Muddling millennial - can’t keep on this way

muddlingmillennial

Today is probably the 5000th time of sitting with my laptop and notebook while I’m home alone and going through all of my finances to see if I can do anything to make it just a little bit more bearable. 

I’m 30 now, but this is all started when I turned 18 and got my first job in a bank. Ironically, this is probably the worst thing I could have done (even though at the time, I thought it was the more ‘cost effective’ option vs. going to uni, but this is probably not the case now). As an irresponsible 18 year old, despite saying no initially, the bank that I worked for proceeded to sign me up with a credit card (probably just so that sales assistant got a tick towards their monthly target) with a £1500 credit card limit. I avoided it at first, but eventually, curiosity killed the cat and that card paid for many nights out with my friends who were in uni. Working in banking, at the time there was a culture that borrowing was ‘normal’ and I learnt all the tricks of the trade. Ie. All the ways that you could spend money that doesn’t belong to you. 

12 years later, I have lost count of the money transfers, balance transfers, refinancing loans, bank account switches… to the point that I have completely ran my credit score down and exhausted every option out there. Right now, I have £13144.13 of debt in my name, which is made up of the following:

Loan 1: £522.17 (ends 25/05/2024) 

Loan 2: £1564.47 (ends 01/10/2024) 

Credit card 1: £2823 (0% until 31/04/2025)

Credit card 2: £419.62 (0% until 02/08/2024)

Credit card 3: £1660.01 (0% until 05/07/2024)

Credit card 4: £301.69 (0% until 09/05/2026)

Credit card 5: £1009.81 (0% until 07/04/2024)

Credit card 6: £3714.55 (0% until 31/01/2025) 

Store card: £578.66 (24.9%) 

Overdraft 1: £300 (39.9%)

Overdraft 2: £250 (39%) 

I’ve just opened a new 6 month 0% balance transfer card with a £1500 credit limit to cover the card ending in April. When I ran the eligibility checker, this was the ONLY card that came up. And it made me realise how much damage I’ve done to my credit history and how little options I have. It keeps me awake at night and the lack of sleep makes me feel like rubbish every single day. 

For a little more context, I’m married and we jointly own our home together with a mortgage. I pay my priority bills every single month and my husband and I both pay into a separate account that covers all of these bills. Our living costs and day to day financials aren’t really impacted by this. However, we want to start a family soon and also consider moving, so this is when I worry that all of this will become even more of an issue for me. My husband knows that I’m not the best with money and that I have a couple of loans ending this year, but he doesn’t know the extent of my credit card debt. Which I know is wrong, but we’ve always kept our personal finances pretty private. I also have a decent full time job earning just over £30k a year - no longer in banking.

We have a joint savings account that is for household costs/emergencies and hopefully one day, to help with maternity leave. We have about £5000 in there. Without this, I don’t think I’d ever get any sleep! I have no savings of my own, but when my loan finishes in May, it’s a goal of mine to save the repayment amount (£265) and start getting my own saving fund together.

I’d love some advice on what I can do/consider to improve my situation. I need to work on my own spending habits to guarantee that the figures start reducing rather than staying level (the total debt figure has fluctuated at this amount for a few years now). But is there any advice on how I can improve my credit score or increase my chances of being eligible for better balance transfer offers? I’m in a cycle of moving money round nearly every month because a tiny interest free period has expired. I also end up with lots of different cards because the credit limits are so low and the balance transfer fees every time do not help at all. 

For a long time, this has been taking a huge toll on my mental and physical health, and I would love my thirties to be the decade that I finally get my financial life on track and start feeling truly happy again. 

WinterWarrior

You are still young. By sorting this out now and never get back into debt you will be well ahead of the game. In my opinion if you keep your own finances separate then it it’s fine to not go into details. 

Personally I wouldn’t save the loan amount when that one ends, I would roll it over to the next debt and make it your aim to get them all cleared. You can start saving once your wage is your own. They do recommend an emergency fund, but you have this already.
I really like Dave Ramsey’s snowball method of paying down debt. He is a bit American iyswim, but if you don’t pay attention to the religious aspect and turn a blind eye to the joint finances (I really don’t hold with that, we women fought a long time for autonomy), then the rest of the debt advice is really sound. You can find him on social media and YouTube. By pecking away at the smaller amounts following the snowball method you should be able to clear of a lot of line items from that list very quickly.
im sure others will be along soon with lots of great advice. Good luck. 

muddlingmillennial

WinterWarrior said:

You are still young. By sorting this out now and never get back into debt you will be well ahead of the game. In my opinion if you keep your own finances separate then it it’s fine to not go into details. 

Personally I wouldn’t save the loan amount when that one ends, I would roll it over to the next debt and make it your aim to get them all cleared. You can start saving once your wage is your own. They do recommend an emergency fund, but you have this already.
I really like Dave Ramsey’s snowball method of paying down debt. He is a bit American iyswim, but if you don’t pay attention to the religious aspect and turn a blind eye to the joint finances (I really don’t hold with that, we women fought a long time for autonomy), then the rest of the debt advice is really sound. You can find him on social media and YouTube. By pecking away at the smaller amounts following the snowball method you should be able to clear of a lot of line items from that list very quickly.
im sure others will be along soon with lots of great advice. Good luck. 

Thank you for the positive words. I will definitely check out Dave Ramsey and the snowball method. I did debate with myself whether to use the £265 for savings or debt, but my biggest worry at the moment is if I was to go onto maternity leave in the future, how would I maintain my share of the household bills plus my credit card repayments. The idea of having about £2000 saved was to use that for my debt repayments if my income was to reduce. Starting a family hasn’t been written on the cards for us yet, but hopefully it will be soon and the financial strain would be huge. But I don’t want this to stop us. I have another loan ending in October so I was going to use this money to get more off the other balances. I know what you mean though.. it would be a huge moral boost to see some of those balances struck off. But paying off say my 2 overdrafts and the store account would save me about £50 a month in outgoings. It’s hard to make the right decision… but I will definitely take this on board and see how else I could get the snowball method rolling! 

enthusiasticsaver

I think you need to prioritise paying it off and ideally telling your husband you have this debt would mean you were both on the same page.  The interest you are paying makes it much more expensive to keep the debt going rather than saving and whilst I understand you do not want to touch the joint savings you should definitely use the loan monthly repayments to snowball the debts.  Prioritise the overdrafts as they will be the most expensive and cut back on all expenditure to make the debts start to reduce. You need to actually pay them off rather than keep moving and unfortunately that is painful as it involves a change of lifestyle.  The alternative is to default and go on to a DMP but I am assuming you do not want to take that route.  Doing an soa would help us see just how much money you have available to repay the debts.  

prettyandfluffy

In addition to the advice given so far, I would add: get rid of the store card.  Decide which 2 credit cards you are going to keep and close the others.  When you've got your finances under control, pay off your credit cards in full every month.  This advice comes from a reformed spendthrift (me) who was older and deeper in debt than you before sorting it out.

redlaces

Just wanted to say that your story really struck a chord with me as I was in the same boat at your age 6 years ago, minus the house and husband but everything else was pretty much the same.

I think your first step is an SOA (whether you share it on here or not) - understand your ins and outs before you go on a plan of attack. I note that you say the debt level has fluctuated around this point for a while, the only way it can reduce is by paying it off, ideally at more than minimum payments. It is a long process, but it works.

I'd also second telling your husband, so you can attack it as a team. Particularly if your income will be suffering as a result of mat leave, it might be that your husband can take a bigger share of the house expenses due to your reduced income.

Definitely think using at least some of the freed up money towards another debt would be useful, you could always split between debt and savings, but the hardcore maths approach would say pay the debt first.

MFWannabe

muddlingmillennial said:

LToday is probably the 5000th time of sitting with my laptop and notebook while I’m home alone and going through all of my finances to see if I can do anything to make it just a little bit more bearable. 

I’m 30 now, but this is all started when I turned 18 and got my first job in a bank. Ironically, this is probably the worst thing I could have done (even though at the time, I thought it was the more ‘cost effective’ option vs. going to uni, but this is probably not the case now). As an irresponsible 18 year old, despite saying no initially, the bank that I worked for proceeded to sign me up with a credit card (probably just so that sales assistant got a tick towards their monthly target) with a £1500 credit card limit. I avoided it at first, but eventually, curiosity killed the cat and that card paid for many nights out with my friends who were in uni. Working in banking, at the time there was a culture that borrowing was ‘normal’ and I learnt all the tricks of the trade. Ie. All the ways that you could spend money that doesn’t belong to you. 

12 years later, I have lost count of the money transfers, balance transfers, refinancing loans, bank account switches… to the point that I have completely ran my credit score down and exhausted every option out there. Right now, I have £13144.13 of debt in my name, which is made up of the following:

Loan 1: £522.17 (ends 25/05/2024) 

Loan 2: £1564.47 (ends 01/10/2024) 

Credit card 1: £2823 (0% until 31/04/2025)

Credit card 2: £419.62 (0% until 02/08/2024)

Credit card 3: £1660.01 (0% until 05/07/2024)

Credit card 4: £301.69 (0% until 09/05/2026)

Credit card 5: £1009.81 (0% until 07/04/2024)

Credit card 6: £3714.55 (0% until 31/01/2025) 

Store card: £578.66 (24.9%) 

Overdraft 1: £300 (39.9%)

Overdraft 2: £250 (39%) 

I’ve just opened a new 6 month 0% balance transfer card with a £1500 credit limit to cover the card ending in April. When I ran the eligibility checker, this was the ONLY card that came up. And it made me realise how much damage I’ve done to my credit history and how little options I have. It keeps me awake at night and the lack of sleep makes me feel like rubbish every single day. 

For a little more context, I’m married and we jointly own our home together with a mortgage. I pay my priority bills every single month and my husband and I both pay into a separate account that covers all of these bills. Our living costs and day to day financials aren’t really impacted by this. However, we want to start a family soon and also consider moving, so this is when I worry that all of this will become even more of an issue for me. My husband knows that I’m not the best with money and that I have a couple of loans ending this year, but he doesn’t know the extent of my credit card debt. Which I know is wrong, but we’ve always kept our personal finances pretty private. I also have a decent full time job earning just over £30k a year - no longer in banking.

We have a joint savings account that is for household costs/emergencies and hopefully one day, to help with maternity leave. We have about £5000 in there. Without this, I don’t think I’d ever get any sleep! I have no savings of my own, but when my loan finishes in May, it’s a goal of mine to save the repayment amount (£265) and start getting my own saving fund together.

I’d love some advice on what I can do/consider to improve my situation. I need to work on my own spending habits to guarantee that the figures start reducing rather than staying level (the total debt figure has fluctuated at this amount for a few years now). But is there any advice on how I can improve my credit score or increase my chances of being eligible for better balance transfer offers? I’m in a cycle of moving money round nearly every month because a tiny interest free period has expired. I also end up with lots of different cards because the credit limits are so low and the balance transfer fees every time do not help at all. 

For a long time, this has been taking a huge toll on my mental and physical health, and I would love my thirties to be the decade that I finally get my financial life on track and start feeling truly happy again. 

Firstly you need to sit down and write a proper budget to see where your money is going and how much you have left to pay off the debts 
Once loan 1 finishes you then need to take that payment and clear the overdrafts and store card as they are the highest apr’s 
Does credit card 4 have any available credit and any offers for balance transfers at all? 

Purplelady65

I agree with the advice that you should use the £265 per month when it’s freed up to repay your debts rather than add to savings. Also you have a reasonable income in relation to the level of debt so if you can reduce your monthly outgoings you might be surprised at how quickly you can make inroads to the debt. Good luck. 

muddlingmillennial

Thank you all. I think those comments have given me a bit of a wake up call not to focus solely on the savings and look at paying off some of the other accounts quicker. I’m going to complete the SOA - please could somebody point me in the direction of the best place to do this? I still feel very strongly about getting SOME sort of savings together in my own name, because I truly feel this will take away the temptation of using borrowing. I’ve opened a Starling account which has ‘spaces’ and I’d like to start utilising this. I’m going to look at my finances as a whole and then see how I can break up the £265 so I can use a chunk of it to pay extra off debts, but use some of it for savings. I think this is a good compromise and it will really help me to see both the debt coming down and the savings going up a bit! When loan 2 finishes in October, I plan on all of the £226 going off my debts as well. 

MFWannabe

Here’s the link to the soa 
https://www.lemonfool.co.uk/financecalculators/soa.php

Format for mse when filled in 

muddlingmillennial

@MFWannabeGreat, thank you! Will complete this and share today. Also.. credit card 4 has no available credit or offers unfortunately I have checked all the cards for offers and there is 1 with Virgin for a money transfer, so I’m trying to figure out how best I can utilise it. 

I have a clear Tesco card with a £5000 credit limit where the balance transfer has just expired. I am also praying that they send me a new offer through, but the chances of this are probably pretty slim. I’m going to keep the card open for 6 months or so just in case.