Please help me get my head around this.

karencks · 13 August 2018 at 11:34PM

Hello everyone,

Last week I found out that we ( me and DH) are in debt to the tune of 56k ish.

Me and DH met t uni and started off our relationship as skint students. We left uni with the usual student debts and have pretty much been in debt ever since.

Fast forward 16 years and we have a good life with a nice house and 2 kids. My DH has done well career wise and earns a good salary. I also work full time and we earn about 5K per month (take home) between us. For the last 6 or 7 years my DH has dealt with our finances. I am nor sure why he picked up this job, but he has been the one looking at our statements, moving balances around to 0% etc.

Now and again he would get stressed about money and start bringing it up in conversation. He would make comments about us needing to reduce our spending and paying off some debt etc. He tends to be a 'stressy' person so I would listen but never thought that there was an major issue. We never really talked balances and I guess I never asked. I can remember a conversation a few years ago when our debt was in the 30K's. We had just bought a car, so whilst it seemed a lot of debt, I wasn't overly worried.

Recently he has been more stressed about money and since Christmas has been on a mission to get us to spend less and not use credit cards. This came to a head a few weeks ago when he broke down in tears and told me just how worried he was about our finances. This is when I found out that our current debt is around 56K, spread across credit cards and a loan.

I am afraid that I didn't react well to this and was angry. I don't really know how much I thought we owed, but I was shocked that we had ended up in such a hole. Part of me wishes he has handled it better, or at least spoke to me sooner, however I can see how has been trying to bring this up for a while, so perhaps I should have taken more of an interest.

my DH is a good man, good husband and a great dad. He is also a proud guy and he explained that he was worried that he had let me and the kids down, or that I would leave him. I do feel bad that he has been suffering.

On the plus side, we are not in any arrears and we are able to meet the payments without it impacting on our general housing and living costs. I am ashamed to admit that on top of our credit card spending, we have around £1500 per month that has been being spent on luxuries/unnecessary items. We really have lived above our means. I am now realising just how much! We should not be in any debt with our level of income. We have spent loads of money on holidays and weekends away - I estimate that we spent 7K on holidays last year which is shocking and makes me cringe.

I am not really sure what advice I am seeking on here. I just needed an outlet to get this all out. Is it wrong of me to feel a little angry with my husband? I have been looking for similar stories online. I have read a lot of stories regarding spouses who were totally unaware of debt that they were in, but my situation is a little different. I knew that we had a lot of debt, and I suppose that I could be accused of burying my head in the sand.

tealady · 14 August 2018 at 4:50AM

Hi
What I would suggest you sit down with your OH and work out TOGETHER what you are going to do. You both need to be in agreement as to what has to be cut. If you have £1500 per month you cn put towards the debt you will clear it in just over 3 years (not counting interest).
The 1st thing to do is complete a statement of affairs (SOA) and start from there.
Don't blame him, or yourself, however you now need to think seriously about what could happen if one or other of you lost your jobs. Could you cope?
I hate to sound so negative but you can do this (for inspiration read the opening post in 11 years a slave.
Good lukc, if you want advise then post your SOA, the lovely people on these boards can then act as a critical friend to show you the best way to shift the debt fastest.
Good luck

Craig1981 · 14 August 2018 at 6:14AM

morning

Budgeting. that is the main headliner here. make sure you get involved in the finances too. advice given above is spot on.
Doing what i do for a living, i see this all too often, and it is because things are being hidden from one another (gambling drinking etc)

assuming your loans and credit card debt are of normal APR - the 56k can be paid back within 4 years (based on an average 20% APR across the debt, at £1650pcm)

if you up to date and never missed any payments, the with the usual loan and CC payments and the £1500 you brand as luxuries, you will get out sooner than you think!

if an SOA is done ( http://www.stoozing.com/calculator/soa.php ) you can post it here, and people here will be able to assist and give strong, no BS advice, which is what you going to need

wont be easy to start, but give it a few months and it will become easier and easier once you see the debt reducing!

good luck!

karencks · 14 August 2018 at 7:51AM

Good morning. Thank you for taking the time to reply.

The £1500 that we have 'leftover' is actually after we have made all of our minimum debt payments too, so on paper we should be able to make a pretty big impact on the debt fairly quickly. however this will mean a TOTAL change of habits for us.

A big chunk of the debt is at 0%. Another big chunk is at low rates for the life of the balance and there is also a loan at around 8%. There is around 20K accruing interest at 20% ish.. Apparently our current monthly interest is just over £300 which whilst not great, could be a lot worse I guess based on our level of debt. I am going to look at how we can reduce this, although DH has said that we probably shouldn't apply for any promotional offers as he has already applied for a few recently - apparently applying for too many in a short time is seen as negative??

Craig1981 · 14 August 2018 at 8:08AM

karencks wrote: »

Good morning. Thank you for taking the time to reply.

The £1500 that we have 'leftover' is actually after we have made all of our minimum debt payments too, so on paper we should be able to make a pretty big impact on the debt fairly quickly. however this will mean a TOTAL change of habits for us.

A big chunk of the debt is at 0%. Another big chunk is at low rates for the life of the balance and there is also a loan at around 8%. There is around 20K accruing interest at 20% ish.. Apparently our current monthly interest is just over £300 which whilst not great, could be a lot worse I guess based on our level of debt. I am going to look at how we can reduce this, although DH has said that we probably shouldn't apply for any promotional offers as he has already applied for a few recently - apparently applying for too many in a short time is seen as negative??

too many applications in a short time does show desperation for credit. your utilisation seems to be on the high side (level of balance to the limit), so no, not a good idea to apply for anything else

if you going to monitor very closely, Id suggest making minimum payments on the 0% cards, and get the high interest ones cleared off first. the focus on loan overpayments to clear off that interest debt, then back to your 0% cards

even if you make an extra £1000 to £1200 extra a month on top of instalments already being made, that is a start... you really need to make sure going forward, you are living within your means - this level of debt suggests otherwise

karencks · 14 August 2018 at 9:00AM

Craig1981 wrote: »

too many applications in a short time does show desperation for credit. your utilisation seems to be on the high side (level of balance to the limit), so no, not a good idea to apply for anything else

if you going to monitor very closely, Id suggest making minimum payments on the 0% cards, and get the high interest ones cleared off first. the focus on loan overpayments to clear off that interest debt, then back to your 0% cards

even if you make an extra £1000 to £1200 extra a month on top of instalments already being made, that is a start... you really need to make sure going forward, you are living within your means - this level of debt suggests otherwise

We have been totally living outside of our means for years. We would just shove things on a credit card with the weak intention of dealing with it later - unfortunately later never came!

Our minimum debt payments are around £1300 per month. Based on the additional money that we can throw at these debts, it does look as though we can sort it out within 3 years. This makes me feel better already!

A couple of my friends/relatives have taken advice from Stepschange. Is this something that we would benefit from?

Willing2Learn · 14 August 2018 at 9:32AM

StepChange are good, but in this case, I don't think you need their help as you two are bright enough to manage this on your own.

What the pair of you need to do is learn how to budget, as it appears that this is where your finances are going wrong. As others have said, post up your SOA then we can see your monthly income against outgoings.

Have a look at the MSE Budget Planner as you may find it useful. There is a spreadsheet embedded within the article and can be a great tool to add to your toolbox!!

-taff · 14 August 2018 at 10:29AM

You're still servicing your debts so Stepchange wouldn't really be any good for you unless you decided to default on them.

You need to work out a proper budget, cut down any unnecessary outgoings, work out what you can and can't afford, look at ways of saving money.
If you want some help from the people on here, post up your SOA. People will definitely start telling you how you can save, and what to do next, although whether you take that advice or not is up to you. It can feel a little judgemental to do that, but other people see things you may not, and see areas where you may not realise you can save.

As for being angry with your husband, he has tried to speak to you before, but you didn't listen, nor did you stop spending the money, nor did you get involved and look at the finances together. So you could cut him some slack and realise that it takes two to tango so to speak.

Sit down together, go through your bank staements to see where you have been spending and what you can cut out or claw back, and cheaper ways to do things. You both earn enough to service the debt, and you both seem on board at the moment.

Don't forget to start an emergency fund, because it's very easy to slip back into the habit of spending on a credit card, because I gurantee you, something wil happen, the washing machine will break, the car will need new tyres, something will crop up..Do your best to resist

and good luck.

kazwookie · 14 August 2018 at 10:37AM

Check you are on the cheapest for gas / elec / car ins / mobiles, etc

pumpkin89 · 14 August 2018 at 10:45AM

karencks wrote: »

The £1500 that we have 'leftover' is actually after we have made all of our minimum debt payments too, so on paper we should be able to make a pretty big impact on the debt fairly quickly. however this will mean a TOTAL change of habits for us.

This is the key. You really need to understand exactly where the money is going. For example, you are shocked that 7K was spent on holidays, but that's not actually unreasonable given your income. On the face of it, an awful lot seems to be going on general / day-to-day spending, and to reduce this you will need a consistent approach (no spontaneous treats!)

You can do this

karencks · 14 August 2018 at 11:32AM

Thanks everyone. I am going to work on the SOA over the weekend with DH.

I have just logged on to our internet banking and looked at last months statement. It's horrific. I have made a list of all of the things that we spent money on that were necessary - this includes a weekend away, currency for our foreign holiday, clothes, a few meals out. I am ashamed that the grand total of this unnecessary spending is £1470.

It's scary to see how much the small spends have added up - a couple of takeaway costa coffees each week, a takeaway, £10 spent in the local shop of magzines etc - it is adding up to hundreds of pounds each month.

When we do our SOA I think that we need to think realistically about how we want to live. We need to cut back DRASTICALLY, but equally I want us to be able to have come planned, affordable fun. I also want us to build up some savings. This Christmas will need to be a credit free one, however I am conscious that there are only 4 pay days to go so we need to start planning.

I agree that it's unfair of me to apportion all of the blame to DH, I am kind of past that now. I just want to sort it out. We haven't spoken much about it over the last couple of days. He is emotional and quiet at the moment, but I know it will be fine if we put a plan together

Please help me get my head around this.

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