Feeling a bit sick at 0 to £3k cc debt within 3 months

[Liesmorelies]

No debt other than mortgage and separate car loan (cheap car - £95 per month over 5 years, ends next year) for a few years now and suddenly it's gone up to £3k just like that. It's due to £1k leftover from big holiday (USA) spending in the summer - I knew this would have happened and thought it would be paid by now, which it would have had the following not happened:

• car repair at £500 just before we went away in July. Paid not on CC but obviously meant had less money in current account.
• Car service + minor repair when we got back - £400
• Cat having to be pts following some tests. After insurance still left with £400 to pay. Some of the claim was settled separately so I actually only pay £400 but didn't allocate the other money when it came in so total of £600 to pay now.
• New laptop for ds going to uni - £800
• Other cat needed dental work not covered on insurance - £700
• Adopted two kittens- £200
• Band ds2 loves announced long-awaited tour dates - been promised to ds for about 2 years - £350
• Other expenses for ds starting uni and travel - around £500. Not all put on CC but has meant less money at the end of every month to throw at the cc.

Ds starting uni means I have to give more money to him each month and have also had to raise ds2's allowance to match what ds1 had at his age - it's not huge but all adds up. I do have it all on interest free cards and should be able to spend around £500 on it each month, maybe more. In addition I have a £20k isa maturing at the end of the year, but wanted that to be a buffer for dc in uni so don't really want to touch it.

I know a lot of this was avoidable but it's scary how quickly it has all piled on.

It seems like everything could be manageable, but you completely messed up the timing and didn't save up in advance for everything. So it would be sensible to put money by for vet bills, car costs, holidays etc and not have to rely on a credit card. Even if it's an interest free credit card, the problem is now is that if one or two unexpected expenses crop up you might find it escalating beyond the point you can keep on top of it. If you'd saved up beforehand and had some reserves, this wouldn't be a problem.

Of course, that all sounds smug and easy. I've made this very mistake myself lots of times in life and only just realised what a big impact it can have and how precarious relying on spending and paying back is compared to having the cash. I've always justified it by saying I 'had' to buy the car, laptop whatever and it's not my fault I didn't have the cash, but to be honest, I've never really prioritised saving/planning for something long term when I didn't need it right that minute. I'm trying to start putting small bits of cash away in different pots to be prepared so that I can use them for costs without relying on a card. I've realised it's going to take me a while to get there as at the moment I'm putting small amounts away plus still having to cover ongoing costs with a card and paying it off. I reckon it'll take me about a year to eighteen months before those small pots actually grow enough to let me cover the costs of something upfront, but when I get there it's going to make a big difference. I then intend to keep those pots topped up!

I am a single parent household. Have 2 DC one has just finished Uni and one on year 2. I have to be very careful with money and can only manage by having various 'pots' for different savings. For DS obviously I knew he was going to Uni so I saved for over a year to kit him out. His 21st Birthday in December and i will be giving him £1k like I did his Sister, again saved for over a year. You should try and do the same it really adds up over time. I do agree with the others about the kittens, mine cat lost his eye this year but was insured - if he died I would not rush to have anymore pet food alone is probably £80 a month.

There will be no change to the ISA limit, it remains at 20k.

I think your high-ish net monthly pay and low mortgage repayment has caused a “I deserve a lot and so do my boys so I don’t need to budget” mindset.

I don't think that's right really. We don't have a lot of stuff - neither of them are into labels or want the latest phone/tech upgrades all the time. Ds2 probably would if he could but totally accepts that it's not happening and ds1 not interested at all. Which is why when they do really want/need something (laptop for uni/long-awaited concert tickets) I like to get them. Ds2 understands Christmas will be low-key due to the concert and ds1 never asks for much at all anyway.

I normally can cover the odd car/vet/house expense or two out of my salary anyway but I do see the 'emergency' fund as access to 0% credit, which is what I have used here. My income has gone up over the last two years, which is why I haven't got more in savings as well. I haven't changed our standard of living to match though, but it did coincide with the holiday to America, which I certainly don't regret.

I will be focusing on getting it all paid as soon as possible and then building up savings to add to the ISA.

You are living beyond your means. You had to take on debt because you didn’t have the means to pay for these things.

There is a lot you didn’t need to spend so much

2 kittens and expense esp after vets bill of over 2 cats

laptop can be cheaper

tickets. Will be other concerts

car you know will be services so budget monthly £50 into a car account

@OriginalUsername2 I have got the means though - access to free credit. I get it's not ideal and could spiral if I kept adding to it though. But it's not like regular living costs - I'm not going to buy another £800 piece of tech or agree to another concert if one comes up. It was a lot over a short space of time, but I'm not going to be adding it in the coming months. To me living beyond your means is when you regularly get totally avoidable stuff you can't afford - not when your car needs repairs and your pets need treatment and you have some other one-off costs that come up at the same time.

It's not the end of the world, you can pay it back in about 6 months, but I do think it's worth building an emergency fund in an easy access savings account to cover these sorts of things in future without having to put it on debt if possible.
You obviously don't want to touch the ISA money so I would save an emergency fund separately to this

If you rely on 0% credit cards for 'emergency ' funds then you are living beyond your means. What happens if you are made redundant or lose your job? What if you can't work for any other reason? You have nothing to fall back on if you are out of work - the 20k in an isa doesn't sound like it would last you for very long. You have received some excellent advice but you've seen it as being attacked for wanting nice things. If you are the only parent supporting your children through university then you have a duty to be fiscally responsible.

That is your problem. It is about priorities. When your expenditure is high enough to need to use cc, rather than choosing to and be able to pay it off next month, you have to revert to essentials only to reset. You also need to start budgeting now towards future costs like the holiday around the concert, to avoid it building up again.

What’s done is done. If you focus on paying this off and then living a bit more frugally, you should be able to save a decent amount for an emergency fund. Generally they advise 6-9 months if you’re the sole earner for the family. Might be worth considering just in case something unexpected comes along.

• Car repair at £500 just before we went away in July. Paid not on CC but obviously meant had less money in current account.- UNAVOIDABLE
• Car service + minor repair when we got back - £400 - UNAVOIDABLE
• Cat having to be pts following some tests. After insurance still left with £400 to pay. Some of the claim was settled separately so I actually only pay £400 but didn't allocate the other money when it came in so total of £600 to pay now.- UNAVOIDABLE
• New laptop for ds going to uni - £800- There was no need to spend this much £300 would have sufficed!
• Other cat needed dental work not covered on insurance - £700- UNAVOIDABLE
• Adopted two kittens- £200 - No need to do this AT ALL!
• Band ds2 loves announced long-awaited tour dates - been promised to ds for about 2 years - £350- Sometimes promises have to be broken!
• Other expenses for ds starting uni and travel - around £500. Not all put on CC but has meant less money at the end of every month to throw at the cc.- Without knowing full details I cannot say that this cost was avoidable. But I’m guessing by last behaviour it could have been a bit less.

@Liesmorelies Stop spending money you do not have!

I think the point the OP was making is how quickly you can suddenly need to use cc for unexpected or unbudgeted stuff. I know I use cc when ordering stuff online , thinking each purchase is reasonable then being surprised by cc amount. I counterbalance by having fome months when I spend only minimum.

Those living within their means don’t need credit cards to pay for emergency costs like car repairs…

don’t get the point of this post when you are perfectly comfortable with your debt. Why did you bother asking??

Why had you no savings? You live WAY beyond your means!

How's your credit score?

Join money saving expert money club and see what you would come out with for a 0%balance transfer card. It's a soft search so doesn't appear.
They also have info on the best ones available go for a longer term low/zero % for balance transfer.
Then pay over the monthly payments and avoid building up again on the other card.

That way you don't build interest up but can get on a even keel again.

OP takes home £3.9k a month. Her monthly mortgage repayment is £700. She has no child care costs. She shouldn't be relying on credit cards to pay for anything.

If you have to pay by credit (rather than choose to), then you don't have the means. I think it is very difficult to change your thinking once you convince yourself that credit is means
It isn't and is how many people get into all sorts of money troubles.
I still dont understand why you spent so much on a laptop, I've just checked and I could buy several in John Lewis or Curry's for a little over half what you spent - not Chromebooks either, just normal decent laptops. That, the kittens and the tickets could have saved you nearly £1k
Also, and beside the point really, why do the uni have any say over whether your child works or not? Surely they can only control his actual education? Surely some simply can't attend that uni if that is the rule? Or can they work in the holidays perhaps?
It bubbles down to the fact that you can keep telling yourself it's all fine, but that doesn’t necessarily make it the case.

If you can’t afford to pay for the treatments of the cats you already have why on earth would you then adopt another two and at the cost of £200 which you can’t afford?!?!

Thank you, but I have said many times this is already on 0%. My credit score is excellent - top score on Experian. My title is that I've gone from 0 to £3k in a short space of time - this is not normal for me, and even when my salary was lower it wasn't. I previously used the cards for things like replacing the kitchen (25 years old and doors falling off) etc. I have never had credit card debt that wasn't 0%, or not since my divorce 10 years ago anyway. It's just been a weird couple of months.

@Soonenough Thank you - that is exactly what I meant and I will be doing what you said as well. I think I have already made it clear I will be spending pretty much all I have leftover on this debt until it's paid off, but many people are talking as if I have said I plan to add to it each month, which is a bit annoying.

why do the uni have any say over whether your child works or not? Surely they can only control his actual education? Surely some simply can't attend that uni if that is the rule? Or can they work in the holidays perhaps?

He's at Cambridge and they can't work - strongly discouraged I think is the official stance, but simply won't have time. Same is true of the shorter holidays.

Well adopting two kittens was unnecessary when you had to spend so much on the other cats….

OP takes home £3.9k a month. Her monthly mortgage repayment is £700. She has no child care costs. She shouldn't be relying on credit cards to pay for anything.

Reached this salary last year and most of my disposable income went towards the USA holiday. No regrets whatsoever but it's why I 'only' have the £20k savings despite this salary/mortgage.

I guess the OP didn't have to pay by credit card as she has the ISA cash but as it's 0% it makes more financial sense to use the interest free credit than pay the penalty for withdrawing cash before the ISA matures.

I agree though, I'm not clear on the purpose of the thread if OP is content that it's all managed debt; and I really can't see why kittens were an essential buy in what sounds like a tight month... but different strokes and all that.

But you are living beyond your means if you had to put that spending in a credit card. There was so much there that wasn’t essential. You didn’t need to spend £809 on a laptop, buy 2 more kittens, pay £350 for concert tickets or even go on a big holiday that put you in debt in the first place. If it is all worth it to you then it’s fine, the debt isn’t huge and like you say you’ve got an ISA coming up and a decent income. But personally I wouldn’t spend money like that if I didn’t have it and definitely wouldn’t put holidays and concert tickets on a credit card and having credit card debt like that would worry me.