I have massively fucked up our finances

[Skintorama]

I've just been scooting along with my eyes shut for ages. I bit the bullet and sat down with DH to go through stuff a couple of months back and we were 14k into the credit cards, and paying interest.

We have a 13k bank loan which we took out to clear the last lot of credit card debt, there are still three years on that.

I also have a car loan that was around 14k, I think that's down to 12.5k now, 4.5 years to go. I am looking into selling the car back to the garage next month and buying a cheaper, smaller car (needed a 7 seater for work but don't anymore).

We then took out a new 0% cc and shifted stuff around, so we're not paying any interest now, but having totted up all the balances today we are now £16k into the cards. I know some of that is fees, but it's also that we've managed to piss £800 away over our budget in the last two months, and we have paid the balance of our holiday (£700).

It's completely unsustainable. About 6k of the debt was court fees, and 5k was our kitchen overspend. The rest is just spending.

Help me. Please give me all your best advice and tips. I seem to just be failing miserably at this. We have over 4k a month coming in and I don't understand how we overspend every single month, it's nuts.

Go through direct debits and reduce / remove except necessities
Sell car and get a cheaper model
Get ebaying - we are in the process of clearing out our garage, have made 2k already. Its also very therapeutic.
You both need to be working on the same side, get obsessive about budgeting. There are loads of great website resources, online budgeting tools, forum (motley fool, martin lewis website).
Breathe you can do this!

cut up the credit cards!

also, holiday, kitchen......... not neccessities

Last thing u should have done is book a holiday wtf.

Cut credit cards up.

We booked the holiday six months ago, the court stuff happened after that and that's what's tipped us into scary territory. I could deal with it, in my head, when it was less than 10k owed on the cards.

We've already gone through and cancelled some stuff, Lovefilm, wine subscription (I know!) etc.

There's an oven in the garage I'm going to clean up and ebay, should get £200 for that. DH is doing overtime (£250 a day..), I'm earning abit more over the summer than usual, although I'm also in the process of looking for a new job and we'll probably take a small financial hit in the process.

We can afford to pay back the debt, I just need to get in the mindset of not spending anything other than essentials until it's cleared. I was nearly sick when I realised we'd spent £400 over budget this month, I thought we'd done ok.

The kitchen was a necessity, actually, the previous kitchen was installed in 1960 and was literally falling to pieces. We had 5k to do it but it cost twice that.

Cut up the credit cards - today.

Realistically you need to up your income. Do you have a spare room you can rent out? Look for better paid jobs. If you are a SAHM become a childminder. Take in ironing, walk dogs, house sitting anything.

You need to go through your entire expenditure and cut out all the fat - sky tv, expensive mobiles, a cleaner, gym memberships are all fripperies.

Meal plan to within an inch of your life.

Set yourself a challenge of buying no new stuff for a year.

I did this when we wanted a new kitchen. It is actually scary how much money can be fritter on unnecessary crap.

Stop using cards, even debit cards. Use cash.

Sit down and work out what you NEED each week, for food shopping (do you meal plan?) getting to and from work etc, lift that IN CASH on a specified day of the week. Thats all you are allowed.

Work out any planned expenses in advance. No going shopping/out for dinner/to the cinema on a whim.

Basically you need to be obsessive with money and stop spending absentmindedly.

Do you know what you spent the extra £400 on?

Make a plan /goal. What can you realistically pay off by the end if this year? Then add 20% and push yourself hard to hit the target.

Moneysavingexpert debt free wannabe forum looks amazing ( I'm not in debt but I use them to give me ideas on saving money)

An income of £4k per month doesnt need to be upped. Spending needs to be cut.

What is your mortgage?
With 4K a month coming in you should be able to pay off the bulk of this new debt within six months, depending on what your necessities are (car loan, mortgage, utilities). Certainly you should aim for it. You should allocate 100 pounds a week discretionary spending between you. Put the rest away. It sounds like a lot of pain but it will only be for six month. You'll then have Christmas, then you have to have another horrible six months. But by next summer you could be very well clear. You just have to put a very short deadline on it otherwise it will overwhelm you and you will never, ever pay it off. A five year car loan is a joke unless on 0pc.

I am a Childminder!

I'm changing jobs and so long as I can get a job with a good enough wage we will be better off, and our food and energy bills will halve.

I am not doing a weekly shop this week and will run the cupboards down, that's about £120 saved. I already meal plan and we waste very little food, but there is room for more budgetting there.

The extra £400 wnet on top up trips to Tesco, the odd bottle of wine, trip to MacDs, train fare for a day out. Over the month all those extra £10 and £20 trips added up. Sickening, really, but I can solve it by not doing those things.

It is the absent minded spending that fucks me up every month. I'm going to start using cash only, that's a really good idea.

And don't go out and buy a nice new lot of stationary for re-organising your finances for the big austerity push.

What are your non negotiables? Mortgage etc?

Was 5k on a kitchen necessary when u already had 13k loan out and 12k car loan? Holiday also a be necessity at this time?

Mortgage is 1k.
Council tax £160
Gas/E;lectric £140
Water £40
Insurances £150
Car Insurance £60
Tv/internet £70
Phones £40
Car loan £250
Bank loan £250

=2160

There is NO NEED for us to be so ridiculously in debt.

Plus you need to realise McDonalds is not cheap.

Running down the cupboards this week and selling an old oven - sorry but you need a plan not random stuff like this. Sounds to me like you need to change your entire outlook on money.

So we have you necessary outgoings - what is your total income after tax etc?

The kitchen predated the car.

The car was a bit of a mental purchase, but I needed a decent reliable car to replace the shed on wheels I was driving for work, and this was before we had to go to court to sort out stuff with my DC, which ended up costing 6k.

And on paper, we could afford it.

£4200.

Just to put it into perspective for you, your leftover income is what we live on a month, for rent, food, everything, and we have savings and are paying for a wedding next year. Me, DP 4 yo and 8 month old.

Not trying to be shitty at all, just pointing out that if you really reign in your spending you can get debt free in a decent timeframe.

good news is you have good earning power so you should be able to sort things out.

bad news, in the nicest possible way, is that you are horrendously extravagant! Not to worry, with earning power like that and an evident work ethic you can sort it.

obvious ones:
cancel Sky, all subscriptions, newspapers etc. TV comes through the aerial on freeview, buy a recorder box for £100 or so for that time at 9pm when all the good stuff is on.
no new stuff. Books from the library. No magazines. No clutter. No new stuff full stop. No cinema trips. Days out on foot or THINK about costs.

sell off the clutter.

can you end that car loan early? Decent cars can be had for £2k or son.
shop around for all your insurances.

stop buying clothes for adults until you actually run out. Most people in the UK will die of old age first.

phones; do you need mobile internet? If not, go for a £10 pay as you go simple phone and a cheap tariff. a tenner lasts me several months.