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£46,000 in debt

(165 Posts)
Debtfairy Sun 02-Apr-17 11:32:00

This is the first time I've written that figure down. I've NC'd as this could be identifying.

We have 3 loans, 3 credit cards and a HP agreement for a sofa. Everything is being managed and we have a mortgage and want to move, so we need to tackle this and get it all paid off quicker than its currently happening. Debt relief order not required so no charities can help.

Basically we have NO idea where the money goes, we only have one salary and maternity allowance coming in due to mat leave with DC1, we shop in Aldi (max £35 a week inc nappies etc)

We have 2 small and economical cars
We don't eat out or go on holiday
We don't go to the pub
We rarely go and spend money
We don't have anything left!

Where does our money go?!

Any tips welcome!

Debtfairy Sun 02-Apr-17 11:35:37

Anyone?

AgentProvocateur Sun 02-Apr-17 11:38:06

With that amount of debt, a lot of your money will be going on interest. You need to write down everything you spend and work out where you can cut back. Either that, or go back to work earlier than you planned.

You're right that you won't get a mortgage with 3 loans and an HP agreement outstanding.

blueskyinmarch Sun 02-Apr-17 11:38:18

Surely it really depends on how much is coming in and how much your loan/card/mortgage repayments are? It can’t be too hard to work out where it goes. Write it all down - money in and money out. See what, if anything is left once you have factored in groceries/petrol/other incidentals. Work out what you might be able to cut back on and look at what debts can be paid of fastest. Work out a plan over a period of time and stick to it.

DH and I did this many years ago when i stopped working to have the DC and our debts piled up a bit. It took a few years but we eventually got debt free. We had a little notebook each and wrote down absolutely everything we spent no matter how little. We didn’t make any plans to move until we were sorted financially. It took about 5 years in total.

LIZS Sun 02-Apr-17 11:39:02

Are you servicing minimum payments or actually tackling the debt balance itself? Are you taking a lot of cash out so your sundry expenses aren't accounted for. Is the 46k less than last year? Tbh it sounds as if you will need to go out to work if you ever want to move.

Asmoto Sun 02-Apr-17 11:40:08

You haven't said what your monthly income is at the moment, but it sounds as though most of it might be being swallowed up by repayments. Have you made a list of all your fixed monthly outgoings vs. what you have coming in?

Iggity Sun 02-Apr-17 11:40:49

Reviewing your bank and credit card statements is a good start to see what you are spending. I'm no expert but perhaps one week or month of intensive monitoring of what's coming in and what's going out will give you a good idea and then go from there. I don't mean this to be rude but how can you have no idea where your money goes? Best of luck.

Snap8TheCat Sun 02-Apr-17 11:41:28

Do you need two cars if only one of you is working?

QuiteLikely5 Sun 02-Apr-17 11:43:03

What is your monthly income?

Can you break the debts down?

I.e how much do you owe for each loan and what the repayments are each month?

Debtfairy Sun 02-Apr-17 11:43:25

Sorry I should have said, we have a spreadsheet with £2400 coming in and £2000 going out including debt repayments. But no matter how many months go by, the actual amount of debt doesn't seem to go down. The interest rates aren't bad as our credit is still good, but £400 sounds a lot to live on a month but it's not in reality. I don't see where else we can cut back. Going back to work is a null point as I'd be earning a negative amount due to childcare so I'm looking for work to do from home

Goldfishjane Sun 02-Apr-17 11:43:55

money doesn't vanish I'm afraid

(well that's a probably a good thing really!)

You need to find out exactly how much you are paying on the debt amount itself and on the interest.

Then you need to account for every penny you spend.

so set up a spreadsheet showing all your bills - counticl tax, gas, leccy, phone, TV licence

then your necessary spends e.g. food, cleaning stuff, health stuff (inc paracetamol, multivits, contact lens etc)

do you mostly spend cash or card - if card, then at least you can see how much you spent in Aldi or whatever.

You need to find out where it's all going before anything else. Do not ignore any amount of money, no matter how small it is.

there's no great secret to finding out where the money goes - you have to list where it goes.

only then can we advise you how to go forward.

Snap8TheCat Sun 02-Apr-17 11:45:24

Unless you earn less than minimum wage then you can't be earning less than childcare.

Debtfairy Sun 02-Apr-17 11:46:16

I've sold my nice watch, not bought any clothes since DD was born, I feel like we've had 18 months of really tightening our belts but we're no better off

LIZS Sun 02-Apr-17 11:46:49

So you are only servicing the interest not the actual debt amount. Until you can increase your income your situation won't change. Not sure how you can expect to afford to run 2 cars on £400.

Goldfishjane Sun 02-Apr-17 11:47:01

sorry we cross posted
but you need more detail than that - e.g. money on each loan, actual loan amount and actual interest being paid off each month

I am a bit stunned at HP on sofa, it must have cost a fortune to need HP? I immediately wonder if you would be better selling it when you get the HP paid and getting a 2nd hand sofa from British heart foundation type places?

Asmoto Sun 02-Apr-17 11:48:14

Agree with a pp - could you get rid of one car while you're not working?

Do you have a TV package with films, sports etc. that you could pare down or get rid of altogether?

Are you on the best deals for your utilities and phones?

AndKnowItsSeven Sun 02-Apr-17 11:49:24

Change your dd on the credit cards to a standing order equivalent to the first monthly payment.

OllyBJolly Sun 02-Apr-17 11:51:09

go to the Debt Free Wannabe board on www.moneysavingexpert.com

People there are incredibly helpful at showing you where your money is going and where you can save. You have to be prepared to hear what can be quite tough - if wise - advice. You'll also get an indication of which debts to prioritise and an indication of how long it will take.

If you are servicing that amount of debt and only paying minimum payments you will never be able to move on.

Debtfairy Sun 02-Apr-17 11:55:54

We've cancelled sky and only have virgin media for the fibre optic broadband - no Tv element (we have a fire stick)

All utilities have been switched to the best deals, when phone contracts run out we'll keep the same phones and go to SIM only plans. I live nowhere near friends or family so we need 2 cars, but the monthly outgoings include £50 a month to cover repairs and some of the insurance costs (the rest we pay in a lump sum).

£1,100 a month is 'house bills' including mortgage

£900 is debt repayments, more than minimum on credit cards and loans are fixed amounts

bathshebaneverdene Sun 02-Apr-17 12:01:46

Have a look at a blog called Frugal Queen - she and her DH had a similar amount of debt and got rid of it in a couple of years (both working so different scenario) but they cut everything to the absolute bone. Agree with debt free wannabe threads on MSE.

How old is DC? Can you get a weekend job to bring in some extra cash? Are all loans/cards etc on lowest possible or zero interest cards?

It does seem overwhelming but the best way to tackle debt is to start repaying it (I know it sounds trite, but head in the sand never works in these situations.)

MovingOnUpMovingOnOut Sun 02-Apr-17 12:01:56

Do you need fibre optic broadband?

If you can't save money you'll need to find a way to make some. Rent out a room/sell old clothes, cds, watches, jewellery.

Can you refinance or consolidate the debt to make your monthly payments smaller or keep payments the same but pay off more of the capital?

MovingOnUpMovingOnOut Sun 02-Apr-17 12:02:48

Weekend and evening work is a good option. Call centres are good for this sort of thing.

LIZS Sun 02-Apr-17 12:04:19

Are you still spending on the cc and how much do you overpay the minimum?

FlappyRose Sun 02-Apr-17 12:04:59

I would suggest going to stepchange.org and using their online tool. You put in your income, outgoings and debts then it builds you a budget and gives you the best way to deal with them. And are you sure you have HP for the sofa? If you bought it from a store other than Bright house or Perfect Home, it's usually a finance agreement (it makes a big difference if you can't afford your repayments).

Belle1102 Sun 02-Apr-17 12:06:48

Could you go on a DMP which makes your repayments a smaller manageable set amount each month? I went from having to pay out over 1000 pm to my creditors to only having to pay 300pm to them and also got all the interest frozen. I'll now be completely debt free next month after 4 years of making these payments. It does mean my credit rating is shot to pieces (for 6 years so I've got 2 years left of it being in the very poor category) but it took away a huge amount of stress being able to make smaller payments

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