To ask for help with paying off debt?

[IcyPlumCrab]

I have a credit card with a £2,300 limit and have about £30 left on it. I have got it up to a couple of hundred but the interest rates are high and I've found myself needing to dip into it due to cost of living.

Other than that I don't have much, I have a £400 overdraft but I'm not worried about that, and a credit card with a £200 limit but it's 0.
However the first credit card keeps me awake at night. I know people have much worse but it honestly makes me feel ashamed and fret. Currently have no savings as I recently bought a flat, so anything I did have went into that.

I've cancelled my pension contributions and waiting on a refund (civil service), but it's just taking forever to hear anything. However when I get that back it'll be around £1000 which will really help.
Without my pension I take home around £2060 net per month and I'm currently looking for a second job.

My mortgage is £440 a month.
Just cancelled my tv licence and gym membership which in total will save me £60.
Electricity is only about £35 a month.
Gas £35 a month atm.
Water haven't been billed yet but hopefully no more than £25 a month.
Council tax is £189 a month until March :(
Internet £24 a month.
Phone including handset £34 a month.
Pet insurance and monthly vet health care plan £32 (i have a cat)
As of March will be paying £120 service charge/ground rent a month.

There always seems to be something coming up like the dentist, household things etc. I think it's the credit card that's killing me, even if I pay £100, £50 is charged in interest.
I have a holiday planned to see a relative this month and in total that's set me back around £400, but that's not something I do very often.
Everything left good on food, transport (public transport, don't have a car), pet food, toiletries etc.
All my clothes and shoes are second hand.

When you say ‘little things’ what do you mean exactly? That’s the kind of spending that can feel ok each individual time, but it all adds up.

Please rethink cancelling your pension contributions, it is madness to opt out if you are in alpha. Also, staying in and batch cooking may seem boring - but it will be worth it if you clear the debt faster!

I know that when we first bought a property we put too much into that and regretted not keeping more savings back for emergencies and just life. But what’s done is done now. At least you have your own place, that’s fab!

I find that it helps to not use my debit card during the week except for the weekly supermarket shop. Take cash out the machine and use that for spending money. I don't know what you habits are, but maybe £60 a week, for example. Then you can track what you spend.
Also go through you bank statements for the last 2 months so that you can see everything that goes out your account each month and on what dates. Keep this list handy so you can also know what else is set to go out before payday.

Pets are incredibly expensive.

{if they are insured}

But the thought of NOT insuring is terrifying.
My dog is one my biggest outgoings, {insurance, routine wormers, 'healthy pet club' vaccines} plus good quality food.

In 'real terms', it's much more expensive to own a pet now than 15 years ago.

But they bring so much joy with their faithful companionship.

Re cancelling your Civil Service pension...hell no!

Don't do that...they have superb pensions.

Are you buying a lot of coffees and snacks out? these can really add up.

A coffee and snack a day can easily be £8 these days.

When I wanted to pay off the mortgage, my main trick was to just pay the money off. I knew from adding up bills that we could cope on £x, allowed an extra £100 for emergencies, and paid the rest off. Get "pots" for the bank and move money for all bills in there, then you keep an eye on the remainder. It's much better to be looking at £450 at the beginning of the month thinking that's all for the month and budgeting from there - rather than spending away and hoping wistfully that money will somehow save itself by month end. Promise yourself a treat when it's paid off, a blow-out of spending the extra on something exciting and frivolous.

Getting on top of spending means minimising expenses out; one night out each month and otherwise read / free exercise clubs / TV films etc. One of Netflix or Amazon or Disney or Now is a good investment if it'll keep you at home. For food shop, you need to get more frugal; pasta, bread, soups, rice are all cheap bought in bulk. You can get bake at home rolls for treats. Chop and freeze onions, courgette, aubergine, cauliflower etc to take advantage of deals without it going bad, invest in a few basic spice jars, and make nice meals at home. Toiletries and cleaning products - it's your own home, so worth shopping around for bigger cheaper items in month 1 and getting the benefit in future months of only topping up; £1 bleach is fine, decent dishwasher or laundry tablets on half price, fairy liquid on 3 for 2 etc.

Good luck!

I see you said you couldn't get a 0% credit card, but could you maybe qualify for a personal loan with a lower interest rate than your card? Use the cash to pay off the card then pay off the loan as early as possible

The little things all add up, I was finding myself short at the end of every month and didn’t know why but when I looked back it was just because of lots of payments under £20 coming out across every week. A lot of it was shopping but instead of doing one big shop I was going to the shops most days and buying what I needed, but then often a treat as well or would buy loads of stuff on yellow sticker but that I didn’t actually need so although I’d got £30 worth of food for £10 I wouldn’t actually eat it all or would be eating more than I needed.

I would try and do one big shop instead of lots of little ones for your food and toiletries etc and meal plan so that you’re not buying more than you need. Bulk buy things like pet food, laundry products etc so that you don’t need to be replenishing often and so that you’re getting the best deal. Give yourself a weekly budget for ‘extras’ and don’t spend above this, turning contactless off on your phone so you have to use cash or chip and pin might help make sure spending is mindful. Turn off any one click purchasing options on places like Amazon and other online retailers too, again so you have to stop and think ‘so I really need this?’ before you spend. Your fixed outgoings like mortgage and bills are quite low compared to your take home pay so the issue is definitely with how you are budgeting for everything else.

Once you r cleared the credit card debt set up a savings account and a direct debit so a few hundred a month is taken straight out of your salary the day you get paid and put into savings, you will then have a safety net for any big unexpected payments like dentistry, home repairs, furniture etc without needing to use the credit card.

Your CS pension is worth it's weight in gold (I'm assuming you are in Alpha). It should be the absolute last thing you stop paying into. You need to make sure that if you do stop paying that you start paying into it again within the set time period it it will count as broken service. If you don't understand the pension you can book an appointment via the pension page to get someone to explain it to you (or ask your line manager).

Agree with this. OP, I was once in a lot more debt than you. I had a very very boring time while I paid it off. But it was worth it to get out from under it, and you know what else? We got into some really good habits during all that time of being frugal.

These days our only non-mortgage debt is a low interest fixed rate loan DH has (we could pay it off now, but it makes more sense to earn interest on the savings) and I am also on a much higher salary with a lot more disposable income. But because of those good habits we got into, we don’t just spend spend spend - in fact a huge chunk goes into savings on pay day.

Yes, it’s boring being frugal and paying off debt, but it will help you develop better habits that will stand you in good stead long after the debt is cleared.

As to feeling shame or stress about it, might it help to talk to a counsellor? As a civil servant you can usually access this free - search for ‘employee assistance programme’ on your intranet, usually you can get 6-8 sessions of private therapy for free. It’s confidential from your employer, the only thing they share is how many people used it.

Thanks everyone. I am reading all the replies and will take the advice on board.

Try a bank account with pots to save in each month, like Starling or Revolut. It made a huge difference to how in control or otherwise I feel about money, I have individual pots for utilities, activities, everything.

It would be easier to give you advice if we could see exactly where all your money is going each month. This online calculator is great and if you post a more detailed breakdown of your finances I'm sure you'd get some better responses https://www.stoozing.com/soa.php

Getting out of debt is a slog. It took me years. Every pound you pay off your credit card will help. I would pay everything I could down to the penny.

Agree with this poster. Chase has pots, good interest rates and cashback per month. The pots will help you plan for the annual expenses.

How do you eat and cook OP? Do you meal plan?

Im veggie and find when in my own I can eat very simply and cheaply. Pasta with sauce, Eggs and homemade chips. Chickpea and potato curry. I would batch cook two meals to last the week, with toast or soup for lunch. Fruit wise I stick to cheap and nutritious options; bananas, apples.

You can do this. Every month on payday, put aside £100 to a savings account. I know it’s not nice feeling skint just after payday but it won’t last forever. This is just a difficult time but it’ll pass.

Do you buy stuff on Vinted? Could you sell stuff to fund new purchases?

Can you invite your friends round to have film night at yours to save travelling costs? Do they come to you?

Could you take a loan to pay off the credit card - interest rates will be much better?

Are you receiving the single person discount for the council tax?

I have an excel spreadsheet with all my incoming and outgoings. I transfer all bills to a pot. All food money to another pot. All money for socialising to another pot, etc Spend a month keeping receipts and have a good look at what you are spending on what. I am really bad with money and have nothing left 2 weeks before payday. I have found this really helps. Also, if your bank does it activate the round ups, I don't think about it and it rounds up any card purchases and put that in a rainy day fund, i can get upto about £100 a month without realising

It’s really just about getting back to basics, after your holiday this month. You can’t afford to save - paying off your debts should be your first priority.

I think the biggest issue you have is that you live alone. There are very few people who live alone that can afford to have a nice quality of life, comfortably pay their bills, and have a chunky amount of rainy day funds. If you don’t live in a one bedroom flat consider getting a lodger.

Have you tried using the eligibility calculator on moneysavingexpert?

It can usually tell you which card you're eligible for before the application. 0% is the way to go here

Second the cash thing, a relative of mine got into a lot of debt. I told her stop using card and go to cash. They started taking out 300 and seeing how far it would go. Keeping money till the end of the month before buying things like clothes and shoes, just basics until they knew what was left. Cleared there 10k card in 18 months also had interest every month then within a year brought a new car outright never looked back. Cash is the way to budget. Card just costs more overall

Splash out on a small notebook and write down everything you spend everyday. Writing things down where you can see it and compare everyday is a good way of starting to take control of your spending and seeing where you can make savings.

See if there is a free debt advisory service near you, they will help you to prioritise your spending habits and make sure you are paying things off in the right order. Randomly cancelling outgoings like your pension contribution could cost you dear in the future.

When is your phone contract up? You could get a non-iPhone contract for much less than you are currently paying and if you get unlimited data, you can use that as a hotspot/tethering for your internet. For example, you can currently get a Samsung Galaxy A55 5G (mid range Samsung), £5 upfront cost, unlimited data for £19 per month. That would save you £39 per month.

When you say you applied for a 0% card did you apply directly for one or use MSE to check all cards? If you're being turned down for all products you must have something significantly impacting your credit score which you need to get to the bottom of. Taking money out of your pension is a sticking plaster to a bigger issue - you need to long term raise your income or change your spending habits.

I completely empathise with dating being expensive. It sounds like you need a "socialising" line in your monthly budget that includes date expenses and stick rigidly to it. It's up to you how you divvy it up between dating and friends.

Also, any time you are tempted to buy a ‘little’ thing you don’t really need (eg takeaway coffee) immediately pay that money towards your debt instead!

Why don’t you understand where it’s going? That’s simply can’t be true, unless someone else is spending your wage you do know where it’s going. Sit down and work it out. It’s never been easier with online banking, you aren’t waiting for a paper statement to come. You are choosing to “not know” . And another one saying a terrible idea to cancel a civil service pension.

I know it’s a sin to mention this here, but could you give your cat to someone who could take care of it for a few months, and who could pay the cat’s costs?

The little expenses add up.

£5 for a lip balm
£1.50 for a box of tissues
£4.50 for a coffee
£3 for a birthday card
80p for a stamp

That's an example of how you can spend a tenner in 5 minutes and not really notice.

Budget in advance. Set yourself an allowance every month for each category and keep a record. Your money is obviously being spent on stuff you don't really need as much as you need to stay in your work pension.

Don't cancel the pension. That would be the height of money mis-management.

Boring is cheap.
A constant need to be entertained is expensive.