£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!

You need to identify where the money is going. Then cut down where possible and also look at increasing household income.

You need to not borrow any more money, so you need to build up an emergency fund so you have money for those small emergencies that turn up.

Meanwhile you need to pay at least the minimum on the loans so that you remain current.

Then pay off the loans one by one.

Pay off Sofa first as that is then smallest.
2,000 on CC3 - This will be the next one.

You want to feel that your scrimping and saving is getting you somewhere, thus pay off loans starting from smallest to largest.
Interest rates don't come in to it as you want to learn a new behaviour... the behaviour of saving money to pay off a debt. You therefore need to see that having a result.

Need some positive reinforcement... watch:

OK, so you are stuck with the mortgage.

But you are going to have to make some very harsh savings elsewhere. You thought the cheapest you could do a wedding was £4K ish - for comparison I'm a high earner, at the time DH was earning and at the time we though the most we could afford was £5K. I have been broke and came from a family that was broke growing up It's about mindset, not money.

Knowing where every pound goes is a real eye opener - you always think you spend no money, but you do. A snack here, a bus ticket there, a bottle of water etc etc.

You can make huge savings on things like food and still eat healthily for example.

@Snap8TheCat. You're wrong. I pay £79 a day in nursery fees. I earn £10 an hour for 7.5 hours a day which makes a £4 deficit. I am only in work myself as will change in September with free preschool places and this job is ideal. So yes, OP can be in negative from childcare.

OP can you take the smallest debt you owe and pay an extra chunk from it each month eg 50-100 of your 400. This will help.

Work on the smallest amount of debt first

Also, stop explaining yourself as to why you're kn debt. It makes no difference to what youve asked and is none of their business.

Very very few places charge £79 a day! That's high. I live in the south east and charge £48 a day.

Are you entitled to any tax credits?

Be late now but for anyone else reading this all hospitals offer either discounts e.g. £10 a week parking or ours was free even for grandparents etc visiting a baby in NICU.

If you get a job, then do look at what help with childcare cost you can get. Could start looking at: www.childcarechoices.gov.uk/

@Snap8TheCat its just outside Wimbledon and average for around here.

when are your 0% cards deals end? what are they going to default to?

Even if you went to work tomorrow earning 1K netto a month it is going to take you 4 years to repay your debt. This is assuming you don't need to replace any of your cars.

I think 10% loan of 10K is a killer - you are paying £1 of interest on each £10 you repay.

No cash = no new sofa. Buy a charity shop/eBay/gumtree one for £50/£100

didn't there used to be an ongoing thread here for people with debts - but with a policy of "No judgement"?

I can't find it....if any helpful poster knows where it is I think the OP might find it helpful.

mind you I bought my sofa on ebay for £1.50, transport was £40 so yes - in London you can easily buy stuff cheaply, I am not sure how it is in the areas where are fewer people selling stuff

This is the thread GoldfishJane is thinking of I believe:

https://www.mumsnet.com/Talk/legalmoneyy_matters/2465435-Drowning-in-debt-and-cannot-talk-to-people-in-Real-Life-A-problem-shared-is-a-problem-brought-into-perspective-come-and-join-the-lens

Antimatter there will be a charity shop that does furniture, freecycle, local ads. You may have less choice than in London but it's still there.

I got my dishwasher for buttons from someone who had bought it, then 2 months later decided she wanted all her white goods to match so was throwing them all out! OK, so I didn't get the exact dishwasher of my choice but what exactly do you want from a dishwasher - fits in the space, low energy, washes dishes. Job done.

11 years later, I still have the same dishwasher

There is a snowball calculator on moneysaving expert where you type in debts and interest rates/end of deals and it tells you in what order to clear debts. It is very cathartic I know to clear the smallest debt first but with huge interests on a couple of your debts, it might be worth tackling those first.

Thank you Lilly - that's the one!

OP I hope you find it helpful.

Interest rates don't come in to it as you want to learn a new behaviour... the behaviour of saving money to pay off a debt. You therefore need to see that having a result.

That's terrible advice , you must always pay off the debt with the highest interest rate first.

Freecycle is also handy

Op
You should never have had to pay for the parking at hospital.
Please write to PALS and your MP.
The hospital should have given you a parking pass.

Seven not all hospitals discount parking for NICU. Mine charges £15 a day, it cost us a fortune for the near-100 days in NICU. Plus the additional time I needed to take off work due to his poor health.

And I'd love to pay £48, or even less a day, for childcare. It's £60 a day here (not SE/London).

There's a lot of really judgemental posts here; OP can't go back & undo all these things - it's not constructive for her.

Op...
Get yourself over here...

Drowning in debt and cannot talk to people in Real Life? A problem shared is a problem brought into perspective - come and join the lens.
http://www.mumsnet.com/Talk/legalmoneyy_matters/2465435-Drowning-in-debt-and-cannot-talk-to-people-in-Real-Life-A-problem-shared-is-a-problem-brought-into-perspective-come-and-join-the-lens

Op - there have been some really unhelpful comments on here, and I completely understand why you would not want to go back to work with such a young baby.

I would however consider evening/weekend work (to eliminate childcare costs) and aim to start 1-2 shifts per week to start off with. In a month or two that would feel more manageable - 'going back to work' doesn't have to be full on full time.

I think the high interest 3500 loan is the right one to tackle first. Something you could do from home to boost your supply of things to see/cash etc is entering competitions. You need to approach it like a job and aim to enter at least 30 per day but you will win stuff. Again, money saving expert is fab at explaining how to get started. Every little bit helps.

Like others have said write everything down.

Make sure you use Quidco when buying anything online, especially the more expensive things like insurance - easy to get £100 per year this way.

Do you have any skills you could do from home? Ironing? I pay £10 per week to have a basket of ironing done. Could that be a possibility for when your maternity allowance runs out? Replacing that income is going to be the main thing in the short term.