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

How many people in your household? Can you make do in a two-bed when this is up?

Judging by the super high rental prices in your area probably 90% of other areas would be cheaper.
Can you relocate to a town or city with lower rental costs that would have suitable jobs for you and DH?

Also (nit sure if it's you who said this) but there is NO way I would sit on camping chairs for 2 years when I can get a new sofa interest free and pay monthly. I don't give a damn what you think about me for that but my god, it's cold enough generally without the added warmth of a sofa.

Fair enough. I prefer being completely debt-free for the past 15 years, including a paid-off house and large pension. A bit of discomfort and inconvenience along the way was worth it. To each her own.

One thing that helps me a lot with managing finances is having numerous current & savings accounts and naming them within my banking app. Opening new accounts with my bank is very easy to do online. On pay day I move my wages around as necessary:

Current account - direct debits - I get paid into this account so if I'm on holiday, no signal etc and have DD's going out the next day the money would be sat there ready.. And I calculate all my DD's for the month and leave the balance here.

Savings account - short term - leave money in this account for upcoming birthdays etc this month, approximate fuel spend for the month, and any other known upcoming expenses e.g hair appointments, etc

Savings account - Christmas - I put a little aside each month specially for Xmas so it's not a huge outlay at the end of the year

Savings account - long term - try and put whatever I can aside although some months it's nothing

Current account - spending - anything leftover goes in here so I can see in black and white what spending money I have left for the month. Groceries tends to come out of here as it varies so much but you could put something aside in say short term savings if you wanted.

I know it doesn't help you in consolidating what you have, but I find doing this really helps me manage things and avoid overspending/using the credit card to start with. Once you start consolidating and reduce your monthly outgoings, it may also feel encouraging to see that balance you're having to leave in the DD account each month coming down.

Good luck however you do it x

Seeing it in black and white is the first step to sorting it out. You can get in that mess just by overspending by a few hundred a month for a few years when you add on interest etc.
It is scary but you can tackle it and come out of the other side. Then you will look back and think “WTF?”

This is what I was wondering. The location seems to be contributing to the problem.

I've only ever bought secondhand sofas in 26 years of home ownership. You can pick them up quite easily either free or definitely under £100.

I wouldn't go into debt to buy a new one. Most of our furniture and curtains are second hand from gumtree and the like. And you can feel good that it's a planet friendly choice.

what is done is done regarding sheds and sofas etc but I would advise you and DH making a resolution no more debt except for a mortgage and current car loans, everything else going forward is saved for in advance.
for the time being all extra money gets thrown at the debts, you save a small emergency fund say £1000 ( in case your vacuum washing machine breaks) and you have a separate savings account for all known yearly expenditure ( MOT car service birthdays christmas insurance clothing allowance for you DH and kids estimated amount for school stuff trips mufti children in need new uniform school bags etc works night out if you can't get away with not going any weddings in the foreseeable, if you know your kid is going to outgrow a toddler bed and need a single bed you add this here, I would also budget a small sum for family treats and day trips even if you can't manage a holiday add this up and save a twelfth every month)

Also find out where your local second hand furniture and electrical centres are. Make a plan to always try there for a few weeks if something breaks down before going interest free at curry’s.

You've had some good advice op. The only thing I would add is to check your accounts every day on the banking app. That way you would have caught the £45 extra internet payment earlier.

Well done on the stuff you've done already. But I agree with a pp - get your DH to agree no more debt - not for anything. If you can't get it second hand then you do without unless it's an absolute essential.

I love the Martin Lewis debt free diaries - they have lots of good tips and advice.

Now you've saved the £100 a month going forward look at where to pay it off otherwise it will get eaten up.

I'm confused what's costing you so much each time you move?

Deposit/rent up front -but you would get that back?

Removal costs? Another good reason to declutter before a move and scale down your belongings.

Or are you decorating/buying furniture etc when you move. That's mad when you are in rented but I hear of so many people doing it.

Same. And similar for dining furniture, bed frames etc.

In fact I think apart from a couple of bits that were wedding presents nearly all the furniture in our house is 2nd hand. It's how I bought stuff as a struggling single mum and I haven't changed now even though we earn comfortably over 100k as it feels better for the planet and our bank balance

You need to stop making excuses for all the spending. £85 a month on a sofa is a lot if it is every month, and for how many months? That's £1000 more or less in a year. I bought mine outright with DFS for under £500 with damage protection which meant they professionally cleaned it for me 4 times and re-covered it after 4 years.
My car cost £2k second hand. £250 or whatever per month is so much more if it is for 4 years for example. No matter if you have to pay for repairs. It costs more within the first year so you are paying more than 4x what I would.
Well done making the changes so far. Now change your mindset. If you don't have the money, you don't buy it. Or you buy second hand. Sheds are always on offer for free on facebook marketplace.

How would she do that when one of the bedrooms is storing the lawnmower, bikes, christmas tree, tools, etc etc

@bellac11
One could get rid of stuff rather than throw money down the drain storing it, when the family finances are dire.

Or be creative. As others have said, sheds are often offered at no charge on Freecycle. There were options besides financing one.

Some people know how to delay gratification, and some do not. I'm glad I am the former and wish the best of luck to those who fall into the latter category.

Look at;

money saving expert
dave ramsey
under the median (you tube)

for a place to start. You are broke, but you CAN fix it.

How would she do that when one of the bedrooms is storing the lawnmower, bikes, christmas tree, tools, etc etc

She owns a shed now so why would her bedroom be full of tools?

Oh I'm also debt free... but hey ho that doesn't match your nasty smugness.

Great work done today OP 👏

Make sure you’re doing tax free childcare makes a difference to us, and quite a few people I know didn’t know about it (for nursery fees if that’s applicable to you)

Just to pop in and say while this thread is great, don't jump to immediately consolidate debts etc.

I think with that level of debt you'd be really best off calling someone like stepchange or Christians against poverty.

As the early poster said Money Saving Expert's forum called debt free wannabe is the place to go for this stuff as well - they can be brutal but when you start reading the board you see the holes people have climbed out of and it can be amazing.

Depending on the costs of your debts and your ability to service them, you may be best off accepting that your credit rating takes a massive hit and pushing to have various debts frozen - there are particular circumstances under which providers will stop charging interest. Whether it's worthwhile or not: This will depend massively on the interest rates you are paying on your credit cards etc, the options for balance transfers and whether it's possible to get bigger ones and how much slack you look like you have once you split debt payments off from the stuff you need to fund living. Again this is where stepchange and MSE will be the best help.

Good luck, sounds like you're making good changes already!

I use Vinted to sell things, it's a very effective platform. It's also great for buying clothes, particularly for kids, usually at least 2/3 cheaper and most of my purchases are brand new with tags or nearly new.

Well done op for taking control of your finances.
Brilliant save of £95 on your phones .
Lots of good advice as to how to tackle your dept. Once you have your plan in place I would use the £200 refund from your internet to start paying down the first on your hit list . Say it's your shed that £200 would pay it off 8 months earlier.
Good luck op the first steps are the hardest

Agree with this ^^

Contact Step Change and get some advice. The level of debt you have relative to earnings has gone past making a few savings here and there.