oh my life...... Light Bulb moment.

MiMi66 · 6 February 2013 at 12:42PM

Well, I am posting for the first time and starting a new thread all in one - I joined yesterday and am I so hoping that doing this will help to keep me on track with facing and resolving my debt.

I am ashamed and embarrassed - both at the debt and at how long it has taken me to face up to being in debt and deciding to address it - I'll have to say it quickly though £21620 - to credit cards.
God, if I can press the post this button after typing that I shall be going some.

I oculd come up with loads of reasons about why I am in debt - all valid and real - but it doesn't take away from the reality of having to pay it back. I am a single mother with two children, I work full time in a good job, and I have spent too much, way too much.

Oddly the children and I don't live some high flying life, no racks of clothes and shoes from designer shops or anything like that - just years of spending over my budget on food, petrol and the big one, trips away. One of these trips was due to my father dying and I needed to go overseas to deal with arrangements suddenly, and took the children - all went on the cards.

I have tumbled recently - poor health, which gave me time to reflect (or wake up you might think), panic (still), contemplate dark things and get very depressed - and now started antidepressants. They are just starting to work and lift my mood, and I want to try and get a plan into place to deal with my awful debt and take a new attitude to it.

I have a mortgage, and good equity (though the bank said no to me borrowing against the house last week - that added to my spiral of mood) - House is worth about £200K and my mortgage is £114K. Also turned down for a loan from Sainsburys bank, which I wanted to consolidate my debts with. Instead I am left with credit cards totalling £21600 (I owed approx £22500 in December, but managed to pay off the Christmas mad spend, but living on thin air this month.)

So - shall I write out my debt?

Halifax - 6830 0% til Dec
Natwest - 2419 0% til Sept
M&S - 5730 0% til June and another at Nov
MBNA - 6632 5.9% for life of balance
Nationwide - 9 (yes only 9!)

= 21620

Tesco - approx 423 which will be paid off on my pay day - 27/02/13

I've rung a financial adviser who was kind but had not ideas for me as my mortgage provider and Sainsburys turned me down flat. I also spoke with National Debt Line - who were very kind and also reassured me that as I have no 'prioirty debts' my house is safe.

I have always paid everything on time - always met minimums plus a bit more, and have never had a DMP, CCJ or any formal action against me. Mortgage is paid and essential bills all on DD's.

My Credit rating on Experien is all Green - just lots of it. I don't really understand why I haven't been ok'd for a loan to consolidate it all - but it leaves me with having to do that credit card shuffle thing (which I have been doing for years and screwed up completely by always adding more debt to it.)

SO my resolution is to live to a budget.
Pay off the debt - I think it is going to take me 7 years (:() - I aim to pay approx £350 a month (plus that Tesco bill next month - will be another very tight one, but I can't bear the idea of not doing it).
Keep my job and sanity and work on my mood.
Hug my kids and get them involved in saving money.
Find ways to live and have fun that do not cost money.

My ex husband may be about to reduce child maintainence and also my eldest will stop getting Child Benefit soon - that plus losing the Council Tax single person rebate as my daughter hits 18 - will add up to losing about 300 per month I think. I have to somehow adjust to that change as well as keep paying off the debt.

Does anybody know what happens with Child Benefit with two children once one leaves full time education - How much does it reduce to?

Gosh, I fel like I have been really self indulgent writing this all out, and I guess it doesn't make for very original reading, but I am so hoping that keeping this forum diary will help me stay on track, and I would welcome any ideas from anyone.

Wish me luck!

OneLife_OneShot · 6 February 2013 at 12:55PM

I'm no expert on bank loans but I'll give you my opinion.

The reason you didn't get a consolidation loan is probably because you likely tried for a high amount.

You are using a high amount of your available credit and although you have no defaults,CCJs etc or bad marks on your credit report they won't give you any more than around 40% of your annual wage as a loan especially as you have it all on credit cards. Consolidation rarely works in the eyes of a bank because most people don't get rid of the credit cards.

My advice would be pay off the non 0% ones as quickly as you can.

Try this also http://www.whatsthecost.com/snowball.aspx

Put in all your cards and APRs and balances and how much you want to put towards the debt each month and it will tell you how to pay them all off as quickly as you can.

At least you have woken up and are facing the problem. With the help of people on here you will be able to do it.

Good luck

Tixy · 6 February 2013 at 12:59PM

Hi and welcome to the forum

All really well done for facing up to things and posting about the situation you are in - on here we know how hard that can be.

So first step is to work out what you have coming in and going out before debt repayments and make a realistic budget that you can live to and see how much you have left for debt repayments. You'll then need to see if that is enough to cover your minimum repayments or if you have a shortfall. And that will then lead you on to your next step.

We recommend filling in the statement of affairs calculator http://www.stoozing.com/msoc/soacalc.php ideally post it on here for some feedback and suggestions of changes you could make, things you may be able to get cheaper and some ideas about how best to tackle your debts. But even if you don't feel ready to post on here I would still suggest you complete it for your own use as its a real help to see everything written down in black and white.

Welcome again - you can tackle this!

PS just to spur you on - that big(!) nationwide debt - pay it off today, you'll feel like you are already making a start!

MiMi66 · 6 February 2013 at 1:06PM

Thank you Conisme and Tixy for your supportive comments and I will have a look at both those sites.

I have kept a budget calculator of my own for years since being a single parent (9years) - but it seems I have constantly given myself permission to overspend. I could go all psychological abouot why I have - but it really just evades the practical issue I have - I need ot pay it back.

The National Debt line people took me through their budget tool - they think I have about £315 a month that I can put towards the debt.
I am now working out how to save some money on my phone contract and bank aco!!!! fees to up that a bit more so I can stretch to the £350 a month. I know this is a long term project.... how wish it wasn't.

Tixy · 6 February 2013 at 1:27PM

It will be long term, but I think it gets easier with time, becomes more second nature to keep costs down or say no easier to children!

Regarding child benefit - its £20 a [STRIKE]month[/STRIKE] week for 1 child.

What is older child planning to do when they leave education? If they are working will you perhaps charge them board? or perhaps be passing on some of their costs to them? Perhaps enough to cover the drop in child benefit (although I guess the child maintenance might drop by a bigger amount).

MiMi66 · 6 February 2013 at 1:35PM

Hi Tixy
It drops to £20 per month?? - That's mad isn't it - when 2 children get £134 a month. Gosh, I have to rework my thinking I guess even more.
My daughter aged 18 is not sure what she is going to do - gap year - work - travel -but we did have the ocnversation about making a contribution should she start working - She's a brilliant girl and just accepts that without any upset. Very grounded.

Willing2Learn · 6 February 2013 at 1:42PM

Hello and welcome.

All good advice above. Well done and having that light bulb moment. It will relieve so much of the pressure you are feeling once you have a plan in place, so keep talking to National Debtline. And it'll definitely help with elevating your mood when you can see visible progress!

Don't forget to take a look at the Statement of Affairs calculator using the link in one of the posts above. It'll definitely help you with your attempts to refocus your monthly budget toward paying down those debts asap. MSE members can also help with this if you wanted to publish the SOA here.

MiMi66 wrote: »

SO my resolution is:
To live to a budget. Good

Pay off the debt - I think it is going to take me 7 years (:() - I aim to pay approx £350 a month (plus that Tesco bill next month - will be another very tight one, but I can't bear the idea of not doing it). Having a realistic and achievable target is really important

Keep my job and sanity and work on my mood. Sanity was part of my plan too. I stuck a post-it-note on the fridge to remind me!

Hug my kids and get them involved in saving money. Fantastic thing to have as part of your plan. Educational re saving. But the hugs is by far the best bit. You're kids are so fortunate to have you as their mum

Find ways to live and have fun that do not cost money.There are load of ideas on this all over the forum. Or start a whole new thread...

Good luck!

Tixy · 6 February 2013 at 1:45PM

Sorry!!!! - £20 a week that was a typo, didn't mean to panic you.

josiebabie · 6 February 2013 at 1:46PM

I think Tixy meant £20 a week

MrsCautious · 6 February 2013 at 1:47PM

MiMi66 wrote: »

Hi Tixy
It drops to £20 per month?? - That's mad isn't it - when 2 children get £134 a month. Gosh, I have to rework my thinking I guess even more.
My daughter aged 18 is not sure what she is going to do - gap year - work - travel -but we did have the ocnversation about making a contribution should she start working - She's a brilliant girl and just accepts that without any upset. Very grounded.

It's £20 a week, £14 for the 2nd child - has always tickled us parents of twins.

Good luck with your brilliant plans. I hope the lovely people here bring you lots of good tips so you power ahead.
Sorry I can see I'm not the first to pick up on this xx

PS not at all self indulgent, I hope you can be kind to yourself, I read a post somewhere here talking about the importance of still allowing yourself treats to keep yourself on track, hope you can have fun along the way.

kwmlondon · 6 February 2013 at 1:52PM

Good luck. To be honest I think that you've done the toughest part and that's facing up to the reality of your situation. Pretty soon you'll start to get a buzz out of beating the cards down (it's sooooo satisfying when the 0% deals work for YOU rather than feeling like it's all paying the credit card companies) and it is a very satisfying thrill when you find a deal or a way of saving money! It's addictive but but in a satisfying way.

End of the day, it's a slog but then so's paying off a car or a mortgage or whatever. You'll get there and when you reach the end of your tunnel you'll be so well set up from the changed you've made to your life you'll be in a great position. You'll also have passed on some incredibly valuable lessons to your kids. Each time you feel like they may be missing out on something you may have splashed out on before remind yourself that you are actually showing them how you can sort out problems and take responsibility and giving them some of the best skills a sorted grown up could ever have. Good on you!

oh my life...... Light Bulb moment.

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