Please help to calm me down - anxiety through the roof

[Gingerthing]

Hi,
i’m 42, married with two kids. After a totally shitty 2.5 years we are in a bit of a financial mess. Unforeseen financial disasters, illness and poor financial choices ( trying to cheer ourselves up) has left us in very high amounts of debt- around 80k. This is bad and I’m not asking for anyone to tell me otherwise. My issue is the anxiety and me catastrophising the situation

dh is a great support but wants me to be like him- focussing on the solution whilst trying to get on with life.

we have reduced the interest on the debt as much as we can and we are up to date with everything.

we take home just over £6500 between us. Our mortgage and regular household bills including food and car fuel are £1950. This means that we have around 4.5k. We are currently paying 2k per month off the debt but I want to pay more. Dh wants to build some savings

my issue is that I’m constantly worried and anxious, to a point where it’s making me Ill. I’m constantly terrified that one of us will lose our job etc- there has never been any suggestion that this is likely

how do I managed to calm down and enjoy life whilst dealing with this financial mess

ps- remortgaging is not an option

Really sorry you're feeling so anxious OP and it really is making you catastrophise when you are in a really comfortable position. X £4.5k a month wiggle room is such a great position to be in, I agree with your husband that building up some savings is a good idea, as it's always ideal to have 3 months worth of living expenses in the bank incase the worst ever happens, if you have the means to save. Perhaps you can both save an overpay a little? Obviously it makes more financial sense to overpay if the interest on debt is higher than that on savings, but having a cushion is important too. X

As for calming down do you have an EAP at work you could contact? I've had talking therapy sessions provided through work before when I've been trying to cope with anxiety. Also might be worth contacting your GP too. X

can i ask where the other 2.5k is going ?
you need to forget about any savings and focus on the debt paying the higher interest ones first .

I used to work in debt restructuring, although a long time ago.

While your situation isn't ideal, I think you should take comfort in the back that you are doing a hell of a lot right:

You are addressing the issue
You have the debt on the lowest rate possible
You have a plan that will see it all cleared within 5 years
You are paid up to date and haven't missed a repayment

I think it's wise to build up some savings for emergencies. Can you agree to a savings limit and increase repayments once you reach it?

Your situation is very manageable, give yourself some credit.

Thank you. We do need to build up some savings as an emergency would just lead to more debt!

This means that we have around 4.5k. We are currently paying 2k per month off the debt but I want to pay more. Dh wants to build some savings

What are the interest rates on the debt and the savings?

What are you doing with the other 2.5k?

I had to get myself out of debt following a divorce. I used step change to freeze all the interest and then we worked out what I could afford to pay. As was said above saving is pretty pointless unless the savings rate is higher than the interest in your debt. As mine was zero interest I saved a quarter and paid three quarters off. It was paid off in about 5 years and periodically I made offers to settle the debt which also saved thousands. Some proper advice from payplan or stepchange who don't charge fees made all the difference.

Having been in that situation I know how you feel! Your Dh is being unfair as he isn’t acknowledging the stress this is placing on you.
I would be getting my savings up to 4 months of expenses, so about 8k, then throw the rest at the debt hard! It should take 3 months to build up your savings, then your debt will be down to 74k. Divide that by 4K and it will take you 19 months to clear it. Less if some of the debts are paid off before others. By January 2025 you’ll be debt free x

Thank you, I’ve spoken to stepchange but they advised against a debt management plan as our debts are affordable, albeit hig. Apparently their role is to support people who can’t afford the minimum payments

It varies from 0% to a couple of nasty ones that I’m prioritising. Will need to check savings rates

Throw 4.5k at the minimum repayments plus paying off the nasty ones.

When you get to a stage where your savings rate is higher than the nasty interest rates you are paying off [so once the nasty ones are gone] then switch to savings as well.

I used to work in debt counselling and I would suggest you go on to the Debt free Wannabe section of the MSE forum. You didn't build the debt up quickly presumably and no doubt you have made the debt consolidation mistake a few times which is why it is so high. However if it is unsecured debt there is little the debtors can do even if you can't afford minimums.

I think you need emergency savings so in that respect your husband is correct but beyond that chuck everything at the most expensive debt first and carry on snowballing. Are you paying high interest rates? If on 0% then saving so you have money available to pay off when deals expire is a good plan. Ultimately though budgeting and financial discipline will keep your finances sound.

No need for anxiety. Seems like you could manage to live on one wage. How long until your debts are paid off if you're paying £2000 a month?

I agree with the MSE forum. I used it to reduce outgoings and pay off debt years ago. It really is good for your mental health to clear it down as fast as you can but in a planned methodical way.

Hi OP, have you posted about this recently? The situation/numbers seem very familiar.

I think on that thread there were lots of good suggestions. You have a huge amount of disposable income left after paying all your bills. You could throw £3k a month to the debt, £1k to maybe build up some savings and then £500 a month for 'fun' which would still give you a nice lifestyle and you'd then have the debt paid off in just over 2 years, which is nothing. Yes the debt number is big, but so is your disposable income.

You're in a very privileged position and it is purely your anxiety talking. I'd suggest some talking therapy to get to the bottom of your anxiety.

I’d build up a small cushion of savings, at least 3 months expenses, so about 5-6k. After that I’d really focus on paying off the debt asap, highest interest rates first.

You have a great joint income so you can really fire through that 80k very quickly. And I assume since you have 2 incomes, you are more protected against job losses as you could live on one income (although does depend on the split of course)

Once you’ve paid off the debt in a couple of years you’ll have 4k per month to really build up savings, pensions and pay off mortagage etc!

The key question that you’re ignoring is what are you doing with the rest of your spare money each month ? As a previous poster suggested I would be looking at saving £1k a month for 6 months to give you a cushion and pay £2k a month off debt - then after Christmas switch to paying £3k a month off debt. This would mean in 2.5 years you’d be debt free and still have three months of bills as a cushion

OP, you keep posting about this, this is at least the third time that I've noticed. You need to get help with the anxiety over this, then hopefully you'll stop worrying so much.

Looking at the numbers, you'll be just about out of debt by the end of next year, which will come round really quickly.

Look at all the interest rates. Obviously you want to pay off the expensive debt quickly.

But you can get 4-5% interest on savings and you can get credit cards that are interest free so being in debt is actually making you a profit as long as you have savings to match (this is a thing that people do deliberately, it's called stoozing, look it up). But you have to be mindful of tax on interest so make sure you understand this, but you can minimise this using ISAs and Premium Bonds.

As well as the debt making you money, you also have the buffer needed if something goes wrong so you can pay for whatever is needed without further borrowing.

Good luck, the light at the end of the tunnel is getting brighter