To ask for help with £10K debt

[Helpwithfinances]

Hi all!
I was wondering for your tips for getting rid of around £10K debt.
I had some unexpected house repairs come up that I hadn't saved for and have put the money on a credit card, have around a year to pay it off - but could potentially move to another 0% card when the 12 months is up.
It is really stressing me out as I am a single mum and I am crap at budgeting each month. I have two teenagers who never stop eating and my DD does dance and a couple of other activities that cost a lot.
I was wondering everyones tips for saving money. I would ideally like to save around £500 a month (not impossible if I am very, very sensible I think) but I am not a natural saver (as seen my getting in debt in the first place). I have already decided no summer holiday this year which will hopefully help..
Thanks!

You could have a look at this:

https://www.moneysavingexpert.com/banking/budget-planning/

Thanks

Bump! will take any tips big or small

If the money is on a 0% card pay the minimum monthly and put as much as you can into high interest savings. At the end of the 0% term if you're not able to move the balance pay off what you can with what you've saved. There is a term for it MSE use but it's a good way to "earn" money if you're sensible with your spending.

Are you willing to post a breakdown of your monthly in and outgoings? We may be able to suggest some other areas where you can cut costs, but agree that money saving expert is a good place to start with setting a budget.

Good on you for facing up to the problem and trying to sort it out- it is worrying being in debt, but you are doing the right thing trying to get on top of it now

That is actually a really good idea!

I read that most people have £2k worth of items in their attic. I don’t know how true that is, but is there anything you could sell?

I also read that 90% of things that go into the attic/shed never make it back into the house again. So now if I’m thinking of putting something in the attic, I try to skip that step and get rid of it entirely.

That’s basically a form of hedging

Hedging?

0% interest credit cards are a sticking plaster. I don't know why people do this. But in all seriousness I don't have any advice beyond what others have said. Unexpected expenses are blindsiding and I'm sorry this has happened to you.

From the Google machine:

"Hedging is a risk management strategy employed to offset losses in investments by taking an opposite position in a related asset. The reduction in risk provided by hedging also typically results in a reduction in potential profits. Hedging requires one to pay money for the protection it provides, known as the premium."

They’re a very useful form of debt. I’ve used them many times to my advantage, and if someone needs short term credit they’re far better than paying credit card interest!

For longer term, a loan would likely be cheaper. But they certainly have their place.

@Asusefulasamarzipandildo This, basically. Proper hedges are far more complex, but the principle employed by saving in high interest to offset a 0% loan is a basic hedge 😊

True. They're also certainly cheaper than payday loans.

I've used them when something big has broken and needs replacing urgently where my savings are depleted but I know I can clear it when the term is up.

Once you've been paid, move the £500 you would like to save straight out your account into a separate account, and try to live on the rest - checking your account daily if necessary. At the end of the month you should hopefully be able to transfer the £500 to pay off the card.

If it just sits in your normal current account then it will just get spent on every day things.
If it sits in a savings account then you still have it in case of emergencies throughout the month.

Start throwing every spare penny at the credit card debt. You can go online and make payments over and above the monthly direct debit. Even if it's just an extra few quid each week. Keep making the payments as often as you can.

Sell all your unwanted and not-needed stuff on eBay or Vinted.

Start meal-planning, batch cooking, and making good use of your freezer.

Switch to the cheapest own-brands and don't buy more than you need.

Get rid of subscriptions (Netflix etc).

Make sure you are on the cheapest tariffs for all your utilities. Don't be afraid to ring them up and ask.

Put a halt on any non-essential expenditure like takeaways, going out, etc.

(When I was in debt I just wanted it gone asap so I did all the above and a lot more just to get it over with. It's the best way to do it in the long run.)

Switch to the cheapest own-brands and don't buy more than you need.

as a counter to this, buy in bulk if you can and have space to store it.

Absolutely. Interest free borrowing is great, I’ve had up to 36 months before now on cards. Next time I’m going to use the hedging technique I think 🤣

Second the Moneysaving Expert link. No-one can say anything else without a full picture of your incomings, essential outgoings and what non essentials you buy.

You don't need to post it here, but you need to know whether you have enough on paper or if not, what the next step is. But if you can afford to, hopping between 0% credit cards and just paying off over time might be the way to go.

But question every expense. Follow the MSE advice on reducing your broadband, mobile phone etc costs to make your money go a bit further.

Watch what you spend on food and be honest about needs and wants. Perhaps your DD needs to drop an activity or if she's an older teen, could she get a job to pay towards them?

Get easy supermarket food instead of takeaways if you spend on those. If you have things to sell, sell them. If you fritter on crap and 'bits' just stop.

Work out what you can realistically save, and set up a standing order to move it from your account the day you get paid. Don't wait until the end of the month as you'll just spend it if it is there

Also something like plum is good, as you save without knowing it

The term MSE used is Stoozing. It's an excellent way of managing your money and cash flow, but only if you keep very strictly on top of things. It's a way to take advantage of the high(ish) interest rates on savings accounts being offered.

I'd caution against giving this advice to someone who is poor at saving, as the small amount of interest gained needs to be balanced against the risk of dipping into those savings.

OP - have a serious think about whether you are likely to do this, and if you are you may be better off paying down the credit card balance as and when you can,

If you kids' activities are expensive, reduce the number/frequency of them. Or have your kids get a Saturday job and contribute to them, if they're old enough. (That's a great lesson for your kids, regardless of your financial circumstances.)