food bill.

With apologies for being a pedant, but it's an important distinction: inflation coming down just means the rate of increase of your food bill will slow; it won't come down unless we have a period of deflation

ChillyP

Didn’t want to read and run. We’re in a similar position, just a few months ahead. We earn less than you, but also have a bit less debt do quite similar. It’s scary how it just mounts up isn’t it!

I remember the feeling of dread when we first faced up to the amount, however you’ll feel much better when you’ve got a plan in place 😀 

ldn83

ChillyP said:

Didn’t want to read and run. We’re in a similar position, just a few months ahead. We earn less than you, but also have a bit less debt do quite similar. It’s scary how it just mounts up isn’t it!

I remember the feeling of dread when we first faced up to the amount, however you’ll feel much better when you’ve got a plan in place 😀 

What was the solution you chose? Just speaking to my wife and I think we’ll probably opt for the self managed DMP and simply stop the direct debits we can’t afford to pay. Then deal with consequences and build up our savings.

jenijen27

Hi, I've not much to add, but have nursery confirmed that the monthly bill will reduce to £1000 when the free hours kick in, or is this your estimate? My dd has just left full time nursery and it was £1300 before 3 but only reduced to £1100 as the 'free' hours only work out at something like 10 per week when split across the full year rather than termtime only and also take into account the nursery opening hours rather than hours attended. (so if nursery is open 7am-6pm you will be charged 11 of your free hours even if she only attends for 8). Each nursery can use their own policy though, but it's something to be aware of. I've had 4 in ft nursery so I feel your pain about the costs! 

ChillyP

ldn83 said:

ChillyP said:

Didn’t want to read and run. We’re in a similar position, just a few months ahead. We earn less than you, but also have a bit less debt do quite similar. It’s scary how it just mounts up isn’t it!

I remember the feeling of dread when we first faced up to the amount, however you’ll feel much better when you’ve got a plan in place 😀 

What was the solution you chose? Just speaking to my wife and I think we’ll probably opt for the self managed DMP and simply stop the direct debits we can’t afford to pay. Then deal with consequences and build up our savings.

Slightly different scenario for us as despite our high debts, we are able to meet minimum payments plus some overpayment. We’re just focussing  on reducing costs as much as we can and paying as much extra as possible. 

JacJac1

ldn83 said:

TheAble said:

One thing just to mention if you're considering debt solutions is the effect they may have on your job. You've mentioned you work in finance so there could be implications there e.g. if you need FCA approval and the like. I'm not too sure on the exact details but would recommend checking into that as one of your next steps.

Do update with the APRs as well when you get the chance, as well as expiry dates of any promotional rates. These will guide on how best to allocate capital.

Thanks for the heads up, I actually work in construction and my wife in banking but she does marketing for a big bank and so not directly involved in finance so this wouldn’t matter.

Please double check this. I also work in the financial services sector in a similar, non-finance support function, and they did a credit check when I applied for the job. Every now and again we are required to sign and declare that our circumstances haven't changed.  

ldn83

Bluebell1000 said:

ldn83 said:

. Also inflation is projected to come right down this year and hopefully so will our food bill. 

I felt I should mention that falling inflation only means that bills are going up more slowly. 

My point is that prices are now coming down relative to wages and earnings, we have noticed this during the last month. Generally as long as inflation normalises and reaches parity with wages as it does outside of the recent crisis the squeeze everyone has been enduring should ease, which goes without saying really.

ldn83

JacJac1 said:

ldn83 said:

TheAble said:

One thing just to mention if you're considering debt solutions is the effect they may have on your job. You've mentioned you work in finance so there could be implications there e.g. if you need FCA approval and the like. I'm not too sure on the exact details but would recommend checking into that as one of your next steps.

Do update with the APRs as well when you get the chance, as well as expiry dates of any promotional rates. These will guide on how best to allocate capital.

Thanks for the heads up, I actually work in construction and my wife in banking but she does marketing for a big bank and so not directly involved in finance so this wouldn’t matter.

Please double check this. I also work in the financial services sector in a similar, non-finance support function, and they did a credit check when I applied for the job. Every now and again we are required to sign and declare that our circumstances haven't changed.  

Only credit operations, accountancy and senior management require a credit check from the firms she’s been at so far. She’s in B2B marketing and has nothing to do with handling money etc.  Mainly deals with ad agencies to create campaigns.

Sea_Shell

One other thing you could try...homework, if you like.

As well as keeping a spending diary, to track every penny...also keep a "didn't spend" diary.

So, every time you stop and think and decide NOT to buy something, you also make a note.

Over the next couple of weeks, try and identify, say, 10 things that you DIDN'T buy or spend on, and then reflect on how you feel about having saved that money and not bought the thing.

Exodi

Since the debt side has already been covered by the wonderful people on this forum, I just wanted to make a quick point on the investments, as to be honest I got major red flags reading it:

ldn83 said:

I lost around 20k in a bad investment which started during covid when everyone it seemed was trying to make it rich in stocks.

I'm a tad confused as the stock market starting during Covid was probably the biggest bull run we will ever witness in our lifetimes. It was a time where it was very hard not to make money, which was perhaps the reason so many people started popping up on social media dishing out normally bad financial advice as they believed that were suddenly experts because any random stock picks would usually print money at the time.

Despite the general market providing eye-watering returns, some got carried away with this and started dropping their life savings in individual stocks, often extremely volatile ones (e.g. GameStop), others got tricked into losing their money on alt cryptocurrencies and NFT's.

Those investing in global index funds (FTSE All World Index linked below) would have enjoyed a 50% increase from the start of the pandemic.

ldn83 said:

I still had some investments that were projected to double or triple so the borrowing was in the hope that the investments would rise and pay off the debt in 2-3 years. However, the markets declined hugely in ‘22 forcing me to cut my losses and face reality that the debt couldn’t be repaid by the investments.

While I'd hope that lessons may have been learned from the above, it's saddening to see you still have investments that you hope can double/triple in value and pay off your debt.

The markets corrected in 2022 following the ridiculous Covid surge (as can be seen above). I would seriously question the risk/volatility of the current assets you hold if there's a possibility for them to move in such a way.

While it's admirable you are facing your debts and people are helping you with this, I think you also need to address your investing/gambling decisions.