Me and DH are both 23 years old. We have a 4 month old DS.
We’ve both grown up in relatively comfortable lifestyles. DH grew up in a single parent household and I grew up with one working parent but we both had more than most. The latest technology, driving lessons and first cars paid for, insurance paid for and we weren’t expected to pay bills the moment we got jobs. We took advantage of this by constantly spending every single bit of our pay check on meals out, trips, holidays and clothes and expensive gear just to “fit in”. This habit of spending every single paycheck lasted up until I found out I was pregnant in March 2023.
DH mum invested in two rental properties over 20 years ago which she knew were going to be passed on to her kids. Although she was originally going to give it to him for free, she was in quite a lot of debt so suggested we buy it from her. This wasn’t an issue as we bought the house for less than 50% of its value.
This we are grateful for as we would never have been able to afford a property of that value and size if it wasn’t for the 50% discount and it leaves us with a low mortgage of £300 a month which is extremely low compared to what it would have been if we bought the house for what it’s full value was. House deposit was gifted by my dad.
We started working part time at 16 and a few years later both started apprenticeships in the careers we wanted to go in. We’d both been qualified for 2 years but had no penny to our name and had never felt so much regret.
The house we bought was very outdated and needed a lot doing to it, including rewiring and new flooring as the old one was in terrible condition. Like I said we both had been terrible with our money and needed to get this done before the baby was born so we were extremely stupid and borrowed a lot of money through credit cards, overdrafts and even a payday loan.
We have paid off a credit card and a next card but still have a long way to go. We have been using the Dave Ramsey snowball method.
My DH is currently on £21,000 a year after tax. He is working at a company that pays the lowest for his line of work so is looking for jobs that pay more.
I am currently on Mat leave and earning £700 a month up until November when I return to work I will be earning £1400.
I won’t have to pay for childcare as my mum will be looking after DS.
Our monthly outgoings are as follows :
£300 mortgage
£165 council tax
£150 gas and electric
£100 fuel costs for both cars
£400 a month groceries & essentials
Broadbrand £30
Debt
Credit card £50 (£550 total)
Furniture finance £55 (£1000 total 0% interest)
Tv finance £79
Bank overdraft £145 (on a repayment plan for 10 months with interest frozen) (£2157)
Payday loan £100 a month (£2300)
My DH is paying all the household bills and I am currently on mat leave so using my wage to pay off the debt and buy DS clothes etc as he grows out of his old ones.
I just wanted some advice on if we are going the right way about this or if anyone has any other thoughts. Although we do have some money left at the end of the month I’m terrified about tackling the high interest overdraft and loan, I know I’ll have to start making much higher payments. It’s just constantly on the back of my mind and with no savings whatsoever we don’t want to add any more debt especially if we have an emergency. We’d like to have an emergency fund built and hopefully get out of this debt now so we can build a secure future for us and DS.
We won’t be eating out or taking any holidays until all the debt is paid off. I know we’ve both been incredibly stupid and we do have constant regret but I can wholeheartedly say we have learnt our lesson and I’m glad we did now rather than later.