How bad is my situation - am i delusional?

[SharpOliveUser]

Hi all,

need some perspective and advice. I am 32, childless by choice but married. Me and dh own our own home.

I earn 44,000 a year (my dh similar) but i am in quite a bit of debt. My partner knows i am in debt but not the extent. To be honest i wasnt aware of the extent - ive just been feeling more and more squeezed by the minimums.

when i’ve sat down and totalled it up my personal debt (credit cards and personal loans) is just shy of 50k. I am in shock.

this has been accumulated over the last ten years of living above my means/travelling.

However, the thought of tackling it seems so daunting - life is so short and there are so many things i want to do/ places i want to travel.

i also have a horse and he costs me a significant amount - i have recently considered sending him away for training as i dont currently enjoy riding him but now i am thinking maybe i should sell? I would get about 10k for him in the current market and as i say i dont enjoy him. However being a horse owner and an equestrian is such a big part of my identity so i am dragging my feet. Realistically when will i be able to justify buying another horse and i will miss the horse world very much.

i guess i just need some perspective on how urgent/ bad my situation is and some advice on how to proceed without getting too depressed. 😔

my only savings total 500 pounds

Okay I mean it's not great but it is definitely manageable. Horse has to go. That's the debt down to 40k. Then anything you used to spend on the horse immediately goes off paying the debt. Get rid of the credit card.

I earn a lot less than you and am still paying off a car loan for my car of 11k and I don't feel paralysed with fear by this. I also have a mortgage of over 100k. I earn just over half of what you do - it's fine.

You can be debt free in as little as 3 years. You don't need to panic you just need to sort it.

What you can't do is tell yourself it's not that bad and carry on. It's only not that bad if you make changes now - and whilst your still on your current salary as things can change. So do it all now, consolidate that debt, cut up the cards, free yourself of all horse related costs.

Can you go on fancy foreign holidays? I mean, no, not really. That's fine though, there's a lot of lovely places in the UK you can visit on a budget. But first you have to work out what that budget is.

Find Financial Audit with Caleb on YouTube and watch some with people with similar debt and see the advice he gives them.

There's a way out of this now, if you tackle it now and don't let it grow.

@SharpOliveUser Hi OP, former Citizen Advice adviser here. I'm sorry to say that if you think having credit card and personal loan debt of almost £50k at the age of 32 is either manageable or tenable then you are delusional. It's also grossly unfair on your DH for him not to know the extent of your debt - he has a financial connection to you through marriage and joint property ownership and if you don't stop living beyond your means and your debt becomes unserviceable (assuming it hasn't already?) he will be affected too when bailiffs turn up at your door. How would you feel if he were concealing this level of debt from you? Marriage is about trust and honesty - where is this in yours?
You need knowledgeable advice from one of the free debt advice charities e.g. StepChange Debt Charity, National Debtline, Citizens Advice, and Debt Advice Foundation. There are five debt solutions which have different qualifying criteria and whichever debt charity you seek advice from will look at your entire income/expenses/debt situation and advise you which you would be eligible for - here's some information on these potential solutions: https://www.citizensadvice.org.uk/debt-and-money/debt-solutions/
The adviser will start by getting you to complete a Budget Sheet of your Income, Expenses (Outgoings) and Debt so you can see what, if any, spare income you have each month - this will be as sobering for you as totalling up the true extent of your debt, but it's the first step in dealing with it.
It's up to you, of course, if you ultimately take their advice, but I've met many debt clients who, like ostriches, have buried their head in the sand for far too long and they all had two other things in common:

• their debts got far worse the longer they ignored them
• they all said "I wish I'd done something about this sooner".

Dealing with debt is daunting, but the key is to start - your situation won't improve until you do. Once you've completed your budget sheet and identified possible solutions for dealing with your debt you will actually feel more in control and empowered to take action. You say "life is so short and there are so many things I want to do/ places I want to travel" - well how will you manage to do any of these things without money, OP? What if one of you lost your job? Could you afford your mortgage on one salary? Would that be the time you'd finally be honest with your DH about your debt? You need to address this now OP. All the lovely things you want in life come from being on a stable financial footing - right now you're on quick-sand.

LOL oh dear - interest free credit cards are typically an introductory offer. They rarely remain interest free. And they certainly don't if you miss a payment (some also require you to pay off the statement balance). They are NOT for people, like OP, who view credit cards as free flowing loan.
There are far better ways to build up good credit than using an interest free credit card. By all means play the "shifting credit card balances to zero interest credit cards game" if you wish - but lots of people try that and fail miserably. Furthermore, you are suggesting you can fund an ISA or other investment purchase with a credit card purchase - but you can't. People who have excess income can certainly play around with money shifting mechanisms, but OP is not one of those people - so your comment really isn't relevant for this conversation.

You said that "life is so short".
Actually, for most people it isn't. Some unfortunately die earlier, but most people these days can expect to live well into their late seventies, eighties, or even nineties.

You need a longer time frame in your head.

You are 32 now, so if you retire at 68 that is 36 years left of working and taking holidays (i.e. "travelling"). Thirty-six years. Plenty of time.
One really good holiday a year still means 36 holidays to look forward to.

If you retire at 68, and die at 88, that is 20 years of retirement to fund.
Twenty years.
You don't want to exist for those 20 years on the state pension.

You owe more than you make a year, not even including your student loans ... and the debt isn't a mortgage for your home. It's for 'things'.

You can't afford a horse and the related upkeep.

Sell the horse, pay off the debt with the highest interest rate. Get a second job or look for ways to make some quick money and pay off as much as you can.

Stop living above your means!

OP, start an excel and start typing out all your incoming and outgoing money. Don't think about it, just do it.

And if you feel like posting it here (edited for privacy), people here will be able to advise you how to make cuts.

But yes, sell your horse as a priority.

But the op clearly wants everyone to say it's ok. We're in debt too. Don't worry, spunk some more dosh on a horse that you don't even ride.

She needs to hear the harsh truth. She's very nearly screwed and that she needs to take action now. So Personally I was blunt and told her to grow up.

Life is indeed for living, but if you are stressed and worried by debt it’s not a lot of fun.
A horse is a wonderful thing but massively expensive. You can easily get through thousands. One accident, colic, or lameness can cost the value of your animal. Not to mention the expense of feed , farrier and equipment. With your debt you are living massively beyond your means and it can only lead to distress.
Sell the horse, offer to help someone with their equine to keep your neddy contact time.
Tell your partner and work out a tight budget to start to repay your debt.You can really life a full and happy life without spending loads.

That’s not my reading of it at all. She’s been open and honest about it, has acknowledged some things have to change and has engaged with the responses

Large amounts of debt can be daunting and a bit like a very messy house can also become normalised. This thread to me is the OP sort of stepping out of that bubble and agreeing things have to change. I don’t think anyone is going to be helped by making incredulous sort of remarks or by just being rude. Saying that yes it’s tough but you can do it is what she needs to hear.

As someone who was previously in debt for a similar amount and paid it all off over ten years ago, you've done the hard bit, OP. That's the bit where you sit down and tot up what you actually owe. I don't think you need Stepchange or similar, you just need to follow the guidance on moneysavingexpert.com. Use it to work out how you should be paying down these cards, in what order.

Sell the horse. Just do it. I'm old school about these things: if you don't want to or aren't able to train your own horse, you've bought the wrong horse for you and/or are not really cut out to own a horse, at least at the moment (money aside). Find a local stables that's looking for help and you'll probably be able to ride a range of rideable (to a greater or lesser extent!) horses once a week or so.

Once you've worked out what you're paying off and how much you have per month to pay it off with, get a bank account like Monzo which allows you to hive off money from your main account and sweep the amount you're budgeting out of your account every month. The aim is to ensure that all of the money in your usable bank account is yours to spend.

I'm not suggesting using credit card money for investment 😊Just replying to your suggestions that all credit cards are disastrous. They're not.

As I stated, IF you have the money to pay them off, 0% debt can be leveraged to make money. This can be helpful. Of course it's introductory, banks want to make money.

However IF the OP can sell a horse for 10k, and transfer 10k of her CC debt to an interest free credit card, put the 10k into a long term ISA for the length of the interest free card, she will be making money on the "locked away" money, paying a minimum fee off the interest free credit card monthly, and will have more than enough to pay off the balance of that card at the end of the interest free with the horse money, plus some more money to pay elsewhere.

This ONLY works if the interest earnt is more than the interest on her debts. If she has been fortunate enough to get low % borrowing, it can be helpful. Learning how to make the best of a bad situation with money can be helpful.

OP, is your house mortgaged?

I do understand why you're suggesting this, but personally I think if OP was the sort of person who could keep track of this sort of thing she wouldn't have got into the debt she's in now.

£50k debt
£75k student loan debt that 'taxes' you at a much higher rate than normal, but that's apparently 'fine'.
A horse with who knows what the future holds in vet bills as it ages, but you see this as a £10k 'asset'.
A partner who doesnt know the extent of any of the above.
£500 in savings.

£44k annual income in an economy that pretty scary right now.

You dont need Mumsnet to tell you to tighten your belt and get 5 dinners out of a chicken.

I wouldnt sleep with that hanging above my head and I would be at CAB tomorrow morning at 9am.

I do agree, it's just something I wish people have pointed out to me when I was in debt, but had a bit of liquid cash too. If I'd understood how to make money work harder (a bit like the snowball effect) paying off debt would have been a lot easier 😊If the OP is committed to making a change, having the mindset of making money work for you can make it easier.

@iamnotalemon "I appreciate you don’t want to sell your horse but £10,000 is lots of money and would be a good start in clearing your debt." Not to mention all the money OP would save, month on month, on the expenses associated with owning a horse.

Thing is if you don't enjoy horse riding then it really ISN'T any part of your personality... it might be someone you once where but you have grown and don't even like it anymore.

People get into trouble when they view themselves as their 'hobbies' and their past with rose tinted glasses... you are SUPPOSE to grow and change, lean into it and find who you are now (and a life you will enjoy that suits you better).

It’s not just the money you will get for selling your horse, it is the ongoing savings that being horse free will make for you.

livery costs
vets bills,
insurance
farrier costs etc
These must be making a huge dent in your monthly budget.You are going to have to cut back on many expenses, so these are the obvious ones.

Then you can look at making other savings too, no more coffee runs, home made lunches, no new clothes.

Use cash not a credit card for everyday purchases, which you need to record daily to see where your money is trickling away from you.

Then see how you can raise some money, vinted, eBay, a second job.

This is fine as long as you can cover your essentials which op right now is starting to struggle with. Plus the impact of the stress of so much debt.

Op there's some really good debit advice charities out there such as debt action or particularly CAP who will act as an intermediary between you and debt collection agencies, help negotiate a lower repayment plan and consolidate things for you and most importantly look at a realistic budget plan. You've actually already done the hardest thing - actually doing the maths and facing how much you actually owe is very scary and many people just stick their head in the sand while it gets worse. You've been able to recognise this is an issue and now you need to take steps to address it.

First plan is contact a debt action charity - this should be free if they're any good.

Second step is sitting down with your husband and being honest with them how much you're in debt and that you need help from them to tackle it. This will mean changes in lifestyle for both of you so he will need to know how much. Also you need to look at how much of this is your debt solo and how much is his debt. Is some of it holidays you've taken together but it's gone on your credit card for example in which case is half the cost of that holiday his. You also need to know if he's in any debt, how much and what savings you have together if separate from your £500.

Second step is going through your outgoings, separately and together and categorising things. How much are you spending on what and where can you realistically cut back.

The horse needs to go. There are ways you can still be involved in that world such as volunteering your time with a riding school or stables that don't incur the costs you've been covering to date. If it's becoming a burden then it's time to let it go. Would anyone you know buy your horse off you so you could visit? 10k off 50k debt is a massive chunk off your mind.

I would also look at your mental wellbeing. Has spending been a coping mechanism for something underlying. How are you managing the stress of this debt. It will be important to have a support network around you either from friends, your husband or a counsellor while you go through this. Especially if your husband might have a negative reaction.

I think you also need to be realistic with what and who you can keep up with. I used to be in debt and i had friends who I loved but who out earned me massively and I now see that i put myself into more debt keeping up without realising it. I had to be honest with them that I was paying off debt and would only be available for free hang outs for a while. It was tough but only a few of them remain my good friends- I saw who really cared about me pretty quickly. It's a hard process but honestly worth it. I saved as much in personal energy as i did in the bank.

Then you just need to stick to a plan and keep chipping away at paying it off while also making long and short term savings accounts and paying into these even by a little every month so you're creating a cushion.

Once you get through this initial part, the monthly repayments come down and your savings are established and you're in a better balance you can still do versions of what you did before, just in more economical ways and better planned and saved for.

People have got out of worse debt but it takes support and hard work. £44k used to be an amazing salary but the reality is that it just isn't any more. You're both on what are now two quite average salaries given the rise in cost of living so you cannot live like you're a high earner.

She can’t afford to go on holiday or own a horse. She is in a ridiculous amount of debt. I’d love to travel to expensive faraway places, but I don’t want to take loans and end up in OP’s position.

@SharpOliveUser Sell the horse and cut back in other ways. No holidays until you’ve cleared all the debt or else you’ll end up in more debt. Come clean to your husband.

The current situation may seem challenging, but the practical course of action would be to sell the horse and use the proceeds to reduce the debt. Regarding your husband, it’s important to discuss the situation with him and ensure he is aware of the circumstances. Additionally, I recommend seeking guidance from a debt management service to help establish a manageable payment plan with your creditors.

@outerspacepotato "I don't know your laws where you are but is he going to be responsible for marital debt?" No, in the UK you don't become responsible for someone's debt just because you're married to them and if OP's debts are in her sole name (as they seem to be) then her DH wouldn't be responsible for them. However, they seem to have a joint mortgage on their home and if OP could no longer afford to pay her half of their repayments and her DH couldn't cover the shortfall, that would affect him.

To OP and others who have been in this position before - what does it feel like? Do you actually feel scared about your future, the chance of losing your home/partner or being extremely poor in old age? Or do you successfully ban the thoughts from your mind? If the latter, is it that ability to avoid anxiety that gets you into this position in the first place? Or are you just terrified the whole time?

I’m sure she could put it in to AI herself. It’s actual help she wants.

p.s this isn't an AI reply. I'm just sharing my thoughts.

Sell the horse and delete social media. It’s making lots of young people believe that multiple holidays and constant new clothes are normal.

It’s not and the debt you are building to live this life is crippling you.

Reducing the debt is one thing but reducing your expectations is another thing you need to do and deleting socials will help with this