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  • FIRST POST
    • optimizm
    • By optimizm 27th Oct 18, 12:26 AM
    • 20Posts
    • 57Thanks
    optimizm
    high income high debt!
    • #1
    • 27th Oct 18, 12:26 AM
    high income high debt! 27th Oct 18 at 12:26 AM
    Hello!

    I chose my username as I do feel optimistic about tacking my debts.

    We owe around 49k unsecured debt on a net montly take home pay of £5050 ( joint). Thankfully mortgage and other monthly outgoing are relatively low so it's manageable, albet high.

    Why is it that so many people with decent incomes ( like us) end of with very high debt levels?

    Is our level of debt an unusually high amount?
Page 4
    • optimizm
    • By optimizm 4th Nov 18, 10:44 PM
    • 20 Posts
    • 57 Thanks
    optimizm
    Apologies for not replying for a few days. We took the opportunity to get away for a few days - house sitting for relatives in Dorset. It was a much needed break and it didn't really cost anything as we took our own food and drink ( from Lidl), in fact the only money we spent in 4 days was on fish and chips by the sea.. We decided to apply a 'no internet' rule to our few days away, as we both spend far too much time glued to Iphones.

    I had underestimated how much this debt stuff had taken its toll on my wife. We had lots of time to talk during our break and its clear that I need to offer her more support. She's stressed and worried about the debts and has been losing sleep. I was not aware of this, so I feel bad for that.

    In keeping with my profile name on here, I am a naturally optimistic person. This can be both a blessing and a curse. I will generally look for the positives in most situations and tend to not worry excessively, instead preferring to look for solutions. The down side is that I can sometimes take risks without weighing up the worst case scenario. My wife is more level headed and therefore she is finding the debt situation harder to deal with mentally. She suffered with some depression a few years ago, and whilst this was not linked to anything financial, I am determined not to allow this situation to push her back into that place.

    We have decided to focus on the 'budget' rather than the 'debt'. As many of you have stated, the debt is a symptom and we know that we have to deal with our spending. If we can do that, the debt will reduce quickly. We accept that it may take a few months before we nail this.

    I tend to approach things like a bull at a gate,however we know that we need to take a realistic approach to this. I compare this to losing weight- a sensible steady approach will almost always lead to sustainable results, as opposed to a crash diet.
    • MeenaM
    • By MeenaM 5th Nov 18, 8:03 AM
    • 271 Posts
    • 483 Thanks
    MeenaM
    hello , I wanted to wish you luck on your journey to being debt free!

    I am pleased to see that you and your wife are talking, I think to be successful and clear this debt up you both need to be on the same page. For me the way to tackle debt is to have a plan you both agree on and stick to it. I am basically following Dave Ramsey plan, this if you have not heard of it is the following,

    1. save up an emergency fund of £1000
    2. order your debts smallest to largest, then pay the minimums on all but the smallest, with the smallest you should throw all your spare money at it to get rid of it as fast as you can. Once that one has gone (hurray!) you start attacking the next one.
    3. when the debts have gone ( yes!! ) save an EF of 3 to 6 months

    I wont go on to the other steps as you are not there yet and it takes a bit of explaining, but i like the fact they are called "baby" steps as you say you cant just expect to rush at this and solve it all over night, it will take time but during that time you will see success that will keep you making those baby steps.

    The key to finding extra money to throw at debt is to make a budget each month together with your wife and stick to it . There are a lot of good apps and websites that provide budget templates, the best way is to allocate every £1 each month to a task, I would also allocate some money aside for things like car repairs, birthdays, christmas etc things that you may need extra money for in the future.

    For me seeing my successes kept me motivated and also helped reduce my stress by seeing that the debt was reducing so i have a few sheets of paper on my fridge door, one is showing how the CC debt is reducing and the other is a chart to show when we will be totally debt free, both are good reminders and keep me motivated

    If you haven't already done so then see if there is anything you can sell to get you started, you will soon get a really happy feeling when you throw money at that debt and start to see it reduce !

    some tips, make sandwiches instead of buying lunches , sign up for apps which give you freebies , like subway , greggs etc that way you can have a treat for free and not feel guilty!

    keep reminding yourselves that this is not forever, it will be for a relatively short time of your lives and then you can get on with saving your money and enjoying it in the future with being able to afford things you want and need plus be able to be generous to others as well,

    I hope this helps , best wishes to you both.

    ps you might also want to start a diary over on the other section,
    Last edited by MeenaM; 05-11-2018 at 8:08 AM.
    Sealed Pot 11. #199Next£1170Barclays Credit Card £4891.20/0- 0% ends April 2019 virgin 0% ends july 2020 £4138 £570.09AA Credit Card £860 0- 0% ends Dec 2017 Sainsburys Credit Card £521.27-0 0% ends Feb 2018 STARTED Nov 17AIM TO BE DEBT FREE JULY 2019Emergency Fund £614/£1000
    • Lee Walker
    • By Lee Walker 6th Nov 18, 10:39 PM
    • 14 Posts
    • 22 Thanks
    Lee Walker
    I'm majorly jealous of your CT and property value. £210k here wouldn't get you a 2 bed flat in a rough area.

    I'd suggest that for where you live you're earning well above average.

    Good luck paying it off
    • Verbatim
    • By Verbatim 8th Nov 18, 6:17 PM
    • 4,628 Posts
    • 13,983 Thanks
    Verbatim
    Better to pay off the highest interest debt first rather than the smallest. You'll pay less interest that way and be debt free quicker.
    CCs @0% £24k Dec 05 £19,621.41 Au £13400 S 12600 Oct £11,981 £9481 £7500 Nov £7250 D £7100 Jan 6950 F £5800 Mar£5400 May £4830 June £4660 July £4460 Aug £3200, S £900, £0 18/9/07 DFW Nerd 042
    • TheMoonandBack
    • By TheMoonandBack 9th Nov 18, 4:47 PM
    • 68 Posts
    • 104 Thanks
    TheMoonandBack
    Better to pay off the highest interest debt first rather than the smallest. You'll pay less interest that way and be debt free quicker.
    Originally posted by Verbatim
    Better in theory, but I can vouch for Dave Ramsey’s method which is based on human nature. Actually paying off the debts is a motivator.
    I know that I was going nowhere until I did it myself.
    When you get to the end of your rope, tie a knot and hang on

    Proud to be dealing with my debts
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