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

Is it really that deep? Fancy holidays are fun and luxuries are nice to have. OP and her DH have been spending more than they can afford but I don’t think wanting a nice holiday necessarily means you have deep seated emotional wounds.

You're not necessarily idiots, presumably you enjoyed what you spent, had a good time, etc, as well as giving some others a helping hand. You are still quite young too and earning well. Why worry? Your life has been better than had you been frugal and I expect you have good pension schemes. Life is for living and money for spending, you can't take it with you.

Most of the people get into debt. I would say, get some debt advise. If you have freelance work and are considered self employed, you can speak to Business debtline and they will advise you on your options. Also look at national debtline, step change and CAB resources on debts. If you have a disposable income, you can do a DMP or IVA.

It can be - overspending is like over eating or drinking too much or whatever, it can be a way of avoiding emotional pain. Not always of course, but sometimes. Hence AA and all its offshoots

I tend to think of the cost of things in how many hours of work it would take me to pay for it. So I ask myself, do I want to work x number of hours for this item, this meal, this hotel?

OP, you've got this! We've a household income equal to your DH's salary, two teens, a mortgage, two cars and pets and live entirely debt-free, paying into pensions and monthly savings. We're pretty frugal but live really well on little. Go you!

At least you’ve realised this now and you’re looking to change. Look at it as a good thing, positive. Now work out a repayment plan, and also savings.

Well done, OP. The teens may be a challenge if they’re used to a certain level of indulgence. And uni may be another expense on the horizon.

Op, I really do not think you are unusual. I know a lot of people with significant amounts of debt, it’s bloody easy to run up. Ignore all the judgemental comments, you haven’t killed anyone! Set your budget and stick to it, feel the satisfaction of watching the debt decrease and in a couple of years you’ll be in a much healthier financial position. Good luck

Hey OP, you said you looked at your credit reports and were declined a remortgage. I'm guessing that is because of the credit you have, rather than your scores.

In our 20s, my DH and I took out credit for a business. It failed (never go into business with family without a contract - I fucking warned him). Anyway 50k down and we recovered.

We paid off every penny. We went without holidays and nights out, pasta and sauce became our diet 😄. Our credit ratings took a hit for a while.

Now we are in our early 40s we have perfect credit ratings, no debt apart from a small amount left on our mortgage, and we are solvent.

Good luck OP. It is easily doable, especially with what you have to throw at the debt.

Can I just say that is bloody amazing!!! Well done 👏🏼👏🏼

Did you manage this in the 15 years?

How did you save that amount of money?

Sorry I do not mean to be nosey, I’m only asking because you shared some huge achievements & if I can learn anything that would be great.

Thank you x

@Platform8 Dont be disheartened by some comments. Some people do need to think before posting.

@Temp2024 has given you some excellent advice!

My concern having read your post is that this isn’t the first time you have run up debts so what makes you think you won’t do it again?

Why will this time be any different to the others?

The only other question is what are you both really spending your money on?

I read the figures & I was getting heart palpitations on your behalf.

Please sit down together & have a real conversation about your spending habits. Why do you both spend so much? You need to get to the bottom of why so you don’t do it again.

I know you said your Mum said she is happy to wait but it’s not fair to ask that of her so if you can from the freelance work that you do start paying your Mum back.

You can do this as you have done it before but you need to understand why you keep on repeating the same mistake over & over.

Don’t forget the example you are showing your teens about financial management, it’s a pretty poor one and not one you would want them to follow.

Please don’t feel bad! This is very easily done! Have been in a similar situation- you have good salaries and you will get yourselves sorted that’s for sure. We ran up around 60k and earn about 125k combined and have nearly got rid of it all in a couple of years

You're going to need a more detailed plan for what you will be able to spend once you've sat down and looked at the debt picture.

Look at hacking away at the debt first.

Look at subscriptions.
Look at utilities - are lower rates possible?
Look at car and house insurance - can you get a better deal?

But then you need to look at the possibilities available to you with the money earmarked for keeping the house and all your lives ticking over.
Switch to budget friendly supermarkets (Aldi, etc).
Switch to store brand staples.
Reduce takeaways to once a month.
Obv no more coffees on the run.
No more new clothes for anyone for two years. Wear what you have. Sell what you never wear.

You'll need to do a deep dive into all the household and individual expenses.

Only on mumsnet will you find a thread from someone being in debt on a whopping £120k combined household salary with other threads complaining about 20-something year olds not moving out on their £20-25k salary.

We were also in a similar situation. We had one of those “Carol Voderman” advertised loans at 12% when interest rate was zero and spent the money on ridiculous frivolousness including holidays. We had a rental property which we mortgaged too and spent on? No idea really. About 10 years ago I moved jobs and started to get bonuses. We used these plus overpaid on debt using the Dave Ramsey snowball method. We paid off 120k in debt, are now debt free and have saved into SIPPs for retirement. I never thought we could do it, but we did and Covid showed us even more just how much we “wasted”. We saved a lot during Covid, enough to buy a house deposit. Good luck, with discipline you can do it

Look forward to working out a “Savings” plan going when you clear the debt.
it will feel good to have some savings behind you.
well done for approaching it head on.

Excuse me?! OP and her partner deserve it bcoz of how high their salaries are?! What a horrible thing to say! Maybe if you spent your time educating yourself you could also earn a good salary instead of being nasty to others who have worked hard to get where they are. No employer hands out money for the sake of it. OP and her partner obviously work very hard to earn that much. If you are jealous, do something about your own situation rather than being horrible to others!

While I agree they have been irresponsible with money, what you have said is wholly unacceptable. Please read what you have written. You should be ashamed.

I don’t find your statement rude just odd, and Illogical. No one disputes they were reckless, imagine building up 90 grand of debt on frivolities,but deserve what? That makes no sense.

I can't believe all the negative berating posts here.

Well done for facing up to it. Dave Ramsay on you tube has lots of good advice and you may enjoy one of his books.
A budgeting app like YNAB may also help.
Good luck!

But that’s the attitude that gets people into debt.

@Bumbleboohoo this is so sad to hear- ignore your ‘friends’. I’d never get pissed off wt someone trying hard to get their financial affairs sorted. They sound horrible and demanding!

I think those of us who are frugal are very intrigued what you’ve bought! Husband and I are the complete opposite, apart from holidays we are stupidly tight and that’s just as bad in another way. However what I would say to the posters who are berating you , they may not have debts but they could do with working on their emotional intelligence!

@Platform8 I can understand how it happens. It's easy to get into a mindset of 'we deserve it' rather than 'we can afford it'.

As a pp suggests, along with the 'how much?' discussions also have 'why?' discussions. What was the thinking/emotion behind the excess spending.

A few years ago (first lockdown) I was threatened with having my salary cut by 20%. This forced me to really get a grip on our spending. The result was a massive spreadsheet which details and categorises all our spending and saving. For the first time I actually feel in control.

That's right, and as it should be! It's for everyone, no matter what you do for a living, where you live, how you live... makes mumsnet more interesting and more helpful.