my debt confession

[Kaththetwat]

Hi Everyone

I have been a member before but not posted for many years. I am not sure what I am looking for from this post, however I feel like I need to 'come clean' about the terrible financial situation that we are in, as we aren't telling anyone in RL.

we are both mid 40's, 2 dc's, nice home, 2 cars etc. We have both done well in our jobs and we earn well over 100k combined. Despite this, we are in an absolute shit load of debt. Before I go on - this is not a sob story and the debt is completely unacceptable. We have both been absolute f**king idiots, living way above our means and never being willing to wait for anything. I am embarrassed, disgusted and disappointed at us. Dh feels that same.

I had a mini stroke at christmas and this made us re-evaluate things. Thankfully I am ok now and my income wasn't impacted, however if things had been different then we would have been in an absolute catastrophic financial mire. This can't go on and since the start of the year, things have been different. It's only now that I can really face up to the mess we are in.

I expect that I will get lots of negative comments - that's ok. I think I deserve it.

So between us, we owe just over 100K, on top of the mortgage. It's disgusing, shameful and totally avoidable. No excuses. About 40% of it is linked to home improvements, but even these were wants and non needs.

The rest has been built up by both of us spending freely on credit cards, taking consolidation loans and repeating the cycle etc. This has gone on for years without us really taking stock. Fast forward to 2023 and here we are - 100k in debt and not quite sure how we got here! I have cried and cried but now is the time to put on my BG pants and get on with it.

We don't want to remortgage the house and we are not eligible for any type of debt management as despite the debt being astronimical, we can afford the payments.

So now we have to sort it out. For the first time in our married life we have sat down and actually looked at doing a budget. Not something that either of us found easy as it was like shining a spot light on our past financial inadequacy.

Our joint take home pay is just shy of 7K per month.

We pay £2200 for our mortgage and regular bills - this includes things like our mobile phones, internet. Basically every direct debit that we pay.

We spend about £500-600 per month on food, although we both accept that this could be reduced

Our debt payments are 2k per month - sickeningly ridiculous amount of money. It's all loans and credit cards. At least the loans are a fixed payment with a definite end date.

dh's car costs him £376 per month for the lease - this is tied in for another 18 months. My car was included in the debt amount as we took a loan for it.

What's even more embarrasing is that we shold have almost 2K left for saving etc - we don't as we have just spent spent spent everything. God knows how much we have spent on holidays. Totally ridiculuous.

So I have confessed all and it feels like a weight has been lifted. I now need to find a way to stop the self flaggelation and get on with it.

I would like to talk to my parents about it ( they aren't in a position to help but they are generally supportive) but dh is adamant that it's private, so I have to respect this.

I can't help but wonder how many others are in a similar position. I want to reiterate that am not looking for sympathy and I agree with everyone who tells me what a twat I have been.

ideally you would print of a budget planner and go through it and see what money you have left then really you need to try and get as much debt moved on to 0% as you can, chuck as much as you can afford at it, at the same time building sinking funds for birthdays, emergencies etc. because without these you'll end up getting to more debt.
we cancelled sky, tv licence (we never use them channels) that freed up another £50 to add to the pot, days out were free or very cheap and we took drinks and picnic, holidays didn't happen, clothes were only purchased if need not just because. takeaways became fakeaways which everyone really enjoyed. I wrote down every spend in a diary to keep an eye on outgoings, i know it sounds miserable but seeing the numbers dropping made it worth it.
If you have Instagram the debt free community is great there's loads of great tips, ways to save money & make money.

Have you looked at the snowball method? Where you work out what you have available to put towards debt, make the minimum payment on all but one and focus all your extra on that debt until it is paid, going from smallest to largest? I think that is a really motivating way of doing it tbh.

Well done for facing up to it, it’s the first step.
At least your DH knows and you are doing it together- when I did similar DH didn’t have a clue so I had to try and save my marriage as well.
Dont rule out remortgaging, it might be an option and yes get Monzo or similar, seeing it all so clearly helps

It is a lot but with your salaries it should be clear within three years or so.

Once you have finished paying it off, try and pay the same amount each month into a savings account to give yourselves a buffer.

Good luck.

This is my suggestion too - try to over pay what you owe so its gone faster with less interest.

Its great that you are starting this now!

Nothing but admiration from me OP, facing up to it and then saying it out loud (or to MN!) is the first step.

As others have said snowballing is very effective. The other thing I would suggest is there's plenty of people on TikTok/Instagram who are on a journey to be debt free/have already managed to pay off huge debts who you might find both inspirational but also useful for hints and tips.

You've got this

Have a look at Dave Ramsay on YouTube. His channel is quite inspirational, especially when families like yours come out the other side.

I too applaud you OP. You've had brilliant advice here. (I'm not in debt but been meaning to set up a Monzo for ages, as I sometimes wonder where some of my money goes, so this has spurred me on).

Can I suggest that maybe you both try to read up on why you've been spending like this? It's often complex, and if you understand why it may help with this period of paying it off and, importantly, for afterwards when you have more funds each month.

I have a good friend who turned around her whole attitude to spending after a period of reading/ thought/ joining some helpful FB groups and discovered why she spent, spent, spent (in her case related to events when she was younger.)

You've got this.

Hey OP,

No judgment here - just a congrats that you have had your ‘awakening’ moment, and to urge you to cease it and make the changes and carry them through. Don’t let yourself ‘calm down’ and think, it’s ok, and just drift back to your former lifestyle. Keep hold of that horrible feeling and use it to push through. It didn’t happen overnight, and it won’t be fixed overnight, so you need motivation to push through.

i won’t repeat what’s been said, but my extra thoughts -

*watch short Dave Ramsey clips on YouTube. He has 7 Baby steps, including starting with a small emergency fund, then tackling debt via the snowball method many people have recommended here. His videos are motivating, and you will need a lot of motivating to get through this!

*try and make a 2 year or 2.5 year get out of debt plan. The reason being it’s hard to be motivated to be frugal for so long, so better to be extreme, have a 2 year limit and then get your life back.

*clearly this is a lifestyle issue and you are going to need to ‘unlearn’ a lot of bad habits around spending. Maybe you and your husband should do a course eg Dave Ramsay’s financial peace? Before you dismiss this - to be £100k in debt, with earnings of over £100k/year shows that your are overspending, say £10k (if it’s over the last 10 years) or £20k (over the last 5 years) per year, meaning you are living a lifestyle 10% or 20% above what you earn. By cutting back to spend within your means PLUS normal debt repayment you would be cutting your lifestyle down to 80% (so going from spending at 120% to 80%) or if you also add extra debt repayment, you may be cutting your lifestyle down from 120% to 60%. I draw this to your attention, because it will be hard and may feel like you are broke and you do nothing fun. I found knowing these figures helped me get through it, and was motivating to know that at the end of paying it off I would have 100% of my salary again. Also by spending at about 60% of my earnings, then paying the debts off, I learnt a lot about what I really needed vs what I wanted, and after paying the debts I set up savings and pension accounts and only added back in some ‘wants’ that I REALLY wanted.

*finally, this is worth it - stick with it. I didn’t haven’t a lightbulb moment, I got a high paying job and decided I should pay off all my debts before I let ‘lifestyle inflation’ take over. So I lived on my old salary for a year and put the extra towards debt and then an 3-6 month emergency fund. Now I am on the other side with debt paid off and the fund in place, I am scared how vulnerable I was before. Getting ill, or losing my job or being made redundant or an expensive house/car accident any one of a number of things could have had me in such a vulnerable financial place back then. And if you had asked I would have said I am ok, because I can afford to make the debt repayments! I can’t tell you the peace of mind I have now at knowing if something happened, it might be emotionally upsetting etc, but financially I am ok to cover most emergencies. What’s the saying? “An emergency fund turns an emergency into an inconvenience.”

Wishing you the best of luck with it.

*seize, not cease!

I would try and sell somethings and use the money to pay off debt. I would then use the snowball method, be strict with yourselves. You’re lucky you’re in a position to pay it. I think it is easily done so don’t be harsh on yourselves.

OP well done for facing the problem head on.

Next step - ditch the shame... I've been in a similar situation and it was the shame that stopped me sorting it out.

And then.... is your husband actually on board with sorting it out? If not then whatever plan you make simply won't work. It's going to take budgeting, being strict and sacrificing the lifestyle you've become accustomed to (and have been paying for with credit) at least for a while.

I don't think it's fair of him to expect you to keep something like this secret if it's hurting you so much.

I'd have a look on YouTube for some debt confessions and their plans to sort it out.

Dave Ramsey's plan has been mentioned a few times. It's a bit self punitive, rigid and the man is a bigot trying to sell you something start a cult . there are lots of people around who will show you how to pay of debt, find the one that works for you.

Good luck OP, I hope you get yourself on an even keel soon. I think a lot of people are in a similar position proportionally but it isn't spoken about openly, not even on MN really.

Hope you're recovered from your mini stroke too, that must have been scary

Forget Dave Ramsey trying to sell you courses, get on the money saving expert forum and the debt free wannabe section.

There are some great posters there, fantastic free advice, lots of support and some really inspiring stories.

You need a full statement of account so you know what you are spending and what you need to pay off. It is great that you can afford the minimum payments, the next step is to trim your budget so you can pay more than the minimum. Cancelling some subscriptions or cutting back on takeaway/eating out are obvious savings.

Use the snowball technique to focus your over payments. There are two snowball methods, one where you pay off the smallest debt first for the psychological boost and one where you pay off the highest interest debt first so you save more money. I prefer the second version but it depends a bit on your debts and your mindset.

As you have a good income it would be worth considering whether you can shift any debt to 0% deals so that you save interest and pay the debt off more quickly. Some advise against this as it can encourage you to spend more, only you know whether this is a good idea for you or not.

Thank you all so much for your comments. I have sat and cried reading them. \i expected to be totally flamed but every post has been so supportive and it's really picked me up.

Plan for this afternoon is to go through our accunts and see what DD's I can get rid of! I have the afternoon off. before I start I am going to have a coffee and an entire Easter Egg !

Money saving expert forums are amazing for this
You're in a great position to get out of debt and make a huge lifestyle change
Don't take the easy way out by remortgaging or a debt plan. Make a solid plan, put money aside for everything and have a few years getting rid of the debt
At the end of it think of the position you will be in. Enough money to live a really comfortable life and save for your and your children's futures
It sounds like you already have a lovely home and cars. You don't need to spend anymore here
I work in mortgages and you're not alone. So so many people are on really good salaries and have huge amounts of debt. They spend spend spend then remortgage, clear the lot and the cycle repeats. But lenders are tightening up again. We don't want to lend to repeat debt consolidators. And house prices are not likely to rise as they have previously so they end up running out of equity
You really can do this and life will be so much better for you once the debt is gone. Good luck

You were very brave to write this post. It must come as a relief to get it out of your system.

You've got a lot of good advice here, one small thing to add: whenever the OH or I intend to spend money on anything that's not a recurring bill with a value of £20 or more, we have a discussion about it. We then decide together whether it's a necessity, a need, or a want. Far too often things fall in the latter two categories but one of us has convinced ourselves that it's a necessity. It really helps to see the savings balance etch up.

Lots of great advice here on managing debt and good luck on getting out of it. The most difficult part will be to change your mindset around money. Separating wants and needs and communicating that to your children so they don't make the same mistakes will be important. A debt payment plan will be the easy part, lifestyle change will be the difficult part.

If you can, go to the library (save money) and get some personal finance books. Your Money or Your Life, by Vicki Robins, Start Late, Finish Rich, David Bach, etc.. there are a lot of great books out there that can help you shift your perspective on money.

Well at least your written it. Feel better. You have a plan. This is good.

Are your credit cards, loans etc, on the best deal?

Your very frank post does make me wonder about the lessons that children can learn from the spending habits you describe -(no need to budget, wait & save / little differentiation between need and want).

Does debt support / help / guidance / tactics / tools contain advice on how to address attitudes that are quite likely to be picked up or mimicked by some children, or how to teach them good practices? What will you be doing, if you don't mind me asking?

Do not feel embarrassed we all get into this situation but you are wanting to change and tackle it and when you are on the other side of it, you will find that the way you see your finances will be completely different. Write down your debts and pay off the smaller ones in one go(if this is affordable) if you added at least one small one to pay off completely each month this would slowly clear some of these debts and put the others on payment plans where you can see the end date. Remember it slowly crumbles the day away and won’t be instant but it is decreasing each time. Join some saving pages on Instagram and Facebook for some tips as a lot of those individuals have been in the same position and offer advice on how to save and how you can still spend but save loads. This is a long term lifestyle change.

I thought the same. I bet after insurances, subscriptions, school lunches, clubs, etc there is a lot less than 2k per month to play with. Can you get a handle on everything you are actually spending and then make a plan to chuck most of what is left over onto the debt?

Just echoing what other people have said about heading over to the Debt Free Wannabe board at Money Saving Expert. You'll need to do a detailed statement of account, listing all your debts, with their interest rates, your income and your outgoings - but you need to do all that anyway if you're going to get out from under.

You will then need to start budgeting really carefully, throwing spare money at your debts to start really making an impact. Your budget will need to be super realistic, include categories like Christmas or insurance or new shoes, which aren't monthly fixed amounts but will otherwise crop up unexpectedly and catch you out. You'll also need an emergency fund as well to stop you falling back on to the credit cards. And you'll need to be realistic about how far you can cut back your lifestyle, you can't live on tins of beans for 3 years as you won't be able to stick at it.

The mini-stroke has obviously been a wake-up call for you. The most important thing is that you're okay. You can sort out the money with a concerted effort by both you and DH and may well find yourselves in 5 years' time in a significantly more comfortable position than your peers, who are likely recklessly overspending as well. You'll get through this, just stick at it. Good luck.

@Kaththetwat

Please don't call yourself a twat.

We were/are in a similar situation. 73k of debt, income 120k a year, just on overspending over many years and not really being able to wait for something/save up.

We have a DMP to pay it off in 7 years time. We are lucky we faced up to it when we did.

We both had a lot of help in therapy to face up to it. The difficulty and intense anxiety about waiting and budgeting has emotional and developmental roots. That is not to say its Ok, or you don't need to do something urgently about it and learn to do things differently. Of course you do.

But don't crucify yourself. Everyone has some difficulties or other. You have been able to hold down a job and have a family, and earn a successful income. Your DH and you sound like you had a solid relationship where you are facing this together and respecting each others feelings. All these sound like strengths.

Your difficulties are around waiting and debts. The person next to you at the station might be brilliant at budgeting and living within their means but be unable to progress at work or create a loving relationship.

It is being so harsh on yourself that has stopped you from seeking help this far. Don't be harsh on yourself, seek help and start sorting it. Even if it takes you 10 years you'll feel much better.