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.

What I can say is that you have done the hardest bit now - owning up to it.

Start overpaying even small amounts. Find stuff to sell and chuck the money into paying off the debt. Find ways to have frugal fun (you still need fun). Once you start seeing the debt go down it becomes addictive

(I had about £20k from legal costs etc after leaving abusive ex , I remember if felt insurmountable but then the more I paid off the more I wanted to pay off . I worked over time when I could and chucked it at the debt. That moment when I realised the end was in sight was amazing. )

OP, I saved a couple of threads from Mumsnet about earning extra income, most of which can be done from a home desk. Idk how practical it is given you have kids, but thought I would share anyway.

https://www.mumsnet.com/talk/money-matters/4782707-quick-cash-help

https://www.mumsnet.com/talk/money-matters/4759761-ways-to-supplement-your-income?page=1

https://www.mumsnet.com/talk/money-matters/4667523-earn-ps10-a-day-new-and-ongoing-thread

No judgement here. I got myself into about £35k of debt about 17 years ago and paid it off at lightning speed with the DFW forum on moneysavingexpert that others have recommended.
Also have a look at the free 34 day trial of you need a budget (YNAB) which lets you set debt repayment targets.

Someone mentioned Dave Ramsey, check out his 7 baby steps. My family is in financial peace because of his plan which we followed and living the debt free life now.

@Kaththetwat well done for saying it all out loud. I’m sorry to hear about your health issues, I was wondering if you had existing critical illness cover that might have paid out after your stroke diagnosis? If you do, it might be worth exploring to see if that could provide some relief to the debt situation. Did you tell your creditors about it?

Regarding your Parents, I really wouldn’t burden them with this, especially if they are of retirement age as they might be upset/worry if they can’t help you or might insist on helping you with funds designed for their retirement which could cause issues within the wider family. It might make you feel better for sharing but could also be overwhelming for them (especially if they have time on their hands to think about it).

I agree that considering why you overspend is the next step. I wouldn’t dwell on the money that has been lost, it is not helpful but after you pay off each card, be sure to close down the line of credit to reduce the temptation to resurrect it. It is not that easy to close the cards (they want you to retain it for their numbers) down so be firm with the provider. Good luck to you with it all, you sound like you are in the right mindset to succeed.

You need to make a spreadsheet and record exactly what you spend every month. That will make you more vigilant. Ditch any expenses you can now. Pay off most expensive credit first.

Cut your cards up first, that way your debt can't increase. Look at Martin Lewis's site for ways to save money, use the budget planner & stick to your budget. Make sure you pay everything to keep a roof over your head. Have you any equity in your home to extend your mortgage? That would be one way to cut your monthly payments. Pay as much as you can on the debt with the highest interest rate & pay the minimum on everything else, could you take out a 0% balance transfer card to pay off one of your other cards? If you do, cut up the card as soon as the transfer is done so you aren't tempted to spend on it. I've been there, I got saddled with £25k of debt when my marriage broke down, 13 years later I'm still paying it off but I know one day soon I will be debt free.

You need to manage the money. You have the income coming in but it is flowing though your fingers. You do not know what that money is going towards. You need to decide before the month begins, where that money will be spent, in categories, and in priority. Food, housing, utility bills, essential transport & essential clothing. Beyond having those covered, you have a pot of money for unexpected events (starter emergency fund, say £1000) and everything else goes towards paying off the debt.

Are you on a fixed mortgage, when does this end? Or is £2200 tracker/recent fix? Just thinking if you fixed for 5 years, 3-4 years ago this outgoing is going to jump soon?

Do look carefully at your mortgage, possible increases in interest rates and consider adding to it to cover half of the debt. It could save significant interest in the short term of and then when you have paid off the other half of the debt you can overpay your mortgage and reduce the capital and interest when you come to renegotiate in a few cycles time.

Loads of us are in debt.

stop being so hard on yourself.

x