I hope I can do this

ftbwannabe · 1 August 2018 at 9:06AM

Hi

Why am I a Debt Free Wannabe? Because someone in my family has just offered to give my partner and I money towards a deposit for our first house, but I owe 17k in unsecured debt & I think that will make it hard to either get a mortgage at all, or get a decent deal. Now I feel like I'm ruining both my partner's chances & my own.

I never thought I'd be able to get on the housing ladder. I've been in debt since I was 18 (I'm just past 40 now) & getting out of it has always seemed either impossible or unimportant.
But my SOA reckons I have hundreds of money spare each month that I could throw onto my cards & clear them in about 2 years. If I make a big effort over the next 12 months, apparently (I find it hard to believe) I could halve my debt, & then we'd be a better prospect for mortgage lenders.

Typing this makes me want to cry, & has my stomach in knots. My inner critics are saying 'you stupid girl, you could have got out of this years ago' and 'don't bother trying, the numbers are wrong, you won't be able to keep this up and then you'll fail and feel worse' and 'he'll resent you and your money problems'. Also, 'life will be miserable, you'll have no fun, no friends and everyone will think you're boring & badly dressed'. 'LIfe's too short to scrimp' and 'you'll never get on the housing ladder anyway, or the market will crash & leave you in even more debt'

But the more positive practical side of me is hoping that accountability will help me focus on this one day at a time, and then in 365 of those I'll look up & see £7k wiped off my debts. Even if we don't get on the housing ladder, at least I'd be debt free! My salary seems much more generous if I imagine not paying my credit cards back each month.

Using apps to honestly track my eating, weight & spending has been really effective for me this year - I use myfitnesspal & Monzo. I love Monzo! And I will be relying on it to help my spending stay visible & something I'm in control of.

I hope starting a diary here will help keep me accountable, and help me when it's the small day to day actions that are making a difference, not just the 'i've just started this and yes I'm going to change my life' big drama moments. (I really like the 'what small DFW things will you do this week' thread, & want to do something similar here.

My SOA is below. The credit card payments listed are the minimum, I reguarly pay more (never the minimum) & have today changed my direct debits to pay £100 a month to each. I always have 0% deals so tell myself it's fine to have the debt- but year by year, the amount never goes down:
SOA DFW
Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household.........
Number of cars owned....................

Monthly Income Details
Monthly income after tax................ 1964.89
Partners monthly income after tax....... n/a,
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1964.89

Monthly Expense Details

Rent.................................... 625
Council tax............................. 134
Water rates............................. 39.8
(all other household bills paid by partner)
Mobile phone............................ 17.66
Internet Services....................... 4.99
Groceries etc. ......................... 265
Clothing................................ 0

Medical (prescriptions, dentist etc).... 17
Presents (birthday, christmas etc)...... 0
Entertainment........................... 40
Holiday................................. 0
Emergency fund.......................... 0
Socialising............................. 100
internet costs.................. 5.89
Charity................................. 12
Toiletries.............................. 10
Total monthly expenses.................. 1291.34

Unsecured Debts
Description....................Debt......Monthly...APR
C Card 2........................1079.23...10.79.....0
C Card 1...........................8839.83...88........0
C Card 4.......................1605.63...37........0
Student Loan 1...................800.......25........3.1
Student Loan 2...................600.......83.28.....3.1
C Card 5...................4280......90........0
Total unsecured debts..........17204.69..334.07....-

Monthly Budget Summary
Total monthly income.................... 1,964.89
Expenses (including HP & secured debts). 1,291.34
Available for debt repayments........... 673.55
Monthly UNsecured debt repayments....... 334.07
Amount left after debt repayments....... 339.48

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -17,204.69
Net Assets.............................. -17,204.69

Created using the SOA calculator at stoozing com.
Reproduced on Moneysavingexpert with permission, using other browser.

ftbwannabe · 1 August 2018 at 9:14AM

Things I did yesterday to take control of my debt & reduce my spending:
Increased dd payments to £100 each (so will be £400 a month instead of 250. SOA reckons I can sock £600+ a month at my cards, but I'm nervous of committing to that & then having to spend on a card because my current account is dry)
Let a friend buy me a drink
Had a frank conversation w friend about my level of debt, asked about hers, asked how much her house cost to buy
Asked a friend what it was like to live in her area (a cheaper diatrict than the one we!!!8217;re looking at, but with travel costs)
B & L from stores
Bought a pack of biscuits to last a few days vs 1 expensive choc bar
Harvested veg from allotment
Checked a cc dd & noticed the wrong bank deets there - got that correct straight away
Made SOA here &
made what I hope is a realistic budget based on last 3 month's spending according to monzo's categories, as frugal as possible (feeling nervous about sticking to it already)
Walked home instead of train
Arranged with a friend to take picnic when we meet on Fri instead of buying a meal
Remembered I owe a friend money for a ticket in September & put half of that away this month
Read the DFW threads diaries & found tips I can use, like charge stuff at work
Was honest with a friend about my money situation so we went to local pub for 2 beers instead of out for dinner

efes_shareholder · 1 August 2018 at 9:30AM

Welcome

My motivation to become debt free is very similar to yours , as in the next couple of years i will have a lump sum coming to me which will get me back on the property ladder

Looking at what you pay in rent , mortgage payments will prob be a much better option for you but your lending capacity will be better the less personal debt you have and it would be much more rewarding to see the amount invested in to your new home then viewing it as money already spent

I can't see many places that you can cut down on except maybe the groceries and the socialising which is maybe just considering your choices before you make them - I used to say yes to everything as in my mind the curry we were having was half price as someone was using a tastecard so it wasnt much etc , but all of these things add up and when you are trying to make chances you can't do everything

Your excess cash looks healthy - Is this spare each month ?

Getting in to better habits now and stopping the borrowing culture will be so beneficial when you reach your aspirations of a property as this tends to be time when we borrow to kit it out

pidge04 · 1 August 2018 at 10:29AM

This totally resonates with me! GOOD LUCK! You are able to do this! Things will look completely different in a short time.

pidge04 · 1 August 2018 at 10:53AM

I feel really positive for you! I think your situation is very hopeful!

I had exactly the same thoughts about the housing ladder. I too have spent the majority of my adult life in debt. I am 43.

You have a 12 month goal. I find it highly motivating to have time frames. You then know that this is not forever. There is an end.

It is really difficult not to dwell on the past and how the debt was amassed. But it is done now. Finished. Focus on the future and what it will be like to be debt free.

The most important thing for us is that there is a fundamental change in our spending habitsin the present and in the future, that our cards are cut up and we do not add to our debt at all. For me, it is really important that I break the habit of consolidating my credit card debts with loans or else I will be forever in this cycle of debt.

My husband does not know the extent of my debt but he knows I do have debts and that has been helpful in lowering his expectations about what I can do and spend. Same with friends. These last few months have actually been some of my happiest with a slower, calm and less hectic pace of life with little consumption. I hope you find that too.

Do you have anything you can sell? That can be motivating - seeing little bits of money coming in here and there. This can be particularly motivating at those times in the month when you feel like you are doing nothing to reduce your debt.

You have shown that you can effect change with your eating and your spending so there is every reason to believe you can conquer this!

Is there any chance you could cancel your charity donation and put that money towards your debt? When you are debt free in the future, you could look to re-start the donation.

Have you looked at snowballing? Are you going to focus on one debt at a time? Focus on clearing one?

I have my debts written down in a notebook and amend the figures every month so that I can see them going down. That has helped too.

This forum has helped me a lot. Checking my bank accounts every morning helps too.

Best of luck to you! You can totally do this!

ftbwannabe · 1 August 2018 at 2:52PM

Thank you so much for your replies! Your questions & support have made me feel optimistic & not alone. There's so much shame associated with debt, that when we do talk about it it's so vulnerable-making! These forums make a big difference, knowing it's not just me - not just even a tiny minority - but also knowing that things really do change for people.
Onwards :-)

ftbwannabe · 1 August 2018 at 2:56PM

pidge04 wrote: »

It is really difficult not to dwell on the past and how the debt was amassed. But it is done now. Finished. Focus on the future and what it will be like to be debt free.
!

This x 1000: in my original post I had a couple of paragraphs about my debt history, ranging from when it 'wasn't my fault' and when it was, and in the end I left those paragraphs out. Those reasons don't matter. I can't (& in some cases wouldn't) change the decisions past-me made. Only the ones I will make in the future:-)

ftbwannabe · 1 August 2018 at 3:06PM

efes_shareholder wrote: »

Welcome

in my mind the curry we were having was half price as someone was using a tastecard so it wasnt much etc , but all of these things add up

Oh yes, the tastecard trap! My brain likes to tell me things like 'I need to eat 3 courses even though I'm not hungry & this was supposed to be cheap, because the more I eat the more I save money' :rotfl:

pidge04 · 1 August 2018 at 3:16PM

Spot on!

Onwards and upwards!

It is going to feel so good to be free.

efes_shareholder · 1 August 2018 at 3:23PM

We can be the naughty forties club ................A past of bad budgeting and costly experiences ( but probably also some great memories ) but a future of available wage and assett building

Never stop learning Ladies , Every day is a school day

ftbwannabe · 1 August 2018 at 3:58PM

efes_shareholder wrote: »

We can be the naughty forties club ................A past of bad budgeting and costly experiences ( but probably also some great memories ) but a future of available wage and assett building

Never stop learning Ladies , Every day is a school day

Well said!

I hope I can do this

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