£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!

Agree mortgage repayments are dreadful - My mortgage is £135k and I pay £700 so you are paying way over the odds.

I cannot believe you used credit to pay for your wedding when you already had such debt. Why did you do that?

And £9k on a holiday (and other things) I can't imagine the car insurance was a large part of that. It does rather sound like you have been having a rather lovely time living beyond your means and are now going to have to pay the price

My advice would be to start working as soon as you can. If DD starts sleeping through the night then get a night job and try to catch up during the day when she sleeps.

I know it's all hard and a bit shit but aside from a huge windfall you are going to have to work hard to get back on an even keel.

I hear you on the preemie and illness thing too, it's very hard.

I think make a list of priorities. You say you can't remortgage while on mat leave, is that correct? So that's out until you go back to work?

in that case, the main task is finding out where the money goes and making sure you're paying the loans off in the most sensible way (which MSE will tell you)

then seeing if you can sell as much as possible. You don't say the rate for CC3, if it's not 0%, can you switch?

I don't think anyone is saying go back straightaway just that you really need to have work in place for when your MA period ends or you're not going to have any money to live in never mind pay off the debt.

It's not an ideal situation but it's the one your in.

If you could find a way to manage without the second car, and sell it, that could make a big dent in the 18.9% wedding loan.

OK crossposted with you:

Rewiring the house etc - had to be done and you thought your finances would be in a better place

Debt from DH hope he's better at finances now

Debt from wedding - probably you spent too much, but again, you thought you would be a in a better place earnings wise

Debt from NICU - this is what has blown a hole in everything. It's cut off your earning potential plus racking up far more debt than you would have had on a normal mat leave.

However all is not lost: there definitely are things you can do to earn money at home, have a look on MoneySavingExpert.

You also definitely have a rubbish mortgage deal - very much look into this. You probably haven't saved everything you can do on utilities, insurance, etc - I don't do this with the same intensity any more but when I was really broke I did the whole MSE routine to the letter and saved loads.

Can you wriggle anymore of the loans on to interest free credit cards? Would significantly cut down your interest payments.

And then for the time being things will have to be cheap, very cheap. Sofa falling apart - is there a sofa on freecycle? When the debt is cleared you can get rid for something you actually like but at the moment, free stuff would be better.

You need to change your mindset, you've both appeared to have just gone ahead with what you want with little thought as to how you intend to pay for it. Getting into more debt for a wedding astounds me, if you wanted to be married it costs very little to just pop to the registry office. Likewise your OP says you don't holiday yet then say the credit card debt was for a holiday

It sounds like you both need to grow up, face your responsibilities and work as many hours as you can between you and clear the debt.

I have no money advice but just wanted to wish you luck with sorting it all out. You have been through a lot so don't be hard on yourself girl. It will be ok. You have your health and your baby is ok and you survived a premature baby arriving early with no family around so I think you are doing great. You can tackle the debt as your daughter gets stronger.

One step at a time, you can definitely achieve it, especially with all the advice you have gotten here. Good luck x

How come wedding was £4, 200 but your calculations say you spent £7k on it split between a £3.5k loan and a £3.5k credit card?

You can get married for a lot less than that by the way................

Childminding is an actually career with start up costs and effort involved, not something people can just pick up and put down when nothing else appeals.

Are you certain you can't remortgage? Try London and Country as they're brokers.

Longer terms and consolidating the debt you have into the mortgage will make you a less risky prospect.

That's really tough OP. I had a 29-weeker & would not have been able to work psychologically at the point where you are just now. I was traumatised, anxious & probably had an element of PTSD/PND.

I think you need to tread water for a few months, then get an evening/weekend job that you can do around your DP/DD. Your DD will be stronger in a few months time & you will be in a better place mentally.

In the meantime, I would see an IFA re: remortgaging & getting some proper debt management advice.

£4200 for a wedding vs actual costs of about £150 for a quick trip to the registry office yet it was the cheapest option? Not to mention you say there was a loan of £3.5k and a CC of £3.5k both for the wedding so there's a lot of money missing somewhere.

Not seeing how your income would have cleared the CC quickly this year given you aren't actually at work and if you can't clear childcare costs then you weren't going to make much headway on the credit cards.

Well it wasn't really the cheapest way to get married, you can't change that now of course, but what you can change is how you think about 'cheapest' and how you approach deciding what you can afford and what the best use of money.

It's not just about paying off debt but staying out of debt requires a change in attitude to what you spend money on and your expectations as to what you can afford. As I said I've also learnt the hard way.

We're 3 years into a 5 year fixed horrendously high rate with an equally appealing early repayment charge so we can't change. Our lender won't touch us whilst I'm on mat leave.

I've been looking at jobs today and I'll start applying at the end of the month as my mat pay ends start of June. I feel physically sick.

Everything we have almost has been gifted or hand me down, but a surprise baby who was then in NICU for 11 weeks has crippled us, it all appeared perfectly manageable before that.

You must have been quite a low earner even when employed?

How come you are on MA and not SMP?

Surely the solution would be to sell your house, use the equity to pay it off, and rent while you start saving again?

And by it I mean the debt.

OP, you're going to have to stop living as if you have more money than you actually do; start living within your means, in other words.

The wedding is done now, so nothing can be done about that, but the expenditure on credit for holidays and 'other stuff', whatever that may be, has got to stop if you ever want to get your finances under control!

Your debt will never go away without a lot of sacrifice on both your parts.

Were you made redundant? Do you have a job to go back to?

If you're still employed then there's no reason to even mention your maternity leave to the lender. Can you get a secured loan with your current provider?

Only £2k of the debt was caused by the maternity leave and if you are only on minimum wage then you weren't managing and had your heads truly in the sand if you thought you were.

Snap raises a good point, if you are claiming MA you either were earning very little or hadn't been working for very long.

I've almost finished paying off around 24k in debts I racked up (on my own) and I've had to sacrifice everything. I can only buy myself cheap clothes once a year when I get some new look gift cards for xmas.
I have to budget my food shopping each week and make things like spag Bol in bulk so it can last for 4 dinners a week.
I basically have no social life at all and can only see friends or family if we spend time at each other's homes.
I don't have a car and have to walk loads even in horrible weather or catch about 3 different buses.
I haven't had my hair done in 4 years (I just trim it myself now).
The only holidays I can ever afford would be a very cheap weekend in a cottage in the U.K. Somewhere (self catering).

All of my money has gone on paying off the debts and paying my rent and household bills.
I'm so glad I sacrificed so much as it means I'll soon be completely debt free and can start rebuilding a more normal lifestyle (whilst also ensuring I save as much as possible for emergencies too). I'll never get anything on credit again either, if I can't afford it then I'll just save up for it until I can afford it

What is done is done. I do get that your circumstances looked different pre DD but now is the time to tackle it.

You say your credit is good but you're paying 18% on some of your debt. Have you approached your bank for a loan? I was at RBS last year and loan rates were about 3.9% and have since gone down.

If you get a loan instead of cc even over 10 years at leat there is an end in sight. And for gods sake chop up the cards so you're not tempted to use them again.

DH and I are now debt free, thanks to him really. It's very hard accepting that you just can't afford stuff even if you've had a crap week and feel like you 'deserve it'(looking at myself there!). It's miserable but we got there.

As PP have said. Account for every penny. You'd be amazed how easily it can trickle away on an odd coffee or paper.

I posted about the £95 my DS and I live from weekly and how it's spent, to show you that even on a low income, cuts and savings can all be made. If I had to, I could stop Pilates and the window cleaner and shave a £5 each off food and gas and electric. I'm sure if you start recording every single tiny little spend, you'll see where you can cut back or cut out. It's not easy or fun, but you and your DH need to do it, if you want to make a dent into your debt.

I am in the same situation as yourself but without the debt. So 100k mortgage, no new clothes, two cars, no eating out, one identical income but four kids.

What have I done different not to be in debt? We decided not to go into debt to pay for holidays/weddings. So we only have a holiday if we have the cash in the bank. Our wedding reception was a 2k affair.

Getting a new roof and electrics I understand more. All essentials for a watertight safe house.

In a nutshell, you've lived beyond your means.