My accountability thread - diary of an in-denial credit card spender

MissMaud

Hi all, long time lurker of this site and I love reading the diaries and being inspired by how well everyone is doing.  I thought that adding my tale of woe here might finally give my head a wobble and help me get on top of my debt.  

In short, I'm a total spendaholic who thinks that credit cards are free money.  I put purchases on my credit cards rather than pay from my bank account because I can't afford them; I have even cut up all my credit cards but of course I can still use them online so that's not much help... although it did help me with not being able to spend on them in store (trust me, I tried taping one back together - spoiler, it did not work).  

I'm going to attach my SOA below to show where my money's going.  I am in the lucky position that I have inherited the house that I live in (that needs a hell of a lot of work) and I also own with a mortgage a house in the city that I occasionally work in (which also needs work), so I'm paying two sets of rates/gas/oil/electricity/insurance/internet etc, but I need to keep both those houses on so selling is not an option for either.

I'd really appreciate any insights and advice as to how I can get on top of my finances.  I know I'm seeming light-hearted here, but my debts are really a huge source of worry for me.   Thank you.

MissMaud

Edited: Honest realistic version of SOA to replace the initial one below - this includes all expenses I've previously put on credit cards:

Statement of Affairs and Personal Balance Sheet

Household Information

Number of adults in household........... 1

Number of children in household......... 0

Number of cars owned.................... 1

Monthly Income Details

Monthly income after tax................ 2230

Partners monthly income after tax....... 0

Benefits................................ 0

Other income............................ 0

Total monthly income.................... 2230

Monthly Expense Details

Mortgage................................ 308.7

Secured/HP loan repayments.............. 0

Rent.................................... 0

Management charge (leasehold property).. 0

Council tax............................. 170

Electricity............................. 50

Gas..................................... 20

Oil..................................... 125

Water rates............................. 0

Telephone (land line)................... 0

Mobile phone............................ 10.95

TV Licence.............................. 0

Satellite/Cable TV...................... 4.99

Internet Services....................... 58.97

Groceries etc. ......................... 300

Clothing................................ 10

Petrol/diesel........................... 150

Road tax................................ 15.75

Car Insurance........................... 50

Car maintenance (including MOT)......... 30

Car parking............................. 0

Other travel............................ 0

Childcare/nursery....................... 0

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 10

Pet insurance/vet bills................. 30

Buildings insurance..................... 89.56

Contents insurance...................... 0

Life assurance ......................... 7.62

Other insurance......................... 0

Presents (birthday, christmas etc)...... 10

Haircuts................................ 40

Entertainment........................... 15

Holiday................................. 0

Emergency fund.......................... 50

Total monthly expenses.................. 1556.54

Assets

Cash.................................... 0

House value (Gross)..................... 250000

Shares and bonds........................ 0

Car(s).................................. 6000

Other assets............................ 0

Total Assets............................ 256000

Secured & HP Debts

Description....................Debt......Monthly...APR

Mortgage...................... 44000....(308.7)....1.79

Total secured & HP debts...... 44000.....-.........-   

Unsecured Debts

Description....................Debt......Monthly...APR

Tesco Credit card..............4410.69...44........0

MBNA credit card...............6398.75...160.......0

Halifax 1 credit card..........2715......67.88.....0

Halifax 2 credit card..........836.7.....20.92.....0

Total unsecured debts..........14361.14..292.8.....

Monthly Budget Summary

Total monthly income.................... 2,230

Expenses (including HP & secured debts). 1,556.54

Available for debt repayments........... 673.46

Monthly UNsecured debt repayments....... 292.8

Amount left after debt repayments....... 380.66

[b]Personal Balance Sheet Summary

Total assets (things you own)........... 256,000

Total HP & Secured debt................. -44,000

Total Unsecured debt.................... -14,361.14

Net Assets.............................. 197,638.86

[i]Created using the SOA calculator at www.LemonFool.co.uk.

Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

Statement of Affairs and Personal Balance Sheet

Household Information

Number of adults in household........... 1

Number of children in household......... 0

Number of cars owned.................... 1

Monthly Income Details[/b]

Monthly income after tax................ 2230

Partners monthly income after tax....... 0

Benefits................................ 0

Other income............................ 0

Total monthly income.................... 2230

Monthly Expense Details[/b]

Mortgage................................ 308.7

Secured/HP loan repayments.............. 0

Rent.................................... 0

Management charge (leasehold property).. 0

Council tax............................. 152.14

Electricity............................. 50

Gas..................................... 20

Oil..................................... 125

Water rates............................. 0

Telephone (land line)................... 0

Mobile phone............................ 10.95

TV Licence.............................. 0

Satellite/Cable TV...................... 4.99

Internet Services....................... 58.87

Groceries etc. ......................... 200

Clothing................................ 0

Petrol/diesel........................... 150

Road tax................................ 15.75

Car Insurance........................... 0

Car maintenance (including MOT)......... 0

Car parking............................. 0

Other travel............................ 0

Childcare/nursery....................... 0

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 0

Pet insurance/vet bills................. 29.02

Buildings insurance..................... 89.56

Contents insurance...................... 0

Life assurance ......................... 7.62

Other insurance......................... 0

Presents (birthday, christmas etc)...... 0

Haircuts................................ 40

Entertainment........................... 0

Holiday................................. 0

Emergency fund.......................... 0

Total monthly expenses.................. 1262.6

Assets[/b]

Cash.................................... 0

House value (Gross)..................... 250000

Shares and bonds........................ 0

Car(s).................................. 6000

Other assets............................ 0

Total Assets............................ 256000

[b]

Secured & HP Debts[/b]

Description....................Debt......Monthly...APR

Mortgage...................... 44000....(308.7)....1.79

Total secured & HP debts...... 44000.....-.........-   

Unsecured Debts

Description....................Debt......Monthly...APR

Tesco credit card..............4410.69...44........0

MBNA credit card...............6398.75...160.......0

Halifax 1 credit card..........2633......26........0

Halifax 2 credit card..........836.7.....21........0

Total unsecured debts..........14279.14..251.......

Monthly Budget Summary

Total monthly income.................... 2,230

Expenses (including HP & secured debts). 1,262.6

Available for debt repayments........... 967.4

Monthly UNsecured debt repayments....... 251

Amount left after debt repayments....... 716.4

[b]Personal Balance Sheet Summary

Total assets (things you own)........... 256,000

Total HP & Secured debt................. -44,000

Total Unsecured debt.................... -14,279.14

Net Assets.............................. 197,720.86

[i]Created using the SOA calculator at www.LemonFool.co.uk.

Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

MissMaud

I've put in what is the minimum payments for my credit cards above, but I pay over that, so in total my credit card outgoings each month are about £600.  I really don't have a lot left after those have gone out.

Abbafan1972

Hopefully someone will be along with some practical advice. 

Can I ask though, why you need to keep both houses on? 

WinterWarrior

I’m also puzzled about the two houses. The council tax seems very low for two payments and you have nothing in for mot’s or servicing your car? Could you rent out your city house for a while until you are in a better position? 

MissMaud

Hi, thanks for your comments.  I keep both houses on because I live in one but I also need to stay in one when I'm working in the office, and I have friends in the city so it's nice to have a base there.  The commute is 1.5 hours each way so it's convenient for me to not have to drive all the time.  

Regarding renting the other room - I did think about this, but honestly the house is not in a very good shape to rent out, I'd need to put a lot of money into upgrading it before I could do that and I just don't have the money.

I haven't put in any money for MOT or servicing my car because I put it all on my credit cards... this is a big part of my spending problem I know

MissMaud

So, I got paid yesterday and my resolution not to spend anything has not started well.  I spent £62 in Tesco (groceries, wine, and a restock of cat food for my three cats), and then today I spent another £38 in a local supermarket.  Plus £10 on diesel to fuel these unnecessary journeys.  So that's over £100 gone in just two days.  No wonder I have no money.  I need to address the reasons why I spend like this or I'm just going to keep getting in more of a hole.

I don't expect anyone to read this, but it helps me to get it out of my mind and into words!

Sarahwithlove

You need to do a more honest statement of account that's based on not using your credit cards. You need to reduce your debt repayments to just above minimum as there is no point paying off above the minimum if you then just use your credit card. 

You say you need the house for work. That's not a need it's a convenient and expensive want. Why can't you sell the house that's not in the city? Or sell both and buy somewhere in between the two so it's less of a commute? How often do you go to the office or to see friends? Would it be cheaper to rent an air b n b instead? 1.5hr commute may seem alot but owning another house for that is just a luxury. 

Moneywhizz

I agree that you need to do a much more realistic budget that includes everything you spend money on. This needs to cover all your regular monthly expenses as well as pots for annual bills, Christmas, presents etc. This will give you a much clearer picture of how much you have left each month to pay towards your debt. If you seriously want to get out of debt you need to stop using the credit cards completely and use your monthly pay to cover everything.You also need to make sure you start to build up an emergency fund so that you are not in a position of needing to use credit for anything. It doesn't seem to make much sense to try to run two houses, so that is something you can look at longer term, but your priority needs to be a proper budget so that you can see if you  have enough money coming in to cover everything that needs to be paid.  

MissMaud

Thank you @Sarahwithlove and @Moneywhizz for your comments.  I'll redo my SOA, to be honest I've no idea how to as I'm so used to putting everything on my credit cards so no idea how to budget for the things that crop up during the year.  I fear it will make for sobering reading for me when I do.

I know what you're saying about the extra house being an expensive want and not a need.  And it is expensive as well, as it needs a lot of work done to it.  It's something I've been thinking myself.  I will never sell the house I'm living in currently as it's on our farm and I'd never part with it.  I just keep hoping I can keep both on and get myself out of this debt hole.   Perhaps wishful thinking... I need to have a good hard think about things.

Thank you both for the insights.

HampshireH

MissMaud said:

Thank you @Sarahwithlove and @Moneywhizz for your comments.  I'll redo my SOA, to be honest I've no idea how to as I'm so used to putting everything on my credit cards so no idea how to budget for the things that crop up during the year.  I fear it will make for sobering reading for me when I do.

I know what you're saying about the extra house being an expensive want and not a need.  And it is expensive as well, as it needs a lot of work done to it.  It's something I've been thinking myself.  I will never sell the house I'm living in currently as it's on our farm and I'd never part with it.  I just keep hoping I can keep both on and get myself out of this debt hole.   Perhaps wishful thinking... I need to have a good hard think about things.

Thank you both for the insights.

Go through all your statements and list out what you are spending on each month.

Stick in in a spreadsheet so

For example credit card 1 on 1 row 2 on row 2 etc

 Column A food shop column B clothes C travel D random stuff you don't need  E Coffes and lunches F alcohol/nights out etc.

Do the same for each card credit and debit then at the bottom you'll have a tally of the total spend for 1 month in each area

That will give you a starting point