To ask those of you who are sensible with money to take a look at my plan to clear my debts and get back on track

[TwiggyCat92]

I'm in a mess financially and have been for a long time. I have never been good with money and was even worse going through a period of quite severe depression. Can I please kindly ask those of you who are sensible with money to take a look at my plan to clear my debt and change my bad habits with money permanently, if there are any more tips you can offer me I would be grateful

Step 1: Get my credit report and see who I owe money to (I know who I owe money to, but if there is anything from tha past I have missed)
Step 2: Set up affordable repayment plans to those companies (I am on a low income)
Step 3: Open a savings account and work out my incomings and outgoings
Step 3: Put £20 a month in to the savings account for DC birthdays/Christmas/etc (£20 is all I can afford as I won't have much disposable income)
Step 4: Learn to be better with money. Before buying something, think "do I really need/want this?" Put it back if not. Meal plan, take food and drinks out with us and leave my bank card at home whenever possible.
Step 5: If anything is left from my disposable income each month, put half of that in my savings account and half towards the debt as extra to clear it quicker
Step 6: Get a cheap sim only contract to start rebuilding my credit rating

Please talk to StepChange. They are free and impartial. They can liaise with your creditors to lower payments, freeze interest etc.

you need to limit spending. Only spend what is absolutely necessary. Are there things where you can save money by cancelling or switching (phone/TV licence/utilities).

Do you spend money on luxuries you can cut.

I would not spend £240 on Xmas and birthday present for the DC if you are in such a mess. You also don't ask yourself if you want something. Only of you need it. You really need to get your priorities straight and it doesn't sound like you have.

If you wanna get rid of debt, you need a complete paradigm shift! It's hard but it can be done!

Go to step change I did and it has massively changed my life. They deal with your creditors for you and work out what you can realistically afford to pay each month. All interest is frozen and the debts start reducing. You can set it up online. Good luck being in debt is awful and stressful

I am also on a low income and have some debts to pay off. I have a charity helping me with this. They got me to open a new bank account so my overdraft could be dealt with as a debt.

The bank account I have is called Monzo. Everything you spend it puts into a category - like groceries or transport so you can see exactly where your money has gone. You can set budgets for each category and make pots to keep for example your bill money seperate or a savings pot. I would really reccomend it.

The charity made me a budget and has negotiated repayments for all my debt. I have a standing order that goes to them and they pay the debts out of that. They also save some money for me - some for clothes/shoes, some for christmas/birthdays and some for household maintenance. They said it was important to save while paying off debts as people get into more debt if they don't have savings when the washing machine breaks for example.

I think your plan sounds good but if you feel you need more help (the charity is helping me with benefits and getting important insurance, too) then have a look for a debt charity.

Op, how old are your dc?

I always find some peoples budgeting advice a little cart before horse. Eg.. Write down how many coffee you have a week or spend £& on lunch.

We lived off one small wage for a long time. Never knew what we could afford when out without guilt or worry we would go into over draft etc.

The only thing that sorted us out was
1/ incoming, outgoing necessities.

What's left?

Break it down to the last penny.
Set petrol/travel needed each week.

Set food money for each week

Fun money, for each week.

Holiday and Xmas and bday money each month.

To begin with it might be good to physically draw the cash out each month to break it into weekly money.
That really stabilises you.
Your weeks money in that envelope is it.

The other thing we did was almost take a year out doing very little to help build up the holiday pot, the Xmas pot etc. We were saving about 20 a month too, but added ebay sales etc. Aftershave or perfume for Xmas... Sell on eBay.

We accumulated enough for a 2 night b and b by the sea and more the next year.

We knew exactly what petrol money we had and what we could spend food wise. So I'd say find out what you have to spend and work around that.

Also pin point where your weakness is.

@Swelteringmeltering

Op, how old are your dc?

I always find some peoples budgeting advice a little cart before horse. Eg.. Write down how many coffee you have a week or spend £& on lunch.

We lived off one small wage for a long time. Never knew what we could afford when out without guilt or worry we would go into over draft etc.

The only thing that sorted us out was
1/ incoming, outgoing necessities.

What's left?

Break it down to the last penny.
Set petrol/travel needed each week.

Set food money for each week

Fun money, for each week.

Holiday and Xmas and bday money each month.

To begin with it might be good to physically draw the cash out each month to break it into weekly money.
That really stabilises you.
Your weeks money in that envelope is it.

The other thing we did was almost take a year out doing very little to help build up the holiday pot, the Xmas pot etc. We were saving about 20 a month too, but added ebay sales etc. Aftershave or perfume for Xmas... Sell on eBay.

We accumulated enough for a 2 night b and b by the sea and more the next year.

We knew exactly what petrol money we had and what we could spend food wise. So I'd say find out what you have to spend and work around that.

Also pin point where your weakness is.

Thank you, your answer I feel is the most achievable and realistic for me. My DC are 5yrs and 18mo.

I have a spreadsheet column a is the date of payment, column b is the payee and column c is where l marked 'paid' once that bill has come out of my account. Go onto online banking every single day to see what has come out and what is left. Definitely pay higher interest debts first as pp have said. Is getting a second job an option? That got me out of trouble years ago, all wages went on clearing debt.

maybe...
Before buying something, think "What's the worst that could happen if I don't buy this?" Not having it needs to be obviously problematic before you can justify buying it.

Have you looked into a Debt Management Plan?

Try to contact Step Change - they are a charity and will be able to help you