New here and need advice - we are in debt

harrisc

Hi there -

Well don't really know what to say. We are in debt, not hugely I don't think but enough to worry about it.

I am 27, partner is 32 and son is 2.

Interest only mortgage for 80k, monthly repayments currently at 332.00 on a special offer that will go up shortly with 20 years left on it.

An open loan, against the house, for 20k currently paying 300.00 a month but our problem is that we keep spending the money we are paying off so the balance is never going down, this is just going on pure living.

Credit card with 2k

Each have a overdraft we are using to the max of another 1k each!

Part of the problem is that I used to earn well, was made redundant whilst expecting our son and we still live as if we had my wage. Not entitled to any help whatsoever as my partner apparantely earns too much! I work part-time bringing home 213.00 but nursery fees swallow up 168.00 a month of that!

What do we do?

Carry on paying our loan off as is against the house?

Take out a loan for 20k with fixed monthly payments over say 7 years and that way we will def. pay it off as we aren't at the moment, this will also give us about 20.00 a month extra.

Not too worried about the credit card as that is coming down as we don't use the card unless emergency, car bill etc.

Thanks Claire

nearlyrich

:wave:Hi Claire :hello:

Welcome to just the right place to sort out your finances, there are lots of very experienced people who have been where you are and have got back into a strong financial position.

The first step is to admit you have a problem which you have done so that's a good start, next you have to work out your income and set a budget to live on which is a little harder.

If you go up to the top of this board you will find a few things to help you, an article called where to deal with problem debt (or you can click here for a link.) There is also a budget planning spreadsheet which will help to remind you of everything you spend money on.

Once you have worked out how much you have coming in and sorted out where you spend money if you post it here you will get some great advice on cutting your spending.:)

delboypass

1/ Do a incomong-outgoing analysis
2/ Post analysis so users can see whats happening and give feedback on your budget
3/ I wouldnt take out any more loans.
4/ Reduce your monthly outgoings as much as possible - amazing what you can save when you really put your mind to it and concentrate at the task in hand.
5/ Use this incoming - outgoing analysis to start to budget more effectively.
6/ If you are having problems with CC's or Loans and are defaulting, get 1 done as quickly as possible but maybe try to freeze interest on loan if possible. Dangerous as secured against house.

nelly_2

harrisc wrote:

Hi there -



Part of the problem is that I used to earn well, was made redundant whilst expecting our son and we still live as if we had my wage.
What do we do?


Thanks Claire

That obviously and seriously need addressing, if you aint earning it you cant spend it!

Nicky_3

How can you tackle a debt problem if you are still spending money you dont have? Are you spending money for things that are a needed to live on? Or are there things that you can cut back on?

A little more info on what you are spending this money on may give a better picture as to whats happening and help us to give you more relevant advice.

elona

Do you really enjoy your job?

If not it could be cheaper to be a stay at home mum and cook from scratch etc.

I find the things my family enjoy are the home made soups, bread, jam pies and flans etc - that cost a quarter (or less) the price of bought stuff.

Little_Miss_Winner

Hi Claire,

Well done for doing something about your finances now before it's too late.

The thing that stood out most to me (being a mum also) - was the fact that you are working for £45 per month. Thats £10.38 a week. And how much of your £10.38 do you actaully spend at work? Getting there (petrol or fares)? food/drinks while there? Birthday Collections etc.

Is there no way you can get a job in the evening or at weekends. I know it's hard trying to juggle work/kids. But I would seriously think of swopping jobs to A) Spend more time with baby, so he wouldn't have to goto nursery and Getting another job while he was in bed. It wouldnt be for long as he will be going to school when he is 3 anyway.

Thats what I had to do, I have 3 children aged 5, 3 and 9 months. And I spend all day, doing school runs, playing with the baby, going to mother & toddler groups etc. Then when they are all safe and sound in bed (or on their way) I work two evenings 6-10.30pm. And one Overnight shift 10pm-8am.
I clear approx £675 per month, and none of it goes to child care, as I am here all day.

Please do an incoming/outgoing list and post it here, so that the members on here can help you. They are really good, and will find loads of ways to save you money. Probably things you hadn't thought about.