Trying to get out of the money mess

Goinggreyearly

So I have got myself in to debt.

I'm in a fortunate position in a way, my husband earns a decent wage and pays the mortgage and all that main bills.  We have a joint account which I pay £150 into, the family allowance goes in and he pays the rest, everything comes out of there bill wise including mobile phones.
Our wages go into our separate current accounts and we transfer our money in.

I buy the food shopping,  kids clothes, shoes and uniforms, pay for school trips etc.  We both run a car.

Not sure how it got this had but at the end of last month I owed £18,333.90

CC1 -  8,150.37
CC2 - 4,861.46
CC3 - 4,645.00 
Overdraft - 677.07

I have already made some changes, I'm usually up to the edge of my overdraft every month, my lightbulb moment came at the end of July when I finished the month with literally 5p left of my overdraft.  Since then I have made some changes.

I'm writing this down to keep myself on track! 

MFWannabe

You state you’re not sure how your debt has got this bad; this is the first thing you need to address; you need to find out why
Is it day to day living? 

Extravagant spends? 

Then sit down with husband and do a proper budget with every expense factored in. Is your husband aware of the debts? 

You can post the soa (budget) here if you wish for some advice where you could cut back etc 

itsthelittlethings

You say everything comes out of the joint account but then you say you buy the food shopping, kids clothes and trips. That's quite a lot to be spending so not everything is coming out of the bills account if so.

elsien

Yes, I agree. 

Although the mortgage and  formal bills come out of the joint account, if you are paying for everything else then you need to sit down properly and work out how much you are spending on the family, not on yourself. 

If your wages don’t cover the necessary family spending on clothes, food and trips, then you need to have a discussion with your husband about how to address this.
Obviously if you are spending it all on wine, men and song, that is slightly different, but I’m guessing that’s not the case.
So you need to do a joint budget covering all the bills and then work out what’s a fair share for you to pay. 

Or if there are any areas that are not affordable for the family as a whole, what you can all cut back on together. 

Goinggreyearly

Just got back from food shopping - I think that I know where most of my money is going!  

Hi MFWannabe,  thanks for your comment.  Yes, my husband is aware of the CC debts, he's been very supportive.  He does want to help but I'd rather pay this off myself.  This has been me overspending over many years, but the debt wasn't something that I thought about until the interest rates started to rise.  Probably something you hear a lot. I never had a CC debt before we had children, we always paid off our CC are over paid on our mortgage.  It's when I stopped paying the full amount and started just paying the minimum that things slowly started to build up.  I also probably spend more than I need to on the kids, I wanted them to do all the things that I couldn't do and have all the things I didn't have.  Anyway if I let my husband step in and help I am not going to learn from this am I?  
I am going let him help with practical things like meal planning, I know I spend too much on food!  

itsthelittlethings I read your comment and looked again at your name and it made me smile.  When I took a position with less hours after the children arrived it seemed very fair.  Now they are both in secondary school, eating me out of house and home and growing!  So now what where smaller expenses are much bigger bills!  Moving forward, DH and I are going to discuss and share the additional expenses (new school shoes, bus passes things like that).  Both new new winter coats, I usually get them from supermarket, it all adds up! 

I've been asked to do a few extra hours in Oct to relieve work pressures when a colleague has a planned absence next month, which I've accepted.  I've listed some items for sale on ebay, and am going to list some clothes on Vinted next week.  I've set my DDs at above the minimums.  No spending went on a card at all last month.  My mad overdraft is £900,  managed to finish the month overdrawn by £670. 

I've decided my first goal is to clear my overdraft, does this week sensible? 

elsien

If your overdraft has the highest interest rate then clearing it first seems reasonable.
Do you know what the comparative interest rates on the different debts are? If not then you probably need to rummage them out. 

Brie

Clearing the overdraft is a good idea.  So often that could be costing you more than the cards.

One way to do this is to open a new account without an overdraft and use that.  And pay down the overdraft on the old account and then close it.

Then look at your cards and see which one is charging you the most interest.  Generally that's the one you need to target to pay off first.  BUT you may decide to clear the one with the smallest balance (sense of success!!) and then use that for any card spending and just chip away at the others.  Make sure the one you're spending on is paid off in full each month.  

Good luck with your journey to being debt free!!!

MFWannabe

I didn’t mean for your husband to step in and sort the debts out; I meant for you to have a conversation reference household expenses and how to pay off the debts; which it sounds like you have done 👍
No one can say if paying the overdraft first is sensible or not as we don’t know the interest rates on your debts 

Sarahwithlove

I think you need to sit down with your husband and budget together. Plan everything including extras for kids. Alot of people put child benefit aside and use this for kids extras for example. I think having a budget and sticking to it is more a lesson you need to learn than punishing yourself for spending too much on the kids. 

Goinggreyearly

The overdraft is really bugging me, my wages go in, and the overdraft swallows them.  I would feel better without it. I will however dig out the interest rates.  Now I am actually looking at my debts, I need to be sensible about them.

Thank you all for comments so far, really helpful.  

elsien

If it makes you feel better and there’s not much difference in the interest rates, then go with clearing the overdraft. Sometimes the psychological boost is more important to keep you motivated than a few pounds here and there.