In dire need of help, time to take control of debt

MEM62

Appreciate all the advice regarding my spending, which I will definitely be cutting back on. However is this all I should do?

@orangebees22 No, but getting your spending under control is the first step. Until you control your spending you cannot make any kind of plan to deal with your debt.

Also, I appreciate that you OH may not have accumulated this debt but it is a joint issue as it will impact both of you. His input and support will make the debt-free journey that much lighter.

MasterG83

Start with a budget, write down everything you spent over the last three months into categories, look at those you can immediately change, and you will be able to trust me.

Then use a free excel budget sheet, paper and pen or app and start budgeting, I do mine the day I get paid. As soon as that money drops I know where its going. Some goes to a current account where all my DD come out, plus a small buffer, the next budgeted amount goes to ISA or additional spends allocated that month, the remainder moved to a Chase spending account where I get 2% cashback and thats it for the month, if I spend that then I dont spend anything else.

When you get to this stage you have choices, I have pots in Chase, one for the annual home insurance, one for holidays, one for birthdays, this is when you start to win with money.

orangebees22

https://forums.moneysavingexpert.com/discussion/comment/82083303#Comment_82083303

Hi - Sorry yes i've listed them as 0% but yes only £12k is. The 5k loan is 0% and the other loan is about 5-6% (can't remember specifically).

Is it better to default them all or only some?

orangebees22

https://forums.moneysavingexpert.com/discussion/comment/82083330#Comment_82083330

Yes it's about £850 each that we put in the joint for joint nights out etc.

It's hard to know what i need to cut back on myself when it comes to the groceries, nights out etc. Is this extremely higher than average in London (we're early 30s). I also use my personal bank account for nights out when i'm not with my partner and the groceries is mainly work lunches, which I will now be cutting back on significantly (making my own lunches/meal deals). The personal shopping is where i see a lot of my issues, which have got significantly worse in the lead up to the wedding. However this will be over very soon and I'm going to get my act together.

ellenvan

Sorry but you can't afford nights out for a while.

It's not your money you are borrowing and increasing debt to go out and have fun.

You need to partake of some free entertainment, entertain friends at home.

Shadyocuk

Please take this as constructive criticism rather than an attack.

I am not convinced that you have yet had the light bulb moment , you seem to be still at the stage of thinking about cutting back some of the overspending at some time in the future , rather than at the stage of cutting back all the overspending now.

You dont need to worry about what is an average amount for someone in their 30's living in London to spend on nights out , you need to work out what YOU can afford to spend on nights out and not spend more than you can afford.

As others have stated your first task is to be totaly honest with yourself and work out exactly where your money is going,then work out what are your real essential costs (rent, bills , travel to work, food etc) what you have left is what you can spend on discretional spending (less what you need to pay back towards your debts).

Your current SOA shows the £300 for clothes , which you have then stated is included in Klarna and paypal , but the total for Klarna and Paypal only shows as £153?

ManyWays

Is this extremely higher than average in London (we're early 30s).
I don't know what an average is. But it is much more than you can afford while you have this much debt!
I am not saying live like a hermit

orangebees22

Completely understand the point regarding not being able to go on nights out now due to my debt, however what i'm trying to understand is if I actually am overspending on going out in relation to my salary?

The debt was caused from overspending on shopping, but I didn't think I was overspending in other categories, so just asking out of interest. The SOA above is what I have been spending on average over the last few months (with some silly purchases added on and lots of additional shopping due to the wedding). It is not a budget for the future.

Regarding the BNPL, it's hard to judge as it depends monthly but I would say in recent months I have added about £300 a month in clothing/shopping to Klarna/Paypal, but this is split into pay in 3 usually, so the amounts change each month. This month I paid £153 as it depends when in the month I make the purchase whether it will be in this months pay or next months pay i'm required to pay the next payment.

Of course my plan is to now no longer use Klarna/Paypal pay later/pay in 3 options.

I think as people have said, to deal with the debt and actually have an emergency fund, I think I will need to get on a DMP. I think by doing this and also removing any access to my credit cards, it will force me to finally confront my overspending and create a proper budget to decrease my debt. Is this something I should do?

MEM62

Completely understand the point regarding not being able to go on nights out now due to my debt, however what i'm trying to understand is if I actually am overspending on going out in relation to my salary?

Well you are certainly overspending somewhere or you not have the level of debt that you have. And you are absolutely overspending in relation to your debt level. For the medium term, getting debt free takes priority over enjoying yourself.

Smudgeismydog

• presents/christmas/birthday at £20pm looks low, who do you buy for and what is your budget for each person?
• Groceries at £100pm looks low, but then I suspect your monthly food costs are covered elsewhere, e.g. in daily spends for lunches out and also your eating out budget
• clothing needs to be slashed to new underwear only until this is under control. Could you sell some clothes on e.g. Vinted or EBay to recoup some money?
• Hairdresser at £75pm is too high, can you increase the time between visits to reduce this?
• as others have posted, the £850pm Daily Spends and £200pm eating out is not affordable when you have £56,400 worth of unsecured debt

Although that debt figure must look scary, you have the potential to throw a really decent amount at it, as long as you are prepared to make some big lifestyle changes.