Oh what financial fools we’ve been

[Platform8]

Good evening,

So today DH and I finally sat down, pulled our credit reports and faced up to years of spending fuckery. We are early 40’s with 2 teens. In ‘good’ jobs with a reasonable mortgage. I earn 65k and DH earns 50k. I also earn an additional 5-10k on freelance work .

for years we have been financial dickheads taking fancy holidays, spending on the house, cars, supporting other family members and generally buying whatever we want. We’ve consolidated many times and run up debt again and again. We tried to remortgage recently but we were declined due to our level of borrowing.

I owe 47k and dh 44k. Please be gentle…. I know how atrocious this is. We also owe my mum 18k but she has said that there’s no rush to repay.

so…. This is where things change. Thankfully we can afford the payments if we get our spending under control. we’ve been through everything and we think that we can throw £3500 at the debt. It will still take a while but we WILL do it

what fucking idiots we have been

@SmallestMan they'll be able to refix with their current lender most likely, you don't have to go through checks again for that, but wouldn't be able to borrow more until they were at a level the bank was comfortable with which they could then potentially do a further advance.

Well done for facing FORWARD! Check out the debt-free forums on MSE and Reddit - you’ll get fewer weird comments than here! Good luck, it’s going to be ok x

I used to work for a Credit Union where people are encouraged to save regularly. And when they get a loan they are encouraged, if they can afford it, to continue saving. It's important to have some savings.

I agree with not throwing the whole available amount at the loan, keep some back in case of emergency then you hopefully won't have to borrow again. You can't beat ready cash in the bank, even if the loan costs more than the interest generated.

The PP knows her mother’s situation better than you, it’s quite possible that she is well off and doesn’t need it back for now.

I don’t think the PP is being blasé - it’s that she’s dealt with that bit of the problem, and is focused on the bits she still has to tackle

I think your position is more common than you realise. Social media has everyone duped into thinking it's normal to have new cars on finance, expensive AI family holidays, fabulous recently decorated homes & huge wardrobes full of chichi clothes. Meals out, beauty treatments etc. A hell of a lot of people fall into a trap of using debt to fund a lifestyle they simply don't earn anywhere near enough to afford.

I think you really need to just embrace the change as a positive in your life.

Once you take a step back from consumerism you realise how pointless a lot of it is. I bet you have loads of stuff you hardly ever use. Loads of clothes that just sit in cupboards.

When you think of everything you buy as unnecessary landfill it's quite easy to stop and also quite liberating. You realise that you just don't need so much stuff.

It sounds like it's going to be a massive adjustment for you and I do wonder if you will both be able to stick to a budget. If these things were so important to you before, you do need a good plan of how to resist temptation.

Well done for facing up to it and good luck keeping things in order from here on in. Think of the great example you'll be setting for your children - teens is a good age to learn the truth of spending within your means.

Well done on facing the problem. I agree with spreadsheets but don't do them on a computer, get an account book/ledger and write it by hand. Enter every receipt in it as you spend it or consolidate your accounts at the end of the month. Something about pen and paper makes it all seem so much more real for some reason. I think debt is easy to accrue now because everything is digital and not tangibly in your hands.

I agree with the money saving expert website advice however how are you going to manage with the increased mortgage as you can't get finances. Are you able to downsize and use some equity towards your debts?

I'm not sure whether you have replied to me by mistake instead of the OP? If it was intended for me, I'm confused why it is relevant? The OP has come on to admit that she has made a mistake and I have just replied to them to let them know they are not alone in it. Will it make you feel better to know the what, when and exactly how much I spent? The advice will surely be the same regardless?

In my situation, I naively took out a £20k loan in my name for my then fiance, who left me when I gave birth. I was left with a newborn, huge loan, paying for a wedding that didn't go ahead and in a private rental. I was in over my head and it racked up. BUT, even if I had spent £45k on chinese takeaways, I would still be deserving of empathy and helpful advice.

Everyone has their addictions / unhealthy coping mechanisms / things they're not amazing at handling as adults - money just happens to be one of those things for some people and there is no shame in that.

Yep. How frequently are there threads saying ‘how do people afford cars, holidays etc’, this is how.

NC for this but us too. We’ve got a several year plan to clear it. In our 40s. 2 lots of nursery fees at the moment and a newish 2k mortgage so at the moment our card repayments are about 2k a month. Trying to clear as much as possible and shift around until it’s all on low interest terms. I’m on 35k and owe 24k. DH on 80k and owes 30k. We paid 10k off with some money I came into. We are using the snowball approach - paying off the highest interest balance first. We’ve got a couple of small short term loans too, Ikea, phones, curry’s etc so when they are paid off we will add whatever we were paying off those to our biggest credit card payment, and so on. Completely our own fault we’ve got into this mess and I hope no one we know in real life ever finds out. It’s very embarrassing. Feels very good getting that off my chest. We can do it but it feels very ‘big’.

Came here to say this. One of the reasins we left the UK.

Well done for facing up to it.

With such good levels of income and your positive attitude you will be able to turn this around

it is not unusual, it is so easy to overspend and sometimes it feel s a if money is’t even real anymore, you just wave your phone and “ping”

good luck

Listen to Dave Ramsey on Spotify. Very effective steps to being debt free and building wealth, he is straight talking and what he says makes sense.

OP I get you. I’m on 49k and partner on a fair bit less. I have about £25k debt. My partner about £5k. I’ve always been shit with money and then 2 maternity leaves, not budgeting and poof. Plus I am now on interest accumulating ones so it’s not going down. I’m watching your thread with interest as I’m seriously trying to tackle mine too. I’m trying the snowball method, closing down as I go so I can’t spend. I’m terrified to check my credit rating.

I agree. It should be prioritised, too. It's not fair to your mum.

Dave Ramsey is problematic, but his baby steps programme works.

Our income is similar to yours, having grown up with little financially, my young self would imagine a life of luxury on these salaries, but in some parts of the country these days it's just not the case. We don't struggle, we pay our bills and go on holiday once a year, DS does the activities he wants, and I don't have to budget for growing feet etc, but we share a 12 year old car and our kitchen has needed doing since we moved in six years ago. We do save every month and we do save for ds, but I can see how you got yourself into this situation, living the life Mumsnet thinks you can afford if you earn over 100k.

I think a fair few people we know, definitely my DB and SIL live the way you do, I get comments like when our car was in the garage recently, oh just get a new one on finance etc. DH was similar when we got together but I am very very debt averse and happy to look after our finances, so the only debt we have is our mortgage, maybe sometimes I err too far the other way. I will not take credit, I save and then I buy, which is a bit silly given we both have very secure professional public sector jobs.

Good luck OP the good thing is you do have the means to clear this and when you do it'll feel incredible.

Well done for facing your debts
Have a look for a 0% interest card to see if you can transfer some of the debt then concentrate on paying the highest interest down first
MSE " Debt free wannabe".. if it's still called that will help you draw up a plan to focus on
Best of luck to you.

I got into a lot of debt, not on the same scale but also on less income. It took me 3 years to clear and the relief was immense. Almost a year later I have not run up any more debt, I’ve saved a fair bit, got loads done in the house and had a couple of lovely holidays.

You can do it, just start right now!

I've been where you are, OP, not exactly but close enough. You're right, it is so, so very easy to get into debt that seems manageable, because you're servicing it, right? Totally doable until either something happens to knock you off kilter like an expense that is just too close for comfort.

Quick question, nothing is on sub-prime, is it? Those are the ones with whopping interest rates just the right side of legal. It makes sense to look at your highest APR and nuke that one first because it's costing more (comparatively, depends on what you owe on it) - and then when that one's paid, move that amount of paying money (and then some) to the next highest.

It sounds as if you both have your heads screwed on and you're both earning good money so you'll get this debt right down. I can very well remember owing my max credit limit £10k to M&S, servicing the debt every month but paying £300+ interest, every single month. I consolidated that debt twice and then took out a loan to clear it, it took a good while.

I still have that card and it's the only one I use now - but it gets paid off every month, I owe them nothing and haven't paid interest for a few years which feels great, they've had enough from me.

Ignore the posters who are being judgemental, wagging their fingers at you. They're not going to be paying this off for you. I'm rooting for you... you'll get this cleared.

I would post on money saving expert to be honest. People here aren't qualified to comment, are being judgemental for the sake of it and aren't intending to help you. The guys over there will be much more helpful.

You know what, notch it down to experience. You had fun! Now you are dealing with it head on……

I am slightly envious of all the fun you had! I am the total opposite and save save save….high 6 figure salary, no mortgage on a £1.2 million home….savings and investments, but you know wha - my life is dull as ditchwater!

Get an IVA or Debt management plan. Look at step change website for more information.