Help me get out of debt

[wishfulthinking25]

Hi all, I’m currently about 10k in debt and really need some help.

I work ft and earn 45k a year plus x2 annual bonus’ bringing yearly earnings to 60k.

I got into debt whilst I was on maternity leave and my partner lost his job, I was left covering everything he did not care about any bill (this is another story altogether) right now, my focus is clearing this and building savings. I have 2 young DC.

All bills/travel to work/ nursery and the money dp now gives excluding food I should be left with around £900 but I never am.

I’m not great with money I’ll admit, but I have 2 young DC so I NEED to be good with it. Please give me any advice you can.

How much interest are you currently paying every month? If you have multiple debts, it might be worth looking to a debt consolidation loan for starters. I've just taken one out, and have lowered my monthly outgoings by £300, which is fab. It will take 6 years to pay off, but the difference is that the payments are manageable, and not spiralling like they were before.

A few months ago, me and DP sat down together, looked at every single bill, and worked out where we could cut back. We decided we could do without a few TV and music subscriptions, we both lowered our phone contracts. We cut back drastically on takeaways and started batch cooking and eating the most boring foods imaginable.

As for transport to work, I'm sure you've thought of it, but are you definitely using the cheapest option?

Is there anything in your house you can sell on eBay/Vinted? Have you got the time for a side hussle? (I'm currently using an app that pays play time on mobile games, only get about £150 a month but that's super helpful at the moment. There are also a couple of decent survey apps that I can recommend. It's not amazing, but it can help you chip away at a little bit of the debt).

Also, before you make any purchase, think about whether you really need it. Anything you decide you don't need, but nearly bought, pay the equal amount off a credit card, or whatever, before you spend it on something else.

Debt is hard, really hard. But 10k honestly isn't the end of the world. I promise!

(PS if you have a really big mortgage, you might find that adding 10k onto that would be the best bet, spread out over the remaining term).

How many different debts do you have? Either use the snowball effect - pay off the smallest ones first - or pay down those with the biggest interest rate. Det up direct debits so they go out of your account before you notice that they're there.

Try and reduce outgoings. Are there old subscriptions on your account? Can you get cheaper insurance?

Saving - start small. If you can save £10 a month it's better than nothing, especially if you can either invest it or put it into an account med high interest rate.

How do you shop for food? Would it be cheaper to get it delivered with current fuel prices? You're less likely to add random stuff to your basket when you shop online.

Is your do on board with this? Is he going to reduce his spending and help pay down the debt?

Thank you so much for this, it’s really helpful. I’d definitely make time for a side hustle as I’m so desperate to get this gone, I feel like a complete failure of a mother and my eldest is only 2! Please could you recommend some apps I can use to make some extra money?

The interest rates are something ridiculous, I haven’t looked out of fear but 1 credit card I have about £4500 on and my minimum payment is £170 a month, another is £2600 and minimum payment is similar to the first. Does the debt consolidation order effect your credit at all?

Re travel to work I have a railcard which improves train fares. Takeaways are a real weakness, when I’m in the office I don’t get in until about 7pm and the last thing I want to do is cook a dinner but today we had jacket potato cheese and beans and it was lovely!

great idea about paying equal amount into credit card when I get an urge to splurge and think! Thanks so much, again.

I don’t think the apps are great but if you have a little patience then you can make money by switching bank accounts.

Can you get any 0% cards ?

The first thing you need is to find out where your money is going, if you should have £900 left over but don’t. You can either go through bank statements for the past 3 months and see what you’re actually spending, or do a zero based budget. That means when you get paid you allocate a purpose to every pound, eg whatever your mortgage/rent, bills are. Then an amount for food, essentials and a small amount of discretionary spending. If you go over one category, you need to take something out of another to balance it. You Need A Budget is a really good way of getting to grips with your money, they do 5 weeks free and there’s a charge after that but I save much more than the fee each year.

Theres no point in making more money if you don’t know where your money goes now.

I cleared this amount a few years ago.

check out Dave Ramsey - very helpful for getting out of debt and the mentality for it. Also Rebel Finance School. Both free resources.

i think it helps to hyper focus on it - my financial well-being was my number one personal priority that year so did a zero based monthly budget, gave a small amount of spending on myself per month and I tracked it and checked my accounts everyday.

personally I did the debt snowball where I paid off small bits of debt, then my overdraft and then my credit card which was the largest debt. I did transfer to a 0% card. Getting out of debt is a mentality and not just a maths/logic problem, at least for many people. Debt snowball helps with that as you see payments vanish when you repay on the smaller items so it’s motivating.

I wish you nothing but the best with it OP!

I just got one the other day 0% for 6 months but only £800 limit

It’s mostly on pointless things ie, I do a weekly shop but then need more milk, but I also add xyz to the basket and the total goes to £20 or lunches at work or a £40 takeaway..I know it’s so stupid to keep spending when I know I don’t really have it to spend. I think I just need to be stricter with it all now.

It’s so easily done, having a way of keeping track of your spending before you spend it will really help. For example the takeaway is fine as long as you have space in your budget, but that might mean you don’t take the kids to soft play or whatever. Basically being intentional about what you do with your money will help you find where it gets frittered away. I allocate an amount each week for food, petrol and incidental stuff, if I go over one week I need to reduce spending the next because my budget is build around X amount each week so if I over spend, other plans are affected. If you were able to “find” even half the £900 that gets swallowed up that’s a good chunk you can use to pay off debt.

I second Dave Ramseys baby steps, it’s very Americanised and there’s some faith stuff I don’t get on with but the principles are sound and give you a framework, having a framework - whatever you choose - will really help you with money management.

I was hopeless with money but a combination of YNAB and baby steps means I’ve been able to replace my knackered car without any financial stress. That’s worth half an hour of admin each week.

Don’t consolidate debt onto your mortgage, it’s the worst possible advice to turn unsecured debt into debt secured against your house. The other problem is consolidating debt doesn’t address the underlying behaviour that got you into debt in the first place, so you add £10k onto your mortgage and before you know it you’ve got another £10k, because you never took time to understand how to manage your money well.

You have a good income with enough left to pay this down with a bit of planning and discipline.

Don’t consolidate the debt. It usually ends up increasing the amount.

The only way to get out of debt is to account for every penny and be strict about where you spend. Restrict things like takeaways and have some cheap freezer meals available for days when you are tempted. Baked potatoes are also a great alternative for quick cheap meals. Pay slightly over minimums and tackle most expensive debt first. Move the cards to 0% deals if you can.

Keeping a spending diary may help where you write down all your spends. If there is a pattern of over spending on takeaways, alcohol, groceries which are all common overspend areas then being aware may help you cut down.

Look at Moneysavingexpert.com. The money makeover walks you through setting a budget including all those annual and irregular expenses that will be taking up some of your £900 that appears to be spare, but much of it might not be - some of it will go on things like car repairs, insurance, Christmas, school uniforms etc etc.

You need to include these sorts of things in your budget and put money aside for them before spending on things like takeaways, coffees or days out.

MSE will also signpost you to ways of increasing your income, cutting the cost of broadband, phones etc etc, increasing the money available to get out of debt and then save/spend.

Agree that adding the debt to your mortgage or getting a consolidation loan is probably a very bad idea so its quite irresponsible for people to suggest that when they don't have a full picture of your budget and you don't know what you can properly afford or whether its the best solution, which it rarely is.

If you keep plugging away, tackling the debt with the highest interest rate first, you might become eligible for a 0% balance transfer in time. For now, transfer the maximum you can to the £800 card.

For all credit cards, if you pay even £1 above the minimum payment, it removes the minimum payment marker from your credit file so looks a little better to lenders. Then every few months use the MSE eligibility calculator to find and apply for a new balance transfer offer as you may be able to get a bit more on the 0% deals as your finances improve.

For takeaway avoidance, plan for the CBA to cook nights with things like pizza in the freezer, supermarket meal deals - choose carefully and a £10-15 curry deal for 2 will feed the 3 of you. Or have something batch cooked in the freezer.

Also have the teens cooking at least one night a week each, or doing two nights when they both share the cooking.

Another quick easy cost effective weeknight dinner I like is spaghetti bolognese with a jar of Heinz pasta sauce, which is quite nice, not UPF and often on offer. I use a can of green lentils, but you could also use pork or turkey mince which is much cheaper than beef. Add some grated parmesan or strong cheddar, a bag of salad leaves, punnet of cherry tomatoes and possibly ready made garlic bread if your teens are bigger eaters.

You will never pay off credit card debt by just paying the minimum payment each month - the minimum anount is deliberately calculated to keep you in debt.

Find a 0% balance transfer deal to a new credit card that runs for at least 12 months and transfer all your cc debt to it. Divide the total debt by the number of months and set up a direct debt to pay that amount (which will be much higher than the montly minimum) into that debt. Do not spend anything at all on that new card. Set up "pay off balance in full" dd arrangements on your old cards so that you cannot build up more Ccc debt.

The mystery of where your theoretical "leftover" income that seems to just not be there at the end of the month is very familiar to me. I resolved to write it down consciously whenever I spent money on something that wasn't in the budget, along with a reason why the expenditure was necessary and an estimate of how frequently that expenditure would be necessary. After a couple of months I was able to adjust the budget to take into account genuinely necessary extra spending that my initial budget hadn't tho8ght of, but intetestingly I found that just the fact that I had to write it down made me less likely to spend it, and the edtra step caused me to start having money left over at the end of the month that I coukd put into the debts.

Are you signed up for the emails from Martin Lewis? He gives very sensible advice on where to save money on practically every aspect of life. I follow his advice and I’ve found it invaluable.

As your children grow, your outgoings will increase. You’re right to get a grip on your finances now, so well done for making a start. I raised three DC as a single parent. Their father was a loser, who never paid a penny in child maintenance. I was always short of money but I never got into debt.

I budgeted weekly. I bought the cheapest food. We ate a lot of things like beans. I used to buy a big sack of potatoes and we ate a lot of jacket potatoes with different toppings. I always cooked from scratch and we never had takeaways.

We didn’t have the heating on much but made good use of hot water bottles.

You can live frugally, when you have to. We all survived. Good luck.

I see someone has already mentioned MSE. Their forums are great and they have a ‘debt free wannabe’ section which was a massive help to me.

Start with a simple budget of your income and list all of your outgoings no matter how small, Netflix, minimum debt payments, petrol, etc and see what you have left. If you are at the point where you can’t afford the minimum monthly debt repayments, you can call them and ask if you can lower the amount, but I’m not sure if this affects your credit rating.

Check the APRs for the credit cards. It’s scary but important. Ideally you need to make the larger payment to the one with the highest APR and make the smaller payment to the one with 0% interest.

If you don’t know where your money is going, check your bank statements, all the little bits and pieces
quickly add up! I give myself a weekly budget and used to have it in cash as I was more mindful of handing it over.

Start with tracking all expenditure. Go old school - paper and pen. The act of writing down every time you spend money will help you to think about what you spend money on, help identify Needs and Wants. Things you Need to sustain life.
Use a spreadsheet, create your own or use one someone else has made, to track expenditure. It is just like paper & pen, you are adding things to the list, so are conscious of what is being spent.

There are tools, such as Snoop app, which will track expenditure for you, but that automates the process and thus you are less engaged. So go old school - notebook, or spreadsheet.

Meaningful Academy Financial Foundations has a transaction tracker GoogleSheet if you need a template. It’s not perfect, nothing ever is, but it makes a nice pie chart when you get to the stage of creating categories for your expenses.

Once you know what you spend money on, every penny, then you can budget in advance for the next month. You can decide what to spend in each category.

Build a small emergency fund, then focus on paying off debt.

Citizens Advice have debt advisers or can sign point you to them. They will go through everything with you and help you to sort it all out.
Citizens Advice - Debt and money

Here’s how to find where your local branch are based. Free, impartial, independent and confidential advice for anyone who needs it (yes, I do work for them!).

Branch Locator

I agree with others - start with your spending habits and budgeting. £900 is a lot but I bet your genuinely surplus money is less than that. You’ve also not said if the minimums are coming from that £900 either.

prioritise having an emergency fund - put the first £900 aside rather than paying off debt. Then when the washer breaks etc you don’t have to rely on credit to get a new one. Otherwise you’ll just be stuck in a cycle of debt.

Do not put the debt on your mortgage and think carefully before consolidating - if you haven’t addressed your spending and budget you’re not actually solving the problem. You can’t borrow your way out of debt.

if you can move debt between cards to get 0% deals you’ll pay it off quicker as no interest - but you have to overpay and make sure it is settled within that interest free period. For instance on one of my cards I can currently transfer for 18 months at 0% - your £4500 would take 250 per month to clear, but the minimum pyt would only be about £100. If you pay the minimum you’ll only reduce the debt by £1800 and pay interest on the remaining £2700.

make sure your partner is actually paying a realistic amount and contributing to the debt pay off (presumably you wouldn’t be in debt if he hadn’t lost his job - no blame on him for that but it’s a shared accumulation not just on you).

Can you tell me what the game and survey apps are called please?

Here is the link for the Debt Free Wannabe forum mentioned above. Spend some time reading that, both advice and people's diaries, and it should really help with both practicalities and mindset.
Debt free wannabe forum

For me, I did a budget and logged every penny spent, I got rid of my credit cards so I couldn't spend more money and looked at ways to live more frugally to get the debt paid off and made sacrificed like no clothes and holiday spend. I stayed accountable by sharing a debt diary on the MoneySavingExpert forum, where lots of lovely users would keep me honest and share their tips. None of this would have worked unless I really wanted it, and it sounds by posting today, you really want this to happen. Good luck.

Try and take a packed lunch and drinks to work with you, as that will save quite a lot of money which can be paid towards clearing your debt.

When you go shopping, write a list and stick to it.

If I am out and see something I would like, I just ask myself if I really need it - and the answer is usually no, I don't. Likewise, over the last couple of weeks, I have been tempted to have a posh coffee a few times - but I resisted and saved myself around £15 😁

I ended up in a similar situation due to my ex being incredibly poor with money. I was paying for absolutely everything, he'd contribute to the household pot but basically take it all back again to throw away! Like you, i should have had so much left but never seemed to. Sitting down, going through my statements and seeing exactly what was going where was a big help (and made me see how much he was leaching off me!) In terms of shopping, I find meal planning helps save money - i see what I have in the fridge/freezer/cupboards and make a plan for the week, i then do a shopping list where i only buy exactly what I need for those meals. It helps to prevent waste and stops me spending loads without actually having anything to make a meal out of.

I have the clear score app which gives you plans and tips on the best way to clear your debt, right down to which of your cards to pay off first based on the Interest etc. It suggests the snowball or the avalanche methods which may be worth looking up. It also helps you to find interest free cards etc and shows you ones you're pre-approved for/likely to be accepted for to avoid damaging your credit score.

I write down (old school pen and paper) every penny I spend. You need to start by logging this way for at least a month to see where your money is going.

Can you list your take home pay and DP take home pay. All your regular outgoings. That will enable posters to see the overall picture better.

Then how much debt do you have in total.