Debt issues

[Tia74]

Hi there

Just wanted some advice at the mo please. I'm really unsure what to do at this point. I have credit cards and getting to the point where I am just paying minimum. Cost of living it's goin up, wages are not so getting a bit stuck.

So what do I do now? Try okay these off somehow, or go the consolidated loan route? I am trying to pay off a 0% but the others are not and don't want k keep applying for more

I feel like I'm running out of money each month. No savings

Thanks in advance.

Go to Citizens Advice for help.

What are the amounts and interest rates for each card? Generally advice is to pay off the most expensive one first - so minimums or just above minimums on all the others and funnel any extra cash to the ones with highest interest rates. Assuming balance transferring to the 0% card isn’t an option.

Thanks for that. But I don't really have extra cash to pay more. Things are tight enough as they are x

Try an organisation like StepChange - they’ll be able to advise on best way forward for you

Agree with stepchange, citizens advice will just send you to them or similar

Speak to them all, except the 0% , explain the situation and ask them to freeze the interest.

Pay a token gesture to them all £1, £5, whatever, but leave the 0% one as it's costing you nothing, funnel funds into the one with the most expensive interest rate.

Draw up a budget 3 columns.

💷 Income: maximize this. Check you're getting all relevant benefits. Consider a second job. Use a foodbank if you have to. Walk everywhere if necessary.
💷 Bare essentials outgoings: the stuff you can't not pay eg council tax, rent, travel to work, utilities if you can (prioritise gas/electric, they can't switch off your water).
💷 Other "essentials": you're going to have to redefine what that word means for your family. There's going to be some things others consider essential but that you can't afford to have. Remember to factor in some for the credit cards and food.
Grand total has match 0. If it's a minus figure you have to look again at what you need to cut out.

I agree with token gestures, they will definitely accept them as 1. It’s better than nothing and 2. It’s cheaper than taking you to court. Ask to speak to the debt team (or whoever is appropriate) and insist that the interest is frozen and you can only pay £1 a month. They may only say for 6 months but take it and then ignore any letters that say you need to pay more. Your account is active and receiving money so you’re all fine.

As for generating more money. Try the following:

1. Get a better paid job
2. Renegotiate your current salary
3. Take on more hours/over time
4. Could you let out your driveway (if you have one)
5. Take in a lodger (£625 a month tax free)
6. Take in foreign language students
7. Have you got any skills that you could sell on Fiver.com. So easy to set up an account and fairly easy to make money.
8. Buy yellow sticker items only from the supermarket
9. Cook one pot meals (I generally find these cheaper)
10. Last resort- do the kids have savings accounts that you can raid? If they’re young, you can always pay them Back at £5/10 a month or just write the money off and restart the account when you’re a bit More stable. We had to take £1800 from DS’s savings when he was a kid as we were so broke and only ever paid back £900. I felt bad but it was a difficult time for us.

Look at the debt help in Moneysavingexpert and also contact a debt charity, but to get the best advice quickly, you need to put together a full picture of your incomings and outgoings.

www.moneysavingexpert.com/loans/debt-help-plan/ (Mumsnet will probably scramble the link, so you might have to find the right section yourself).

Without further detail, it's impossible to say what the solution should be, which will be anywhere between cutting back a bit, doing what you can to reduce the interest charged and being honest about needs vs wants and bankruptcy, and other solutions in between.

But if you're at the stage when you can't afford the minimums and are struggling to pay for essentials like food and bills at the same time, that's often a trigger for needing a more formal solution and to reduce what you pay towards your debt, because that will then allow you to pay all your essential costs, then reduce your debt repayments to the amount you can afford after all these are covered.

OK thanks everybody. In goin to read through these again and take advice you have given me

Just been like this for a while and sometimes I blank it out but I know I can't do that

Things are just hard like for everyone. Horrible cycle to be in

You're doing the right thing OP. Ignoring it won't help. Come back if you need more info.

I know how soul destroying it is to match the income versus expenditure and come out with a minus figure, then having to look again at the outgoings list and find something else to cut out when you already cut out everything you could think of. I've been there.

Remember this is temporary, debt is the biggest problem. Once you've cleared it, however long that takes, you'll be better off.

In future, draw up the budget for income versus expenditure every time your financial situation changes. If you do it in eg January then you change jobs in June, do it again in June. By always knowing your budget you can hopefully avoid debt.

Do the budget for the year so you don't miss off one-off expenses. Weekly things you get a monthly figure by times 52 (for the weeks in a year) then take the answer and divide by 12 (for the months in the year) to get your monthly expenditure figure. Or you can times everything by either 52 or 12, as appropriate for the interval it needs paying and do the budget for the year, then divide the whole lot by 12 to get the monthly expenditure figure.

In the long term, look at things like insurance and ask the provider what the annual amount is and what the monthly amount is. Sometimes it's more expensive overall to pay monthly. So if you reach the point of being able to save a little, keep that money to pay an annual insurance fee next year. This reduces your overall expenditure next year and means you'll have even more spare next year.

When you have enough left over for casual spending after all your necessities (it'll happen one day!), so you've done your income versus expenditure and been left with a small surplus at the end, take that figure out of the bank each month in cash and keep it somewhere separate from all the money that's budgeted for. Then you know when it's gone it's gone and you can't accidentally over spend.

You'll get used to the idea that the money in the bank is not to be spent on anything other than your budgeting list, it might be physically there but it's not really there, it's already been mentally allocated.