Paying out more than I can afford

Brighterdaysarecoming

Hello, a newbie here

i have been a complete fool, cost of living has kicked my bum, nursery fees, dropped hours in work has led me to take out loan after loan, credit card after credit card and now I’m paying out a lot more than I can afford and I’m riddled with anxiety, not sleeping and unable to talk to anyone about this. I’m finally facing my stupid decisions I’m over £13000 in debt and I just don’t know where to start. I can’t take out any 0% cards as there is no point, they dont offer enough credit to transfer over, I don’t want to take out another loan to pay all back. I’m just stuck really and looking for some help and advice please . Thank you

MattMattMattUK

Brighterdaysarecoming said:

Hello, a newbie here

i have been a complete fool, cost of living has kicked my bum, nursery fees, dropped hours in work has led me to take out loan after loan, credit card after credit card and now I’m paying out a lot more than I can afford and I’m riddled with anxiety, not sleeping and unable to talk to anyone about this. I’m finally facing my stupid decisions I’m over £13000 in debt and I just don’t know where to start. I can’t take out any 0% cards as there is no point, they dont offer enough credit to transfer over, I don’t want to take out another loan to pay all back. I’m just stuck really and looking for some help and advice please . Thank you

If you can fill in an SOA an post it here then people should be able to help. 
https://www.lemonfool.co.uk/financecalculators/soa.php

sourcrates

As a basic first step, you need to separate essential debt (mortgage/rent/council tax/food/utility bills etc) from non essential debt, which is basically everything else you spend money on, including any credit repayments.

Make sure essential payments are maintained, and non essential stuff can go unpaid for the time being, if your money won`t stretch that far.

If you don`t pay your credit card, absolute worst that can happen is you get a CCJ which you repay by affordable monthly payments, if you don`t pay your rent you can be evicted, so its common sense stuff really.

Most people don`t realise this and that`s how they get into the position you are in now.

If you can complete the SOA, we can work out a way forward for you.

EssexHebridean

100% echoing what sourcrates says above - for now, you pay essentials first - so the priority bills. Make sure you are housed, Council tax covered, heating, lighting and water, and that you are fed. Any essential travel too, and childcare so that you can continue to go to work. Any secured debt 9so car finance, for example) comes under this heading too. Loans and cards can whistle for the time being - literally stop the Direct Debits and pay manually IF there is the money to do so, but not otherwise. 

As matt says, the SOA is a really useful tool - aside from anything else it will let you see what you should have left over at the end of the month, if anything, and so means that you can track down if any expenditure is occurring which can be halted. 

As and when it comes to thinking about 0% BT cards, ignore the limit for the time being, as any debt that you can get from interest bearing to zero interest is a good thing. the way it works is to choose a card that an eligibility calculator suggests you will be accepted for. Apply, get whatever you can over to it, then wait a few months before repeating the experiment. Eventually the aim is to get at least the majority of the debt onto 0% - but it might take a while. In the meantime though, at least you aren't paying so much interest, so that in turn means that you can make more of an impact. that's for the future though, for now though, the steps above are your focus. 

enthusiasticsaver

I would start by doing an soa as suggested above. In the meantime though I would suggest you stop  spending on the credit cards and if you cannot afford minimums then you will  need to default and enter a DMP usually depending on amount and circumstances.  

Brighterdaysarecoming

Thank you everyone, all my important bills are paid and paid on time, Iv never missed a payment my problem is paying the cards off and re spending as I have nothing left. It’s a vicious circle. Have been working out my payments and bills and although I’m terrified I think I can do this little by little. I honestly don’t think I would be in this mess if it wasn’t for ridiculous nursery fees mixed with my stupidity. Thanks again . 

RAS

Brighterdaysarecoming said:

Thank you everyone, all my important bills are paid and paid on time, Iv never missed a payment my problem is paying the cards off and re spending as I have nothing left.  

You appear to have this back to front.  You need to work out what of that spending is necessary, and plan monthly allowances for annual costs, then you pay what's left to the cards, pro rata (ish). A SOA really is needed for you to understand your core financial needs.

If you wish to share, do so as sometimes people know of cheaper options. Most often there are essentials that are too low or left off and derail plans, cause panic leading to using credit when a little budgeting previously would have covered to cost. You may well have got into this because of unplanned changing circumstances, but need to grab it now and halt the slide into further debt.

EssexHebridean

Brighterdaysarecoming said:

Thank you everyone, all my important bills are paid and paid on time, Iv never missed a payment my problem is paying the cards off and re spending as I have nothing left. It’s a vicious circle. Have been working out my payments and bills and although I’m terrified I think I can do this little by little. I honestly don’t think I would be in this mess if it wasn’t for ridiculous nursery fees mixed with my stupidity. Thanks again . 

This is the bit the SOA helps with in the first instance. It may be that when you've completed it, it will indeed confirm that there is no surplus once your priority bills are taken account of - but more often than not, people find that's not the case. What usually happens is that the SOA shows some surplus - and the person simply doesn't know where that money goes - and that is when we'll suggest they keep a spending diary for a few months, to try and track that down. Culprits for frittery spending of what should be surplus are often things like top-up-shops - you know, when you trundle into the shop for milk, remember while in there you need bread, and come out £15 lighter and struggling to carry everything in the one bag for life you shoved in your pocket because "I only need milk"?! A couple of those a week can easily drive monthly grocery spending well above what someone thinks they spend, because their perceived spending is based on what their main weekly shop usually comes to. 

That you've never missed a payment to your cards is why things have escalated to a position where you feel things are spiralling out of control, I suspect. The only things that you MUST pay each month are your priority bills - after that comes payments to unsecured debt IF you have the money to pay them - and definitely NOT if that will leave you in a position of needing to re-spend on the cards part way through the month for food, for example. 

It's brutal the way childcare costs can impact on the cost of living - are you one of those in a position where the free hours you get will be increasing at some stage before too long, or where school age is approaching so you'll be needing to pay for wraparound care but not full days?