Starting Over...

SpendySpender123

Hello, and thank you for reading.

I have wanted to start a diary for a long time, but part of me has held back because of fear/shame/life/overwhelm...the usual, really. I read your diaries and posts and find a lot of support and comfort in them, so thank you for that.

Essentially, life feels like a bit of a mess right now. I am in my mid-30s, and have been in debt since I was 18 years old; I can remember the day I marched into NatWest to take the first £100 out of my student overdraft, and it's been downhill ever since. My highest amount of debt had previously been £18,900 (that was in 2018 or so). During COVID, I managed to get it down to about £13k and now it's shot back up again to the new highest amount of £19431. It had originally been hovering back at the £18,900 mark but some recent (and needed) balance transfers have caused it to increase. This general increase is due to losing my job during COVID and then taking a pay cut, needing to move house three times during the last few years, and getting back into some terrible spending habits.

I have to be honest...I am shockingly bad at money. I have sincerely tried to pay back debt on and off over the years, but in recent attempts the debt has just increased. I know I can do it as I've done it before (albeit during a period of time where I literally couldn't leave the house(s)) but I am a very impulsive and emotional spender. I also feel like some of my recent "changes" have essentially just been moving debt around and spending again. Ten years ago, my debt stood at around £7k and two rounds of consolidation led me to the magic figure of £18,900. This happened again recently - around 18 months ago - when I made a money transfer to pay off my overdraft and just...ended up right back at the bottom of my overdraft again. This is partly why I want to write a diary: to ask for advice and to keep myself accountable, as I have no idea what I am doing. I have thought about finding some kind of Spending Anonymous group, but there doesn't seem to be anything near me.

This year feels particularly stressful. I struggle with mental health - this impacts my spending and some of my spending decisions - and the stress of debt and personal life is starting to come out in strange and more obvious ways. I am crying a lot in work, and colleagues are starting to notice. I notice a huge correlation between my spending and my mental health - for example, my spending spikes seem to occur around difficult or low periods.

I am in a house share but my house situation will change by the end of the year and as yet, I'm unsure how (I am in a rolling contract and the landlord has made hints about selling when the next person moves out....and if that does happen, that will happen in the next 2-4 months as a housemate has put an offer in to buy a house. I don't know what to do or where to go, and am dreading the inevitable). I can afford to move into another house share and am grateful for that, but feel stressed about the idea of it.

The more I am writing, the more I am unsure how to paint this whole picture, but I feel scared and lost and so very sad. This year, so many of my friends have gotten engaged or married, bought houses or had babies, and I can't afford to even think about these things. A lot of my spending has been on friends over the years: hen parties I can't afford, weddings I can't afford, drinks I can't afford. I am always buying the first round or buying tickets for people or spending money on presents. When I have tried and pull back from these things in the past, I have lost friends.

I try - I really try so very hard to improve my life and my mindset - but I suspect that I have had some sort of relapse into depression in recent months, and it's been hard. I am functioning but not really. I tried to get NHS therapy and couldn't (I was offered some online therapy forum but was discharged before I could log in!), and spent more money I can't afford on private therapy - and whilst beneficial at the time, I am still miserable, and still in debt. 

My credit score is currently showing as "fair", and I can't imagine it improving for a while. I do have family members who can be a guarantor, and I can afford to move into another shared house but not to live alone - I am not looking forward to it, but I will try and stay hopeful. I can't move in with family for a few reasons - mainly because they are too far from work.

I have considered a DMP, but in light of needing to move I don't want to engage with that at the moment. I can't tell family about this as they will not understand and may stop speaking to me. In the past, family members provided some financial support and I feel so ashamed that it just...all fell to seed. I have told some friends about my situation, keeping some details private, and have had mixed responses and not huge amounts of practical support (people still want me to spend, for example). And honestly, I have been keeping track of my spending in recent months, and I can cut back on a lot. There is so much wasted spending on coffees, drinks, meals out, presents, etc. etc. I would really like to just try and cut back and be frugal for a few months and see what happens. 

Alongside this, I am planning to actively start looking for a new job with more money. I am not planning to find a new place right now, as there is a chance I will be able to continue my housing contract for longer. I have £1500 saved for a deposit, and want to increase that to £2000 by the end of the year.

I really do want to change things; I really want to have hope that things can turn around. This year has felt very hard and lonely, but I am trying to imagine what it'll be like by the end of the year: progress into my debt payment, a new job, maybe a new place to rent?

I haven't done a proper SOA yet as my current bills are mainly included in my house - I do expect my housing costs to increase in the future - and I am aware that I am spending more than I should right now, so I know where to make cutbacks as I am wasting a lot of money (social life, non-essentials, drinking, Spotify, etc).

Salary per month - £1991

Rent and bills included - £600

Phone - £47 (now contract has ended, can change to sim only)

Debt currently stands:

Virgin - £1952/£4000 - 0% until Sept 2025 - £30 min

MBNA - £6084/£8000 (£1939 0% until May 2025; the rest is at 34% - I pay £90 (!) on interest on this a month but can't see how to shift this for now - £161 min

MBNA 2 - £2707/£3400 (34%) - £59 min

Natwest - £3630/£5400 - (21%) - I pay over the minimum on this, around £80

Tesco - £3208/£8000 = 0% until May 2025 - I have a balance transfer offer on this to include more until May 2025 - I thought about moving the MBNA 2 or my overdraft, but scared to spend overdraft again? - £32

£17581

I also go into my overdraft pretty much every month - £1850 out of £2000 - I need to move this but again conscious of spending it again. I could just close it - so simple, so scary.

I also have two empty cards available, but no offers yet (£8000 on Halifax, £4000 on Barclaycard - I think Tesco may switch to Barclays, which is maybe why I am not getting offers? And Halifax won't allow me to move MBNA balances, but also...no offers yet).

I feel a sense of relief in writing this and throwing it out into the world, but also feel ashamed.

I am going to make a plan for my finances for the next month and take out cash for each week, and leave all cards at home. Am aware this post is a work in progress and will come back to this with more thorough analysis of spending. As a small aim, I'd like to get down to £16500 by Xmas to change my habits and mindset this year, and then pay down more next year when I have a better idea of where I'm living.

Thanks so much for reading this.

Sarahwithlove

I'd transfer mbna to tesco so you are paying less in interest. Then focus on getting out of overdraft and staying there with a realistic budget. 

I know it's hard to say no to things but true friends shouldn't abandon you for that. Be honest and say moneys a bit tight at the moment I can't go or do. Maybe suggest a cheaper alternative activity instead. 

I too am an emotional buyer, I found taking my card details off of the sites I would usually use helped. But it may be time to reach out to your GP again for help. You don't want to let this spiral any further. 

kfletch88

Hi, welcome and well done for taking the first steps, i too have started a diary today!

Reading your post, I would definitely look at transferring your higher interest balances on the cards to the 0% cards where you can, that will save you money in interest and help you pay them off sooner!

Time2count

I would open 2 new bank accounts - 1 for wages and bills etc and the other for weekly/ monthly spends. This way when you are asked for that meal out/ drinks after work etc etc you can only spend what is there. No overdrafts on these accounts, you need to start living within your salary.
Credit cards I'd remove all details from online accounts and cut them up.
The paid part of MBNA 1 can you move to Tesco? Majority of MBNA 2 could go to virgin.

Go through all your bank statements and credit card bills for the past year and categorise the spends. Then you can put a realistic budget together.

It will be hard and it will take a long time but let's see what you're working with so the kind people here can help you with a plan.

SpendySpender123

Hi - I just wanted to say thank you for the kind words, comments and advice so far. I am planning a longer update next week but wanted to post now to keep up my momentum!

I have switched MBNA 2 to Tesco, leaving totals of credit cards at:

£1922 - Virgin = 0% until Sept 2025 (£30 min)
£3691 - Natwest (I got this number slightly wrong before) - 21% (paying min payment plus, which was £108 this month; min is £87)
£6048 - Tesco - 0% until June 2025 (not May!) - min payment was £32, will now go up
£5999 - MBNA 1 - £1939 0% until May 2025, rest is 34% (min payment £166)

£17,660

Empty cards - 

Halifax - £8000 - no offers
Barclaycard - £4000 - no offers
MBNA 2 - £4000 - no offers (just moved balance to Tesco)

Tesco have also said they want to increase my limit to £10,000.

My aim is to reduce my overdraft by £100 this month, so get to £1750. I will also open a new account to start paying my salary into. I am also planning to go to the GP to discuss medication options or being re-referred to therapy for a while, so thank you again for the kind words.

I mainly wanted to write today to say that I've started doing calculations and going through statements, and I spent £321.99 last month on...coffee and the pub. This is a combination of coffee before or during work, coffee with friends (sometimes paying for us both) and a few rounds at the pub a few times a week. This is horrifying, and also an example of how easily money is slipping away at the moment. This doesn't include other things I am frittering money away on - such as lunch out, etc - so stay tuned for that.

I am planning a no-spend day tomorrow and have taken £40 in cash out for the week to see how that lasts. I will leave my cards at home, including debit. I do need to cut them up but that feels so strange - that is next week's aim!

Thanks again for your advice. This is going to be a long journey and involve a lot of radical habit changes during a difficult time, but I don't have a choice! 

Have a good evening, all.

Chocolatefund

You are definitely not alone on this.

I was buying lunch at work everyday. I worked out that I spent a good £200+ just on lunches alone. Add on the coffees and takeaways, it was adding up to a mahoosive amount.   

So I thought about what was actually important to me and decided to challenge myself. No buying lunch at work and no takeaways.

I knew that I loved coffee, my log fire, and gaming. So I knew that I wouldn't be able to cut those out completely. I buy nice coffee to have at home and I'm good for the rest of the day.

Even just cutting out one thing makes a huge difference. I keep a no spend day calendar hung up on my fridge and cross of the days I have a NSD as they go by. I also keep a notebook and write down everything I spend. It really helps to keep the motivation going on a daily basis.

Sarahwithlove

Well done on balance transfers. If you increase the tesco balance is it likely they will give you ab offer so you can move the rest of credit cards that's charging interest? I wouldn't normally recommend it but that way your repayments go on actual debt not interest. 

I think we are all guilty of spending too much on coffees, meals out and general spending without thinking about it. I know I am! 

Scott_Weiland79

Well done for posting and starting your diary. Its a big step but honestly a step in the right direction.

Some good advice has being given here i definetly agree regarding the second account bit but do it slightly different. Tally up the totals off all your bills ie direct debits. The minute your paid pop all the money in a savings account, then when the direct debits are due pay the money in the day before. Do you use your main banks mobi app? Then just dont touch the money.

I am a coffee fiend too lol I take my coffee into work and a tiny travel kettle as the coffee machine where i work breaks a lot and getting hot water at 3am is a night mare. Buy one of those big travel mug things I cant go anywhere without mine i bought one of them bamboo costa mugs like this

https://www.comunicaffe.com/costa-coffee-welcomes-the-new-bamboo-reusable-cup-bottle-and-coasters/

re your debits have a look at this I hope it helps

https://www.moneysupermarket.com/credit-cards/calculator/

SpendySpender123

Hello - thanks all for the comments! There are some really good ideas and suggestions, and reading through your diaries have also helped me.

MBNA 2 have instantly popped up to offer me a 0% balance transfer - which I thought about doing for NatWest (it would leave around £600 left on Natwest, which might be a good incentive to clear it?)? The recent balance transfer fee has nudged my overall balance up, so conscious of that - even though I know long-term this is a good thing - and also conscious that I might start just spending again on the NatWest card - but if I just cut it up, then problem solved! 

My credit score has gone up by 15 points to almost good on TransUnion, and has jumped up to Good on Experian - I have no idea how these things ebb and flow, and am only conscious of keeping it as "up" as possible at the moment as I know I will likely have to move house within the next few months. Still no update about this as yet - I might not have to move, but trying to think of worst-case scenario. I would like to open a fresh new account to start paying into, instead of my overdraft. Would this impact my credit score if I did this now amongst the balance transfers?

This month, I have not overpaid on any card (apart from NatWest, where I pay minimum payment plus), have put £100 in savings - and I have £350 left over for the rest of the month. This feels a bit mad - as I know I have even more things I can cut back on next month - at the start of this month, I paid for some birthday presents and some tickets to visit a friend in a few months (as it'll be cheaper than my usual "holding off until last minute and doing it anyway" plans). £350 is very liveable for the next few weeks - I could probably even look at cutting this back further, as I have plenty of food in - and it means I am on target to reduce my overdraft by £100. I feel a bit in shock!

What has happened in recent months is that I've overpaid a lot on my cards, ran out of money by 11th or 12th of the month, and promptly used my cards to live off - which has partly ended up why I have had a recent debt increase. I've read on other diaries about the problems with overpaying on cards, but it does feel mad to finally see the difference it makes to not do so in my own practice! I think because my problem is spending, I need to spend the next few months figuring out my budget - as you have kindly advised as well - and sticking to it, rather than overpaying on debt.

I have taken lunch into work this week. Still bought two coffees out, but that's fewer than usual, and I'm working on it - would like to have one a week as a treat.

Today will be a no-spend day. One of the reasons I am posting now is to keep myself accountable. It's lunchtime, and a housemate has asked me whether I have plans after work today (I don't). This instantly made me feel a bit rubbish and then have the urge to just do...something, anything, to feel better, even if I spend money in doing something alone? But I don't need to do anything. I will go for a long walk after work, and for free, as previously planned.

Have a good day, all

londoner2019

Following your journey - you're doing great. You're organised and conscious of your spending decisions. Honestly, kudos to you!

Secondly - I've been in the position of wanting to tackle things too quickly and ending up being short for the rest of the month. Do compile a reasonable and realistic budget, so that you don't find yourself short. Taking things a little slower, and paying off slightly less might be annoying, but it's far less stressful that way. And at the end of each month, if there's anything left over, throw it at one of the cards.

I'm a coffee snob too - but I also buy the good stuff for home and enjoy it there

birdsfoottrefoil

Good to read your diary and well done so far. Coffee has always been a big thing for me, our local coffee company gives you a discount on beans if you buy from them and bring the bag back to be refilled. Think it works out at about 15% off which is good, might be worth seeing if there’s any like that about? I use an aeropress at home now and avoid buying coffee out except once a week.