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Debt - really can't believe the mess we are in

(82 Posts)
Nerfmother Sat 04-May-13 11:29:19

It all seemed so lovely when we got together but the combinations of two failed marriages, debt from first marriage, me leaving work for ages due to sick child, and lack of common sense means that on an income of about 75k we are unable to even do spontaneous trips to the cinema. Not looking for sympathy , but is anyone else. In a similar boat?

Nerfmother Sat 11-May-13 22:10:28

That does sound lovely. Well done, something to aim for

lateSeptember1964 Sat 11-May-13 16:15:19

Wow debt free apart from the house looks funny written down.. Also spreadsheets are the key. Nothing fancy just a straight forward excel. Every payday sit down and write your budget and use the envelope system.

lateSeptember1964 Sat 11-May-13 16:11:34

A Dave Ramsey disciple here. You need quick wins to have the psychological strength to beat the debt. List all your debts smallest to largest and start paying the smallest. As Dave says just do it his way. Your priority is food, light, shelter. Listen to his podcasts there really motivational. I got hooked about 16 months ago and were debt free apart from the house, and I will start overpaying this by September.

Nerfmother Sat 11-May-13 09:03:55

Murtette, I know that makes financial sense but the biggest one is 12k on a card and the smallest 1300, so I would rather get rid of the smaller ones so that the list of creditors reduces.
Xenia, nothing's in arrears, all of it is unsecured credit, so no risk of homelessness, just no fun as we can't enjoy our income.
Doubt you will find anyone with 1.2 million to pay!

Xenia Sat 11-May-13 07:55:19

I think most debt advisers would say your list of priority should have at the top which organisation is likely to make you homeless first rather than trying to pick off paying off smaller ones first so the number of organisations owed reduces although if you are not at a point of being made homeless or bankrupt then psychologically tackling smaller ones may help.

Given the sum I had to pay my ex on our divorce (I earn more) the debt was £1.3m. I wonder if anyone has been at my level.... So in a bigger way like some on this thread I have been paying that off.

Murtette Fri 10-May-13 23:27:04

Nerf - when you say you chose the "smallest one", what do you mean? The one with the smallest amount to be paid off? Whilst I can understand the psychological benefit of knowing that one is done, it would be better if you could pay off the one with the highest interest rate first as that is the one costing you the most.

Nerfmother Fri 10-May-13 17:18:20

Weird that's kind of my plan before reading it. Maybe the paychological tactics will work better for me.

Yep, and you're only supposed to save a mini emergency fund (£1000 -or dollars, probably!) while doing the debt snowball, then go back to it and bump it up to a proper one once you're debt free.

Amilliondifferentpeople Fri 10-May-13 10:12:30

Yep the god but killed it a bit for me, and I also thought it was unusual to consider building savings whist you have debt.... But as you say, it taps into the psychology of debt.

Nerfmother Fri 10-May-13 09:48:59

That's what I'm doing antoinette - it's much nicer to reduce the number of debts and not just the overall total

Hope it's useful amillion. Ignore the God stuff (unless that's up your street) and the advice is very sound. He's a bit controversial in that he recommends paying debts from smallest to largest rather than from highest to lowest interest, but his argument is that it gives you a psychological boost to pay off whole debts more quickly which is worth more than the money saved by doing it the other way.

Amilliondifferentpeople Fri 10-May-13 07:34:37

I've downloaded that total money makeover recommended earlier. Interesting....

Nerfmother Thu 09-May-13 22:11:38

Leaders, no, dh won't do a debt plan etc. tbh, by looking at the links on here , and facing reality, it's a case of head down, pay it off for the next four years, and hope we both keep our jobs. I spent too long til recently looking for a magic answer and juggling bits of cash around. Now I know exactly what we owe I have a plan...

leaderscorp Thu 09-May-13 05:50:28

Have you consulted an expert about debt already? I think you should see one.

Nishky Sun 05-May-13 19:53:46

I am at the other side of paying off debts after about 8 years- it is hard but you will all get there.

I actually enjoyed parts of regaining control - the first Christmas I paid for in cash/debit card rather than credit card gave me a massive thrill. Even though the presents were slightly smaller.

Good luck. It can be done.

We have about 6-7k debt not inc mortgage and secured loan (with them it's about 88kshock) that we managed to fall behind on payments when DH was made redundant in 2010. We have bitten the bullet and entered into a debt management plan. It was the best move I have made (I made the decision as DH buried his head in the sand about it all) we now shop at Aldi and get clothes etc from eBay where possible. Any spare money I find lying around is saved in a pot and we meal plan and save extra portions left over in freezer boxessmile we now have a small amount of disposable income and can put some aside for little luxuries. With debt I have found pride to be an enemy as it stopped me from being practical and sorting out the finances earlier... It's horrible, the helplessness of debt...

Badvoc Sun 05-May-13 19:29:01

I went on the stepchange website (would recommend) and in some ways it was good news...we are not late on any payments and (apparently) have Osage money left over each month but its sobering to see all your debts in one place.
£8k is a lot sad
It also did mention selling the car,(our only asset) but dh won't hear of it and as we live in a village it will be handy for job hunting.
All I see for the rest of the year is money needing to be spent sad
Holiday (uk)
Family wedding (just dh and I going)
Then back to school and uniforms etc
Birthdays
Xmas
Sigh.

Nerfmother Sun 05-May-13 18:09:59

Thanks rants. Am off tomorrow so will try the snowball one first

This is the link to the Debtfree Wanabe board on MSE. They are a great bunch of folk and are really supportive and have lots of ideas for getting extra cash to pay down the debts.

Also bung your details in the Snowball Calculator and see how quickly youcan pay down your debts.

Nerfmother Sun 05-May-13 13:29:26

Yes, I'm not surprised. I pay gas and electric on one of the cards hmm

Badvoc Sun 05-May-13 12:31:22

Yes I saw that too.
I wonder I'd the govt care tbh...

eminemmerdale Sun 05-May-13 11:16:33

Just watching the news - apparently 43% of people are using cards or savings to do the food shopping sad In a way, that makes me feel better - so many people (squeezed middle) in the same situation.

Nerfmother Sun 05-May-13 10:00:46

Our spreadsheets are: outgoings and grand total so that each month I know how much is left for fuel. Then a spreadsheet updated each month with every debt balance and totals at te bottom.

Badvoc Sun 05-May-13 09:27:52

I think I need to get me a spreadsheet! smile

Badvoc Sun 05-May-13 09:26:38

Antoinette..yes that's true. It does mount up doesn't it? Like the car too I guess...ins, fuel, mot etc.
I do find I use the cable a lot though, things like catch up, recording programmes I can't watch, and the kids use it too. I think I would have a revolution on my hands if we got rid of it smile
Plus our (old) laptop is on it's last legs, so would need to get a new one to benefit from iplayer etc.
Gah.
For me it's about completely changing the way I think about and spend money.
I will check out the stepchange website, thanks.
Thing is, I am not bothered about going out, having nice clothes, going abroad etc but I do worry that soon it will affect the dc and what we can provide for them and whether they will be able to take advantage of school trips etc sad
So I have to do something.
Ideally by Xmas I want to not be using my (free) overdraft at all. And kept in budget for Xmas gifts. And have a savings plan in place for 2014.
Easy, right? smile

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