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’s happened and fortunately you’ll sort it out, which is great to hear. To be fair, you’ve not asked for solutions or opinions - but you have posted details about your situation on Mumsnet, so people have responded with their views on what’s “unavoidable”. The spending is done now and you’re going to be ok, but you’ve been very defensive and perhaps don’t realise how privileged you sound, when some of the expenses you’ve listed are avoidable (and completely out of some people’s reach). You’re fortunate to have this debt on 0% but I think it would do no harm to have a quick reality check on what essential spending actually is, so that you feel ok about tightening your belt, should this happen again. Poor people who manage on a low income are incredibly good at this, whereas more affluent families find it difficult to get to grips with cutting back, when necessary.

Debt can quickly spiral out of control. You have realised there is a problem, that is step 1.

Step 2: a starter emergency fund to stop taking out any more debt. That may be £500-£750-£1000 whatever you feel is a reasonable amount to cover small emergencies.
If you ever dip into the emergency fund, you pause debt repayment and build emergency fund back up.

Step 3: Pay off the debt, as quickly as possible.

Step 4: Enlarge the emergency fund to be 3-6 months of expenses.

Step 5: only use the credit card for getting the buyers protection, repay it shortly after transaction is on the statement. Always clear the balance before end of statement period.

Have some kind of system in place for tracking your expenditure. This time you have noticed there is a problem at around £3k value. By tracking expenses closely you will spot any issues sooner.

I don’t really get this- it’s choiceful spending (holiday, laptop, cats, concert tickets), which is absolutely fine of course, but not a surprise when there’s a credit card bill if you’ve stuck it all on credit card. And you seem fine with it rather than feeling guilty/stressed/regretful. What did you hope for from the thread?

Why on earth are you spending so much on pets? And why isn’t your son working??

I don’t understand why you are adopting more cats!!

My partner had a cat that would get sick whenever she got stressed. We had repeated tests for cat AIDS, cat flu, feline leukaemia. Even if the cat had anything wrong with it those things could not be treated.

My cat now has cost literally thousands of dollars in emergency surgery because she insists on rolling in grass seeds. Obviously we pay it - but there’s no way I would be paying for exploratory tests for something where there is no treatment.

Your son needs to get a job, you need to stop adopting cats.

Then what are you moaning for??

I think some "unpredictable" expenses are sort of predictable. Pets are likely to need vets fees at some point, so you get insurance and/or put money aside for it at the times when they don't need it. Likewise, cars do tend to be expensive when they go wrong, so I put money aside every month, so I'm ready for it needing something more than usual when it's in for its MOT next week. If I don't need to spend that much, then that's great, but I'm covered if I do.

But otherwise - it is partly what credit cards were invented for, and you know when you can pay it off, so it's not unmanageable debt, and it on 0%, so it's not earning interest, so it's not really a problem unless you keep spending on it.

Hi OP I think I understand the point of your post - yes it is indeed scary how quick debts can build when life hits you. In a way though I think this is a good wake up call for you.
Your salary I think has protected you to date from doing any serious budgeting as there has always been enough available (and still is).
I think though you need to make some serious changes. First, most importantly, you need an emergency fund. Between 3-6 months expenses just sitting there easily accessible for situations like this or situations where you get a curveball such as you lose your job. Start on it as soon as you have cleared your CC.
Second, whilst the majority of your spends were not discretionary, they WERE foreseeable. Please put together an annual budget using actual spending over the previous year incorporating any known changes for the future such as your new university costs - there are plenty of online tools and guides to help. Update this each month against plan. This would have highlighted that many of these expenses would have fallen at once and that the holiday cost was lingering allowing you to prepare.
Credit cards have great advantages but should always be paid off from current account in full each month. Using them (even interest free) as an emergency fund is dangerous as you have found out and one unforeseen change such as losing your job can leave you heavily in debt.
Once your finances are back on track, use your excess income for investments, mortgage overpayments and your retirement fund (depending which gives you the better returns) whilst you can, your future self will thank you.

Yes, I will start using my savings account again once this is cleared - I used to use it before the USA holiday to save up for other holidays and big purchases/Christmas etc. I may kick start it with the interest from the ISA (leaving the 20k to reinvest), or I may put that to the debt. Also, I do have seasonal second job that starts next month so I should be able to funnel all of that (not huge - maybe around £500) to the debt. So hopefully I will have halved it by the end of the year.

I don't want to jinx myself, but I am in a very secure line of work and have been with my employer for 20 years. Doesn't mean it's bullet-proof, but, to be honest, I don't think I've ever been in a position where I could have saved enough money to cover me and the boys for months on end without it, and, if I did lose my job, I don't think I would regret that we went on holiday and did fun stuff while we could.

I have life insurance, critical illness cover and an excellent pension along with a death in service payment, so long-term not too bad hopefully, but who knows what the future holds and I do think it's important to enjoy life while you can.

@Liesmorelies

some of the money you have spent is luxuries, some is unexpected like vets bills and the car repairs. I'm sorry that you have lost a cat and hope the new kittens are getting on with the older cat.

You have a plan to pay it off and as you said it's 0% so not really the end of the world but, it gives you a bit less money each month to spend. You do have a ISA which, if life was tough you could dip into and replenish slowly.

I wonder how many pp on here have costa every morning, add random stuff to shopping that they didn't need, go shopping and come back with a new top etc as it was in the sale but not needed. I know I do!

The mistake you have made is coming on here expecting a bit of sympathy.

This all being said, what do you want from this thread then?

Yes I’m confused- OP said they’re feeling sick and stressed out by the debt but then has spent several pages detailing why it’s all totally reasonable and affordable.

Just what I was about to say.
maybe they feel guilty and just want validation they’ve not over spent.

Yes, the best thing to do when you have little money is add two cats so you can pay another £40 a month in cat food.

Your son is an adult and should pay for his own concerts.

£800 for a laptop? My work one was 180. I replace it every few years, just like your son could.

Why bother leaving the womb at this point.

I suppose I wanted reassurance that it's not the end of the world from this thread. I mainly had people saying you shouldn't breathe unless you have £100k in savings, or something.

Your son is an adult and should pay for his own concerts.

He's 16 and has just started A levels, so, no, he couldn't.

No, you mainly had people saying that you could have avoided feeling anxious, as you presumably were yesterday afternoon when you created the thread, by living within your means and learning how to budget. The credit card debt could also have easily been avoided.

OK, I suppose I exaggerated a bit. I do think the phrase 'living beyond your means,' holds a different meaning for different people though. For me it would be rent or mortgage being half or more of my income, other large unsecured loans on the go all the time, adding to debt every or most months due to constant things like eating out/takeways/upgrading tech or clothes, none of which I do. I don't think a few unexpected bills/expenses coming in a cluster is the same as living beyond ones means, but I suppose it's semantics really. I won't be getting anything else inessential for a while and if a costly emergency does occur I do have access to more free credit and the ISA - not ideal but there if absolutely needed.

Edited as I’ve realised you have two sons, I was confused about the university thing.

I mainly had people saying you shouldn't breathe unless you have £100k in savings, or something.

I know you are deliberately exaggerating here, but even taking that into account, that isn't what most people have said at all.

He's 16 and has just started A levels, so, no, he couldn't.

I've had 3 dc who were all 16 once, and of course they can.
If they are adult enough to go to a concert (let alone a concert abroad) then they are adult enough to work out how to pay for that.
All of mine managed to go to concerts during 6th form, by asking for cash present at Christmas and birthdays and saving it until they needed to spend it, and also by working PT jobs alongside their studies.

Let's remember you started a thread saying you were feeling a bit sick at the cc debt. People are answering that.

Sounds like you could do with a buffer/emergency fund which is accessible. Yes credit can be your emergency fund but better to save I would say. Sounds like you can afford what you spend but a lot of the purchases were luxuries, not essentials. Lots of people will think it unwise to spend credit on luxuries is all. I personally find I have good intentions to pay off my credit card, like you, but other things crop up again (as they do) & my 6 month repayment plan becomes a 9 month repayment.

No, you've had people telling you you don't buy cats the same month you can't afford vet bills 😂

3k credit card debt isn't the end of the world, and I'm sure if you are careful you'll have it paid off. You just need six months of being very very careful, and cutting your cloth accordingly. This means essential spend only. A treat is a walk in the countryside or a book from library or watching something good on telly.