Renovation Spiraling Debt - Reduce Debt Cost

plamb85

Good morning

We moved into our first property over a year ago and have spent a considerable amount of money to modernise including some extensive building work. Unfortunately (or stupidly!) the costs were all paid by credit and as you can tell from the title those costs spiraled!

I am looking for some general critique of our spends and also any advice on how we can reduce debt or shift onto cheaper debt. Unfortunately we appear to have maxed out our limits so moving money to 0% interest its really an option for us. We are a family of 5 but our eldest works and pays monthly boad.

Income:
Salary (Combined) - £4,186
Child Benefit - £170
Board - £150

Total - £4506

Monthly Spends:
Mortgage - £950
Council Tax - £145
Water - £47.60
Energy - £178.00
Broadband - £45
TV License - £27
Groceries / Eating out - £500
Sofa - £65.00
Boiler - £87.00
Vet Cover & Insurance - £26.50
Mobile Phones - £93
Car Insurance - £85
Car Fuel - £100
Childcare - £100

Total - £2,449.00

Debt:

Loan 1 - £13,100.00 - 10.2% - £319.41 Monthly
Overdraft 1 - £1000.00 - 29% - £30.00 Monthly (Interest Only).
Overdraft 2 - £500.00 - 39% - £20.00 Monthly (Interest Only).
CC1 - £1500 - 30% - £50.00 Monthly (Minimum Payment)
CC2 - £4460 - 27% - £120 Monthly (Minimum Payment)
CC3 - £3769 - 0% - £100 Monthly (Minimum Payment)
CC4 - £4832 - 0% - £80 Monthly (Minimum Payment)
CC5 - £2094 - 0% - £100 Monthly (Minimum Payment)
CC6 - £833 - 0% - £25.00 Monthly (Minimum Payment)
CC7 - £450 - 24% - £40.00 Monthly (Minimum Payment)

Total Debt - £32,538.00

Monthly Debt Payment - £885.00

So Income - Spends - Debt = £1,172.00 - Which doesnt seem too bad but a household full of women money is often spent on grooming, clothes etc. 

The 0% cards end between October 2025 and April 2026 so we do have some time. My biggest concern is the CC2 debt which is charging over £100 a month on interest alone.

Thank you.

fatbelly

You may still get 0% deals on credit cards and that would be something to explore.

The overdrafts need to be cleared as a priority.

Suggest that everyone has a 6-month moratorium on clothes and eating out.

plamb85

Thank you. Tried a few eligibility calculators and doesn't look like we will be successful. Will concentrate on the ODs and move on to the credit-cards. Recommend to tackle the CC2 which is costing £100 in interest alone?

MFWannabe

plamb85 said:

Good morning

We moved into our first property over a year ago and have spent a considerable amount of money to modernise including some extensive building work. Unfortunately (or stupidly!) the costs were all paid by credit and as you can tell from the title those costs spiraled!

I am looking for some general critique of our spends and also any advice on how we can reduce debt or shift onto cheaper debt. Unfortunately we appear to have maxed out our limits so moving money to 0% interest its really an option for us. We are a family of 5 but our eldest works and pays monthly boad.

Income:
Salary (Combined) - £4,186
Child Benefit - £170
Board - £150

Total - £4506

Monthly Spends:
Mortgage - £950
Council Tax - £145
Water - £47.60
Energy - £178.00
Broadband - £45
TV License - £27
Groceries / Eating out - £500
Sofa - £65.00
Boiler - £87.00
Vet Cover & Insurance - £26.50
Mobile Phones - £93
Car Insurance - £85
Car Fuel - £100
Childcare - £100

Total - £2,449.00

Debt:

Loan 1 - £13,100.00 - 10.2% - £319.41 Monthly
Overdraft 1 - £1000.00 - 29% - £30.00 Monthly (Interest Only).
Overdraft 2 - £500.00 - 39% - £20.00 Monthly (Interest Only).
CC1 - £1500 - 30% - £50.00 Monthly (Minimum Payment)
CC2 - £4460 - 27% - £120 Monthly (Minimum Payment)
CC3 - £3769 - 0% - £100 Monthly (Minimum Payment)
CC4 - £4832 - 0% - £80 Monthly (Minimum Payment)
CC5 - £2094 - 0% - £100 Monthly (Minimum Payment)
CC6 - £833 - 0% - £25.00 Monthly (Minimum Payment)
CC7 - £450 - 24% - £40.00 Monthly (Minimum Payment)

Total Debt - £32,538.00

Monthly Debt Payment - £885.00

So Income - Spends - Debt = £1,172.00 - Which doesnt seem too bad but a household full of women money is often spent on grooming, clothes etc. 

The 0% cards end between October 2025 and April 2026 so we do have some time. My biggest concern is the CC2 debt which is charging over £100 a month on interest alone.

Thank you.

You need to do a proper soa including every expense; grooming, clothes etc
Any clothes that could be sold on Vinted? Help bring in some extra money 
Mobile phones are very high; if not in contract change to sim only 
Why is TV licence £27 a month? 

When do boiler and sofa payments finish? 

p00hsticks

MFWannabe said:

plamb85 said:

Good morning

We moved into our first property over a year ago and have spent a considerable amount of money to modernise including some extensive building work. Unfortunately (or stupidly!) the costs were all paid by credit and as you can tell from the title those costs spiraled!

I am looking for some general critique of our spends and also any advice on how we can reduce debt or shift onto cheaper debt. Unfortunately we appear to have maxed out our limits so moving money to 0% interest its really an option for us. We are a family of 5 but our eldest works and pays monthly boad.

Income:
Salary (Combined) - £4,186
Child Benefit - £170
Board - £150

Total - £4506

Monthly Spends:
Mortgage - £950
Council Tax - £145
Water - £47.60
Energy - £178.00
Broadband - £45
TV License - £27
Groceries / Eating out - £500
Sofa - £65.00
Boiler - £87.00
Vet Cover & Insurance - £26.50
Mobile Phones - £93
Car Insurance - £85
Car Fuel - £100
Childcare - £100

Total - £2,449.00

Debt:

Loan 1 - £13,100.00 - 10.2% - £319.41 Monthly
Overdraft 1 - £1000.00 - 29% - £30.00 Monthly (Interest Only).
Overdraft 2 - £500.00 - 39% - £20.00 Monthly (Interest Only).
CC1 - £1500 - 30% - £50.00 Monthly (Minimum Payment)
CC2 - £4460 - 27% - £120 Monthly (Minimum Payment)
CC3 - £3769 - 0% - £100 Monthly (Minimum Payment)
CC4 - £4832 - 0% - £80 Monthly (Minimum Payment)
CC5 - £2094 - 0% - £100 Monthly (Minimum Payment)
CC6 - £833 - 0% - £25.00 Monthly (Minimum Payment)
CC7 - £450 - 24% - £40.00 Monthly (Minimum Payment)

Total Debt - £32,538.00

Monthly Debt Payment - £885.00

So Income - Spends - Debt = £1,172.00 - Which doesnt seem too bad but a household full of women money is often spent on grooming, clothes etc. 

The 0% cards end between October 2025 and April 2026 so we do have some time. My biggest concern is the CC2 debt which is charging over £100 a month on interest alone.

Thank you.

Why is TV licence £27 a month? 

OP needs to double check this - the most likely explanation is that they are paying by monthly direct debit. In this case the annual cost of the licence is taken in six monthly instalments to start with, after which the monthly amount falls to one twelfth of the annual amount. If this is the case then the DD amount should be about to drop if it hasn't already.

The current figures are £28.25 and £14.12 or £14.13

p00hsticks

plamb85 said:

Recommend to tackle the CC2 which is costing £100 in interest alone?

If there is any spare cash the quickest way to reduce balances is to direct it at the highest interest rate first - so CC1 rather than CC2 (after the overdrafts). 

vampirotoothus

Hi are those the minimum payments that are actually due, or ones you have set yourself? If you have set them yourself I would reduce all the ones which are on 0% to the minimum round up to the nearest £5 and then adjust the direct debit to the one with the highest  interest to receive all of that extra payment. Good luck on your journey V x

Sarahwithlove

Is your eldest working full time as that isn't much board. I used to pay £250 and that was 20 years ago. I hope none of the expenses are for your eldest other than general household bills and food. Anything else they should be purchasing themselves so they learn good budgeting skills when they have very little in way of expenses. 

Are any of your phone due to come out of contract or your broadband as that seems high as well. 

I would review your minimum payment direct debits and see if any can be reduced, especially the ones on 0%. The others you just want to make sure you are paying just above the minimum payment. So round up to nearest £5 and then everything extra at overdraft 2. 

I'd recommend doing a proper SOA that includes all the extras such as grooming costs and clothing. Though I would suggest reducing this as much as possible. Sell items on vinted, make use of charity shops, eBay and vinted for purchases. You need to cut back on everything and try and do as many free activities as possible. I'd also cut back on eating out and make sure you menu plan so that you can create a shopping list and stick to it.