Just worked out how much we owe…

[EmbarrassedDebt]

Sat with DH tonight as it’s a week till payday and we have nothing left, so started a spreadsheet for our income and outgoings we are broke like absolutely destitute

In doing this I’ve found out between us we owe

55k’s worth of debt no wonder we have no fucking money

credit cards stand around 17k

cars around 9k on one and 7k on the other (nearly £600 a month on car repayments)

we have 4 loans between us owing 18.5k (seriously didn’t know this)

and other random stuff on finance (shed, tv, sofa)

Dh earns around 40k and I’m on 35k

I literally have no idea what to do but seeing it all down on a spreadsheet make me feel sick.

so far I’ve started a new spreadsheet sheet with the amount owed on each credit card and the interest rate & looking at ways to start paying it down.

I am horrified 😞😞 I’ve been half heartedly for a new job and looking at a second job but now that is something really important on my list of things to do…

please no nasty comments I just needed to get this off my chest and then plan a way out of this mess.

randomly we both have reasonably good credit scores as well I check those tonight as well

I don't mean this unkindly but just to illustrate the mindset change you are going to need (i used to be in a financial advisory capacity) but buying a shed to house a mower was a luxury. You can cover the mower with a large sheet of plastic to keep the weather off, for a tiny fraction of the price.

Every potential purchase that occurs to you, you are going to need to nix or come up with a vastly cheaper alternative.

It can be a creative challenge.

Free camping chairs from Freecycle as alternative to sofa, for example. I sat on the floor for two years before buying my current 20-year-old sofa & chair, and I was single on 75K at the time. You just have to bite the bullet and avoid borrowing at any cost from now on.

You’ve had lots of good suggestions and some not so helpful ones re your phones which you’ve already said is on a contract that can’t be broken yet.
I’ve been scared by my debt levels in the past so I sympathise. The main thing is to face up to them and start thinking differently in future and being more money savvy like not paying high interest on credit card loans. I’ve wasted £££ on the same thing over the years but you’ve woken up to it today so that’s positive even if it feels negative right now!
If you move home in future, try to find somewhere you don’t need 2 cars. Also childcare costs will naturally fall as the children get older. Though maybe there are savings to be made now especially if you sometimes wfh.

@EmbarrassedDebt

Honestly, you have a shed, why are you paying for childcare? Tether the kids up!

😂😂 it's good you're getting sorted now, learn from your mistakes, but don't keep beating yourselves up. Plus, yep, renting is hard & DH being made redundant. It's a mix of terrible luck & not being careful enough with bits & pieces (phone contracts). Don't get into the blame game though, it's not worth it.

you'll do it!!

It's probably a generational thing but I'd never get into debt for the sake of a new sofa or a shed as they are hardly necessities. Those are the type of things you'd save up for.

@ZeldaWillTellYourFortune

we moved from a 4 bed house with a double garage to a 3 bed house with no garage - the shed houses a lot more than a lawnmower, 4 x bikes, my dining table and chairs (as I can’t fit it in this house but has massive sentimental value) all of DH’s tools, my Christmas decorations, my sewing machine, everything you’d normally find in a garage…I’m not sure I’d fit all that under a plastic sheet and it still be in good condition 🤷‍♀️

I get it the shed was a bad idea but it’s a bit late now I can’t send it back!

Ive looked at my bank account quickly and 99% spare money has gone on food, childcare, and diesel, I did spend £4 in Costa on the 8th October

childcare is something I’m looking into sadly we are now back at the office more and more so I’m not 100% sure how to eliminate it completely, this may change when dc1 goes to secondary school next year

there is a lot to look at and digest

I will be starting the job hunt tomorrow and looking at getting a second job, I have some stuff to throw on Facebook etc

I think people are unnecessarily getting caught up on a bloody shed

A shed is a necessity, if you dont store things carefully you'll end up wasting money as things get damaged and need replacing.

I cant tell you how much money Ive wasted on getting 'cheap garden storage boxes' which in the end shatter or let the water in or arent big enough so things get shoved somewhere else or I need another one and so on and so on.

Theres nothing wrong with borrowing money, its how you do it that is important and as above, people are keen to say 'we dont have any debt' but they happen to have a mortgage but dont see that as a debt.

You'll come out the other side OP, you need to cut back right now on everything, get cars that dont incur a monthly charge, check things like the phone and other subscriptions and pay off as much as you can, have a 5 year plan

When you write a budget you need to think of every single thing that you buy, even if it's just once a year. For example, if you need to buy school uniform at the end of the summer holidays and it comes to £240 (plucked the figure out of the air for easy maths). Divide that figure by 12 and you get £20. You know that you need to budget £20 per month even if the expenditure comes around once a year. Likewise birthdays, Christmas, MOT, car servicing , new tyres, school trips.
With council tax see if your local authority will allow you to pay over 12 months. Most take payments over 10 as a matter of course but will allow 12 if you're not in arrears. You will still pay the same figure annually but monthly installments are less and you don't get those "free months" which aren't.
Are you on a water meter? If you are, look at water saving devices and make a habit of checking for leaks. If you aren't metered then see if metering will save you money.
Cancel service plans for appliances that you no longer own.
Sell stuff that's no longer serving a purpose.
Finally identify the difference between WANT and NEED.

Hi OP - you’ve taken the first & hardest step so well done on that at least

Good advice on this thread about consolidation etc - and others are more knowledgeable

I wanted to share my experience of ‘coming out the other side’. I got into some debt in my 20s, about 10k when I was earning prob 25-3Ok. I managed to get rid of it in 2 years by just spending very little (no holidays etc): it had happened from just a little overspending here & there, keeping up with what people who earned more (or were a couple when I was single) were spending

Those 2 years were hard I’m not going to lie, and it WASNT worth it … I regretted the past overspending when I was paying it off more than I appreciated the things I bought that led me to the debt. With interest rates rising getting rid of it/getting it down will help you in the long run

This is not about being nasty (like I said, been there myself). What jumped out to me from your post was I think your lifestyle is probably too expensive vs your salary - eg I am a homeowner (with a mortgage) and earn substantially more than you. I drive a car I bought as a used low mileage second hand 2 years ago for 9k (outright) - car was 2 years old. And I think I’m really lucky/it’s a luxury to me. Did you buy (lease) a brand new car? Why, as I don’t think your income allows it ….

My thoughts von how we end up in that trap: not thinking just about the cars but look at what others spend/economise on … and think about what you can realistically afford in future

We tend to see what people spend on, but not where they save: eg some of my friends spend on things that I think are lovely but I can’t afford- Ocado, highlights, yoga retreats..) but save by having cheaper homes, no car etc. Likewise my friends will think I have spent loads getting my house nice - but I shop at Lidl/ALDI - we all have different priorities, spend on some things, save on others to make it work

The point is it’s easy to think it’s ‘normal’ to have a lifestyle that you just can’t afford when you look around- but you don’t see the cheap pasta dinners/hand me downs /whatever

PS - I do think you’ve been v unlucky to have to move 4 times and it always costs loads sadly

Realistically it’s going to take a number of years to get out of this, but the good news is you’ve seen some leaks in your budget.

Re a new job: good idea (and negotiate salary) but don’t throw away security esp as your DH was made redundant so must be somewhat new in his job .., definitely I’d say you need ten percent or more to move

Writing it all down is terrifying but now you've done it, you've taken the first step in the right direction.
At one point, by sticking my head in the sand and being totally irresponsible, I chalked up nearly 37k in debt. I've now paid off 22k of that and I no longer use any form of credit. Still got a ways to go but every time I get a little extra money, I throw it at the debt. It can be done! I wish you luck!

With this level of debt you need proper debt advice.
And obviously stop buying things on credit.

StepChange or Citizens Advice will help you work out your options and won't charge you for it.

Well done for confronting it. It’s scary.

0% balance transfers and changing phone contracts will make a big difference already! Haven’t even read the rest of your thread, but once you take the bull by the horns, things will improve!

I would store all that in a bedroom or front room or get rid of it before I went into debt for a shed. Buying things to store more things in is a sign of a consumption problem. Food for thought.

It's a mindset. I have worked with people on 20K who stay debt-free and people on 120K who are awash in debt. It's seldom a matter of income or bad luck. Very seldom.

Personally I drove my last car for 16 years and the current one is 10 and I still think of it as my "new" car. All of my furniture ALL of it, and I'm nearly 60 aside from the aforementioned new sofa and chair 20 years ago has been purchased secondhand. I can count on one hand the number of times per year I get takeaway or eat at restaurants, aside from a couple of annual events with family. My biggest TV is 24".

The good news is that while daunting, and while likely to demand a downsized lifestyle, the OP's level of debt is not unmanageable. Additional income via second jobs, weekend/evening childminding or whatever will help immeasurably. I do think that one way or the other, one of the cars has to go, though.

buying things to store more things in is a sign of a consumption problem

Agree with this. I see so much excessive consumption generally

Recognizing that is part of what helps people get out of debt.

1. Take out a consolidation loan and pay it all off. At least then there's only one debt.
2. Cut up all the credit cards.
3. Get better phone deals.

Are you paying for your childcare using tax free childcare or vouchers? If not that would be a 29% saving.

Sorry - 20% saving

Re credit card repayments look at the last minimum payment you made on each.

then set up a standing order for that amount. Not a direct debit. By paying the same amount each month it will gradually chip away at the capital.

next work out which one has the highest interest and throw as much as you feasibly can against this on top of the monthly standing order. When this is gone take that amount and do the same with the next highest interest.

I thinj that’s how the trick works anyway.

for car loans can you consolidate them? Or swap for lower emissions more energy efficient cars?

I've been here and come out of the other side. You have had loads of wonderful advice and have done the really hard bit of facing it dead on. I just wanted to wish you well.

You owe less than you earn, all is not lost! Don’t consolidate, we made that mistake, move everything onto 0% as much as you can and start hitting it. We paid off approx £20k in around 14 months that way. Look into snowballing.

Dont feel like you have to buy anyone birthday or Christmas presents. At this point you’re literally getting yourself into more debt by doing it. People will understand. My husband and I still don’t buy for each other to this day anymore!

Best of luck and again try not to feel overwhelmed, you do earn more than you owe which is a good start.

Some helpful hashtags to follow on instagram are: #debtfreecommunity, #debtfreecommunityuk and #daveramseybabysteps

The amount you've spent on the cars, whilst a lot, is quite normal for two cars in decent nick. I wouldn't recommend changing them because you may end up spending more on repairs on something cheaper.

I'd keep them as they will see you through the next few years when you'll be wanting to save as much money as you can. You know that your cars are running reliably, that's important.

Dont feel like you have to buy anyone birthday or Christmas presents. At this point you’re literally getting yourself into more debt by doing it. People will understand. My husband and I still don’t buy for each other to this day anymore!

Yep, I agree this kind of mindset is really important.

Any money you spend is more debt - you don't have any money until you've paid this off - so every time you buy something, you need to think 'is it worth getting into more debt for this?'

Good advice on here but these charities can offer free advice, too :

Stepchange (as mentioned above)
Money Matters

What I have done in the past is focus on one loan/credit card at a time. So minimum payment on most things, pay all you can on one, then pay them off one at a time. I start with whatever has highest interest rate.
Feels like you are getting there with each thing that gets paid.
When paying off a credit card, I also reduce the amount of credit on it each time I make a payment so it can't build up again,