Overwhelmed with stupid debt & in desperate need of advice.

stu12345_2

when I went with step change, wife went too,we both had cars on regular hp finance, they were due to end in about 12 months, 
stepchange let us pay the regular amount l, they did not add them to the dmp and then worked out we could increase our dmp payments once hp was cleared and we owned the cars.

we sold the cars to dealers instead and bought cheaper older cars with the equity.
we then upped our dmp payments

kimwp

enthusiasticsaver said:

There are lots of things in your soa which are not accounted for.

Mobile telephone
Entertainment
Car maintenance
Haircuts
Presents
Holidays
Clothes
Car parking

I would suggest you do a detailed soa using the link in my signature putting both the debt and your monthly outgoings in.  As said above you seem to be in shortfall even without the items of expenditure above.  I think that means you need to consider a DMP.  

You  have debt of £15705 plus the  loan your parents took out for you so that is probably also in the region of £12-13k.  I am not sure what you do about that as technically the debt is not yours if they took it out so cannot be included in the DMP but obviously I am assuming you do not want to default on that.  You may have to manage the DMP yourself as stepchange will not usually manage them where you prioritise debt as you would be if you continued to pay them £315.  For future reference for anyone reading this CONSOLIDATING DEBTS IS NOT A GOOD IDEA.  Even worse if someone else is taking out the debt for you as people trick themselves into thinking the debt is dealt with when they consolidate and see all these empty credit cards  when in fact the debt has only been moved not repaid.  There is no incentive to change spending habits and very soon (2 years in your case) the debt builds up again whereas if you had not consolidated you would have been forced to deal with it when it was £15k and not almost £30k as it possibly is now. 

However you are where you are so the first thing I would do is a forensic search of your accounts to see where this money is being spent.  You don't live in your own home so your outgoings should be low as £300 is low for housing costs. You pay too much each month for your car considering the debt you have so long term you need  to address the fact you cannot afford to buy new cars on PCP which are the worst ways of buying cars. Changing your attitude to spending is not easy but it can be done.  Take a read of some of the debt free diaries on here.  Loads of people have been in your position and come out of it and you will too.  Read this thread for some good ideas on what to do first. In Debt and Wannabe Debt Free? First Steps! - Page 2 — MoneySavingExpert Forum

In the meantime check your bank account and get rid of any direct debits for subscriptions and things you do not use.  Do you actually go to the gym regularly and is there a cheaper one you can join? Do you take lunch to work from home to save money?  Can you cut back on takeaways, alcohol, eating out etc etc?  Consider maybe starting a debt free diary of your own.  

Ultimately I think you will need a DMP which means the interest is frozen, you have to default on the cards which will affect your credit record for 6 years until they drop off and you need to do a comprehensive soa where you work out how much you can afford to throw at the debt each month and you get used to living without credit. You would need a basic bank account with no overdraft (do you have an overdraft now?) and it needs to be with a bank you do not owe money to. Normally I would say phone stepchange and they will sort it all out for you but make sure you default on the credit cards and loans first.  The two biggest problems you have though is with the PCP for the car and the loan your parents took out for you.  If you continue to pay those but default on the rest you are prioritising one debt over another as whatever you can afford should be split proportionally between your creditors. For that reason stepchange may not be able to help you but you could ring them anyway. 

I don't think therapy is what you need.  You know how you got in debt or you will when you look at the bank and credit card statements but having the discipline to not use credit cards means breaking a habit you presumably have had for a while.  Take card details off websites and delete links.  Remove cards from purse or wallet and maybe initially just use cash for weekly spends for food and entertainment etc. Join some no spend challenges or saving challenges on here and long term address the expensive car.  Do you actually need a car? 

Best of luck and you will get lots of support on here. 

I agree with this. Before you self diagnose as financially self-sabotaging, you need to thoroughly understand where you are spending your money and how much you have available to spend, in order to understand how you have overspent. If you don't know this, it's more likely just mindless and hopeful spending rather than deliberate self-sabotaging.

And you need to come clean to your parents. If they hadn't taken on the debt for you, you would have defaults on your credit history preventing further credit for a while and forcing you to sort your finances. If you go down the routes of defaulting and a dmp, which sounds sensible, then you are going to get a lot of mail - much better than you tell them what is happening than have them worry about what is going on. I think a good plan is to do a proper SOA and post it on here, then we can help you create a proper plan to present to them.

pmartin86

stu12345_2 said:

I used to use the council gym £7 a month in 2008. I made my own post workout drink, pure  orange juice diluted with water, a dash of salt , blended with a can of tuna( drained). carbs and protein in the correct balance
it was a tip I got from an ex natural Mr britain bodybuilder., who was also a  poorly paid window cleaner!
and I baked my own protein flapjacks, porridge oats, chocolate protein powder,  butter, put in oven, then cut up and take some to work as snacks 

You been to a "council gym" lately? Same erquipment as 2008 (which was 20 years old in 2008) and probably 30-35 quid a month now!

I looked at our "local leisure center" (council owned and run) last year to try and save a few quid from the private gym I'm in, it was about half the size, equipment was falling appart, limited opening hours and about £8 a month MORE.

stu12345_2

its probably around  £16 to go now to the council gym, it wasn't a local leisure centre. it was the one of the biggest Scotland indoor and outdoor sports centre, huge athletics track outdoors, huge free weight indoors.
not the banatynes place with exercise bikes and treadmills  to pumped music, spa and sauna,.
none of that.

there was a four star hotel a mile from the sports centre that was £240 a year, you had to pay per year, with pool, sauna, steam room, treadmills, but I asked where is the leg press,Squat rack,  etc, the owner said we don't do that.

eventually I started buying used free weight plates, bench, rack from adverts online and in  local ads papers.
it took a while to find it, but I ended up owning over £1200 worth of equipment. I got for about £200
I trained in an unheated council  lockup my mate rented from to keep his car. we trained together, we moved the car out when we trained, and reversed it back in at the end 

I trained for a number of years with all the equipment, until I sold it ( made a profit)when my mates wife said she wanted the lockup back for the car and car only lol.

kimwp

A quick Google and choosing the first option shows the cost of a gym only membership in Scotland to be £38 a month. My local leisure centre "gym only" (includes fitness classes) is £37 a month. One of the "local" private gym only chains is £15 a month for off peak access, £23 for all hours, though it's a 20 min car journey there. So it probably depends on where you live as to whether you can pay £16 a month.

Annisele

IndividualNo175 said:

Where do I turn for help? I can't afford a therapist and there's no chance of seeing anyone via the NHS any time soon. I need to change my mindset and I just can't seem to do it on my own. I have a problem and I need help!

I think that depends on what you spent the money on.

It sounds like you managed to run up £15k of debt over two years while having a take home pay of around £21k. In other words, over those two years you earned £42k and spent £57k - over a third more than you earned. I accept that some of that will be interest, and about £7,500 will be on repaying the debt to your parents - but that's still a lot of money you didn't have.

I think you need to work out where it went in order to work out where to go to get help. If you're spending all your money on drugs or alcohol, then I'd suggest treatment for substance addiction. But that wouldn't help in the slightest if the actual problem is that you're constantly buying drinks for everyone else at the bar, or you're getting takeaway three times a week, or you have hundreds of new clothes still on their hangars.

foxgloves

A lot of good advice has been given. I would definitely add my voice to those who have said that consolidation loans do not work when tackling debt. We consolidated 3 times - of course each time was to be the last, but our use of credit cards & my satanic flexi-loan continued until we were back to square one, a situation which then heralded the next consolidation loan. 
One thing I will add is that I spent over 2 decades telling everyone I was hopeless with money management. How would I know? I had never tried it. I spent more than I earned every month, not because I couldn't manage money, but because I DIDN'T manage it. So by default, I chose not to. It is a choice, isn't it, at the end of the day? I didn't enjoy some of the situations my overspending got me into, but still continued to spend more than my income. When the debt-busting lightbulb pinged on at around a £35k level of debt, I started budgeting for the first time & discovered I was actually pretty good at it. In my early 40s by then, it was honestly the first time I had actively engaged with money management instead of routinely outspending my income & relying on magical thinking that it'd probably all be ok. 
Even very longstanding bad financial habits can be turned around. First thing is an analysis of bank & credit card statements so as to understand exactly where the money has gone.
F

ayupmeduck

pmartin86 said:

stu12345_2 said:

I used to use the council gym £7 a month in 2008. I made my own post workout drink, pure  orange juice diluted with water, a dash of salt , blended with a can of tuna( drained). carbs and protein in the correct balance
it was a tip I got from an ex natural Mr britain bodybuilder., who was also a  poorly paid window cleaner!
and I baked my own protein flapjacks, porridge oats, chocolate protein powder,  butter, put in oven, then cut up and take some to work as snacks 

You been to a "council gym" lately? Same erquipment as 2008 (which was 20 years old in 2008) and probably 30-35 quid a month now!

I looked at our "local leisure center" (council owned and run) last year to try and save a few quid from the private gym I'm in, it was about half the size, equipment was falling appart, limited opening hours and about £8 a month MORE.

My local leisure center is £56 a month unless you can get a discount, never heard of council gyms.

sourcrates

Back to the debt, 

(1) Get a realistic SOA together
(2) Make sure the budget is manageable
(3) Cut back where you can, but if you like the gym you go to, so be it.

See what you can afford to pay towards the debts, seek help with a debt management plan, possibly stepchange or PayPlan, as I said in my previous post.

enthusiasticsaver

foxgloves said:

A lot of good advice has been given. I would definitely add my voice to those who have said that consolidation loans do not work when tackling debt. We consolidated 3 times - of course each time was to be the last, but our use of credit cards & my satanic flexi-loan continued until we were back to square one, a situation which then heralded the next consolidation loan. 
One thing I will add is that I spent over 2 decades telling everyone I was hopeless with money management. How would I know? I had never tried it. I spent more than I earned every month, not because I couldn't manage money, but because I DIDN'T manage it. So by default, I chose not to. It is a choice, isn't it, at the end of the day? I didn't enjoy some of the situations my overspending got me into, but still continued to spend more than my income. When the debt-busting lightbulb pinged on at around a £35k level of debt, I started budgeting for the first time & discovered I was actually pretty good at it. In my early 40s by then, it was honestly the first time I had actively engaged with money management instead of routinely outspending my income & relying on magical thinking that it'd probably all be ok. 
Even very longstanding bad financial habits can be turned around. First thing is an analysis of bank & credit card statements so as to understand exactly where the money has gone.
F

Great post @foxgloves