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  • FIRST POST
    • deux x m
    • By deux x m 7th Feb 18, 9:30 PM
    • 13Posts
    • 33Thanks
    deux x m
    My life in debt
    • #1
    • 7th Feb 18, 9:30 PM
    My life in debt 7th Feb 18 at 9:30 PM
    Hereís the thing Ė Iím 44 and Iíve been in debt my whole adult life.
    After my parents split up when I was 10 my mum had very little money. To this day I still hate tinned meatballs and cheap sausages. Anyway I went to uni and suddenly had financial independence, well a student loan and overdraft but it was money available to me which I had never had before, and I swapped food for beer and having a good time.
    That was it. I left with a huge overdraft and a large debt to the Student Loans Company. In my first job I paid off the loan but the overdraft stayed. A loan paid that off but it was soon spent again and so it started. That was 23 years ago.
    The stupid thing is, it never really mattered. I always was able to get money and the debts were always serviceable. They just got bigger and bigger. Holidays, a wedding, cars, kids, a mortgage Ė all were werenít a problem. Then a couple of years ago it semi-dawned on me that I actually owed other people this money and that it was real. At some point I had to pay it back.
    My wife also had some credit card debts and the joint account was nearly £4000 overdrawn. I read the posts on this website and with YNAB and with getting cheaper deals on the mortgage and utilities, and cutting back on pretty much everything the joint account is gradually sorting itself out, as are her debts, but really weíve only been playing at it and my own debt levels have barely changed. This will change and we are both committed to sorting it out.
    What really brought things into stark reality was that two of my credit cards finished their 0% deals. Suddenly my monthly payments have massively increased. I rang MBNA to see if they could help with the interest rates but they said they couldnít, suggesting that I contact Step Change and go on a DMP.
    I created a spreadsheet with everything on it and currently I am paying out £93 a month more than I have available. I also went on the Step Change website. They too suggested that a DMP may be the best way forward. However this is something that could impact on my job, at the minimum I would have to declare it, which Iím not keen on doing.
    Itís so frustrating. Due to sticking my head in the sand for so long I am in this ridiculous position. I have a decent job, a nice house and great family life. What I donít have is any money!
    My total debt is just over £49000 Ė terrifying. Iíll break it down once Iíve checked my spreadsheet/statements Ė but I do have a plan.
    Sorry for rambling on, but I thought writing this down would help me by seeing my situation and thoughts in black and white. It is a strangely cathartic experience.
Page 1
    • deux x m
    • By deux x m 7th Feb 18, 10:27 PM
    • 13 Posts
    • 33 Thanks
    deux x m
    • #2
    • 7th Feb 18, 10:27 PM
    • #2
    • 7th Feb 18, 10:27 PM
    Here it is !!!8211; as of today I am in debt to the tune of £49311.52
    Natwest loan - £4959.17 £401.76 per month !!!8211; ends Feb 2019
    Barclaycard c/c - £4942.72 £106.71 min pymt last statement
    Barclaycard c/c - £10619.94 £240.20 min pymt last statement
    MBNA c/c - £17026.46 £291.20 min pymt last statement
    Fluid c/c - £7514.10 £212.07 min pymt last statement
    Natwest o/d - £4249.13 £67.25 interest last month

    Not great. The interest rates vary and I!!!8217;ll set that down another time as some of the cards have different amounts at different rates. There has been no spending on any of the credit cards since before Christmas.

    The options I have considered and discarded so far:
    Remortgage and consolidate. I don!!!8217;t really want to do this unless I have to. My mortgage is on a 1.19% fixed rate and has 18 years to run. It is less than half the value of the house but were I to borrow more money this would last the length of the mortgage and I want it gone way before that if possible. It would also impact on my wife !!!8211; this is my fault and I will sort it out.
    IVA. Again this would likely involve the mortgage issues above.
    DMP. This is appealing, but I would at least have to declare it at work and it could possibly have more severe consequences. If I don!!!8217;t have a job then I am in a worse position.
    Borrow money from relatives. Not going to happen. While it may be possible and would probably be interest free, again this is my problem and I don!!!8217;t want to put them in that position.

    My plan. Today I sold my motorbike. I love that bike. I should be getting £4000 in cash at the weekend. Of this I am going to use £1000 to buy a cheaper 125cc bike. The motorbike is my only form of transport and I need it to get to and from the train station etc. A smaller bike is more economical to run and service. Its not what I want, but getting what I want is why I am in this position.
    The £3000 will go straight into my current account and reduce the interest. There is an almost total ban on overtime at work, but I should still be able to do 5-10 hours a month. This and the reduced interest should mean that my monthly payments don!!!8217;t exceed the money I have to service them.
    After the June payment to my loan the balance will be £3095. I!!!8217;m going to pay this off. I appreciate that I would in effect be swapping a loan debt for an overdraft one, and that the interest rate would be worse, but in my head the loan has been a millstone for 5 years. I think that paying even one debt off in full will give me a mental boost. It would also free up £401 a month.
    The £401 no longer used for the loan would then all go towards the highest rate credit card !!!8211; Fluid at 25.9%. From there it will be snowballing each debt based on the highest interest rates.
    Its not the most complicate plan but it seems a huge task at the moment. I!!!8217;m going to take one step at a time and keep at it. If I don!!!8217;t do it now it will never end and I won!!!8217;t be able to live the life I want and the life I want to give my kids.
    • fatrab
    • By fatrab 8th Feb 18, 7:34 AM
    • 852 Posts
    • 2,236 Thanks
    fatrab
    • #3
    • 8th Feb 18, 7:34 AM
    • #3
    • 8th Feb 18, 7:34 AM
    Hi and welcome to the forum. You are in the right place for good advice.

    Start by completing an SOA, it'll give you and us a very clear picture of where you stand and more importantly where you might be able to make significant improvements.

    http://www.stoozing.com/calculator/soa.php

    Format it for MSE and then copy & paste it here. Be as brutally honest as possible.

    £49000 isn't anywhere near the highest figures I've seen on here and my own debts were higher than that a few years ago so be reassured it can be done.

    Whichever path becomes the right one for you to take I wish you the very best.
    You can have results or excuses, but not both - Wannabe debt free by Dec 2022
    June's targets - Be 15st by end of month, 19/30 AFDs
    39 x £2 coins (#32)
    • fatrab
    • By fatrab 8th Feb 18, 7:39 AM
    • 852 Posts
    • 2,236 Thanks
    fatrab
    • #4
    • 8th Feb 18, 7:39 AM
    • #4
    • 8th Feb 18, 7:39 AM
    Also, I can absolutely relate to you're feelings towards debt. I'm 43 and been in debt since I was 18. I was Mr Splash-cash when I was younger and I'm paying for it now. Cars, nights out and holidays were my downfall.

    My wife and I just had a baby and I don't want him growing up surrounded by debts and the stress it causes, my goal is to be debt free by the time he goes to school.
    Last edited by fatrab; 08-02-2018 at 7:48 AM.
    You can have results or excuses, but not both - Wannabe debt free by Dec 2022
    June's targets - Be 15st by end of month, 19/30 AFDs
    39 x £2 coins (#32)
    • UK_Ozzy
    • By UK_Ozzy 8th Feb 18, 8:08 AM
    • 29 Posts
    • 35 Thanks
    UK_Ozzy
    • #5
    • 8th Feb 18, 8:08 AM
    • #5
    • 8th Feb 18, 8:08 AM
    Morning deux x welcome to the boards and good luck on your debt free journey.
    My first port of call would be telephone all credit cards explain your struggling to make the payments and see if they can suspend/ put account on hold for 3 months. They might try to help so worth making the call and if they did divert all funds into loan I'd make that number 1 priority to pay off.
    • enjoyyourshoes
    • By enjoyyourshoes 8th Feb 18, 8:36 AM
    • 1,061 Posts
    • 1,302 Thanks
    enjoyyourshoes
    • #6
    • 8th Feb 18, 8:36 AM
    • #6
    • 8th Feb 18, 8:36 AM
    Review all of your costs (both of you) and agree:-

    Only spend on NEEDS not WANTS
    Reduce all 'service/utility' cost
    start cooking from scratch
    cancel any subscription tv, phones, extended warranties etc

    start selling stuff yo have accumulated
    Prioritise your debt repayments by APR

    Throw as much against the debts as you humanly can

    can you get another job on top of the existing one?

    good luck
    Debt is a symptom, solve the problem.
    • beanielou
    • By beanielou 8th Feb 18, 9:46 AM
    • 55,063 Posts
    • 219,989 Thanks
    beanielou
    • #7
    • 8th Feb 18, 9:46 AM
    • #7
    • 8th Feb 18, 9:46 AM
    Happy shiny new diary
    Wishing you well on your journey.
    Lou~ Debt free Wanabe No 55 DF 03/03/14.
    **Credit card debt free 30/06/10~** **Weight loss 2 stone 11 lbs **

    "A large income is the best recipe for happiness I ever heard of" Jane Austen in Mansfield Park.
    ***Fall down seven times,stand up eight*** ~~Japanese proverb.
    It starts with you, it starts from now. *** It is ok to be me.***
    ***Keep plodding***
    Out of debt, out of danger.
    • redofromstart
    • By redofromstart 8th Feb 18, 1:22 PM
    • 1,765 Posts
    • 10,783 Thanks
    redofromstart
    • #8
    • 8th Feb 18, 1:22 PM
    • #8
    • 8th Feb 18, 1:22 PM
    Happy new diary, and good luck with your journey.
    • deux x m
    • By deux x m 8th Feb 18, 10:04 PM
    • 13 Posts
    • 33 Thanks
    deux x m
    • #9
    • 8th Feb 18, 10:04 PM
    • #9
    • 8th Feb 18, 10:04 PM
    Thanks all. The comments are really appreciated. I didn't realise I had written quite so much last night! Reading back tonight really helped me get my thoughts straight, instead of a constant churn of emotions and what ifs.

    I did sit down and do a SOA with my wife at the weekend. Pretty much everything is as cheap as we can get it, but there is quite a lot of room for improvement in the food budget. I'm not going to post it here as that is for us - this diary is for me and my personal debts. I hope that makes sense.
    I have read so many SOAs on here and the advice is brilliant (and copied to ours). I know people can give advice on our circumstances but at this stage this is how I want it.

    I've updated my spreadtsheet and am becoming a bit obsessed with it. If all goes to plan and I appreciate that is a big if, but I am determined, I should be free in April 2022.
    • deux x m
    • By deux x m 17th Feb 18, 10:19 PM
    • 13 Posts
    • 33 Thanks
    deux x m
    beloved motorbike is now someone else's. On the plus side I've paid £3000 into my bank account. I've been looking at different ways to use it.

    My options:
    - Pay off £3000 of my Fluid c/c. This is the highest interest rate (25.9%)
    - Leave it where it is, reducing my overdraft (19.9%)
    - Pay a lump sum against my loan (9.9%). This would either reduce the payment to £163.27 per month or keep the payment the same but bring the end date to July
    - Stick to my original plan, leave it where it is until July when I'll use it to pay off the balance of my loan

    I think I'm going to stick with my plan. I know that from an overall view point I should hit the highest interest first, but I want to rid myself of one debt. The loan is one of the lowest amounts and the one I pay the most to each month.

    As a bonus I got one of the interest rates wrong on my spreadsheet and paid £98 off against my MBNA card as opposed to interest!
    • NeverendingDMP
    • By NeverendingDMP 17th Feb 18, 10:40 PM
    • 73 Posts
    • 408 Thanks
    NeverendingDMP
    Hello and welcome. Im fairly new to mse world myself but am also someone who learnt debt was okay as a student and then never un learnt it until it was too late. I understand why you want to clear your overdraft first. Our overdrafts were the smallest of our debts but with some careful budgeting and both of us swapping bank accounts for the cash back we paid ours off. I'm not sure on current offers but we got £250 each last year when we swapped. My partner was offered interest free overdraft for 6 months as well. (He wasn't listed on the DMP at the time so could still get lots of credit unfortunately. ) it might be an option if you want to avoid the dmp route if only to give you a temp reduction in overdraft fees. I'm also now in a thread were everyone sets there own challenge for the monthly food shop. Currently in February grocery challenge 2018. Our budget is now extremely tight so I personally have found this a motivator to try and figure out how to feed us all for 390 a month x
    35,213 Jan 2018, 32308 remaining.
    Mortgage 77230 Jan 2018
    76345 remaining.
    • savingholmes
    • By savingholmes 17th Feb 18, 11:02 PM
    • 8,955 Posts
    • 17,015 Thanks
    savingholmes
    Hi have you looked at the MSE credit club - to get an up to date report on your credit score. It would show you if you were eligible for any other offers. May be worth going down that route first before declaring to the banks you were struggling to pay.... Our debts are higher than yours and were £10K higher a year ago. Depending on your income and your commitment you can pay it off... Keep going. You have made a major first step in selling your motorbike - I can only imagine what a wrench that was - my OH is into motorbikes too...

    I understand the attraction of having fewer debts but personally I would pay off the highest interest one asap.
    Today is a new day £93/310 £10 a day Mar Challenge DFD August 2021
    • Mumoffourkids
    • By Mumoffourkids 18th Feb 18, 5:20 AM
    • 628 Posts
    • 3,141 Thanks
    Mumoffourkids
    Hello and welcome. Im fairly new to mse world myself but am also someone who learnt debt was okay as a student and then never un learnt it until it was too late. I understand why you want to clear your overdraft first. Our overdrafts were the smallest of our debts but with some careful budgeting and both of us swapping bank accounts for the cash back we paid ours off. I'm not sure on current offers but we got £250 each last year when we swapped. My partner was offered interest free overdraft for 6 months as well. (He wasn't listed on the DMP at the time so could still get lots of credit unfortunately. ) it might be an option if you want to avoid the dmp route if only to give you a temp reduction in overdraft fees. I'm also now in a thread were everyone sets there own challenge for the monthly food shop. Currently in February grocery challenge 2018. Our budget is now extremely tight so I personally have found this a motivator to try and figure out how to feed us all for 390 a month x
    Originally posted by NeverendingDMP
    Sorry to highjack your thread deux, but never ending when you say you have £390 to feed all of you for the month, how many of you are there? Just wondering as it is me and six kids and I have just over £400 a month to feed us all including nappies for the youngest two and packed lunches for four of them. I budget £100 per week and I regularly have money left over apart from this last week as it was half term and the kids have been home and eating!

    To return to your thread deux, welcome to the boards and good luck on your journey. I just read that you have £3000 from selling your motorbike. Have you put your figures into the snowball calculator on stoozing.com. You put all your debts in and the interest rates and minimum payments and it tells you what order to clear them in in order to pay the least interest. It might be worth playing with that in order to see where is best to put your £3000.
    Total debt Dec 2017 £23090.83
    Ma7 2018 £3691.78 84.01% paid
    Emergency fund £150/£600
    Total Savings £1328.05
    • NeverendingDMP
    • By NeverendingDMP 18th Feb 18, 7:39 AM
    • 73 Posts
    • 408 Thanks
    NeverendingDMP
    Hi mumoffour kids. It's for five of us plus a dog. I'm sure it can be done and nice to know you are managing with money to spare. Downfall is hubby and alcohol !!!55358;!!!56596;. I've changed the way we do our finances though now which is teaching him some tough lessons.
    in money...haha

    Deux x m. The snowball apps sound a good idea.we went to a DMP with stepchange as we had a life change and couldn't afford the minimums. It's very good for us but does frustrate me that we still owe money to everyone and we can't pick them off one by one. If you try different things in a snowball calculator you will have clear options of what order you need to pay to make it the cheapest and quickest way.
    35,213 Jan 2018, 32308 remaining.
    Mortgage 77230 Jan 2018
    76345 remaining.
    • Mumoffourkids
    • By Mumoffourkids 18th Feb 18, 8:03 AM
    • 628 Posts
    • 3,141 Thanks
    Mumoffourkids
    Neverending, I am only managing because I went for about 8 weeks with no tax credits so I had to survive on my weekly child benefit and maintenance which comes to £170 per week. That had to cover food, petrol and any other kids expenses. I got used to only having a max of £100 per week to spend on food, my wages covered my rent just about and my other maintenance covered my monthly bills. I think when you are faced with a strict budget, when you eventually have more money, it is hard to spend more, or at least I find it is. I rarely drink so that helps and my food bill was about £50 per week when I was with my ex! I definitely have more money now I am on my own but it is hard when you have no one to talk to about money and important decisions!
    Total debt Dec 2017 £23090.83
    Ma7 2018 £3691.78 84.01% paid
    Emergency fund £150/£600
    Total Savings £1328.05
    • deux x m
    • By deux x m 18th Feb 18, 3:26 PM
    • 13 Posts
    • 33 Thanks
    deux x m
    Hi Mumoffourkids. Our food budget is £400 a month. That's for two adults plus 8 and 10 year old boys who are permanently hungry. That also includes all the household cleaning stuff and toiletries. Alsi is our friend!
    I have played around with a couple of different snowball calculators. There is no doubt that paying the highest interest rate first is the best thing to do from an overall view. However I think that the boost from paying my loan off will give me the impetus to keep going. I worry that I'll feel the frustration of NeverendingDMP in that I'll owe money to everyone instead of picking them off one by one. Either way the Fluid c/c (highest interest) will be paid off in October next year - sounds ages when I say it but looks so close on my spreadsheet...
    • Mumoffourkids
    • By Mumoffourkids 18th Feb 18, 3:52 PM
    • 628 Posts
    • 3,141 Thanks
    Mumoffourkids
    Hi Deux, I think you might be able to reduce your grocery spending slightly. Trust me I have a 15 year old who plays rugby and eats loads, a 9 year old boy who seems to have hollow legs and two small ones still in nappies. My budget also includes all toiletries, cleaning stuff and packed lunches for the four of them. I used to shop at Aldi but I found I spent more than I do online with Asda. For example this week my main shop is £50. That includes everything for the week until next Sunday. We are having takeaway one night as it's one of the kids birthdays. During the week I will spend about £15 - £20 on bread, milk and fruit from the local shops. So I reckon my total spend this week should be about £75.

    I know what you mean about wanting to clear debts so you have less to pay. I was lucky in that I had a few small ones of less than £1000 which I was able to clear quite quickly. After next month, I should be down to just two debts from a total of 9 at the start. I was also lucky in that one of my largest debts decided not to chase any more for the money and one seems to have disappeared.
    Total debt Dec 2017 £23090.83
    Ma7 2018 £3691.78 84.01% paid
    Emergency fund £150/£600
    Total Savings £1328.05
    • deux x m
    • By deux x m 20th Feb 18, 10:55 PM
    • 13 Posts
    • 33 Thanks
    deux x m
    Pay day!

    Payments to both Barclaycards made - rounded up to the nearest £5 as it made me feel better!
    The other 2 credit cards are on direct debit at the end of the month for the minimum payments. They'll stay like that until my loan has gone, then I'll pay what was the loan money into the higher interest card.
    Loan payment goes out tomorrow, then 4 more payments until I can pay it off.

    And only 28 days until I get paid again!
    • deux x m
    • By deux x m 20th Mar 18, 9:30 PM
    • 13 Posts
    • 33 Thanks
    deux x m
    Pay day again, and for the year's shortest month it dragged!

    It wasn't the greatest month for saving money and being frugal. The wife's birthday coincided with mother's day, an extra £25 in petrol was needed to visit my mum for mother's day, insurance and road tax for my new bike needed paying and both of my boys came home with letters for a school trip and cub camp. Frustrating - but part of life and nothing I begrudge.

    On the plus side I've made all my payments today, and the total debt is now (just) under £45000. Not quite as much of a reduction as I had hoped initially but better than when I started. 3 more paydays and I should be able to pay off my loan - this is my first goal and what I keep focusing on to keep me on track.

    More good news on our joint account (which I haven't really mentioned here). The rise in this year's council tax was offset by an almost identical reduction in the water bill, renewing the electric and gas bill saved another £4 per month and we have under spent on food by just over £100 this month. Add in the last 2 months gap in council tax payments and that overdraft is getting paid off nicely.
    • deux x m
    • By deux x m 19th May 18, 9:47 AM
    • 13 Posts
    • 33 Thanks
    deux x m
    Another payday down - 43 to go!

    Things are going pretty much on track, although I've really got to be stricter on making my lunches - buying lunch near work is just needlessly spending money that would be better put paying off some of my overdraft.

    Looking over my spreadsheet and YNAB since I started this diary the thing that truly puts things into perspective is not the total amount I owe, its the interest I'm paying on my debts. Since February I have paid £1446.67 in interest!!!

    £1446.67? That's over 3% of my debt - in only 3 months. That hurts. I knew I was getting charged and paying the interest, but it was never something I really thought about. As long as I was within my limits and paying the bill each month I was managing. In hindsight this is a ridiculous way to be, but it was how I was for years.

    I can't do much about the interest rates at the moment but hopefully as the debts come down I may be in a position to balance transfer to a lower rate. If not its still on 43 paydays - and I can do that.
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