Need help clearing debt accrued on Mat Leave

[MatLeaveDebt]

Can I please start off by saying I'm a very anxious person and having been in debt before (15k+) and having to be on a debt management plan, this new debt may seem small to you, but to me it's causing me stress, anxiety and sleepless nights.

I haven't told my DH and I don't plan to.

I have £1000 debt which I have accrued during maternity leave. I'm laying out my finances here so please can I have only helpful comments.

My DH earns double my salary so allows me to have more money to spend each month. We both have £700 after bills have been paid. We're paying off a holiday for next year just now so extra money is paying that off.

Out of the £700, that is used for food shops and petrol for our one car (which we split, E.g if food shop was £50, we both pay £25 from our own money, same with petrol).

My debt is broken down as follows:

Overdraft £200
Credit card £600
Next £200

I'm really not sure what is best to target first. I want to get rid of it all asap but we have Christmas coming up so will need to keep some money aside for that, and also DDs first birthday at the end of December too.

I am due back at work next week which in a way is good as I can't be shopping for baby clothes and stuff lol, but I need a focus on getting rid of this asap. And I don't want to tell my DH.

I don't want to take a loan to consolidate as rates are increasing just now even with an excellent credit score.

Any finance savvy Mumsnetters out there willing to offer helpful advice?

Thank you x

You are a team and as such he should also be involved in paying this debt off. I'm assuming it's not spent willy nilly on frivolous items.

Why would you pay equal to expenses if you are on maternity pay and he is on full pay?

@dementedpixie even though I'm on maternity pay, I have still been getting extra money from my DH. The finances have been like when I was working full time before so really he's been reducing the money into savings for the holiday to keep me having the same money each month as him.

Debt is just stupid items to be honest - skin care for me, clothes and toys for DD. Just stupidity really.

Stuff for your DD should come out of joint money (as should food).

I'm unclear. Have you got into this debt because you have been contributing too much on reduced salary, or because you fritter money?

Either way you and your DH should be a team. Talk to him.

@TeenDivided 100% frittering money and being stupid.

He won't be able to do anything as all our extra money is covering the increase in bills and savings for the holiday.

I want to do this myself, I got myself into this mess so want to get myself out of it

Which of the debts is costing you the highest rate of interest?

Personally I'd pay off the Next card first and then cut it up. Store cards are too tempting.
Then the credit card.

@MintJulia next is the online store account so no physical card. But I'd say Next is the highest in interest so I'll get that first. Credit card is 0% until January.
Overdraft I'm tempted to refuse £50 a month as I bloody hate seeing the - sign! But I suppose I'm only in that the last week and a bit of the month so the interest isn't that high.

I just need a plan on how much to pay each month to get rid and never get in this situation again.

I'd still say talk to him.
Maybe together you can come up with a plan. For example spend less on DD's birthday & Christmas in general. If this debt is costing you interest the sooner the two of you together can clear it the better, even if you end up paying your DH back.

You could probably transfer it all to an interest free, and often fee free credit card and pay it all off over as long as two to three years, which should be affordable as long as you're careful with the rest of your spending.

It's likely that the overdraft and Next card are more expensive than the credit card, so pay them off first.

When you say your overdraft is £200, what do you mean by that? You are overdrawn by £200 the day before payday, you are overdrawn by £200 immediately after you have been paid, or something else? How much interest does it cost you a month?

Some banks pay you up to £150 or so to transfer to them, so that would pay most of your overdraft off just by doing that.

Have a look at:

www.moneysavingexpert.com/loans/debt-help-plan/

Do everything that is relevant and look for the links to transferring bank accounts for free money and interest free overdrafts and the different types of credit card deals to pay off the money interest free over time.

Concentrate on paying off the one that is costing you most in interest. This will probably be the Next card.You don't say how much is left from your £700 after paying groceries and petrol so it is difficult to give further advice. If you set your mind to it,you should be able to pay off the lot by the New Year. Stop spending.

Definitely spend little or nothing on DDs birthday and Christmas. She's 1, she has no idea what it all means.

I agree with paying off the one with the highest interest rate first.
Or the other option is to look for a credit card with 0% interest and put all outstanding balance on it.
Check out Martin Lewis, Money saving expert for the best one.

Then...don't go over board on a birthday gift for your DD or Christmas presents she's to young to appreciate it or you'll be in exactly the same position come January.
Kids of that age just love the box and wrapping paper the best anyway, although I'm not saying get DD that.
How lovely would it be to be dept free at the start of next year.

The way you split finances doesn't make any sense.

All joint expenses should be one pot. Whatever is your spending money should be that, for you, not for more household expenses?

Could any of the next items be taken back? Do they still have labels on etc?

Could you sell some of the baby stuff or outgrown clothes? Your clothes or shoes?

Use food in the cupboard, rather than buying as much each week.

I agree, the split of finances is bonkers and makes no sense at all.

I got into a similar mess on Mat leave during lockdown. I slowly slowly got out mine by paying £100 off immediately on "pay day" and selling all the baby clothes I could on ebay. even if it was 50p it all quickly added up. Then when back to work I kept up with the paying £100 off and more if I could at end of the month. I found unlinking my cards from my PayPal account helped stop other spending.

Ok so I've told DH. He said to stop spending on rubbish. He asked me what I have to show for it and I said I didn't know.

To cover some questions asked.

I have sold the smaller clothes on Vinted and used that money and put towards other new clothes for DD, it doesn't cover it all hence the spend on next.

My credit card is interest free until January so I might pay next off with that.

I can't do anything about the overdraft as the credit card I have isn't showing as being eligible for a money transfer just now and to check back at another time.

It's the last 2 weeks I usually hit my overdraft. This month I was at £200. I have since reduced my limit to £200 so I can't overspend that and I will reduce each month by £100.

In terms of spare money, I'd say after food shop and petrol, I have around £300 for myself. This includes getting my hair done which I'm going to start doing myself - that's going to be an awkward convo with my hairdresser! (I've been going to her for years).

I honestly don't know what I spend my money on each month, probably just crap, takeaways etc.

Time to be strict on myself. It helped to tell DH yesterday.

Our salaries are paid into a joint account and our bills are paid from there, savings taken from there and saved away etc. we have pots for birthday and Christmas funds, MOT funds, holiday pots etc.

Whatever is left, we split evenly between us to spend as we wish. I think that's fair. It works for us and always has done.

With our bank, if one of us does a food shop or buys petrol, we just split the transaction. It's easy and works for us.

What works for me might not agree with others, but we're happy this way. There's nothing hidden, I have full access to everything.

Well done for telling DH.

Why not double the time interval between hairdresser appointments, that effectively halves the cost?

Think really hard about what clothes your DD actually needs . She's only 1. Do they need to be from Next? She'll grow out of them in about 3 months flat won't she? Have you tried NCT sales, or charity shops or Ebay bundles instead?

£300 seems a lot to spend monthly and not know where it goes.
Try for a month or 2 writing down absolutely everything you spend.
Or try a month of 'no spend' on anything absolutely non essential and then at the end of the month see what you haven't missed?

But why is food coming out of your personal money? It would make much more sense to have food, petrol, stuff for DD come out before you split the “remainder” so then you are sure exactly how much money you actually have as personal money, otherwise surely you’re flying blind.

I agree. If you have so many pots, why on earth not a food/petrol pot & DD pot too?

Because the cost of food can be a bit unpredictable. We're happy keeping it that way, it works for us - honestly.

I'm going to write everything down and see what happens there! I'm going to be so strict on myself

That might work for you but right now you need to reduce the amount going into these pots and make the amount split between you as high as possible to clear the debt. You can't afford holiday with debt.

Why is the money for DD coming out of your account and not the joint account? Why isn't her dad paying for her?

Stop shopping at Next. Primark or h&m or ebay bundles are the way forward here.

Does your husband spend any of his money on clothes for your DD? If not why not.

What are you going to do about childcare costs?

I don't have any advice re your debt but for my DS first Christmas and birthday we bought him one thing as he was too little to know any different and when people asked what they could buy him I asked for next vouchers so I could top up on clothes in the year as needed

But it doesn’t work for you, because you’re in debt!

All joint expenses, including food, petrol, things for your joint child (which aren’t discretionary, in other words) should come out if the joint pot first. No questions.

Then you can split your disposable income and it will be truly disposable. You could take yours out in cash so you can only spend what you actually have, if you have trouble staying within your means.