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

@Peaceandquietandacuppa and @Platform8

Please consider setting up an account on Money Saving Expert, then start a ‘diary’ in the debt free diaries section (there’s also a debt free wannabe section with tons of advice).

It’s a way of keeping track of progress to reduce the debt, but you will also get great advice from others in the same boat as you, some of whom have cleared similar amounts to you.

MSE also has a template where you list your set income and outgoings each month, and can see what you need to retain or can get rid of, again with lots of advice from others.

One comment that is made repeatedly is that you need to have your light bulb moment before you can successfully lose the debt. Hopefully this is the moment for you Op, but it does take a change of mindset.

Glad you have a plan but I don't get the 'it's easy to do' comments at all. Surely once you get a high credit card bill you will struggle to pay, that just is when you think 'bloody hell, better get a grip'.

Break it down + give yourself (SMALL) rewards.

Eg, once you have paid off £5k = a takeaway night with the family watching a film

Once you have paid off £10k = £50 each to get your nails done/ go to a football match

Good luck x

Sorry you got this bother. It does feel like an ambush when you finally tot it all up and stare it in the face. My sympathies even though you have been prats.
One question not seen so far. Are the teens on board with this new state of affairs and do the realise life has now changed?

Their attitude to the new austerity will be crucial.
You can do it, it's only money and no blood has been spilt.
One practical thing. Can you manage your time so that you can cook from scratch not via prepared stuff from M&S Food or takeaways. Cooking can be therapeutic.

@RaininSummer

I think some people just move debts between credit cards, pay off minimum and carry on. As per my post above, MSE are adamant that rock bottom/Light bulb moment needs to be reached before the spending stops and the debt is cleared.

As others have said, maybe social media and peer pressure is one aspect and the ease of credit. I grew up in an era of spending cash, credit cards were rare, and no debts apart from mortgage, so carried that on.

I have a DH who refuses to change his 15yo car, and a friend who runs an 18yo one! Both have more than enough money to buy a new one outright but neither feel the peer (or wife, in our case 🤣) pressure to change them.

Interestingly, I had to correct an older relative recently who said she didn’t think her very bright, teenage grandson should go to uni, as “he would be in debt afterwards.” She had also been brought up to never to have debt, but I assured her that uni loans are different.

I’m amazed you can shave £3500 from your budget in your salaries. I’m on similar to you and take home less than that a month (although do have student loan and 10% pension contributions). I’d think seriously about not going totally overboard with promises to yourself but instead identifying an amount that is achievable. £2000 maybe? £1500?

I think the problem lies within the first couple of sentences of your OP. “We’re on good salaries £50k/60k.” You’re earning more than your parents did, in management positions and you feel like that should make you rich. It’s just not. Life is expensive. £50k is about £3k a month, £1k for the mortgage, another £400 for half the bills, doesn’t leave much does it? News cars, branded clothes, teenagers needing the right labels, games consoles, Xmas, holidays in nice hotels, new iPhones, new sofas, stadium concerts, football matches, nights out and takeaways.

I wish you well. It’s going to be a massive shift for
you. Maybe document it on you tube to make some money. Or could you Airbnb your house for some extra?

I don’t think my lovely tenants of 8 years would be delighted if I sold their home in the middle of a housing crisis!

Caution! I understand why some posters are suggesting ease off on your target a bit, so you still have some money for emergencies and to live.

However, we all have different psychological approaches to accomplishing goals. Some people suit slow and steady on an extended timeline. For others, gung-ho frugality for fewer years is the more achievable strategy.

What's important is that OP and her husband make a plan that works with their psyches as well as their incomes.

Wow!
Similar here, but my husband is very financially wise (massive age gap) and allows himself very little debt.
Also our income is "unearned".
I haven't got a practical advice, OP, however, can see myself slipping one day if I don't kick my own arse really hard!
I'm sure other posters have been wise with suggestions.
Good luck. ❤️

@Platform8 as I understand this, you are in debt but you are helping other family members???? really??????? how did you manage to get to that high level of debt??

I also struggle with understanding folks saying it’s easy to do. They have over 90k in debt. It is beyond enormous, and we earn way more than they do, so I’m not in the oh wow,look at your salary club. I don’t think it’s remotely easy to get into this sort of debt.

I know, this is the worst part. Your poor mum. Surely you would prioritise paying her back first. I don’t think it’s at all easy to get into that level of debt.

@Platform8 throughout my whole married life, neither I nor my husband accumulated a pile of debt! we have a joint credit card which I use for all purchases including food. this is paid off every month because we do not like paying interest!! if we did not have any money to go on holiday then we didnt go!! purchases were not made if we did not have money to pay for them. a new car would be the only thing and that would always be paid off within 2 years!

Is it worth OP sitting down and figuring out if there are any triggers to your spending - like sadness, work stress, jealousy, feeling like you need to buy stuff for 'just in case', your relationship dynamic, family expectations, pressure from the kids for stuff - just really getting to the root of what causes you to spend - maybe with some professional help?

OP @Platform8 - genuine question but if you have been living off credit cards to get by each month, how all of a sudden are you going to find £3500 a month to pay off debt?

Thanks for everyone’s posts. I expected some of the trickier ones!

to clarify - mum has been very clear that she’s happy for us to prioritise some of the other debts before we repay her loan. It IS a loan though and it will be repaid. It doesn’t impact mum and it isn’t money that she needs right now.

our debt has built up over about 16 years and sadly it’s just built up and up. It’s totally our fault and I’m not looking for anyone to minimise it or to tell me that it’s fine- it isn’t!!

I people tend to follow their parents example with money. I grew up poor and have never fully shaken off the frugal lifestyle.
When we bought a house we didn't go for the most we could afford. When DC were little it worried me that our income went down and yet our costs went up so I probably erred on the wrong side of meanness. We saved, never borrowed anything apart from a mortgage and it seems to have rubbed off on the (adult) DC. They see their friends with the latest phone and cars on credit but I'm proud that they saved up for a car and don't indulge in competitive consumption.

I'm not saying this to judge but to illustrate that changing your spending attitude won't be easy as habits start young. You can learn a whole new way of approaching spending. Lots of tips on here and on MSE.

I really wish that we had lived like that, but we didn’t so now we have to fix it

It was for us. I’m not justifying it though- my entire post centres around us taking responsibility and sorting it out

Well our contractual payments are already quite high so the £3500 includes what we already pay, plus an overpayment. Our spending has been wildly out of control so we can afford the payments if we stop spending like twats on non- essentials

And to also clarify… in disappointed that we’ve been so silly and irresponsible, however I am NOT ashamed, nor will I allow myself to feel shame. That would be pointless and unnecessary. We haven’t broken the law and whilst bloody awful, ours is a fixable problem

Myself and my husband are on similar wages and we have spent our life moving debt from one place to another, consolidating, building up more etc so I can see how it is easily done. We were saved by a massive redundancy pay off a few years ago otherwise we would have been similar to you I think. As it is on top of mortgage we have about 20 grand of debt. All very manageable at present but we are planning a tight year to bring that down. I know there can be little sympathy on here - some people are really good and strict with themselves about getting in to even the tiniest amount of debt but I know how easy it is especially as myself and my partner are very similar in personality and almost seem to encourage each other in spending . Anyway, you have a plan now so in a few years (which will fly by) you will feel very rich when debt is down and you have all this extra money !!

Having been employed in financial services/advice for many years what I would suggest works for many people is make a list of debts starting with the one that has the highest interest rate then clear them in that order and as you delete each one you will the be able to put more towards the next one as you will no longer have the payment to make for the one you have just cleared. It's a great way to motivate yourselves to carry on with the payoff.

This is a really great attitude OP, shame is an immobilising, overwhelming feeling that won't serve you well when you're trying to change.

Where I would gently challenge you though is this narrative that it was 'scarily easy' to do. Let's be real, no body is knocking on your door offering you bank loans or frog marching you to take out finance on the latest ultra HD TV. You made a series of proactive choices to take on more and more debt. Ok you may have been preauthorized for certain things but again it was your choice to accept.

I recently increased my credit card limit, not because I need the money but just because of some of the consumer benefits it confers. Yes it only took minutes to do, but I still thought about it carefully, decided on a sensible limit and submitted the request via my app. It's that kind of mindful approach to credit and spending that will get you out of this mess.

I would also have a think about some of the underlying causes as to why you spent/ consumed the way you did. It's important you tackle these as otherwise it's the equivalent of going on a crash diet only to pile the weight back on again.

Best of luck!