Am I overthinking this?

[mollyzex]

Hi Everyone.

Before I start I will say that I am a person who worries about everything. I am a catastrophizer! We have been getting to grips with our finances and I am stressing over how much of our money goes out each month.

We are currently in the middle of paying off a lot of debt, hence the high debt payments, however this will come to an end in 3 years.

Here is our situation.

mortgage 726
secured loan 498
loans/credit card payments 900
council tax 148
gas/elec 248
water 30
phone/internet 37
Sky 39
Mobile phones ( X4) 89
Food 400
Car 385
insurances 127
car fuel 120
kids clubs 80
prescriptions 18
TV licence 14
pet costs 56
gym 27

TOTAL - 3942 :(

We both work full time with a joint take home pay of £5100. I feel mega stressed having written this all down. Am I overthinking this?

You are being quite ridiculous. You have over £1k a month leftover after paying out £1400 on debt which is temporary.

Honestly you need to realise that many people's FULL TIME salary whilst supporting a child is the same amount as your debt payments pcm.

I'm not sure what your point is. If I had over a £1000 left in my bank account each month after all bills and debts were paid I'd be ecstatic not stressed.

What are you doing with the excess? Can you pinpoint what your exact worry is?

Yes, you are overthinking.

I don’t get what you’re worried about.

You own a house, have a car, can buy plenty of food for your family, have pets and lots of luxuries. You have £1k a month to save, and that’ll increase to over £2,400 once you’ve cleared the debt.

How much credit card debt do you have? Just chuck an extra grand a month at it to get it gone.

Are you saving anything? Life feels scary if you've not got even a small rainy day fund.
How the fuck did you get so much debt?

I am afraid that this is just my anxious mindset. I think that the amount going out on debt worries me, and the fact that so much of our money just goes

I would be using some of the left over cash to repay your debts faster. Other than that I think you’re in a fortunate position.

That’s an awful lot of debt. I’d be very uncomfortable with that. Try and build up some savings so you can avoid more debt in the future.

Cancel sky and look at getting better deals on the mobile phones if it's stressing you out.

I'd be paying the debt off faster but otherwise it is fine - if you double your debt payments you'll be free in half the time.

Your non essential debts are around 27% of your take home. That suggests a history of poor money management. I'd be worried about that, unless it was spent on something with material value like home improvement.

You have about 23% expendable income every month of about £1160. That's a lot compared to many households. I don't think you have much to worry about. More so in three years when you've cleared your debts and your expandable goes to 50% and over £2500.

Is your income after salary sacrifice pension(s)? If yes, then you're doing even better.

I'd personally be tightening your belt and using some of your current free cash to pay off those debts quicker.

Your left over money is more than my wage....... think you need to re evaluate your over thinking. Maybe save some or hit the debts higher.... you're in a really good situation even with that debt

I think you are in a pretty good situation in terms of current cash flow.
However, that is a stonking amount of debt. If it was accrued for a one off purpose, and planned, you will be great when it's paid off.
If you aren't quite sure where it came from, I'd be concerned.

I think you’ve just realised the enormity of your debt. It’s completely understandable to be anxious, even without any anxiety issues. Are your cards at the lowest interest rate, if not, get a 0% if you can and transfer. It does seem overwhelming, but once you’ve paid it off, think of how much you can then save! I was in a similar position, but we cleared everything in 2yrs. Covid helped - no spending! Now we use credit cards to our advantage with cash back and avios. Repay in full every month and have the bonus of free flights etc. We’ve also got a healthy savings pot.

I don't want to put the totals on here as husband has asked me not to, however it's a lot, hence the payments.

I am afraid that this is just my anxious mindset. I think that the amount going out on debt worries me, and the fact that so much of our money just goes

@mollyzex

I would say your anxiety is valid, you seem to be learning a lesson perhaps?!Nearly 1.5k is a ridiculous amount to be paying out to debts each month! Why are you not using the leftover money to pay it off sooner?

Why aren't you paying more than £900 to the cards and loans op?

What was the debt for? That is 25k

Why aren't you using the leftover money to clear your debts?

You have a relatively high income and loads of cash leftover after essentials, despite what is clearly a huge amount of debt.

How did you get into so much debt?

whether it was something important & deliberate would concern me less that continual spending on credit/credit cards

I agree that we need to do that. The debt built up over many years due to wedding costs, maternity, home improvements, bad decisions, silly spending..... I can't attribute it to one thing in particular. BUT we haven't added to the debt for quite some time now, so it is going in the right direction.

Unless you have lost the use of the credit cards, I'd whack as much as possible off the highest debt. If you've lost the use of the credit cards, I'd put half in savings & half off the highest interest debt.

It's good you've stopped adding to the debt. Is that something you feel in control of now?