£46,000 in debt

[Debtfairy]

This is the first time I've written that figure down. I've NC'd as this could be identifying.

We have 3 loans, 3 credit cards and a HP agreement for a sofa. Everything is being managed and we have a mortgage and want to move, so we need to tackle this and get it all paid off quicker than its currently happening. Debt relief order not required so no charities can help.

Basically we have NO idea where the money goes, we only have one salary and maternity allowance coming in due to mat leave with DC1, we shop in Aldi (max £35 a week inc nappies etc)

We have 2 small and economical cars
We don't eat out or go on holiday
We don't go to the pub
We rarely go and spend money
We don't have anything left!

Where does our money go?!

Any tips welcome!

I agree you are making excuses.

I EBF my DC and went back to work PT when they were seven months old. You should be able to do a four hour shift or work evenings/nights.

What did you buy with the credit, aside from the cars? Is there anything else you can sell? If you were both working before I am struggling to see how you got into that much debt. Was one of you gambling?

I'm sorry but agree with other posters you are making excuses! How can the car be your only luxury when you've got to a sofa on HP. I said don't sell the sofa as thought if you sold the car and were perhaps spending more time at home it's nice to have when you've already got it so to speak!! Does that make sense?
I understand about not working with the distance you have to travel for minimum wage that's a no brainer - I also appreciate with Dd you may not to work, but if you did there must be minimum wage jobs closer to home.
If you bought the car outright what were the loans for? Assumed x2 were for cars. As another PP said it is the upkeep and running costs not the original purchase.
I think apart from the fact you have totalled up the debt you are still in denial about the lifestyle you want and the one you can afford if you are to clear these debts.

I take on board about the car, but I cannot lose that, it's the ONLY 'luxury' I have, and it was bought with cash, not credit. It'd be worth £1,500 to sell and that's not worth the angst of not being able to get out and see friends and family, and we have no public transport nearby

I understand your thoughts. OP. But you say it is a luxury, a luxury you cannot afford. And if you are seriously about saving money then the first thing that should go are luxuries. Because if it is the only luxury then you'll have to make economies by cutting back on essentials. I am 2 miles from public transport,4 miles from the nearest shop and 9 from the town, with children to get to and from school and so on. We manage with one car, just a lot of juggling, forward planning and a lot of walking (which is never a bad thing).

And for me £1500 is a huge amount of money, just huge. It would make such a difference. It would pay electric bills, and food and council tax. I wouldn't think twice. Yes, I miss my car and the freedom it gave, but I would much rather be without transport than in debt (or more debt in your case).

Good luck though, whatever you decide.

You need to have 2 incomes coming in to clear this amount of debt. Consider a job working around your dh's hours so no childcare costs.

Ok. Do you normally spend on cash or card? Do you normally keep receipts?
Either by going back in time, or over the next few weeks, write down everything you spend. Add it up. Is it more than you think you spend? Look at that list, and see what can be cut.
With the loans. Leave the ones that are fixed prices. Look at the credit cards. Work out which one has the highest interest rate. Look at the minimum payment on each card. Add £5 to it, and fix that amount on 2 of the cards. Put everything else you have on the card with the highest interest, and get rid of it.
Good Luck.

Can you get a job closer to home? Being a SAHM is a luxury you really can't afford with the debts you have, not if you want to pay them off.

Even £800 a month childcare and petrol costs leaves you over £200 to plough into your debts.

Paying off debts is not fun, but I've been there and now on the other side I can only tell you that it is totally worth it. The biggest cost of debt is opportunity,

You are making lifestyle choices as though you don't have a huge £46k debt. This is the reason you got into this mess in the first place.

You can't afford new sofas on HP, you can't afford a second car, is there a cheaper/slower option to fibre optic broadband, why did you take out mobile phone contract with mounting debts - you don't need them, you need to consider working weekends and evenings to clear this debt.

Just now you are treading water and not clearing anything, any large expenses will probably increase it. You need to get real and stop sticking your head in the sand.

Was going to recommend MSE too.

As a priority I'd advise trying to move all your cc debt on to 0% cards and setting up and emergency fund, just a few pounds a month a first, it's the unexpected crisis that are a killer, sorry if someone has mentioned that already?

I think some posters might have missed that DD was premature and her "real" age in those terms. I completely understand if OP doesn't feel ready to leave her for work yet.

You've had some good advice OP, think the best thing to do is to do all the detail of where money goes and look at selling everything possible.

last winter my dad has sold a coat that he had from years ago that was a fashionable man's coat again last year!! Really don't think anything is not likely to sell - it's quite amazing. Especially with you wanting to work from home anyway, the tiny time it takes to list it on ebay is well worth it - even if lots of items means lots of times, you should make money there. Esp if the credit cards were used to buy goods that can be sold (but I do note you haven't said that so that might not be it).

Has anyone suggested becoming a childminder yet? Only my bingo card isn't quite full.

OP you need to go out to work on Saturdays and Sundays when dh is home. It is absoloutley essential. You could do pub or restaurant work which would be supplemented with tips.

Wrt to the two cars - it absoloutley IS a luxury to run two cars. So id say if you arent prepared to work weekends then get rid of the car and spend your weekends seeing friends and family in the one family car.

46k doesnt just appear. How long have you had your head in the sand about this?

How can you be paying £900 month for a 55k mortgage? That's ridiculous...I pay £273 for 45k mortgage. Can you extend the term if mortgage or remortgage to a better rate?

And I know your dd is 12weeks adjusted but if you work weekends she will be with her father

Many many women leave their dcs at 12w or less to return to work because they accept that needs must. Its shit. But you and dh have spent this money. It needs to be recouped from somewhere.

She's on maternity allowance at the moment and will presumably have about another 3 months as her baby was premature. No point getting a job now when MA is still paying out.

But it is worth looking for something to start around about then. Also worth looking to see if you can share one car - might mean doing some drop offs and pick ups.

Or keep the car and become an Uber driver?!

Poisongirl the £55k is equity in the house not the mortgage. When is the rate due for renewal? If you went back to work you would be able to increase the mortgage amount and release funds to clear some of the debt balances. Mortgage rate is usually less than loans and definitely less than accumulating cc. Is any of the debt secured on the property? Could family help with childcare even short term or parttime.

Having a car and being a SAHM are luxuries you simply can't afford. Having a child whilst in so much debt and then quitting work was irresponsible, it's going to take a long long time to pay off and you seem to want a magic wand rather than actually do something about it like work.

Crickey. £46k of debt and one income? That's a lot of money to owe. Which I'm sure you realise.

I don't even think you will be able to consolidate that into one payment through a card or a lender.

I would start with whichever is the highest interest rate, make minimum payments on the rest and pay the most you can to that every month.

I also think the second car has to go. You would stop have a car evenings and weekends and can you drop dh at work or a train station etc if you need it during the day.
You also need to write down everything you spend. You don't have the luxury right now to be able to afford not to.

Is the debt rising or are you keeping it at the same /slightly lower each month?

Our mortgage is £115k
Debts run as follows;

17000 on a loan that rewired and re-roofed the house - 6.4%
11,000 on a loan that was from before DH met me (was over a 10 year period) - 10.9%
3,500 on a loan from our wedding - 18.9% (we've been overpaying this one with any spare cash and items I've sold)

9,000 on CC1 - 0%, paid for car insurance, a holiday and other things
3,500 on CC2 - 0% paid for our wedding
2,000 on CC3 - run up when DD was in the NICU, parking was £12 a day, plus lunch in hospital (CS and nowhere to eat in the unit)

It's a shameful situation. The sofa is from sofology because the old one broke beyond repair. It's £12 a month and was £700, but I should be able to pay that off if I sell everything I can on eBay.

I really can't go back to work yet, DD feeds every 1.5-2 hours and refuses a bottle, we can't wean her either.

I'll speak to DH about the car. I did actually consider becoming a childminder but the fear of germs on DD when she's so prone to illness scares me. I want help, I need help it's just incredibly hard facing this

I think some of you are being unnecessarily hard on the op. Of course she doesn't want to go out to work and leave her baby. Why should she when she's currently getting MA any way? There are parts of the country where childcare is prohibitively expensive.

She's not said she'll never work again

Unfortunately some women do have to leave DCs at home, even EBF ones that have have expressed milk in order to work.

MoneySavingExpert is brilliant - do absolutely everything on there.

However I suspect you have lived beyond your means for a good while. How much exactly did the sofa cost? dread to think how much it will cost with interest And was it so much better than a £300 job from Ikea or Tesco?

You have to really harshly look at what you view as normal and what really is a luxury. If you haven't got the money, you do without or have a v cheap one until you have the money speaks as someone who has spent 9 years with a broken kitchen waiting until she's saved up

And your mortgage is bonkers. You are paying nearly what I do for a £200K mortgage. Speak to your bank and remortgage. You are on a rubbish deal.

The 17k loan was for a sensible reason, but I wonder if itd have been better to remortgage to free up the equity for it than take out a stand alone loan.

Honestly Im gobsmacked that someone who already had 11k of debt would then (1) have a wedding outside of their budget (2) go on holidays (3) wouldnt have tried to tackle this before having kids.

Its a massive thing but could you sell up, use 46k of the equity to pay off everything and then rent for a while, somewhere small?

You may have to give up your aspiration to move in the short term.

Are all those loans personal loans? If so I would borrow against the equity in your house and pay them off because you're paying well over the odds in interest. Then start overpaying the credit card debt. Those won't be 0% forever.

No more holidays.

Foolish to borrow so much for a wedding you couldn't afford but it's done now. The only thing you can do is learn from it.

Yes definitely look at remortgaging if you can.

Don't sell up and rent - that's a waste of money.

DD was a happy surprise for those who're saying it's irresponsible

Moving is a 5 year plan now due to this

The wedding was 4,200 and was the cheapest way we could see to get married before DD arrived, or else we wouldn't have done it.

The holidays were from before I was pregnant, and my income was meant to be put solely to credit card repayments this year and we'd have cleared it fairly rapidly