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

I became laser-focused on the snowball method. Obsessively-so. We paid off £50K in a few years, but the knock-on effect now is an inability to enjoy spending any money. We're absolutely far from poor, especially asset-wise, but I can't get out of the MSE mindset. I'm criticised for being 'tight'.

We got into that position in the first place by being young and extremely stupid. Burying our heads in the sand and refusing to see it as 'real money'.

If you don't even currently enjoy riding your horse and were considering sending him off for training (which I assume would cost a significant amount too?) can you look at it all as a way to get a different horse? I'm not horsey and have no idea if this is a reasonable way to look at it, but I assume horses get bought and sold for all sorts of reasons, not just affordability but suitability too? And if that is too painful to contemplate, could you lease him out for a few years. Use the money (and the lack of expenses) on the debt and still have him at the end of it all?

If you can get 10k for your horse work out how long it would then take you to pay off the 40k of debt with the money you'd free up. Then consider how long it would take you to save up another 10k after that (less than a 1/4 of the debt paying off time as you'd not be servicing 50k of debt). That's your path back to horse ownership. So you wouldn't be leaving the horse world, you'd just be rejigging things to get you onto a more suitable horse. (Alternatively your path to paying for training for your current horse that you've leased out.) If it's feasible, maybe you could get a few hours of work at the stable in the evening to keep your hand in as well as earning a bit more money.

Having suggested all that, you do also need to assess your life. You've been spending over your income by ~10%. Something needs to change. You mention two big stressors on your finances - traveling and the horse. Is the horse world more important than travel? Is there something else you can cut back on to afford both? Would not traveling affect your relationship with your DH? You probably need to have a good think about what gives you the most in life.

It may be that you can push your career a bit and up your income enough to be able to afford both within the next few years. Age wise you are at a good time for that and if you sell or lease your horse you'll have more time to dedicate to it.

I do think you should talk to your DH about it, though possibly only once you've started to tackle it and have a clear idea of how you'll get back into the black. He may have financial goals too. And may have made assumptions about what you can both afford together and when. I'm assuming you have separate finances apart from household expenses, but if you travel together and are intending growing old and retiring together, possibly moving house at some point. etc., you have joint financial goals and you should be talking to each other about how that's fitting in with the other things you're committed to.

Good luck OP. It's great that you've sat down and faced the reality of your financial situation. Now you can tackle it.

Great advice - not. No-one gets to "live the lifestyle they enjoy" without the means to do so - this view is naive to the point of being moronic. OP's only 32 and already has almost £50k of debt (and rising). What advice will you have for her when she's hiding behind the sofa from the bailiffs? When her home is repossessed? When her furious DH has left her? Do you think she'll be "living the lifestyle she enjoys" then? 🙄

You’ve received some great advice here op. I’d add - you say life is for living and that’s very true…it’s also for learning and growing and facing problems head on. You’re still young and have a reasonable income … you’ll be able to clear this debt and when you do you’ll feel fantastic! And proud! And when you’re older (and going on exciting trips again) you’ll look back and see it as an important part of your well lived life. Sell your horse, make a plan and go for it.

On what coin though?

• sell the horse; that's £10k to pay down on debt
• how much will selling the horse save you per month in terms of livery, other costs etc.? - use all of this to pay off/over pay debts
• look at balance transfer cards if you can, you can then save on interest
• also look at debt snowballing - pay off the smallest debt first, once that has been cleared, then put what you were paying monthly on the paid-off ones towards paying the rest of the outstanding debts
• Print out a bank statement, plot all outgoings onto a spreadsheet and see which ones you can cut down on or cancel (even temporarily)
• Do you have things laying around that you can sell - old equestrian clothing, tack etc.? - Vinted is your friend here in terms of clothing, or even eBay
• Shop around for the outgoings that are essential - electricity/gas, insurances

His issue is depression - at the financial situation his family is in!

Do you not need to make monthly repayments on this loan as your salary is over the repayment threshold? I don't understand what you mean about seeing it as a tax?

Sell the horse and fast! Pay off the most expensive debt you have with the money. Then with the money you’re saving without a house pay it towards your most expensive debt! If you can re finance/balance transfer any of it to a 0% card do that as a priority so that you don’t keep accumulating interest.
if you have say 5 credit cards with 10k debt each. The first thing to do is list them all and their APR% you should be able to find this easily on your statements etc.
If for example it looks like this:-

10k TSB 26%
10k RBS 25%
10k Santander 22%
10k Virgin 20%
10k BOS 18%

you pay it off in that order. If you can get the first one paid off with horse then focus on getting the 2nd most expensive transferred to a 0% card. Then focus on paying off as much as you can the next most expensive. Whilst going the minimum payment with the rest. Every 6 months you should be applying for another 0% balance transfer and transferring the next most expensive debt.

So really you're in debt by £125,000 if you add the student loan and the other debt together. That's a huge sum to owe. How much do you pay off the student loan every month?

Sell the horse. You can still ride when you have the cash . My DD pays £25 for an hour.
Be honest with your husband.
Contact Step Change.

I hate to say it as an owner of several ponies myself, but selling the horse is the sensible thing to do here. Not only the lump sum you'll get from selling him but the money you'll save on keep/livery etc every week. It'll be relatively easy without the horse expenses to get a grip on the debts. Once you're financially back on the straight and narrow you can look at a share or whatever. Even if you get less than £10k for the sale price it's the money you'll save every week that will make the most difference here. If you don't like riding him, it's a bit of a no-brainer really...
I think you need to do the full maths here on the true cost of keeping your horse - lessons, transport, entries, tack and rugs, insurance, routine vet visits, physio etc. something is horse owners generally avoid, but it sounds like you need to do it now to get on top of your overall finances....

I bet he’s sad at the OP’s long face🤣

(see what I did there?)

If your making minimum payments don’t involve any consolidation companies (only consolidation I would look at is a loan to make your credit cards ) but only commit to that if you cut the cards and don’t spend as you’ll be in a cycle. Using step change will black mark you if you ask them to help negotiate payments etc, imagine you’re not keen on that. I’m 100% not perfect so probably shouldn’t give you advice as I have about £20k which I need to work on, but need to get in my head that I can’t live the lifestyle I previously did (split with partner so all household and mortgage payments are mine to deal with so have lost about £500 a month) so it will take longer but I’d rather make the minimum and over pay where I can rather than blacklisting myself essentially

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

Sell the horse. That's a fifth of your debt paid off and an instant end to all the costs of having a horse. Let the horse go to someone who will enjoy riding him, it's not fair to him to have an owner whose heart isn't in it anymore.

Also you say being a horse owner and an equestrian is a big part of your identity. I know exactly what you are talking about here. I've been into something for so long (nothing horsey), all my life in fact, but in the last couple of years I've had to face the fact I'm not enjoying it any more but who I am is so wrapped up in this thing and it is really hard.
I've been working on it, I just keep saying to myself that's who you were then, now you don't enjoy that thing any more and it's not who you are now. Also, I look on the positive side of now being free from that thing to try something else in life.
But I totally get why you are dragging your feet.

If you are keen to stay in a horsey lifestyle, does that mean you are socialising a lot with other horsey people? That might not be helping because you are likely surrounding yourself with people who can afford things that you can't. Which is fine if you are happy to be honest about eg 'sorry money is tight at the moment, can we meet for coffee and cake at mine instead of going out for expensive 3 course meal'. But considering your post it doesn't sound as if you are going to be able to do that. So removing yourself from that environment, even if just temporarily,.might be a really positive thing.

Selling the horse you will have £10K plus you won't have the costs of feeding/stabling/shoeing etc. Is there any way you can earn yourself some extra cash looking after someone else's horse for them, or can you keep in touch with the horsey world by exercising someone's horse for them?

In my teenage years (long time ago) I worked at a riding stable and used to get a 15 minute free ride (exploitation at it's finest) I hope it's less exploitive now! Would this help with keeping you in touch

I love horses, but do not have one. I realised at an early age that owning a horse is only for the very rich and the 100% utterly obsessed.

Don't panic. If you are meeting the repayments then sit down and work out a strict budget and really get into the "stingy" mindset. Look at 0% consolidation or the snowball effect.

If you aren't then look into debt management plans. Not sure if they are available for home owners but we had one and it was brilliant for us.

I was young and silly with money but obviously much better now so no judgement from me. I would say though that mumsnet isn't the best place for advice, MSE is probably much more helpful.

Yes you are delusional. Sell the horse and pay off some debt. Prioritise paying off the other debts and do local camping type holidays. We'd all love to go travelling and have expensive things but you can't afford it!

Hey OP, if you're anything like me then you'll feel awful looking at it like this, but as soon as you start to make a plan and stick to it, you'll feel better.

Definitely agree with letting the horse go. Go through your outgoings forensically and see where you can cut back - see it as a challenge maybe... you'll be paying a lot interest alone.

Get on Money Saving Expert and immerse yourself in the most efficient way to get this debt down.
Best of luck.

I think this is manageable…

Sell that horse! And work out how much you spend monthly on horsey things. You know you can afford to save that! You don’t have any children so if your living costs are not too high you could save a decent amount a month.

Could you do £550 per month and still live your life in relative comfort? The rest of that £40000 could be paid off in 6 years.

I am currently clearing a load of debt (£18k - mostly credit card with some student loan). Been at it since July last year and it's been a huge lifestyle adjustment. No holidays, strict budgeting - for you it'd be also getting rid of the horse. You're right that you're going to have to make some big sacrifices and you can't do it half arsed - e.g. treating yourself to "rewards" on a regular basis for your progress or you just set yourself back. You're lucky to have your spouse, would he subsidise more of the bills perhaps to let you focus on clearing this?

Think on how good it'll feel when you're debt free and can enjoy your holidays knowing you've paid for them already. I get my satisfaction now from watching that debt figure reduce - only 5 months left to go!

Simple as that.

You say you own your house, mortgage free?