Am I kidding myself with finances

[Timeforchangeornot]

Need a reality check and don't feel like I can ask ppl in irl.
In summary,
Have a mortgage of £220k (equity £200k). Payments £1200pcm
Joint Car loans 33k
Joint Credit card debt (all on 0%) 30k
Joint Income 98k

The credit card debt is the bit that's bothering me despite being on 0%. We have deliberately made some family decisions which has created this debt. However are we kidding ourselves that this level of debt is manageable?
Long term plan (within the next 5years) to move and release the equity in house.

Just wondering what others think?

If you’re only paying the minimum you aren’t coming out of this debt cycle even at 0%. You need a real budget plan to clear it. How’s your every day expenditure and savings?

Pay off £1000 per month on car loans and other loans and you'll be almost debt free in 5 years. On 98k a year and with only £1200 mortgage a month that should be easy. You have to start now though.

What’s your plan for when you ‘release equity in your house’, spend a chunk of it paying off debt, no doubt you will fritter the rest away and what then ??

You are very clearly living beyond your means.

Your debt is approximately equal to your post tax annual income.

You need a budget. Work out exactly what your monthly post tax income is, then the essential bills (mortgage, car loan repayments, insurance, fuel costscouncil tax, utilities, food and then work on living within your means and repaying your debt.. And if is not possible you need to downsize the cars or house sooner rather than later

98K before tax.

There is no insurance that covers you losing your job

Yes I'm not worried about car loan or mortgage payments. Its just the credit cards. We are paying regular payments but as others have said up thread, it would take one tiny thing like losing job and we'd he scuppered! There are no savings.

Why have you got no savings?

Your income is ~£6k a month after tax.

Your mortgage is £1.2k.

What’s the rest going on?

I have a budget and have just been through 3month worth of statements. It's all accounted for. Everything breaks even but it would take one thing going wrong e.g oven breaking and we'd end up adding to debt.

I was always told to pay off debt before saving so that's what I'm trying to do

I earn minimum wage and have savings, a very tiny amount but savings nonetheless. To be on 98k and have none you just be spending over and above each month? Live to your means!

Based on your update OP on where the debt is from I think the only issue is you have used the convenience of credit cards to fund it rather than the formality of an actual loan - that has then given you the danger of being able to pay only the minimum amount each month rather than being forced to pay it back in a more structured way.

That is fine if you can be disciplined with yourselves to pay more each month than your credit card company requires, but if not then it's iffy territory than will keep you stuck here for longer.

You need to be paying £500 off the credit card a month, that would clear it at 5 years and stick to it without fail. Adjust that if you need 7-10 years. If you can't be that disciplined then refinancing it on to a loan to make you do it is something that would hugely help ensure you do actually get it cleared - on your income assuming you do not have massive nursery fees etc it should be possible to find that repayment monthly. On similar income we have managed to pay about that a month on a loan (that was for house refurb) as well as having similar car and mortgage payments, and £1k a month for DC and stay in the plus

The car debt is the one that would make me feel uncomfortable and that I would be keen to address.

I'm happy with eveyday expenditure except cost of living. I've always been really frugal with food but despite thar our expenses have gone up. Council tax, bills etc have all gone up as well like everyone else.
I worry that due to only paying the min off credit cards that it'll take forever!

Well that is a good principle to live by, but you do not seem to be paying off the debt, just shifting it around? So you must be spending rather a lot?

If you budget well you could be saving several thousand a month and paying off that credit card in just a few short years.

If your mortgage is only £20k in total - that will be paid off in no time won’t it?

Thank you that's really helpful. Yes, we have used credit cards instead of a loan and I'm wondering if it would be better to acknowledge that and get a loan. We have no nursery fees just expensive teens!

It's joint car loans so i'm assuming 2 cars?

Everything breaks even but it would take one thing going wrong e.g oven breaking and we'd end up adding to debt

It sounds like you're at a dangerous tipping point.

If you have so little disposable income that just the oven breaking would need to go on a credit card then you're in a precarious position. A few more things added onto that card debt and the minimum payments will be beyond you. Then out of necessity you start chucking a bit of the normal food shop on the credit card and THAT situation snowballs fast. There's no money to meet the minimums never mind pay it off.

It's a totally unsustainable level of debt.

I'd be cutting the cards up, getting rid of the cars and downgrading one or both quite a bit and then funnelling every single spare penny towards them until at least a few k is gone and it's a little more sustainable.

It's manageable as your mortgage isn't particularly high. Crazy to borrow 33k for cars though. How did the debt come about, renovations or loving beyond your means?

I’d look at getting rid of the cars if ay all possible. Do you have any equity on the cars you could use to buy 2 cheap cars?

If not, get rid of the cars get a cheaper loan and buy a couple of cars worth 2/3k each and run these. They will be a lot cheaper.

Then put what you were paying for the cars into the credit card debt.

You could look at remortgaging your house over a longer term and paying off the cc debit. I’d not use it for the cars as that’s money down the drain. Especially as you can get mush cheaper reliable cars at a fraction of the cost

Yes there is. It's called income protection insurance....

She has a long commute. I wouldn't be doing that on a cheap car. You get nothing for 2/3k anymore.

I'd get rid of one and replace with a cheap car.

what are your monthly outgoings? how
much do you have left to throw at the credit card debt?

It's actually very easy to get this much debt