Desperate to get out of debt

seven1969

I'm a new debt free wannabe and I say new in the loosest sense. I've been struggling with my personal debts for years and my hubby and I have a saying - "in 2 years time we'll be OK". We've now been saying that for 13 years (since we met). It's mostly credit cards but we've also currently got 2 loans to "clear the credit cards" and each time I've built the cc's up again. I am most definitely to blame for the mess which is why my SOA only includes my income and outgoings. Hubby's bailed me out enough. In fact, he doesn't know the exact picture.

Incoming

Salary - £1170
Benefits - £160
TOTAL - £1330

Outgoing (basics)

Mortgage - £390
Life !!! -£40
Childcare - £50
Council Tax - £129
Boiler Care - £17
Sky (phone, Broadband and TV) - £29
Petrol - £150
Food, toiletries, etc - £400
Minimum payments on debts - £287 (this month)
Savings (1st time in my life) - £10

TOTAL - £1502 (deficit - £172 p/m)

Debts

Tesco CC - £4939
Sainsburys CC - £2246
IF CC - £1086
Next Directory - £355
Abbey overdraft - £960

Assets

House is valued at £125000 with an outstanding mortgage of £87k.
Savings are only about £60 so not much to play with there!

The mortgage itself is a problem as it's an interest free only and we don;t have a vehicle in place to pay the capital. We had to do something to reduce the monthly payment.

I've "snowballed" my debt and it's been calculated that if I continue to pay £287 a month (which I can't afford) I'll be debt free by Nov 2011. I can really only afford to pay £115 a month on my debt but the minimum payment on the Tesco CC alone is £150. Paying £115 a month would take me 94 months.

I just don't see a way out. We have no social life - we never take the kids anywhere at the weekends, we don't smoke, we don't go out (we haven't been out this year at all), my hubby and I have stopped giving each other "treats" at birthdays, Xmas etc - now we buy each other essentials like clothes or, believe it or not, a hair cut for me. I feel sick when I think of how much our kids have missed out on because of my problems with managing money. We manage to get away on holiday each year but nothing fancy - a week away at most on a budget holiday (1* all the way!!)

It all started when I was working part-time - I used the credit cards to live on basically and we're still paying them off (and more) 9 years later.

I am really in debt crisis. What should I do?

jak

Food can be brought down. Also what money does your hubby contribute to the day to day running of the house? You need to include your housekeeping as income - does that make sense?Hope that helps. The old style board is great for cheap recepies. Also do you do a meal plan? That really helps!Good luckx

ltm07

Hi,please stick around. OH & I were feeling exactly the same as you a few weeks ago & very nearly gave up & consolidated. We rode the storm though & are starting to slowly get back on our feet. Can you transfer cards onto low LOB deals or 0% deals? Food can be brought down. We've swapped our regular shop from the major supermarkets to Aldi & Farmfoods,saving us around £100 a month for 2 of us & DD. How old are the kids? Better weather around the corner so you could go out for picnics etc. Abbey overdraft is a huge APR,as we have not long cleared ours! Can you swap bank accounts to get a lower rate APR? Other good people on here will be able to give you more advice. Good luck & stick around,I think that you will be back on your feet in no time. Good luck!

seven1969

My husband pays the 2 loans (£270) plus he puts money away for the household bills like gas/electric, car tax/insurance/MOT/service, Xmas/birthdays etc. He gets a bonus most months and normally he gives me this (usually about £300) but just recently, we've been using it to pay for the upcoming holiday. We thought we were getting a bargain with a holiday cottage in France paid for with Clubcard vouchers but it's the getting there that's the problem! - £190 for passports, £140 car hire and £320 for flights. Not to mention spebding money.

Interesting what you say about food bills. I think we overspend on food. What do other MSEs think? 2 adults, a 16 year old boy and a 10 year old girl. We all take packed lunches to school/work, we hardly ever eat takeaways (once a month maybe). Do you think £400 a month is a lot? That does include things like toiletries, cleaning products, anything you get from the supermarket. I'm keeping a diary of what I spend on food this month so I'll have a better picture.

RAS

seven1969 wrote: »

Incoming

Salary - £1170
Benefits - £160
TOTAL - £1330

Outgoing (basics)

Mortgage - £390 - your half or all of it?
Life !!! -£40
Childcare - £50
Council Tax - £129 - ditto and is this over 12 months or 10?
Boiler Care - £17
Sky (phone, Broadband and TV) - £29 - freeview?
Petrol - £150 - can you cut back on this
Food, toiletries, etc - £400 - You should be able to halve this. Go voer to the Money Saving Old Style Board and get them to help you meal plan and shop.

Minimum payments on debts - £287 (this month)
Savings (1st time in my life) - £10

TOTAL - £1502 (deficit - £172 p/m)

Debts

Tesco CC - £4939 - APR, minimum payment and maximum limit?
Sainsburys CC - £2246 APR, minimum payment and maximum limit?
IF CC - £1086 APR, minimum payment and maximum limit?
Next Directory - £355 APR, minimum payment and maximum limit?
Abbey overdraft - £960 APR, and maximum limit?

Are you in credit for a few days each month - see if you can get an Alliance and Leicester account and move you OD there. There is no interest for the first year.

Assets

The mortgage itself is a problem as it's an interest free only and we don;t have a vehicle in place to pay the capital. We had to do something to reduce the monthly payment.

I just don't see a way out. There are several, believe us.

We have no social life - we never take the kids anywhere at the weekends.

is there anywhere near you where you can walk, park, play ground, close to home, work or other places to which you go by car? What sort of free facilities does the council offer. Library - most do free events for kids.

we don't smoke, GOOD

we don't go out (we haven't been out this year at all),

Consider mystery shopping and look at the compo and freebies boards on here. Make one "us" meal every month and give one another time. Or a massage/

My hubby and I have stopped giving each other "treats" at birthdays, Xmas etc. In which case, you both need to start mystery shopping, pay for clicks sites etc.

I feel sick when I think of how much our kids have missed out on because of my problems with managing money. So you have the motivations to sort this out. Great.

We manage to get away on holiday each year but nothing fancy - a week away at most on a budget holiday (1* all the way!!)

It all started when I was working part-time - I used the credit cards to live on basically and we're still paying them off (and more) 9 years later.

Have you started to reclaim your bank charges and CC charges, if you have any. CC charges are NOT in limbo because of the court case.

What should I do?

Some ideas above, but we really need to see the full family picture.

RAS

seven1969 wrote: »

My husband pays the 2 loans (£270) plus he puts money away for the household bills like gas/electric, car tax/insurance/MOT/service, Xmas/birthdays etc. He gets a bonus most months and normally he gives me this (usually about £300) but just recently, we've been using it to pay for the upcoming holiday.

You definately need to be doing a full SOA of both incomes and all expenditure.

seven1969

thanks for all the tips so far.

At the moment, I can't get any more credit, not even from my own bank (oh dear!). The Sainsburys and IF CCs are on a low LOB rate (hurrah!) but the transfer date expired ages ago so I can't transfer (boo!), the Tesco one is about 19.5%. I phoned them up to see if I could negotiate a better rate - you'd have thought I was speaking Swahili the reaction I got! They wouldn't even let me change my DD payment to £150 a month, it's the minimum or the balance. Cheers Tesco, thanks very much (I'm defecting to ASDA!!!).

I opened a new bank account 6 months ago because of Abbey's deplorable customer service but left an outstanding overdraft of £1200 so this is coming down. I think the APR is about 16% but that does sound low for an overdraft on an account that's not used..............

What else? Bank charges - I've given up claiming them back from Abbey. (I might start a thread on Scabby Abbey if there's not one already). CC charges - thankfully I don't have any.

I'm not sure about including my hubby's SOA in this. I cringe at the thought of asking him. He's paying off about £20k although £15k of this was for the deposit on the house. Hmmm, I'll think about it.

RAS

have a look here for ways to boost your income a bit http://www.moneysavingexpert.com/protect/make-money

Try for the Alliance account and move the Abbey acount to it - then you are not paying any interest. The requirement is that your account must be in credit for two days a month before they will take you.

And pay anything extra towards you highest rated debt which is tesco

Is there anything that you can sell on e-bay, amazon or at a car-boot sale?

And have you joined the local group of www.freecycle.org? Like e-bay but you get the goods for free.

chevalier

seven1969 wrote: »

Interesting what you say about food bills. I think we overspend on food. What do other MSEs think? 2 adults, a 16 year old boy and a 10 year old girl. We all take packed lunches to school/work, we hardly ever eat takeaways (once a month maybe). Do you think £400 a month is a lot? That does include things like toiletries, cleaning products, anything you get from the supermarket. I'm keeping a diary of what I spend on food this month so I'll have a better picture.

One thing another MSE'er suggested to me is to get the shopping bill for this week and put it up on the fridge. Anything that is eaten gets a green line, anything that is thrown away gets a red line. Just before you shop next total up the amount that has red lines through it. That will show what is not really needed and motivate you into being more ruthless with your shopping list.

good luck
chev

ltm07

seven1969 wrote: »

My husband pays the 2 loans (£270) plus he puts money away for the household bills like gas/electric, car tax/insurance/MOT/service, Xmas/birthdays etc. He gets a bonus most months and normally he gives me this (usually about £300) but just recently, we've been using it to pay for the upcoming holiday. We thought we were getting a bargain with a holiday cottage in France paid for with Clubcard vouchers but it's the getting there that's the problem! - £190 for passports, £140 car hire and £320 for flights. Not to mention spebding money.

Interesting what you say about food bills. I think we overspend on food. What do other MSEs think? 2 adults, a 16 year old boy and a 10 year old girl. We all take packed lunches to school/work, we hardly ever eat takeaways (once a month maybe). Do you think £400 a month is a lot? That does include things like toiletries, cleaning products, anything you get from the supermarket. I'm keeping a diary of what I spend on food this month so I'll have a better picture.

A couple of months ago I would have probably said that £400 wasn't too bad for a family of 4. However,from our own personal experience we have cut our shopping bill dramatically. It's worth looking at Martin's supermarket downshift challenge. We rarely buy the top brands of anything,unless there is a special offer on them & even then most of the time the offer isn't as good as buying the supermarket's own brand. We have found Aldi to be a Godsend to us,just wish we'd started shopping there years ago! The food is of very good quality in our opinion & believe me,i'm very fussy about my food & we wouldn't shop there if the food wasn't nice! Our weekly food bill comes to no more than £50 a week whereas when we were shopping at the major supermarkets we would do well to get it under £80! We still use the major supermarkets but only for bits & bobs. Don't let the debts get to you too much,it is hard to deal with at times,we all know that,you will have setbacks now & again,but you will also bounce back from the setbacks. Pick up ideas from the good folk on here as to finding cheap days out etc & most importantly be strong & happy as letting the debts get to you too much isn't good for your health. All the best.

WorkingHardDFW

HI and welcome.

You've taken the first step by posting on here. As I think someone has suggested it might be worth posting your complete SOA so that the friendlty experts on here can see what can be saved, reduced, eliminated. Every little does help. The first thing would be to get the monhhtly in/outs balancing so seeing your OH's income on there as well would show the overall picture. It may not be bad as your think overall.

Ref food. After about nine months into my debt journey I am starting to convert to using Aldi/Lidl to save on the food bills. We're a family of 5 - 2 adults, 3 kids (smallish) and our food budget is £300 pm which I'm still finding tight I will admit. We don't buy takeaways, some wine (not very often) and we like to eat well. Its a slow process. Switching down a brand helps and often is just as good.

My biggest help to starting to reduce our debts was budgeting and keeping a spending diary. I budget for everything from haircuts, birthdays, christmas, holiday, medicines, garden bits you name it there is a budget somewhere. This along with a spending dairy helps keep the budget on track and certainly its helped ID where we were overspending which is what got us into £50k worth of debt in the first place....no one to blame but ourselves.

Ref the kids. I feel that sometimes. Over the Easter hols lots of friends were off sking, on away in the UK. Mine got a day out for my DS's birthday courtesy of Tesco Clubcard vouchers. My view is that sorting out the mess we got into is our responsibility as parents particularly if we want them to have a more secure future....

Sorry I've rambled on a bit..........

Good luck