Have I ruined my life?
Discussion
OP - I know someone twice your age, averaging three times your income with a debt nine times the size.
Debt management is a little like diets. Sooner or later you realise the BMI is shocking. You have to be realistic that it's going to take time to get where you need/want to be and be patient.
You could just chop your legs off - it gets there quickly - but even that doesn't get the habits fixed.
You're neither stupid nor have you ruined anything. Just don't get to the position of my friend!
Debt management is a little like diets. Sooner or later you realise the BMI is shocking. You have to be realistic that it's going to take time to get where you need/want to be and be patient.
You could just chop your legs off - it gets there quickly - but even that doesn't get the habits fixed.
You're neither stupid nor have you ruined anything. Just don't get to the position of my friend!
Dave350 said:
I agree with not carrying cash. I have no cash on me in the week at work, stops afternoon trips to the canteen when hungry or trips out to Subway at lunch like quite a few others do.
I also only take it out on the weekends when needed, you end up spending far less on a day to day!
I find the opposite oddly enough. I also only take it out on the weekends when needed, you end up spending far less on a day to day!
Withdraw cash at the start of the week/month, divide in to envelopes (one for lunches, one for household shopping, one for petrol, etc) and then when it's gone it's gone. Puts a cap on things rather than just allowing it to trickle away on the debit card. Makes it much more physical too. You can see when you are getting low on money.
A bit nerdy maybe, but effective.
otherman said:
Wacky Racer said:
All this talk of a £1000 banger is fine (nothing wrong with that)...but sometimes "bangers" can cost nearly £1000 to get through the MOT test.
The modern day £1000 motor is far from a banger. This ain't 1970. 
Small, cheap, European cars are the way to go if you want a cheap run about!
Terminator X said:
Don't carry cash around. You'll be amazed at how easy it is to piss money away when you have it to hand vs having to go to the trouble of getting some out of the hole in the wall. O/T whilst the new contact-less cards are convenient they are a recipe for disaster imho as so easy to spend using them.
TX.
I'd say the opposite. Carry cash, budget £100 a week, it is much easier to see it going! When you're down to the last tenner you'll know it's time to stay in and eat beans on toast.TX.
Mr Will said:
Withdraw cash at the start of the week/month, divide in to envelopes (one for lunches, one for household shopping, one for petrol, etc) and then when it's gone it's gone. Puts a cap on things rather than just allowing it to trickle away on the debit card. Makes it much more physical too. You can see when you are getting low on money.
Which is how it used to be of course, before consumer credit was invented, a whole industry sprang up and debt, formerly a taboo, became a way of life.Simpo Two said:
Mr Will said:
Withdraw cash at the start of the week/month, divide in to envelopes (one for lunches, one for household shopping, one for petrol, etc) and then when it's gone it's gone. Puts a cap on things rather than just allowing it to trickle away on the debit card. Makes it much more physical too. You can see when you are getting low on money.
Which is how it used to be of course, before consumer credit was invented, a whole industry sprang up and debt, formerly a taboo, became a way of life.I was in this very situation when I was your age and it was totally self inflicted. I recall the panic at opening bills (this was pre-email)
I was panicked. However, I knew the only way was to climb back out.
1) list everything I owed
2) credit cards were the worst of course
3) set a firm,brutal monthly budget - no entertainment,just strictly necessary stuff,eat at home.
4) Every paycheck pay off according to my payment budget.
5) paying off minimum balances on credit cards is last resort so got aggressive in tackling that hard.
6) Made sure to track my diminishing debt every month. It is very encouraging to see it go down. It took me two very quiet years.
I never got into consumer debt again and only ever had one mortgage. One car loan. After that I paid cash. Of course I use credit cards but clear the balance monthly.
When you get past this you will feel as if you have gotten out of prison,looking at a paycheck that is all yours,,no payments.
Good luck! Your life is not ruined.
I was panicked. However, I knew the only way was to climb back out.
1) list everything I owed
2) credit cards were the worst of course
3) set a firm,brutal monthly budget - no entertainment,just strictly necessary stuff,eat at home.
4) Every paycheck pay off according to my payment budget.
5) paying off minimum balances on credit cards is last resort so got aggressive in tackling that hard.
6) Made sure to track my diminishing debt every month. It is very encouraging to see it go down. It took me two very quiet years.
I never got into consumer debt again and only ever had one mortgage. One car loan. After that I paid cash. Of course I use credit cards but clear the balance monthly.
When you get past this you will feel as if you have gotten out of prison,looking at a paycheck that is all yours,,no payments.
Good luck! Your life is not ruined.
ecs said:
Small, cheap, European cars are the way to go if you want a cheap run about!
I'd go Jap myself - and more towards Toyota than say Honda (have one myself but it's a bit pricey to service albeit incredibly reliable). Back on topic, I would ditch the car as it appears to have been the major source of debt. Paying down 4k off 15k is a big step.Edited by fido on Tuesday 2nd December 11:59
Well done for taking a positive approach. You will come out of this and you will learn some very important lessons.
Just one comment about your mobile phone. Have you looked deeply at what tarif you are on? Could be worth down grading or changing your contract. Also I guess you are linked into the Internet provided by MnD when you are at home, so make sure your mobile taps into that for calls etc. It is very easy to run up a lot of extra costs on a smart phone if you are not careful. This should also come out of the good advice tolist ALL outgoings to see where the hot points are.
Good luck
Just one comment about your mobile phone. Have you looked deeply at what tarif you are on? Could be worth down grading or changing your contract. Also I guess you are linked into the Internet provided by MnD when you are at home, so make sure your mobile taps into that for calls etc. It is very easy to run up a lot of extra costs on a smart phone if you are not careful. This should also come out of the good advice tolist ALL outgoings to see where the hot points are.
Good luck
TTmonkey said:
its a mistake to just sell everything in some kind of knee jerk reaction. Selling your TV and playstation is only going to pay off a very small part of your debt - and in the mean time you've got no way of keeping yourself entertained.
Without wanting to derail the discussion, and whilst wishing the OP success, I can't let that comment pass. It's the whole idea that things like Sky TV, PS3s and iPhones are the only form entertainment that gets so many people into a mess in the first place. Making excuses for not selling stuff is a slipperly slope, as you just end up justifying inaction - "it's only £100", "but I need gym membership" and so on - we've seen it all in many similar threads. It may sound daft, but if you're in need of entertainment and lack a PS3 or whatever, what exactly is wrong with engaging your imagination and reading a book?Terminator X said:
Don't carry cash around.
In my experience, do the opposite. Get rid of all cards, even debit cards, and do everything by cash. If you're tempted to spend, handing over cash is far more sobering than handing over a card.Even today, when I have no money worries, I do nearly everything by cash. On many occasions I have been about to buy something daft, and as I've been counting out the notes, thought "f
k it, I'm not buying this." Apologised to person on till and walked out.
Mr Will said:
Dave350 said:
I agree with not carrying cash. I have no cash on me in the week at work, stops afternoon trips to the canteen when hungry or trips out to Subway at lunch like quite a few others do.
I also only take it out on the weekends when needed, you end up spending far less on a day to day!
I find the opposite oddly enough. I also only take it out on the weekends when needed, you end up spending far less on a day to day!
Withdraw cash at the start of the week/month, divide in to envelopes (one for lunches, one for household shopping, one for petrol, etc) and then when it's gone it's gone. Puts a cap on things rather than just allowing it to trickle away on the debit card. Makes it much more physical too. You can see when you are getting low on money.
A bit nerdy maybe, but effective.
It takes practice to budget like that.
As for sorting your debt out, £15k isn't much don't worry about it too much to start with, get your finances under control, budget and get it paid off. Ive found recently that its best to pay things like car insurance, house insurance etc in a lump yearly because the APR is just getting silly. If you can get them to stagger it will make it easier on your budget.
hornet said:
TTmonkey said:
its a mistake to just sell everything in some kind of knee jerk reaction. Selling your TV and playstation is only going to pay off a very small part of your debt - and in the mean time you've got no way of keeping yourself entertained.
Without wanting to derail the discussion, and whilst wishing the OP success, I can't let that comment pass. It's the whole idea that things like Sky TV, PS3s and iPhones are the only form entertainment that gets so many people into a mess in the first place. Making excuses for not selling stuff is a slipperly slope, as you just end up justifying inaction - "it's only £100", "but I need gym membership" and so on - we've seen it all in many similar threads. It may sound daft, but if you're in need of entertainment and lack a PS3 or whatever, what exactly is wrong with engaging your imagination and reading a book?Scrap anything with a monthly outgoing - TV, Netflix, Gym, the lot - but I'd no more suggest selling a PS3 than I would the bike in your shed, a good pair of walking shoes or the books on your bookshelf. None has a cost to own and all can provide great utility.
OP couple of questions...
a) not 100% sure from what you've said but do you i) have a bike, ii) is it reasonably possible to cycle to work (IE is a few miles rather than thinking you can do 20 miles each way, is there a shower or something at work you can use / changing facilities if you need it, looking / smelling horrid if you work in sales won't do you a favour!)
b) If the answer above is yes, then really consider selling the car and getting something else because it is not a disaster if it breaks - you just have to cycle to work even if you didn't plan to, plus it gives you a few days for a cheap part on ebay / to try and fix it yourself. Think if it as a luxury rather than a necessity. If you get something petrol, and relatively simple and cheap, think around 2000s fiesta / mondeo / astra / vectra. They won't set the world alight, but will be cheap to run, possible to fix yourself and plenty of used / good value spares. It will also give you something to do in the spare time if it has the odd niggle. EG the passenger electric window doesn't work, if you have been good for a few weeks in keeping to a budget, perhaps treat yourself to a new switch or something and spend some time taking the door apart to fit. If it works you'll feel pretty positive about it (as you should!) on two accounts - you've fixed something that was broken, and you've got something positive out of sticking to your budget. Its also wasted half a day or being bored and feeling poor.
c)I'm guessing you get paid monthly, it might be worth budgeting on a weekly basis, some people find this much easier, you could setup another free bank account, and transfer a weekly allowance into this account and live off it each week, keep your bills etc on the other account though, you don't want to forget to make a transfer and drop a payment.
d) Have a look at charity shops / ebay / ask around on hear for cheap reading material - people collect huge amounts of magazines and then move / wife forces sale. For a few pounds you can get hours or reading for very little outlay.
e) Are there any green spaces / nature within walking / cycling distance? This has a really good impact on your well being, and helps keep you fit! You can use your phone / take a notepad and pencil and try and make a note of different birds or something you see. Can turn it into a little goal exercise - eg I'm not going home till I see two different kinds of animal. You can look back in your notes over a year and see what you've noticed!
If you do need the car for work, and it has been good to you, don't flog it, its a known entity and while yes you could buy a £1k car and it run flawlessly for a couple of years, IMHO its not worth the risk in this case, especially if you've not done home repairs / servicing before. Perhaps something to try once you've cleared the debt and have a little aside, use it to boost your savings and know you have the money for a repair / another one if it goes south.
Think about as many free / very cheap things you can do to kill time without just thinking about your predicament. The more time you are occupied, the quicker it will feel you are paying it off.
Do the spreadsheet mentioned above, I put all my incomings / outgoings into one, nothing fancy...you can see if you have run a surplus / deficit each month. Put your debt on another tab, arranged by APR as mentioned above, and have a running total. Don't underestimate how much a positive impact seeing the number come down rather than go up is, it will help you feel more in control if you see it constantly go down.
Are there any odd jobs etc you could do for friends and family for a little extra £? just the odd £20 or something here and there, you can use that as your treat money and because you are doing something in return for it, its not them just bailing you out?
a) not 100% sure from what you've said but do you i) have a bike, ii) is it reasonably possible to cycle to work (IE is a few miles rather than thinking you can do 20 miles each way, is there a shower or something at work you can use / changing facilities if you need it, looking / smelling horrid if you work in sales won't do you a favour!)
b) If the answer above is yes, then really consider selling the car and getting something else because it is not a disaster if it breaks - you just have to cycle to work even if you didn't plan to, plus it gives you a few days for a cheap part on ebay / to try and fix it yourself. Think if it as a luxury rather than a necessity. If you get something petrol, and relatively simple and cheap, think around 2000s fiesta / mondeo / astra / vectra. They won't set the world alight, but will be cheap to run, possible to fix yourself and plenty of used / good value spares. It will also give you something to do in the spare time if it has the odd niggle. EG the passenger electric window doesn't work, if you have been good for a few weeks in keeping to a budget, perhaps treat yourself to a new switch or something and spend some time taking the door apart to fit. If it works you'll feel pretty positive about it (as you should!) on two accounts - you've fixed something that was broken, and you've got something positive out of sticking to your budget. Its also wasted half a day or being bored and feeling poor.
c)I'm guessing you get paid monthly, it might be worth budgeting on a weekly basis, some people find this much easier, you could setup another free bank account, and transfer a weekly allowance into this account and live off it each week, keep your bills etc on the other account though, you don't want to forget to make a transfer and drop a payment.
d) Have a look at charity shops / ebay / ask around on hear for cheap reading material - people collect huge amounts of magazines and then move / wife forces sale. For a few pounds you can get hours or reading for very little outlay.
e) Are there any green spaces / nature within walking / cycling distance? This has a really good impact on your well being, and helps keep you fit! You can use your phone / take a notepad and pencil and try and make a note of different birds or something you see. Can turn it into a little goal exercise - eg I'm not going home till I see two different kinds of animal. You can look back in your notes over a year and see what you've noticed!
If you do need the car for work, and it has been good to you, don't flog it, its a known entity and while yes you could buy a £1k car and it run flawlessly for a couple of years, IMHO its not worth the risk in this case, especially if you've not done home repairs / servicing before. Perhaps something to try once you've cleared the debt and have a little aside, use it to boost your savings and know you have the money for a repair / another one if it goes south.
Think about as many free / very cheap things you can do to kill time without just thinking about your predicament. The more time you are occupied, the quicker it will feel you are paying it off.
Do the spreadsheet mentioned above, I put all my incomings / outgoings into one, nothing fancy...you can see if you have run a surplus / deficit each month. Put your debt on another tab, arranged by APR as mentioned above, and have a running total. Don't underestimate how much a positive impact seeing the number come down rather than go up is, it will help you feel more in control if you see it constantly go down.
Are there any odd jobs etc you could do for friends and family for a little extra £? just the odd £20 or something here and there, you can use that as your treat money and because you are doing something in return for it, its not them just bailing you out?
Just a few more thoughts from me.....
Can you pay off some debts (selling your car) to enable you to apply for a 0% credit card?
How far do you live from your parents? Is it commutable? Could you move back in with them?
Could you find a similar paying job (now with some experience) near to your parents house to enable you to move back?
Can you get cheaper shared accommodation?
I would not bother selling phones, TV, PS. It will only dent the debt in a small manner but will also provide entertainment for all the nights in you need. Unless you have the latest iPhone 6??
Bar work, weekend jobs (plenty about, especially in retail at the moment!) would all help as it would take away time where you would normally spend money or be tempted to spend.....
Are there opportunities for overtime at work?
Can your parents/ family provide an interest free loan that you can payback to get rid of the extortionate interest payments? (this will need strict 'rules' to work for both of you....)
I used to live in a similar manner to you (not quite the same level) but a few thousand on credit cards, car loans etc. Career progression, a couple of bonuses, scrimping every penny, cheapo camping holidays, no new (to me) cars, selling stuff on ebay (old Haynes manuals went well!), no new clothes (charity shop at a push or get clothes as xmas/ birthday presents - people prefer this to giving cash!) and overtime all added to me being debt free by 30 (except for our mortgage!)
I now use financial products to my benefit (Tesco credit card for everything to get points and pay off in full each month). Savings accounts to save for cars - otherwise I don't get them. Only disappointment I have at the moment is my endowment (that's another story.....)
You have definitely not ruined your life.
Best of luck!
Mike
Can you pay off some debts (selling your car) to enable you to apply for a 0% credit card?
How far do you live from your parents? Is it commutable? Could you move back in with them?
Could you find a similar paying job (now with some experience) near to your parents house to enable you to move back?
Can you get cheaper shared accommodation?
I would not bother selling phones, TV, PS. It will only dent the debt in a small manner but will also provide entertainment for all the nights in you need. Unless you have the latest iPhone 6??
Bar work, weekend jobs (plenty about, especially in retail at the moment!) would all help as it would take away time where you would normally spend money or be tempted to spend.....
Are there opportunities for overtime at work?
Can your parents/ family provide an interest free loan that you can payback to get rid of the extortionate interest payments? (this will need strict 'rules' to work for both of you....)
I used to live in a similar manner to you (not quite the same level) but a few thousand on credit cards, car loans etc. Career progression, a couple of bonuses, scrimping every penny, cheapo camping holidays, no new (to me) cars, selling stuff on ebay (old Haynes manuals went well!), no new clothes (charity shop at a push or get clothes as xmas/ birthday presents - people prefer this to giving cash!) and overtime all added to me being debt free by 30 (except for our mortgage!)
I now use financial products to my benefit (Tesco credit card for everything to get points and pay off in full each month). Savings accounts to save for cars - otherwise I don't get them. Only disappointment I have at the moment is my endowment (that's another story.....)
You have definitely not ruined your life.
Best of luck!
Mike
egor110 said:
confused2014 said:
Only my car which is probably worth about £4,000 but I need that to get to work. The only other things are electronics. But that's it if I sell those then i am really left with nothing.
Sell it and get something for under £1000, plenty of people on here running bangers with no problems whatsoever.I've just come out of a debt management plan and justified keeping 2 cars on the road, although we ended up swapping a hopelessly unreliable Alhambra for a much cheaper Mondeo. We kept a Volvo V70 which was probably worth a few thousand when we entered the plan because it was very reliable & economical; it also had 7 seats so could function as the family MPV by using a roofbox we already owned.
As stated by others it really depends whether you need a reliable car for work or whether it's a luxury; also whether the current car is a gas-guzzling monstrosity or a 100mpg eurobox with group 0.5 insurance.
There are several debt advice charities out there. Use one (although it sounds like you already are).
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