Please help me sort my finances!!!! AIBU to withdraw money from private pension to pay off credit card.

Talk to stepchange debt charity they can help you budget etc

Dave Ramsey and his debt snowball is AMAZING. I wish I’d known about it when I was struggling with debt. Please look him up.

The main thing is a mindset change. Dave says you have to be sick and tired of being sick and tired. Only then will you make the changes needed. In my experience he’s right. I had to hit rock bottom and then I could
come back up. He teaches you how to have a man emergency fund so you stop
dipping into savings - this has really helped me.

I’ve got out of 20k of debt and now own my own home. It is possible, even when things are tight - and they are right now - but I have the right tools to deal with it.

Don’t give up hope. Knowledge is power. Understand where your money is going and give it direction.

Call all suppliers and ask for a better deal. I rang our house alarm company & wheelie bin provider, both knocked off 20%. I switched house insurance provider and saved 40% (for a better policy!!) And saving about 25% by switching gas & electricity. So all in all we are saving a fair bit each month so do that first along with drawing up a budget.
I also did frugal Jan & Feb where I didnt get any nails/hair/eyebrows etc done
Best of luck OP

This is excellent advice. Dont forget to include all of those annual payments, eg house insurance. I totalled up all of those, and have a savings account where I put a set amount each month for those, and don’t touch it otherwise. I find having different savings accounts for different ‘pots’ helpful (all through the one bank so easy to see all together on the banking app), so one for holidays, one for annual payments, one for gifts, one for emergencies etc.

Download the Fiancielle app. It will help you loads with your mindset. You need an emergency savings account and then need to tackle your debt as others have suggested.

There is an ‘eat for £1 a day’ group on facebook that’s great for cheap food ideas.

My plan would be not to spend on anything other than work commute and food until you have cleared the debt. Food-wise, buy potatoes, frozen sausages, bags of oatmeal and cheap value brand biscuits. Yellow sticker bread and veggies to make a lovely soup meal. you can eat for very cheap if you put your mind to it.

What's credit like? Would be simpler to get a loan to combine credit card and family member loan. Then you would have a fixed repayment amount

There have been some unexpected bills but generally you are managing on your income and to save. Also you have pay rise coming.

Pay off credit card first, then family member then start saving again, perhaps try and have some accessible savings for next unexpected bill. Plan your food shop, most of my unintional spending is in Tesco.

Perhaps look for part time job for either of you if it is an option, i know people who pick up takeaway delivery jobs now and again.

Keep communicating with family member let them know your plan and that it is not forgotten it can be awkward if the start to worry you dont plan to pay back.

I was just about to suggest OP looks at MSE.

But living within one’s means is a mindset, a commitment - a determined effort to accept temporary discomfort and not prioritise short term pleasure for long term shit.

There are lots of books that might help changing one’s approach to finance. The Millionaire Next Door was popular in my day but I’m sure there are probably more up to date ones.

@ShameSames if you want help, please list your household income (after tax), and ALL monthly outgoings. Include EVERYTHING, such as takeaways, coffees, beer/wine etc...

We can then show you where cuts can be made to divert to paying off the debts.

Get a spreadsheet & go to your bank accounts & credit cards & list everything you spent on in the last month.

then split it into categories of bills, essentials such as food, the rest into ‘what’s nice to have’. Then work out what you can cut & put towards paying down the debt.

how long does the £200 need to last? do similar to the above, work out what is needed till payday and see if you can be frugal till then

don’t touch your pension or IsA, the amount you owe, is minimal compared to the impact of touching those things

Excellent advice

You asked for help in writing up a budget. You'll find many examples online, but in essence all boil down to 1/ Absolute Essentials: rent / rates/ utilities, work travel, food / household goods ( cleaning, loo paper,soap). 2/ Variables/ Non Essentials: Outings. Holidays. Clothes. Alcohol. Take aways/ restaurants. 3/ emergency fund as long as that does NOT mean drawing on credit. 4/ treats etc. 3 and 4 get nothing till 1 is dealt with. 2 gets funded only after 1 is dealt with.

Transfer the credit card debt onto a 0% apr card and pay a set amount every month. Cut the card up and don’t use it anymore. If the 0% apr is for a set period, transfer again after that to another 0% apr card. Set up an affordable payment plan with the family member…..£50 a month?

I would write down all incomings and outgoings and do some planning. Try and cut down on areas where you can like coffees/meals out and supermarket choices. Tighten the belt and focus on paying off the card first followed by the debt to family. Do you have anything you can sell like unused jewelry.

Dont be worried or embarrassed, plenty of people have credit cards and a lot worse debt. Take some of the steps above and focus on clearing what you owe. Sign upto Martin Lewis and use guidance there for managing credit cards etc.

DH and you need to be on board for a budget. Start at the top of a page (I prefer excel cos I love a spreadsheet and can play with numbers but pen and paper works too).
First things first - you need to secure your 4 walls that is to say your rent/mortgage, gas, electric, water, council tax, TV licence, building and contents insurance, food and transport to get to work. List them and when they fall due. To get your food budget, look back at the last 3 months bank statements and add up all food shops (not eating out) then divide by 3 and that should give you your budget for the month.
Then list your debts, the minimum payments each month and the total outstanding.
Then list everything else "extra" you pay for eg kids clubs, TV subscriptions, life insurance, fun money etc. give yourselves a fun money budget and stick to it - this includes eating out.
Now take the total of all of these away from your income - the surplus is what you are going to throw at the debt. Clear credit card first - it will make you work harder to get to clear the family debt. Once credit card clears put the payment you were making there onto the family debt to clear it faster
You are going to need to be strict on what you spend - no dipping into the credit card. If you can't afford to buy it outright with a debit card or cash, you cannot afford it. A few months pain for long term gain.
If your expenses exceed your income, slash and burn all extraneous subscriptions. Do you need prime, netflix and apple TV? Pick one ditch the rest. You and DH may also need to pick up a second job. Throw all extra funds from earnings at debt till it's clear. Once debt is clear, put the money you were paying into credit cards into your LISA and save for the house.
If you can maintain the pension as it's free additional money from your work.
Check out Dave Ramsay and the 7 baby steps - game changer. Good luck!

Hope this helps this website will help you with a budget https://www.moneyhelper.org.uk/en/everyday-money/budgeting/budget-planner

One of the best things we did last year was both put £20in a jar when we got paid (from our own spending money), it helped when our guttering broke during that major storm last year and at the end of the year we put the spare amount into our saving (we didn’t really miss it). This year we are doing £10 each and its for emergency situations only. We have had a few large bills lately so if we were short for a food shop we could use that.

1. Stop spending
2. Work out a budget
3. Stick to it
4. Increase income, you need a second job
5. What can you sell? Car boot? Vinted? eBay?
6. When you have paid off your debt increase pension/ISA contributions

As all previous poster have said you really need to understand where every penny is spent. I used to have a notebook where I wrote everything down. You also need dh to commit to this. And every day (yes every single day) you both have to sit down and look at what has been spent.

Don't be horrible to each other about £3 spent on emergency chocolate at the garage, but do noticec it, and recognise that it wasn't necessary.

Don't allow your pay rise to make either of you feel relaxed about your finances, see it as an opportunity to get things back on an even keel and to get ahead of the game.

When you are doing your budget calculations use your take-home pay and the lowest amount that dh is paid. That is your bottom line - you need your normal monthly living costs to come within that amount. Even if that means living on baked potatoes and beans. Learn the price of everything. I bought a carrot at the supermarket (had to weigh and price it as using self-scanner). It was 12p. I bought an apple and it was 65p. So carrots for snacks, not apples. Certainly not grapes at £3.25!!!

After one month of a rigorous approach you will know how much you can put towards paying off your debt. (credit card first). As soon as you start to pay it down you will immediately feel better. You you will be able to look ahead and be confident about the timescale for when you can be debt free and on a positive track towards saving.

Unexpected cost are just that - unexpected, but the often appear every month. I should have had £100 excess every month, but almost every month something accounted for most of that.

You are doing the right thing to sort your finances out now, before they get out of control and you feel overwhelmed. When I was in a similar situation I paid £160 per month to my debt, £20 to my family, and £20 to savings. If you could do similar, in 15 months you would have cleared the debt, you'd have started to pay back your family member (and could subsequently clear the debt [£160 + £20] within another year. Plus you would have £540 in savings - a good head start to a proper debt free life.

The key thing here is that you and dh are on the same page and adopt the same approach, so you're not the one worrying and making savings while he is spending on unnecessary things.

£1500 take home equates to about 32 hours at minimum wage ( I have allowed for tax and NI deductions) it is 18K net and about 20K gross

Cut every single thing you can and pay it off. It.wont even take that long.
I went without buying anything for myself except basic toothpaste and shampoo for a couple of years after my ex H.left. It's doable and you get used to it.

We need to know a lot more about your finances to help you. The first being, how long does that £200 need to last and what bills will need to be paid during that time?

An income of £1500 a month, so you are part time OP. Can you increase your hours?

For a budget, go through every payment you make each month, rent/mortgage, council tax, utilities, insurance, car payment, travel etc.

Scrap anything optional, such as gym membership, nails, pay TV, other subscriptions, coffees and meals out.
Look at your food bills. Two of you should be able to eat comfortably on £70 a week. Switch to own brand, cook from scratch, avoid takeaways, ready meals and alcohol. Switch your broadband and mobile contracts to reduce costs.

Focus on clearing your credit card first and then your loan from a family member. £5k is not a lot if you both put some effort in.

No.

you can’t anyway, so it doesn’t matter whether you want to.

if the family member isn’t pressing for the money back then don’t panic about that for the moment.

go to the debt free wannabe forum page on the money saving expert website. You can fill out an SoA (statement of affairs) which lists all your incomings, outgoings and debts. People there are very helpful, but be warned they are brutal!