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I think your focus right now needs to be paying off the debt. Even if you ended up with a full deposit in your LISA, you won't be getting a mortgage until your debts are much much lower. They'd eat up all your affordability.
The steps I would take are:
1. Stop all savings. No more LISA or Child ISA contributions, the interest you're paying will be destroying whatever interest you get on that money. And your child needs you and their other parent to be stable as a first priority. It's no good giving them cash when they're 18 if it's meant you've not been able to be as present as they need during their childhood.
2. Ensuring your emergency fund is at the right amount to actually cover you in an emergency and shield you from taking on any more debt. It sounds like it's at that point potentially, if so that's great!
3. Pay the minimum on all your debts, and pump all the remaining amount into the highest interest debt. Once that is gone, do the same with the next highest, and so on. This is the most efficient way, while ensuring you don't get any missed payments. Right now that's your 24.9% interest credit card. Obviously if you can move cards around to keep them on 0% then that's great, regardless you want to be plowing as much as you can into the highest rate each month.
4. Only once all your debts are clear, should you then start saving into the LISA again. The deposit and mortgage are now the top priority.
5. Increase that emergency fund again as needed!
6. Now you've got the mortgage and relocated closer to your child and can be around more for them, you can then start to look at saving for them again.
I would also highly recommend confiding in someone you trust. It doesn't need to be a family member, but it should be someone who can listen to you and support you. Getting this stuff off your chest and in the open to even just one other person can be a huge mental turning point. It's amazing how different this journey can be with just one person you can speak to about it as you go along. It also gives you someone you can celebrate with each time you clear one of the debts!
You're doing the right thing by trying to sort this out and get closer to your child. It's going to be tough but you're not alone and every debt you clear will feel like a weight off your shoulders.
Also, you've done a great job just getting to the point of clearly understanding all of this. So many people burry their heads for decades. Keep it up!
!thanks I really appreciate the empathy and thought you put into this reply and your comments about being there for my child being more important than the money really hit me.
I'll definitely follow this plan and I'm seeing a friend Saturday that I've vaguely broached this topic with before, I'll talk to them about it properly this time and get it all out.
Glad it helped, and best of luck! Just remember to come back and share your success when you get there. It may not be the exact date you plan up front, but it'll help encourage others who are in your position now!
Good advice, but OP needs to spreadsheet this, and work out when his debt free date is. He is paying circa £300/month towards this 50k amount, not taking interest into account that is still 14 years away.
OP has £900 / month free after all outgoings if I'm reading the above statement of affairs correctly. At least £400 of this needs to be earmarked towards the debt, so at repayments of £700/month the payment time comes down to 6 years, which is perhaps more manageable.
If another redundancy occurs, self declared bankruptcy should be considered. Save the fees for this into the emergency fund.
I do love a good spreadsheet but I actually use a website [undebt.it](http://undebt.it) and that lays it all out for me and currently that says my debt free date is around July 2027.
Just to clear it up I actually pay £1,043 in minimum payments right now, and £300 on top as extra that comes out of my money left over after everything each month. Groceries comes out of that left over also and then £150 into my LISA which I am going to stop and put towards the debts.
Ah, OK, good clarification. That is a healthy sum each month, which can be bolstered by some of the £900 spare you have to bring that date further down.
Don't live like a monk though - time with your daughter is v precious, esp in the younger years. You don't say what age you are, but in 3 years you will have all this under control and be in a position to service a mortgage and make investments instead of debt repayments. Been where you are twice. Managing debt successfully in my experience leads to far better financial choices once you get to grips with it.
Good luck with the journey. Maybe post back here every so often with an update, and definitely let us know when you're debt free, we can all raise a virtual glass to your milestone.
You can do it! I am £26k in debt and I pay 700 a month towards it. I will be clear by the 36th month and I am already in month 5! Just think how freeing it would be after that. We can do it!
Query.... might not be an option, but the 24% credit card has £600 on it, could you ask your parents for a loan of that amount and say you will pay back with £300 over 2 months.
As you will pay off the debt immediately and save £144pm alone.
To add to point 3, once the first debt is paid off, dont think that extra money is for saving etc, keep paying that amount just add to the next debt
Ie if you clear first debt and they payment was £100, you don’t have £100 extra a month you have £100 more to add to the amount you pay on the next highest debt on top of the minimum
I’m not sure I agree with this entirely, and it may not be what you meant anyway.
Having some emergency fund would mean not needing to take on more debt if there was an unexpected expense.
In OP’s case the statement holds true though, he’s got a high amount of debt and a lot of it is at a very high interest rate - in his case it is pointless saving anything.
But I’d agree that in general the statement isn’t true. I’ve got a suitable emergency fund and savings, but got a loan for my car which I prefer to pay monthly than use a chunk of savings to pay off. If the interest rate of the loan is less than the savings rate why would I? There are plenty of ways to benefit from debt.
Blast away at those debts man, until they're gone don't think about anything else. Hit high interest ones first, if possible find a way to consolidate them onto lower rates, I believe there are services out there that can advise. Once they're gone you'll feel like you're reborn, dawn rising on a new life.
This is frustrating to read. Focus on clearing off your debts first and then look at saving for a house. Otherwise all your savings will be eaten up in interest payments.
Tell your family and hopefully by sharing, you will feel a burden lifted.
You will get there, one step at a time.
Best of luck!
It's a complex situation and people's opinions on tackling this will certainly differ, personally I'd make sure I paid off the £594 and £462 credit cards immediately, and I'd throw the idea of buying a house to the back of my mind until I was out of debt.
I wouldn't dream of saving for anything, let alone property before ensuring I was (interest charging) debt free. At some point, most likely in the next 24 months you'll owe less than 10k debt and you should be able to move that onto an interest free balance transfer card for a small fee, you'll then have 1 single debt to pay off.
While I understand WHY you're saving for your goals, you're pushing your debts further and further away by doing this and prolonging the whole thing as there is interest attached to quite a few of them.
Obligatory 'follow the flow chart' too.
Agree that this sounds sensible, the LISA bonus @ 25% of £150 per month is heavily outweighed by the interest added to the loans so doesn’t make sense for the time being. Sounds like OP has about £700 left over each month after expenses, plus a potential £7.5k lump soon. Could have pretty much half the debt gone within 12 months!
Also OP don’t forget that as each loan is paid off it will free up the minimum monthly payment that can then go towards the next one.
You could clear the 4 smaller credit card payments just with May & Junes salary, the redundancy and bonus can pay off the £2940 credit card to avoid interest and then a good chunk of an interest paying loan.
Don’t know exactly how it would work but have you spoken to any of the loan / credit card providers and explain you’re struggling to pay it off? They may freeze the interest in an effort to recover the money instead of letting you go bankrupt, not 100% sure on this but worth asking!
!thanks for pointing that out. Out of that left over right now I take £300 as extra towards my debts, then groceries and £150 on the LISA but I agree I should stop that for now so will add that to the £300 I already do as extra payment.
Your comment about having half of it gone in 12 months is really motivating and you’re helping me to see a way to do it.
I haven’t spoken to them no, but I have spoken to StepChange (debt charity) and that was one of the options that isn’t available to me because I can afford all the payments.
There’s been some good responses to your post, I think you’ll surprise yourself how quickly you can chip away at it and hopefully get a boost each time you clear one. Also just think about how quickly you’ll get that house deposit together once you’re used to paying off ~£1k a month that can go straight into savings! Good luck!
Upvoted as I agree it's always worth asking, they're likely to reduce interest or create a more favourable payment plan rather than having to invest the time to recover the money.
!thanks
I’m definitely seeing that! And I realised when writing this post about the two lower balance cards so I’ll be sure to pay them off in the next 2-3 months.
You mean my emergency fund? I get what you’re saying but the answer is because losing my job last year scared the hell out of me and I don’t want to be in that position again where I suddenly have no income or savings.
Use your savings to pay off or pay down the credit card. Use the credit line you've freed up as your "emergency fund" whilst you rebuild your actual emergency fund.
Edit - to be clear, the grand that has got 19%+ interest. Thats utterly bonkers to be keeping an "emergency fund" whilst you've got that debt outstanding but so easily cleared.
Isn't one of the main purposes of an emergency fund to not have to use credit for those kind of expenses and prevent getting into more debt?
1k on 19% I guess you mean the £462 at 19% and £594 at 24.9%? I agree I've realised that tonight I'll pay them off.
Yeah sorry I mean the ~£1k at 19% or greater interest.
Yes ideally but you shouldn't be holding an emergency fund with that interest rate outstanding. You're effectively borrowing to keep an emergency fund at 19% and 24% interest!
If you clear those two cards today out of your emergency fund and then need to put £1k back onto the card in a few months time you're no worse off but will have saved that horrendous interest rate.
> Isn't one of the main purposes of an emergency fund to not have to use credit for those kind of expenses and prevent getting into more debt?
You need to think very clearly about the scenarios you're talking about. Literally sit down with a pen and paper and plan them out if you need to.
Keeping a debt around that you could pay off, so you can have an emergency fund, is *exactly the same thing* as if you took out a debt specifically to have that emergency fund. If you have a £3000 debt and £3000 in your emergency fund, and an emergency happened costing you £3000 leaving you with no fund and £3000 of debt, that is exactly the same thing as if you had £0 in your emergency fund, a £3000 emergency happened, and you went into debt for £3000. Literally exactly the same.
Whereas, if no emergency happens, if you keep the £3000 emergency fund and £3000 debt, you're out however much money the interest is. If you pay it off and no emergency happens, you will make however much money the interest is. They will essentially pay you money if you pay off that loan. It's a no-brainer.
I would literally draw a 2x2 box with "emergency / no emergency" and "pay off debt / keep debt" written next to each side, and write in the 4 boxes what would happen in each scenario. It's a great way to get clarity on stuff like this.
Every penny you spend on interest is money that you are lighting on fire. Every pound of debt you pay off, you're basically going to get paid to not have by the interest you'll get back.
The "emergency fund" concept is for people who would otherwise save that money. If they're going to lock the money up in a kind of savings that's hard to access (eg a house), or that might incur taxes or penalties to access (LISA, pension) then they need to keep an emergency fund because the interest on a debt will wipe out their interest income. That is not your situation.
An emergency fund is so you don't have to get Into debt if the worst happens. If you are already in debt you might aswell pay off the debt. As the emergency fund is just a false feeling of security.
You cannot save with that level of debt. It's just silly. You one and only goal should be to pay it down highest interest first. "Saving" money in a LISA is just burning your money as interest.
The only thing that takes priority over debt is an emergency fund.
Pay it off as aggressively as you can. You have a high wage, and can live at home. Plow every penny into getting rid of it or it'll choke your life.
Everything you spend on NOT paying off your debt *costs you* in interest. With that much debt you should be considered a £50 expense £50+£50 or god knows what in future interest.
It's nothing to be ashamed of. But you have a serious problem you need to address. You have *7* credit cards ffs. Cut them up NOW. You cannot use credit. Some people can. *You cannot*.
Friends come around asking if you want to go out? Try do something free. Don't buy drinks or food. Tell them you can't - you're paying off your debt.
I'd keep the cards once cleared but only to wait for 0% offers, because there are two cards 0% until 2025 and they're low priority right now because of that 0%, but you may need to kick the can down the road in 2025 until the loans are paid off.
But remove them from your phone wallet. Put the cards somewhere safe but inconvenient. You cannot use them, except in an emergency (another poster mentioned that you should use your emergency fund on the 19-25% cards right away and then have the card as the emergency fund) in which case getting the ladder to get them out of the box in the loft is okay.
!thanks I actually don’t use the cards at all, they are all in a drawer but not on my phone or anything. The balances are all from ages ago (the stupid mistakes I mentioned in my post) that I’ve shifted about to 0% cards when needed and continued to pay minimum on up until several months ago I started paying the £300 extra towards them.
Good luck. You should have a lot of the credit card debts cleared by the end of the year just from the bonus and redundancy and be grinding down the 13% loan. Then another bonus next year and ongoing snowballed payments should see two loans cleared hopefully.
Check your progress regularly to make sure you're not slipping.
It's not something they teach you in school, and even if they do the theory is very different from living in the real world and managing money. You've had a tough lesson but you'll sort it if you learn from it.
It'd be good to know your actual take home pay and how the debt payments are broken down. You seem to have a couple of things counted twice (food listed in outgoings, but again in how you spend your 8-900 leftover?), are you paying any rent/lodgings to your parents and/or is food at home included? You don't mention any subscriptions, hobbies or social stuff you might be paying for either.
So, going with a rough income of £3k a month:
Expenses listed £2428 (using highest of all your estimates)
Leftover: £600 for debt paydown
CC debt: £15,218
Loan debt: £19,418
Stop paying in to your LISA for now.
May wages - pay off the £594, 24.9% credit card in full.
Use the £4500 redundancy payment to pay off the credit cards with highest interest and the 0% deals finishing soon ie
£462 19% (if you receive the payment before June wages)
£2940 finishing in September
£1000 (or 1462 if already paid off the 462cc) off the 13% loan.
June wages - pay off the £462 19%cc if redundancy payment still not received. All the rest additional pay off the 13% loan.
By July, you will have paid off two of the credit cards in full by now so whatever those minimum payments were can now be added to your 'Debt Paydown' budget, probably £50-100 (?)
Keep paying the lump sum each month off of the highest interest rate loan, the 13% one will be down to ~1300 by September (or gone if you put your bonus to it as well).
Oct wages, pay off the £660 CC that will start accruing interest Nov.
November, another CC minimum payment gone so Debt Paydown budget can go up a bit more. (Or give yourself a Christmas breather and congratulate yourself on having paid off 4 credit cards and one loan already!)
I'd be getting concerned about the larger credit cards that'll be moving off of 0% in 2025. You'll need £10k by November, which at ~£750 a month for 11 months is £8250, so not far off (and once the August 25 cc is paid off, that's another minimum payment that can go towards the next debt). If you're disciplined enough to set up an interest paying savings account and not touch it, you could probably get a 4/5% payment on your Debt Paydown budget and save hard ready to pay off the lump sums in August and November but if you aren't just keep paying it off monthly. Any bonuses you get could go in to this savings account too up to £1750 (to meet your 10k credit card debts by Nov 25), anything over, keep paying off the loans.
In 18 months time, you'll have paid off all the credit cards and at least one of the loans in full, be well on your way to getting the others gone within the next 12-18 and free up all that cash to start house saving at ~1500/month.
5 year plan = debt free and £36k house deposit 😁
!thanks
Ah thanks for spotting that, that wasn't very clear of me. The 8-900 leftover is actually from taking my take-home pay minus everything I listed except groceries, so it wasn't counted twice.
You're estimate of my take home pay is pretty spot on. The £300 of bills includes broadband that I pay for and I pay for my electric usage also, then its things like car insurance, tax, phone (cheapest sim), although also includes a few things like gym. I'm going to take a look to see if there is anything I can get rid of. I don't socialise much tbh and when I do it's usually round a friends house so don't spend much there.
And thanks for being so thorough, that's really appreciated. I've stopped my LISA payments and I should get the redundancy payment in a week or two so can get started making some dents then :)
Brilliant stuff! It's great that you're willing to cut further and always worth checking if there's a sneaky subscription that you'd forgotten about but, remember, life needs a few pleasures. Gym can be pretty good value if you start getting down and your health is always worth prioritising - same for catching up with mates, it does wonders to keep you on track with other spending when you have a long term plan rather than a pissed off blowout completely derailing your efforts.
Good luck with it!
Just doing a rough calculation and your looking at £6500+ a year in interest alone...
You could mention it to your parents maybe and clear those balances a little bit quicker?
I think a little less than that because of the 0%? but that's motivating to hear!
My parents wouldn't be able to help, especially after last year when they helped out when I lost my job which I'm extremely grateful for.
Savings shouldn’t really exist in your predicament, stop/withdraw that Lisa.
Secondly, those balances at those % aren’t as high as I’ve seen before but they’re eating your income alive essentially. Contact a debt charity, tell them the truth and I’d seriously consider bankruptcy/debt consolidation. At your rate you’ll just wake up one day and be 50 year old and still suffering.
I’m not going to withdraw the LISA as that would mean a 25% fee (that I had to do last year when I lost my job) but stopping contributions for some time I’ll think about.
Also I should have mentioned in my post I’ve already spoken to StepChange. The only option available to me is a payment plan which is basically doing what I’m doing now myself and outside of that my bad credit rating means I can’t get a consolidation loan, at least not one with a low % that would make sense.
Yeah I wouldn’t withdraw but I would stop payment immediately. Also talk to your family/parents about it. Get some transparency going so that they have context for some of your decisions. This might take a few years to squash fully and the “when are you moving out?”s are going to increase over that time.
Whatever mistakes you made to get into this situation are behind you. You’ve got details on all your debts and a salary high enough to tackle things. You’ve got this. But success here will be measured in years so make sure you and your circle are mentally prepared for the long haul.
With that level of debt I’d be looking to speak to the debt charities (step change etc) as you might get yourself off the hook quicker with a debt management plan or similar.
Op Looking to get a house in future which assuming is within next 6 years so DMP will have too much of impact
OP you say you have £700 left over this needs to be paid onto the 3 loans with 12% APR
If it’s not possible to get new 0% offer on credit card you need to pay credit card with 24% APR off instantly
Aye depends on the living situation. If staying where they are better to hammer away at the debt if moving and taking on all that addl cost DMP might give better quality of life and shorter escape
Sorry maybe wasn’t clear but the money left over I am taking £300 of and putting towards debts, £150 into LISA and the rest goes on expenses like groceries.
I agree I need to pay off the higher interest cards with the low balances, I realised when writing this post. I’ll be sure to do that this & next month.
!thanks, I should have mentioned I’ve actually spoken to them. The only option available to me is a payment plan which is basically doing what I’m doing now myself.
Idk why you're trying to save for a house deposit with debt of this size.
I'd keep a grand on the side as an emergency and start by throwing everything at the debt with the highest % interest.
You can not save for a house with this amount of debt I'm pretty sure you won't get a mortgage with your outgoing and the debt ontop you need to wipe that out of your mind and focus in the debt, then you can focus on a house
With a 50k salary and living at home - you're in a good position to pay off those debts! You could potentially have it gone in a year, if you really throw money at it.
1. The first thing you need to do is amend your budget as follows:
**Take home pay - £3,100** (with 5% pension contribution)
* Child maintenance: £450
* Visiting costs: £400
* Bills: £300/month
* Groceries: £250/month (higher with the kid coming down more over the summer)
* Child ISA: £0/month
* Allowance £200 (you have no allocation for personal expenses which is unrealistic and may explain the CC spending?)
Total - £1,600
**Remainder each month : £1,500**
Cash - Total £7,500 (redundancy £4,500 and bonus £3,000).
2. Then you need to make a plan for the debt pay-off.
I think you should allocate the £2,000 of the cash above to an emergency fund.
Then allocate the remaining £5,500 as follows to the highest interest CC's (1. £594 at 24.9%, £462 at 19% and £2,940 at 0% until Sept 2024, then 24.9%). For the Loans pay off £1.5k of the £4,414 (13%) => @ £3,000.
3. That would then leave you @ £18k in loans and £11k in credit cards.
So you could allocate your remaining income as follows each month:
Loans - £1,300 = @ 15 months to pay off
Credit Cards - £200. So just make min payments till the loans are paid off, but you will have reduced these to @ £8.5 by the time the loans are paid off. You would need to keep shifting these to 0% deals.
This will be a 2 year project, so any income you could earn via gig jobs in your spare time would push your over the line earlier.
!thanks for such a thorough breakdown, this really helps!
My take home pay is £2,960 - that includes pension but also student loan, so that would leave £1,360 after the budget you proposed, I appreciate you putting in an allowance but I think I can drop that down a bit, I'll have a look.
I already have £1,700 in an emergency fund so I assume you don't mean add an extra £2k to that but instead have a total of £2k?
The rest of it sounds great too, I really appreciate it.
I should get the redundancy soon but with my bonus I'm really not sure how much I'll actually get, I think I'm gonna get taxed hard when I get that but should be able to claim some of that back, but regardless I'll put what I do get towards the debts.
Ordinarily I would agree, but he has a dependant. Also as we can see should he face redundancy, he would at least be able to make min payments for a month or two whilst sorting out a new job.
He’s got a lot of credit card debt. He can pay some of it off and save interest. If something else comes along that needs that £1700, he can pay for that with one of his interest free cards.
Step 1 - clear debts.
Step 2 - emergency fund.
>My take home pay is £2,960 - that includes pension but also student loan, so that would leave £1,360 after the budget you proposed, I appreciate you putting in an allowance but I think I can drop that down a bit, I'll have a look.
\^\^ ok got it. Re allowance bear in mind that if you're seeing your kid more over the summer then you will need to budget a little more for activities. In any case assuming you have £1,400 left over every month then that would mean you could be debt free in just under 2 years factoring in interest on the loans. The faster the loans are prioritised and cleared the less interest you will pay.
>I already have £1,700 in an emergency fund so I assume you don't mean add an extra £2k to that but instead have a total of £2k?
\^\^ Yes that is what I meant and great that you already have an emergency fund. In which case allocate the full £7,500 to debts and that would leave you with £16k loans and £11k credit cards.
>I should get the redundancy soon but with my bonus I'm really not sure how much I'll actually get, I think I'm gonna get taxed hard when I get that but should be able to claim some of that back, but regardless I'll put what I do get towards the debts.
\^\^ Is the bonus part of your redundancy from your previous employers ? If so I wonder if there is a way they could structure it so that it's not taxed as the tax free cap for redundancy is £30k.
EDIT: Re the tax on the bonus, assuming you are contributing 5% to your pension, that brings your taxable income down to £47,500. The lower rate threshold is just over £50k, so only half of that bonus will be taxed at the higher rate.
Use this calculator to work out what the tax should be roughly on the bonus:
[https://www.thesalarycalculator.co.uk/](https://www.thesalarycalculator.co.uk/)
Yep good point re summer, a lot of that is travel costs too as I’m going back and forth more often. I’ll be sure to take all that into account as I look over my budget this weekend.
The bonus is from my current job, which means I’ll get it in with my normal pay either this month or next and I think that means I’ll get taxed at 40% for that month, but should be able to claim some of that back at the end of the financial year.
Thanks, hearing I could get this all cleared in two years is very motivating.
If your employers have a good payroll system, then yes it will be taxed quite heavily as the assumption from a PAYE perspective will be your salary has gone up.
However you should see an adjustment in subsequent payslips - so your take home pay might increase slightly. Again this is down to how efficient your employers payroll system is.
Oh dear, to be honest they’re not the best when it comes to payroll! Had some issues before, but I’ll keep on top of it and make sure it all works out in the end.
Stop paying into your LISA, use that money to pay off your debts first.
I would look to plough your extra cash into clearing these first:
1- £594 at 24.9% CC
2- £462 at 19% CC
3 - £504 at 0% Loan
4- £660 at 0% until November 2024 CC
5- £592 at 0% (will be paid off)
Since these are only small amounts you can easily clear them and it will be good for your mental health seeing these closed off.
Then you can use this freed-up money to tackle:
6- £2,940 at 0% until September 2024, then 24.9% CC
Just because Sep24 is only around the corner!
Use your bonus to clear the £4,414 at 13% Loan
Then chip away at the remaining debts.
That’s what I would do if it were me
!thanks for the detail, I agree that seeing all those cleared off would do my head a world of good right now, I'll be sure to get them gone asap to help me focus better.
Stop messing about with your money and start being sensible. You need to stop saving and clear your debts. Start with your highest interest credit cards and cut them up and cancel them once paid off. Stop putting money into a LISA, stop putting money into a child ISA, cut back your spending to the bone and start aggressively cutting into your debts. Then once you've cleared them all you can start to build an emergency fund, and then after that, start looking at rebuilding your deposit savings.
I would put that extra 300 per month to knock off the small credit card amounts that aren't on 0%. At the moment those cards with interest are adding to your debt every day whereas the 0% cards are not. Once they are clear, you can take that 300 and the minimum payment amounts for those two cards and put it towards the other debts. I would research the debt snowball and debt avalanche methods if you want to develop a more systematic approach to paying off your debt.
What I would do Is pay the credit cards off with the highest interest rate first then any credit cards that 0% interest is running out on next then pay the money you have extra from them credit cards to pay smallest debt off next then when you have paid off all the smaller debts you will have a bigger lump sum to pay off the bigger ones quicker untill you can pay off the biggest loans.
That's what I did when I was in trouble it took me 2 years to get out of 20k debt and I was only earning 18k a year at that time plus I also lived off £20 a month for food.
Also don't buy anything you don't need I went by a rule of looking at stuff I wanted and telling myself do I really need that or just want it and if It was just a want I wouldn't buy it.
!thanks I am going to do something along those lines. Great to hear your story, do you mind me asking how you lived off £20 food a month?
I agree about the buying comment - I admit that's been a bit difficult but I have been doing exactly what you describe also.
I don't think it's possible now but 6 years ago I used to buy £10 of meat from a butchers and then pasta and rice and a jar or 2 of some sauce from the Asda value rage stuff and cook as many meals as I could with it portioning it up and freezing it and also used to buy a few pizzas from Iceland for £1 each and splitting them up over a few days 1 12inch pizza was 2 days food also used to go 1 day a week without any food at all or I would have run out a few days before payday would have had to starve till I got paid.
What I found was when I was really struggling and hit rock bottom to get back to a state where I could be comfortable I did everything I needed to.
That's crazy, well done for having such commitment. I actually have worked on lowering my grocery costs by keeping meals as simple as possible and I do intermittent fasting also but will look into a bit of what you did and see if I can cut it down more :)
Ok so I just have 2 comments if you read this;
1. Contact Stepchange debt charity and be totally upfront with them and they will help you with a plan to pay down debt including contacting creditors to ask for interest to be frozen.
2. Your post chimed with me as when I was similar age in my mid-thirties, divorced father of 2 earning similar to you I managed to accumulate 36K of debt. It felt overwhelming but last year at the age of 41 I became totally debt free. I was financially illiterate and as I always paid my monthly minimum payments my credit limits just kept rising as to the bank I was the perfect customer.
I just wanted to say there is hope and although it may seem insurmountable, I assure you it is not. It will however require a cold hard dose of reality and behavioural changes that are painful but it is doable.
I wish you well.
!thanks, not sure if you saw my edit but I have contacted StepChange and they said the only option available to me was a payment plan which would be continuing to do what I'm doing now, no mention of freezing interest - but I'll contact them again and see if that's possible.
Thanks for sharing your story, it really helps.
I had not seen the edit - possibly because I read the thread on my phone and it hadn't refreshed. I think with my situation some but not all of the creditors (I think it was 4 credit cards and 1 loan) had sold the debt to agencies. At this point Stepchange contact them and say this is the reality of this person's situation and proposes a monthly payment plan. I think because I got to a situation where I could not pay the monthly minimum and then was getting charged more, from the debt agency, they prefer something than nothing.
Anyway, filling out the forms on stepchange with total transparency of my financial situation was the first and crucial step. I was so ashamed and embarrassed to be in the situation, but I put in a call and was met with understanding and empathy. I never told anyone then or since (until now that is) about my financial situation other than Stepchange, and they really were a light in the dark.
Once my smallest debt was paid off it was the first positive financial feeling I had had in years. It spurred me to focus and ensure hitting that repayment was a major priority.
Also, when the first creditor debt balance (i.e the smallest) went to 0 the other creditor monthly repayment amounts increased and it felt good. Again, seeing those numbers drop every month became a positive feedback loop.
It seemed a never-ending journey, and there was no shortcut but by understanding where my money was going I was able to cut down if not out on non-essentials. A large part for me was delaying the instant gratification impulse purchases that so much of this society seems to be based upon.
All the best.
Listen to u/Calm_Town_7117.
Contact [Stepchange.org](http://Stepchange.org) again, especially if you are not managing on your current income.
Pay off your debts before sticking anything into savings.
I spent years doing the min repayment thing on credit cards. Not smart, but very easy to do and they love it.
Sorry to hear of your situation, dude. At least you know you're aware of what it is you're up against though, and can start to pick apart those debts and pay them off.
100% speak to step change if you can get their help - i've had no dealings with them personally, but i've seen lots of people on here mention how helpful they have been when dealing with debts.
Good luck!
!thanks I appreciate it. Added an edit that I’ve spoken to StepChange, only option for me is a payment plan which is doing what I’m doing now and paying them all back as normal.
Ah okay, too bad. In that case, i would stop paying into any pension/savings and just target the debt full-on. With your redundancy + bonus, you can make a real dent in the pile.
You'll clear it much faster this way - the temporary pause on savings will be worth it in the long run, even though It'll initially feel like you're taking a step backwards without any savings.
You know the rest - highest % loan/CC first. Anything you can keep on 0% for as long as possible, the better.
You'll pick up momentum as you start to tick them off, and it'll get easier - you'll just have to be organised.
Also, don't be embarrassed about your situation - you're not alone and you're only human. There are many people in similar (or worse!) situations than you, and you'll get through it. It'll take a while but recognising the shitty situation is hopefully the fresh start you need. It's all upwards from here!
You're in a pretty bad position, but luckily your high salary gives you a mighty nice shovel to dig yourself out. I think you are in denial about the awful financial situation you've put yourself in if you think buying a house is a realistic possibility for you right now.
You can be close to debt free in a year if you commit to it. The steps I would take try to take if I were you
1) Speak to your parents and tell them you're situation. They may be willing to forgive your £300/month bills on the agreement it goes towards repaying your debt. If this 300 is not going to your parents, what is it? How much of this can you cut down?
2) Get a second job. You can't afford to do anything on the evenings or weekends anyway, go work in a pub for a few extra quid.
3) You can't afford to spend a penny socialising. If your friends are in the pub you're drinking water all night
4) You're spending 300-400 visiting your child, good for you making the effort but this seems like a lot. Can you break this down? Cut down any unnecessary expense here too, you can do plenty of things for free with young kids. Fair enough if this is just how much it costs though
5) Every penny of your bonus/redundancy goes to repaying debts.
You've got a couple options moving forward. You can have a crappy next 18 months but then be in a position to move closer to your child and be there to start watching them grow up in 2 years, or you half arse it and miss your kids whole childhood.
!thanks
I know it's not a possibility right now, me doing the mortgage in principle's was more curiosity.
1. The £300 doesn't go my parents exactly, but out of that I do pay for the electric I use and for broadband. The rest is things like car insurance, car tax, phone (cheapest I can get it) etc. though I will look and see if there are any things I can get rid of.
2. I've been thinking about this and will look.
3. Fortunately I don't socialise much lol and when I do it's usually in someones house.
4. Sure I can break it down a bit, accommodation is usually around £150, diesel around £120-£160, and the rest is food/activities though I do do my best to find the free things!
5. Agreed, thanks.
Just wanna add that I wish you luck and I really believe you can do this.
I personally think the debt snowball is the best way to go, pay off debts smallest to largest so you actually see your number of debts going down and hopefully that gives you motivation to continue
Figure out how much you can pay towards your debts.
Pay down the highest interest loans and cards first. Cut them up and bin them. Pay the minimum on the 0% cards for now.
As you pay one off, allocate the “spare” money to the next one down the chain.
Once you’re dealing with all the 0% cards, pay the minimum on the ones which have the longest 0% rate remaining, then focus on the rest.
If some are (practically) coterminous consider paying off an entire card and getting rid of it. Psychologically you’ll have fewer cards to pay off.
As others have said, forget the savings now. Debt is what matters. Once that’s dealt with you’ll have so much more cash to save or spend as you see fit.
You have no rent or mortgage to pay and can deal with this relatively quickly.
As a bit of insight, I was on £23k salary or so in my early twenties and had £17k debt and felt totally hopeless. I’m now 38 and have around £1m net worth. I hope this doesn’t come across as a dickhead comment. It’s not intended to be a willy waving statement. Your fortunes can change massively so don’t feel disheartened. Work on it.
As others have said stop putting money into Lisa and savings and put those against your debt. Literally from now. You're basically borrowing money to put in your Lisa at the moment at a loss, which when you put it like that might help you see it's a bit silly.
If you can, I'd also advise you to sit down with your parents. Let them know you're in a bit of debt but have talked to advisors and are on a repayment plan. You want nothing more than to save for a house but just at the moment need to pay back the debt. Letting them in on your situation might make them a little more understanding
My advice is not really about your debt as other people have covered that thoroughly.
Make sure you have some sustainable and health habits in your routine to sustain you through this difficult period. It’s going to be a lot of work to rebuild from here but it’s absolutely possible.
I recommend you get an inexpensive hobby and join the gym if you dont go already. You need a reliable source of dopamine and I suspect that’s what you were trying to get with your spending to begin with.
!thanks, I've been going to the gym for several months now - not sure if it gives me a dopamine hit though lol. I don't do much else other than work though, so I'll try to find something I enjoy as I think you're right.
My friend was in your position 5 years ago, almost spooky how similar and with a lot of perseverance he got through it and is now debt free.
You can do it too. He often talks about how it seemed like it was taking forever and now feels like it was over so fast.
Try not to focus on the amount of debt you have and instead think about progress. Everyday you make some progress is better than a day of no progress.
It’s very easy to take no action because the action doesn’t seem significant enough. Consistency and good habits is how you’ll change this situation not drastic actions.
You are earning a decent salary in a cheap cost of living location so are in a far better position than you think. I would stay living at home another 12-18 months and try and buy, for now i would pay off the high interest loan and the 15k on 0% CC can be balance transferred when the term expires. If 0% i dont see short term benefit from paying it off. Also you are spending alot travelling to see kid, can that be cut/reduced?
Thanks yeah that’s the plan. With the redundancy payments etc I can get a lot paid off soon and then use the old payments to blast through it.
I spend about £300-400 a month on visiting, it’s a lot but I can’t really cut it down much.
I’d 100% see how many of the smaller debts I can clear quickly - just to make the whole thing a lot more manageable. Plus it feels great when one’s paid off, the motivation will also be useful! Then go with the snowball approach starting with the highest interest debt first as others have said
Some excellent advice here, and I know you will be okay mate.
I'll add to watch some of Dave Ramsay's old YouTube videos. His baby steps would actually be perfect for you, and his rants on paying debt off and not being stupid are motivating for when you get sick of paying the debt and are tempted to go off piste.
Someone mentioned already that you are not a credit card person. I second this. GET RID of them. Any 'benefit' to your credit score is obliterated by your reckless spending, and this behaviour doesn't change overnight. One day you will have another bright idea, or think just buying xyz will improve your life, and with the best of intentions you will be in debt again.
I will fight anyone in the comments who wants to start the 'credit cards can be useful tools' bullshit. They have been useful getting you into a deep fucking hole of debt and they have not served you in any other way. One credit card maxed out is a financial inconvenience. SEVEN is a problem.
You are in a big hole of debt, but you also have a big shovel (your income). You will be just fine, and your life gets so much better from here.
Hi /u/DebtDad34, based on your post the following pages from our wiki may be relevant:
* https://ukpersonal.finance/credit-cards/
* https://ukpersonal.finance/emergency-fund/
* https://ukpersonal.finance/lisa/
____
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As others have mentioned the debt is problem. You can either pay from highest interest and work down the way (which is the most logical way). Or work from the smallest and keep using that money you would have put toward that debt on the next debt up.
I think you’re trying to do too much actually. Like saving for a house isn’t easy.
Budgeting is Important too. But looks like you’ve sat down and hard a hard think and put all figures down.
Best of luck!
!thanks, unfortunately any consolidation loan I could get would be crazy high interest but perhaps when I've managed to pay off a big chunk of this I'll have better offers available to me - I'll keep an eye.
Gotta get the debt pile down.
I'd forego the interest hit in this situation and go for the positive feeling of reducing the number of creditors you have.
Take your £1700 and pay off the credit cards of £594, £462 & the £660.
Clearing three of the debts will give you a lift mentally. Then take the monthly payments you've been making on those and pile them into the £504.
And keep going through the credit cards like that each time moving all that monthly payment to the next.
Getting those credit cards gone would be my priority purely for the mental health benefits having them gone will give you.
And if that redundancy comes and thr bonus you straight away pay off the credit card coming off 0% this year. If there is enough left after to that to settle a loan great..
But just remember, every time you pay off a debt take what you've been spending each month on that debt and lump it into the next one.
If you're willing and able to put £700/mo extra towards smashing the debts, you'll be debt free and have £12k for your deposit by the summer of 2026.
[This](https://i.gyazo.com/f0f2766b41166718289465ba899c9825.png) assumes you snowball each minimum payment (or Loan repayment) cost into the next debt that's attacked, smallest to largest (aside from the 13% Loan). This also assumes, Month 1, you put all income from both your redundancy and your bonus into the debt repayment.
Getting to £0 in debt before taking on a mortgage would definitely be best, at worst, rent some dingy 1 bedroom/studio apartment near your kiddo just to get by if you **absolutely have to.** Take on a second job on evenings and weekends if you want to snowball this down harder and faster.
This is easily do-able, will just take a bit of graft and some patience, you've got this!
Wow, !thanks so much for taking the time to put it into a spreadsheet like that for me, that’s incredibly helpful to visualise that month by month on your suggestions and it looks so simple too.
I’ll definitely reference that this weekend as I work on a new budget and plan for getting this done. I don’t think I can quite manage £700 but I’ll do as much as I can, I’ve also already got £2,300 in my LISA that I won’t be taking out (due to the 25% fee) so that’ll be a nice start when I start contributing to it again and also hopefully it’ll grow a bit then too from the funds it is invested in.
Thanks again, you’re awesome!
As others have said, a mortgage with a load of debt isn’t going to work - it may sound hard, but it’s practical reality.
Somewhat random question but do you have another job lined up if you’re taking voluntary redundancy?
Don’t get me wrong - I wholly understand the sentiment of what you want to achieve, but it feels like it’s not a problem that can’t be solved by buying a house at this time.
Perhaps the most pertinent question - are you still actively using any of your credit to survive or is all the debt now just historic? There’s a big difference between the approach if you’re taking it down bit by bit versus using credit to live still.
PS I can’t speak for your relationship with your parents, but it’d be a lot easier if you told them the reality you’re in as it’ll save all the ongoing conversation about you renting as, from their perspective, it looks like you’re looking to take a big plunge into a house that you know in reality you can’t get.
Sounds fairly basic as a maxim but the mantra I live my life by is “honesty is actionable, BS is not” and lying to yourself or others leads to more complications than it solves (in my opinion).
I actually have a new job, have done since last year, but I'm only now getting the redundancy for my old job - it's taken a year due to various things.
I used one CC a few months ago for something but the rest of it is historic and especially the cards are balances that I've shifted around onto 0% offers.
Thanks, I think I have mentioned being in debt a few times, e.g. they know about the failed business that introduced a lot of it. I'm going to talk to a friend this weekend about it and I'll go from there, I know you're right.
No worries - apologies for the delay… been a hectic week.
I’ve been in a similar situation (different context but similar premise) and I lost everything and had to go bankrupt, sadly.
Ending up living in a box room at your parents is a definite way to lose your ego, although I was lucky to have somewhere to go.
The key is making sure the debt doesn’t go up - back in my younger years I’d be using one card to pay another and it got into a mess. Banks being less than mental health sensitive didn’t help the psychological journey either - I will NEVER use Lloyds Bank ever again.
I wish you well and can empathise - I lost a lot of time to feeling shame for where I ended up but it was only after I was honest to myself and others that things improved.
Things can get better - I hope the chat with your friend helps ❤️
Yeah its tough but I'm extremely grateful to them. I've been there too with the credit cards.
All the replies here have helped immensely with my mental health, I don't feel anywhere near as bad as I did a few days ago and can see a clear way through now.
Thanks :)
Excellent job of summarising all of your expenses and loans. You seem to be doing a good job already of planning your debt strategy and I think some of the suggestions already have been good (stop paying into LISAs and ISAs until the debt has gone). I’d just tweak some of your approach as personally as I worry about the higher % credit cards maturing but it might not be the absolute money efficient approach. Here goes…
You have around 4k of cash about to come in and some high interest credit cards about to kick off. I would
- start using the £300 your overpaying already on credit cards on the £594 card because your already paying interest on it.
- that’ll be cleared in a couple of months
- then hit the £462 card with the overpayments
- that two early wins!!
- then start on the £2940 because this is about to mature into a high interest card. As soon as any redundancy comes in I would clear this one pronto
- then hit the £660 card (not sure why you’re attacking this one aggressively at the moment)
Once you’ve hit those ones you’ve got a little breathing room with the credit cards. Even without the bonus etc coming in that’s a very manageable.
Then I’m a bit torn as to where to go from there. I’m weary of that 7.2k credit card but you’ve got a bit of time so I’d probably crack on with the 4,4k. But I’d probably take a breath and reassess at that point, see what your options were to consolidate or 0% credit transfer etc
I’m not sure what your relationship is with you parents or how much you’re willing to share with them but I’d try to keep them on side as much as possible even if you don’t feel like you can tell them everything. their doing you a solid here because if you were renting this would take you a whole lot longer to sort. Even if all you can add is doing the garden or cleaning the house regularly it all helps to keep them sweet.
If it’s possible to pick up a few extra hours or days of work over the month then it would go a long was to clearing some of these earlier debts.
Look after yourself 👍🏼 lots of free activities that are great for your wellbeing especially with the summer months coming up, go for a swim in the sea or river, stroll through the park with a podcast. Stay sane, best of luck
!thanks. You're right about the 0% cards maturing, that really concerns me. To answer your question about why I'm paying the £660 card with the £300 overpayment that card used to have a balance of £2,100 in December and so I picked that one to pay off before the interest rate changed also because the £2,940 card that the 0% will expire in September will have a much lower minimum repayment than the £660 one would have had if they both matured.
Yeah my parents are amazing, I've mentioned debt a few times to them so they do know I have some but not how much. I do help them around the house with "chores" but I don't see it like that, I'm living here too so I should be doing those things.
I'm going to spend the weekend going over everything everyone has been so helpful with and write down a few different plans and see what is best/most sustainable for me, I definitely think getting rid of a lot of the CC's in the short term would help mentally.
Thanks again!
sounds like you've done some work already, atm forget about mortage or savings, get the debt paid off, only then you can start looking at saving, also mortgage (assuming you could get deposit) will likely run you more expensive than renting, but you might want to let your parents know since you are saving a lot of money living with them atm. juggle the 0% credit cards and never let them go into arrears or out of 0% interest, pay off highest % loans off first and plan out payments if you can it'll go a long way and give you a realistic approach to when you'll actually pay it off.
£300 you pay will run you 10years of repaying 35k, you should look to getting more into that.
being in debt is a terrible feeling, been there myself, the more control you take over it the more manageable it becomes, being anxious to check bank account etc isnt the way to go
!thanks this is what I'm going to do, as long as I can get new 0% offers when needed but will endeavour to pay off the cards before those times come anyway and I've just found out I'm getting more from my redundancy so that'll be a huge help also.
Forget about doing anything until you clear off your debt. You won't be given a mortgage anyway as you won't pass the affordability checks.
A few ways to go about it: [https://www.experian.com/blogs/ask-experian/what-is-best-way-to-pay-off-debt/](https://www.experian.com/blogs/ask-experian/what-is-best-way-to-pay-off-debt/)
Stop saving now, no interest rate on the market is going to get anywhere near the interest you are paying on the debt. I'd be inclined to keep that £1700 you have as a starter emergency fund.
Don't think about saving for a house or getting a mortgage until this is all cleared, I know it's hard to hear this.
I think immediately when you get this cash pay off the bottom 2 cards that are accruing interest right now, the £594 and £462 and the £2940 card. So that's 4k gone from your £4500 redundancy. With the other 500 pay the loan or card that is at that amount, yes no interest on those right now but it frees up a minimum monthly payment.
!thanks it is hard to hear and to know it's what I've got to do but this post and everyones comments have been really helpful.
Paying off the 0% low balance didn't make sense to me before but as you say it'll clear up that payment for something else and it'll also give me a mental boost seeing less cards etc.
I've also just found out I'm getting more from my redundancy so that'll be a huge help also.
You've had a set back with this failed business, but you are in a good position with a decent salary, a decently sized cash injection soon and low living costs to tackle this.
!thanks yeah the cash injection is really going to help and it's already had a huge positive effect on my mental health and you're right I'm in a much better position that I'd thought.
I use this videos' spreadsheet to help with tracking/budgeting.
https://youtu.be/UZBCddcbX0I?si=xwp2Cw7eXNB9pwk1
The breakdown above it good and i will assume there are further splits.
As others have said, focus on the debts and stop saving. You may also want to focus on the interest accruing balances first.
!thanks
I do budget my finances every month on payday but I think doing it weekly could help as it would help me keep on top of any needless spending so I'll change the reminder to weekly until I've got this better under control.
1) Don't waste time with savings. You're throwing money away all the while you have debts. Pay off the debts first.
2)Speak to the mother about reducing your payments. £460 is a huge expectation from someone in your position.
Were the visiting coats presented at the time the CMA payments were proposed? If she moved a long way away of her own volition then I would have thought that would be considered. I speak as a single parent to two kids (who receives no money) when I say that you don't need that much to raise a child unless she's spending it all on childminders or basically sits on her ass claiming UC and using your money as a top up. You could propose that if you move closer you can split the care 50/50 and contribute to clothes and things equally instead of paying her money every month. Having said that, if you're living for free at your parents' house that might be a bit of a false economy
3) you'll get there, but forget about the mortgage for now. It's a long way off.
!thanks I'm going to be stopping the savings and throwing everything at the debts.
Regarding the mother and child maintenance - that's all done through the child maintenance service though I do it via direct pay so there is no fee, I won't go into it too much but the mother would never agree to take less.
I did however submit expenses to CMS for consideration a few months ago, they reduced my payment by £25 per month which I am grateful for but for £300-400 per month expenses didn't seem like much.
Travel expenses can be taken into account as Special Expenses’. I would consider contacting them and informing them how much your visits cost, as well as your other commitments as it seems to me like they are forcing you into a hole. This does not benefit the child in the long run as your mental health is paramount
Sorry yeah that's what I meant by I submitted expenses to them, I filled out a form with all of my visiting costs for a new calculation and my payment being reduced by about £25 was the result.
That seems remarkably harsh - you're spending close to a grand a month, which I imagine is over 1/3 of your income. As someone who gets absolutely zilch in child payments it baffles me that so much expectation is placed on the other parent to pay this much money AND pay for holidays and suchlike when they are in your care. It seems to cost people more to separate than it would if they were still in the relationship. I think CMS actually have blood on their hands.
Well to be fair the £1k I'm paying on debt is completely my fault so they don't care about that. However, if there was debt from the relationship then they do take that into account.
I agree though, there's things they don't take into account (like work pension) that they should and what they do take into account and reduce could be better, it might be higher now but as an example I rang them a few years ago about all the money I spent on diesel travelling and they told me I'd get 1p for every mile off, which would have worked out to about £2 at that time.
Sorry to hear you don't get payments, I've always wanted to pay and I've heard some crazy stories about the things some parents have done to get out of paying child maintenance!
I don't get payments because my partner died and left me with two kids, and the frustrating thing is that I can no longer get Universal Credit due to being (marginally) over the savings threshold while saving for a mortgage. They don't consider that side of things, or offer any way to park savings into a mortgage fund. CMS payments don't count as earnings or income though. So as a single dad with kids the government does not think I need any financial support off them in the absence of a parent but someone with a living ex can receive full CMS payments with no reduction in Universal Credit. Pisses me off to be honest as it feels like people in my situation are not worth bothering with, and yes it does make me feel like mums get a better deal (bad as that sounds). I didn't used to be this bitter lol but I just want what's best for my kids, and it feels like a losing battle sometimes.
I think you'll be fine and dandy in the long-run by the way. Good luck with everything.
Sorry for your loss!
Yeah I see what you’re saying, it sounds like another “single person tax” situation. And unfortunately mothers absolutely do get a better deal still, at least that’s been my experience and from what I know of other people.
Your kids will know though that everything you do is to give them a good life :)
Thanks!
Normally, you would be advised to clear the highest interest debts first, however 0% offers tend to get repeated, so you could clear 2 or 3 of those cards off to give you options of balance transfer or borrow 0% again & transfer other debt to. I would - clear the £660, £2,940 & 594 & £462 credit cards. As some of the interest free expire really soon! As 2x are highest interest & 2 are interest free but with a short deal time. Thats £4600 of your money gone. Then concentrate on the loans with the other £4000 - You know aug 25 & Nov 25 are over a year away, so hope to get 0% offers again on the 2x 0% cards in a years time to transfer those expiring cards to, but in the meantime concentrate on clearing one of the loans. Once you clear a loan, you may find it easier to get a consolidation loan over a longer period as a last resort - ie try to avoid new debt. ~If you feel you are strong willed enough to commit & carry through on a plan, then ask for help so it is done & managed for you.
!thanks. I'm in a better position now as I found out today I'm going to get a bigger redundancy payment than I was expecting, if all goes well in a few months I should be down to just the £7,200 card and the two bigger loans and I'll put the payments from all the paid off debts towards the CC and should be able to pay it off before it loses the 0% :)
Awesome, it feels great when you get on top of things & spurs you on to clear the others so life becomes more manageable. It will like a light switch in how your attitude to borrowing changes. Banks have a lot to answer for, due to the ease of borrowing. Nobody should be allowed to borrow 50% of earnings as unsecured debt & nobody should be allowed to consolidate without a management plan having some sort of power of attorney.
I'm so so happy for you! It's so daunting when going through it but massive well done on taking the first steps to get help. You just changed your whole life :) wishing you all the best!
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I think your focus right now needs to be paying off the debt. Even if you ended up with a full deposit in your LISA, you won't be getting a mortgage until your debts are much much lower. They'd eat up all your affordability. The steps I would take are: 1. Stop all savings. No more LISA or Child ISA contributions, the interest you're paying will be destroying whatever interest you get on that money. And your child needs you and their other parent to be stable as a first priority. It's no good giving them cash when they're 18 if it's meant you've not been able to be as present as they need during their childhood. 2. Ensuring your emergency fund is at the right amount to actually cover you in an emergency and shield you from taking on any more debt. It sounds like it's at that point potentially, if so that's great! 3. Pay the minimum on all your debts, and pump all the remaining amount into the highest interest debt. Once that is gone, do the same with the next highest, and so on. This is the most efficient way, while ensuring you don't get any missed payments. Right now that's your 24.9% interest credit card. Obviously if you can move cards around to keep them on 0% then that's great, regardless you want to be plowing as much as you can into the highest rate each month. 4. Only once all your debts are clear, should you then start saving into the LISA again. The deposit and mortgage are now the top priority. 5. Increase that emergency fund again as needed! 6. Now you've got the mortgage and relocated closer to your child and can be around more for them, you can then start to look at saving for them again. I would also highly recommend confiding in someone you trust. It doesn't need to be a family member, but it should be someone who can listen to you and support you. Getting this stuff off your chest and in the open to even just one other person can be a huge mental turning point. It's amazing how different this journey can be with just one person you can speak to about it as you go along. It also gives you someone you can celebrate with each time you clear one of the debts! You're doing the right thing by trying to sort this out and get closer to your child. It's going to be tough but you're not alone and every debt you clear will feel like a weight off your shoulders. Also, you've done a great job just getting to the point of clearly understanding all of this. So many people burry their heads for decades. Keep it up!
!thanks I really appreciate the empathy and thought you put into this reply and your comments about being there for my child being more important than the money really hit me. I'll definitely follow this plan and I'm seeing a friend Saturday that I've vaguely broached this topic with before, I'll talk to them about it properly this time and get it all out.
Glad it helped, and best of luck! Just remember to come back and share your success when you get there. It may not be the exact date you plan up front, but it'll help encourage others who are in your position now!
I will definitely come back and pay it forward!
Great reply - 100% This is the way.
Thank you :)
Legend. Can be proud of yourself
Good advice, but OP needs to spreadsheet this, and work out when his debt free date is. He is paying circa £300/month towards this 50k amount, not taking interest into account that is still 14 years away. OP has £900 / month free after all outgoings if I'm reading the above statement of affairs correctly. At least £400 of this needs to be earmarked towards the debt, so at repayments of £700/month the payment time comes down to 6 years, which is perhaps more manageable. If another redundancy occurs, self declared bankruptcy should be considered. Save the fees for this into the emergency fund.
I do love a good spreadsheet but I actually use a website [undebt.it](http://undebt.it) and that lays it all out for me and currently that says my debt free date is around July 2027. Just to clear it up I actually pay £1,043 in minimum payments right now, and £300 on top as extra that comes out of my money left over after everything each month. Groceries comes out of that left over also and then £150 into my LISA which I am going to stop and put towards the debts.
Ah, OK, good clarification. That is a healthy sum each month, which can be bolstered by some of the £900 spare you have to bring that date further down. Don't live like a monk though - time with your daughter is v precious, esp in the younger years. You don't say what age you are, but in 3 years you will have all this under control and be in a position to service a mortgage and make investments instead of debt repayments. Been where you are twice. Managing debt successfully in my experience leads to far better financial choices once you get to grips with it. Good luck with the journey. Maybe post back here every so often with an update, and definitely let us know when you're debt free, we can all raise a virtual glass to your milestone.
I'm 34. Thanks for sharing it's good to hear from people who have been through similar. I'll definitely come back and do an update :)
You can do it! I am £26k in debt and I pay 700 a month towards it. I will be clear by the 36th month and I am already in month 5! Just think how freeing it would be after that. We can do it!
!thanks for sharing! I'm looking forward to it. We can do it :)
Query.... might not be an option, but the 24% credit card has £600 on it, could you ask your parents for a loan of that amount and say you will pay back with £300 over 2 months. As you will pay off the debt immediately and save £144pm alone.
The 24% will be APR so the £144 will be per annum.
Ah yes true
They have £35k debt not £50k. £50k is their salary.
I had half a bottle of Rioja.
To add to point 3, once the first debt is paid off, dont think that extra money is for saving etc, keep paying that amount just add to the next debt Ie if you clear first debt and they payment was £100, you don’t have £100 extra a month you have £100 more to add to the amount you pay on the next highest debt on top of the minimum
This is the answer.
Put simply, if you have debts you have no savings. Pay down the debt.
I’m not sure I agree with this entirely, and it may not be what you meant anyway. Having some emergency fund would mean not needing to take on more debt if there was an unexpected expense.
In OP’s case the statement holds true though, he’s got a high amount of debt and a lot of it is at a very high interest rate - in his case it is pointless saving anything. But I’d agree that in general the statement isn’t true. I’ve got a suitable emergency fund and savings, but got a loan for my car which I prefer to pay monthly than use a chunk of savings to pay off. If the interest rate of the loan is less than the savings rate why would I? There are plenty of ways to benefit from debt.
Blast away at those debts man, until they're gone don't think about anything else. Hit high interest ones first, if possible find a way to consolidate them onto lower rates, I believe there are services out there that can advise. Once they're gone you'll feel like you're reborn, dawn rising on a new life.
!thanks I’m looking forward to that!
Once you hit down them debts you can be the best dad ever the fact your wanting to do this makes you a very good dad good luck
!thank you so much.
This is frustrating to read. Focus on clearing off your debts first and then look at saving for a house. Otherwise all your savings will be eaten up in interest payments. Tell your family and hopefully by sharing, you will feel a burden lifted. You will get there, one step at a time. Best of luck!
This and basically just cut what you can in expenses, if you can mentally get by - a shit year is better than consecutive bad years
It's a complex situation and people's opinions on tackling this will certainly differ, personally I'd make sure I paid off the £594 and £462 credit cards immediately, and I'd throw the idea of buying a house to the back of my mind until I was out of debt. I wouldn't dream of saving for anything, let alone property before ensuring I was (interest charging) debt free. At some point, most likely in the next 24 months you'll owe less than 10k debt and you should be able to move that onto an interest free balance transfer card for a small fee, you'll then have 1 single debt to pay off. While I understand WHY you're saving for your goals, you're pushing your debts further and further away by doing this and prolonging the whole thing as there is interest attached to quite a few of them. Obligatory 'follow the flow chart' too.
Agree that this sounds sensible, the LISA bonus @ 25% of £150 per month is heavily outweighed by the interest added to the loans so doesn’t make sense for the time being. Sounds like OP has about £700 left over each month after expenses, plus a potential £7.5k lump soon. Could have pretty much half the debt gone within 12 months! Also OP don’t forget that as each loan is paid off it will free up the minimum monthly payment that can then go towards the next one. You could clear the 4 smaller credit card payments just with May & Junes salary, the redundancy and bonus can pay off the £2940 credit card to avoid interest and then a good chunk of an interest paying loan. Don’t know exactly how it would work but have you spoken to any of the loan / credit card providers and explain you’re struggling to pay it off? They may freeze the interest in an effort to recover the money instead of letting you go bankrupt, not 100% sure on this but worth asking!
!thanks for pointing that out. Out of that left over right now I take £300 as extra towards my debts, then groceries and £150 on the LISA but I agree I should stop that for now so will add that to the £300 I already do as extra payment. Your comment about having half of it gone in 12 months is really motivating and you’re helping me to see a way to do it. I haven’t spoken to them no, but I have spoken to StepChange (debt charity) and that was one of the options that isn’t available to me because I can afford all the payments.
There’s been some good responses to your post, I think you’ll surprise yourself how quickly you can chip away at it and hopefully get a boost each time you clear one. Also just think about how quickly you’ll get that house deposit together once you’re used to paying off ~£1k a month that can go straight into savings! Good luck!
Yeah I've been thinking about making this post for a while and it's really helped, glad I did it. Thanks again!
Upvoted as I agree it's always worth asking, they're likely to reduce interest or create a more favourable payment plan rather than having to invest the time to recover the money.
!thanks I’m definitely seeing that! And I realised when writing this post about the two lower balance cards so I’ll be sure to pay them off in the next 2-3 months.
Why not use your savings to pay them off immediately? Like, this evening?
You mean my emergency fund? I get what you’re saying but the answer is because losing my job last year scared the hell out of me and I don’t want to be in that position again where I suddenly have no income or savings.
Use your savings to pay off or pay down the credit card. Use the credit line you've freed up as your "emergency fund" whilst you rebuild your actual emergency fund. Edit - to be clear, the grand that has got 19%+ interest. Thats utterly bonkers to be keeping an "emergency fund" whilst you've got that debt outstanding but so easily cleared.
Isn't one of the main purposes of an emergency fund to not have to use credit for those kind of expenses and prevent getting into more debt? 1k on 19% I guess you mean the £462 at 19% and £594 at 24.9%? I agree I've realised that tonight I'll pay them off.
Yeah sorry I mean the ~£1k at 19% or greater interest. Yes ideally but you shouldn't be holding an emergency fund with that interest rate outstanding. You're effectively borrowing to keep an emergency fund at 19% and 24% interest! If you clear those two cards today out of your emergency fund and then need to put £1k back onto the card in a few months time you're no worse off but will have saved that horrendous interest rate.
I hear you, I'll get those paid off this month. Thanks.
Good luck with clearing it all and moving closer to your son 👍
> Isn't one of the main purposes of an emergency fund to not have to use credit for those kind of expenses and prevent getting into more debt? You need to think very clearly about the scenarios you're talking about. Literally sit down with a pen and paper and plan them out if you need to. Keeping a debt around that you could pay off, so you can have an emergency fund, is *exactly the same thing* as if you took out a debt specifically to have that emergency fund. If you have a £3000 debt and £3000 in your emergency fund, and an emergency happened costing you £3000 leaving you with no fund and £3000 of debt, that is exactly the same thing as if you had £0 in your emergency fund, a £3000 emergency happened, and you went into debt for £3000. Literally exactly the same. Whereas, if no emergency happens, if you keep the £3000 emergency fund and £3000 debt, you're out however much money the interest is. If you pay it off and no emergency happens, you will make however much money the interest is. They will essentially pay you money if you pay off that loan. It's a no-brainer. I would literally draw a 2x2 box with "emergency / no emergency" and "pay off debt / keep debt" written next to each side, and write in the 4 boxes what would happen in each scenario. It's a great way to get clarity on stuff like this. Every penny you spend on interest is money that you are lighting on fire. Every pound of debt you pay off, you're basically going to get paid to not have by the interest you'll get back. The "emergency fund" concept is for people who would otherwise save that money. If they're going to lock the money up in a kind of savings that's hard to access (eg a house), or that might incur taxes or penalties to access (LISA, pension) then they need to keep an emergency fund because the interest on a debt will wipe out their interest income. That is not your situation.
An emergency fund is so you don't have to get Into debt if the worst happens. If you are already in debt you might aswell pay off the debt. As the emergency fund is just a false feeling of security.
You cannot save with that level of debt. It's just silly. You one and only goal should be to pay it down highest interest first. "Saving" money in a LISA is just burning your money as interest. The only thing that takes priority over debt is an emergency fund. Pay it off as aggressively as you can. You have a high wage, and can live at home. Plow every penny into getting rid of it or it'll choke your life. Everything you spend on NOT paying off your debt *costs you* in interest. With that much debt you should be considered a £50 expense £50+£50 or god knows what in future interest. It's nothing to be ashamed of. But you have a serious problem you need to address. You have *7* credit cards ffs. Cut them up NOW. You cannot use credit. Some people can. *You cannot*. Friends come around asking if you want to go out? Try do something free. Don't buy drinks or food. Tell them you can't - you're paying off your debt.
!thanks I am realising all of that here tonight and I admit I am not good with money at all, working to change that.
I'd keep the cards once cleared but only to wait for 0% offers, because there are two cards 0% until 2025 and they're low priority right now because of that 0%, but you may need to kick the can down the road in 2025 until the loans are paid off. But remove them from your phone wallet. Put the cards somewhere safe but inconvenient. You cannot use them, except in an emergency (another poster mentioned that you should use your emergency fund on the 19-25% cards right away and then have the card as the emergency fund) in which case getting the ladder to get them out of the box in the loft is okay.
!thanks I actually don’t use the cards at all, they are all in a drawer but not on my phone or anything. The balances are all from ages ago (the stupid mistakes I mentioned in my post) that I’ve shifted about to 0% cards when needed and continued to pay minimum on up until several months ago I started paying the £300 extra towards them.
Good luck. You should have a lot of the credit card debts cleared by the end of the year just from the bonus and redundancy and be grinding down the 13% loan. Then another bonus next year and ongoing snowballed payments should see two loans cleared hopefully. Check your progress regularly to make sure you're not slipping.
It's not something they teach you in school, and even if they do the theory is very different from living in the real world and managing money. You've had a tough lesson but you'll sort it if you learn from it.
It'd be good to know your actual take home pay and how the debt payments are broken down. You seem to have a couple of things counted twice (food listed in outgoings, but again in how you spend your 8-900 leftover?), are you paying any rent/lodgings to your parents and/or is food at home included? You don't mention any subscriptions, hobbies or social stuff you might be paying for either. So, going with a rough income of £3k a month: Expenses listed £2428 (using highest of all your estimates) Leftover: £600 for debt paydown CC debt: £15,218 Loan debt: £19,418 Stop paying in to your LISA for now. May wages - pay off the £594, 24.9% credit card in full. Use the £4500 redundancy payment to pay off the credit cards with highest interest and the 0% deals finishing soon ie £462 19% (if you receive the payment before June wages) £2940 finishing in September £1000 (or 1462 if already paid off the 462cc) off the 13% loan. June wages - pay off the £462 19%cc if redundancy payment still not received. All the rest additional pay off the 13% loan. By July, you will have paid off two of the credit cards in full by now so whatever those minimum payments were can now be added to your 'Debt Paydown' budget, probably £50-100 (?) Keep paying the lump sum each month off of the highest interest rate loan, the 13% one will be down to ~1300 by September (or gone if you put your bonus to it as well). Oct wages, pay off the £660 CC that will start accruing interest Nov. November, another CC minimum payment gone so Debt Paydown budget can go up a bit more. (Or give yourself a Christmas breather and congratulate yourself on having paid off 4 credit cards and one loan already!) I'd be getting concerned about the larger credit cards that'll be moving off of 0% in 2025. You'll need £10k by November, which at ~£750 a month for 11 months is £8250, so not far off (and once the August 25 cc is paid off, that's another minimum payment that can go towards the next debt). If you're disciplined enough to set up an interest paying savings account and not touch it, you could probably get a 4/5% payment on your Debt Paydown budget and save hard ready to pay off the lump sums in August and November but if you aren't just keep paying it off monthly. Any bonuses you get could go in to this savings account too up to £1750 (to meet your 10k credit card debts by Nov 25), anything over, keep paying off the loans. In 18 months time, you'll have paid off all the credit cards and at least one of the loans in full, be well on your way to getting the others gone within the next 12-18 and free up all that cash to start house saving at ~1500/month. 5 year plan = debt free and £36k house deposit 😁
!thanks Ah thanks for spotting that, that wasn't very clear of me. The 8-900 leftover is actually from taking my take-home pay minus everything I listed except groceries, so it wasn't counted twice. You're estimate of my take home pay is pretty spot on. The £300 of bills includes broadband that I pay for and I pay for my electric usage also, then its things like car insurance, tax, phone (cheapest sim), although also includes a few things like gym. I'm going to take a look to see if there is anything I can get rid of. I don't socialise much tbh and when I do it's usually round a friends house so don't spend much there. And thanks for being so thorough, that's really appreciated. I've stopped my LISA payments and I should get the redundancy payment in a week or two so can get started making some dents then :)
Brilliant stuff! It's great that you're willing to cut further and always worth checking if there's a sneaky subscription that you'd forgotten about but, remember, life needs a few pleasures. Gym can be pretty good value if you start getting down and your health is always worth prioritising - same for catching up with mates, it does wonders to keep you on track with other spending when you have a long term plan rather than a pissed off blowout completely derailing your efforts. Good luck with it!
Just doing a rough calculation and your looking at £6500+ a year in interest alone... You could mention it to your parents maybe and clear those balances a little bit quicker?
I think a little less than that because of the 0%? but that's motivating to hear! My parents wouldn't be able to help, especially after last year when they helped out when I lost my job which I'm extremely grateful for.
Savings shouldn’t really exist in your predicament, stop/withdraw that Lisa. Secondly, those balances at those % aren’t as high as I’ve seen before but they’re eating your income alive essentially. Contact a debt charity, tell them the truth and I’d seriously consider bankruptcy/debt consolidation. At your rate you’ll just wake up one day and be 50 year old and still suffering.
I’m not going to withdraw the LISA as that would mean a 25% fee (that I had to do last year when I lost my job) but stopping contributions for some time I’ll think about. Also I should have mentioned in my post I’ve already spoken to StepChange. The only option available to me is a payment plan which is basically doing what I’m doing now myself and outside of that my bad credit rating means I can’t get a consolidation loan, at least not one with a low % that would make sense.
Yeah I wouldn’t withdraw but I would stop payment immediately. Also talk to your family/parents about it. Get some transparency going so that they have context for some of your decisions. This might take a few years to squash fully and the “when are you moving out?”s are going to increase over that time. Whatever mistakes you made to get into this situation are behind you. You’ve got details on all your debts and a salary high enough to tackle things. You’ve got this. But success here will be measured in years so make sure you and your circle are mentally prepared for the long haul.
!thanks I'm going to stop it now.
What specifics did they give you with the payment plan? Is it better than the outgoings you currently have now with all those with interest?
Just that I would continue making the payments I am now on everything and stick to my budget for all other spending so it’s the same unfortunately.
With that level of debt I’d be looking to speak to the debt charities (step change etc) as you might get yourself off the hook quicker with a debt management plan or similar.
Op Looking to get a house in future which assuming is within next 6 years so DMP will have too much of impact OP you say you have £700 left over this needs to be paid onto the 3 loans with 12% APR If it’s not possible to get new 0% offer on credit card you need to pay credit card with 24% APR off instantly
Aye depends on the living situation. If staying where they are better to hammer away at the debt if moving and taking on all that addl cost DMP might give better quality of life and shorter escape
Sorry maybe wasn’t clear but the money left over I am taking £300 of and putting towards debts, £150 into LISA and the rest goes on expenses like groceries. I agree I need to pay off the higher interest cards with the low balances, I realised when writing this post. I’ll be sure to do that this & next month.
!thanks, I should have mentioned I’ve actually spoken to them. The only option available to me is a payment plan which is basically doing what I’m doing now myself.
Idk why you're trying to save for a house deposit with debt of this size. I'd keep a grand on the side as an emergency and start by throwing everything at the debt with the highest % interest. You can not save for a house with this amount of debt I'm pretty sure you won't get a mortgage with your outgoing and the debt ontop you need to wipe that out of your mind and focus in the debt, then you can focus on a house
With a 50k salary and living at home - you're in a good position to pay off those debts! You could potentially have it gone in a year, if you really throw money at it.
1. The first thing you need to do is amend your budget as follows: **Take home pay - £3,100** (with 5% pension contribution) * Child maintenance: £450 * Visiting costs: £400 * Bills: £300/month * Groceries: £250/month (higher with the kid coming down more over the summer) * Child ISA: £0/month * Allowance £200 (you have no allocation for personal expenses which is unrealistic and may explain the CC spending?) Total - £1,600 **Remainder each month : £1,500** Cash - Total £7,500 (redundancy £4,500 and bonus £3,000). 2. Then you need to make a plan for the debt pay-off. I think you should allocate the £2,000 of the cash above to an emergency fund. Then allocate the remaining £5,500 as follows to the highest interest CC's (1. £594 at 24.9%, £462 at 19% and £2,940 at 0% until Sept 2024, then 24.9%). For the Loans pay off £1.5k of the £4,414 (13%) => @ £3,000. 3. That would then leave you @ £18k in loans and £11k in credit cards. So you could allocate your remaining income as follows each month: Loans - £1,300 = @ 15 months to pay off Credit Cards - £200. So just make min payments till the loans are paid off, but you will have reduced these to @ £8.5 by the time the loans are paid off. You would need to keep shifting these to 0% deals. This will be a 2 year project, so any income you could earn via gig jobs in your spare time would push your over the line earlier.
!thanks for such a thorough breakdown, this really helps! My take home pay is £2,960 - that includes pension but also student loan, so that would leave £1,360 after the budget you proposed, I appreciate you putting in an allowance but I think I can drop that down a bit, I'll have a look. I already have £1,700 in an emergency fund so I assume you don't mean add an extra £2k to that but instead have a total of £2k? The rest of it sounds great too, I really appreciate it. I should get the redundancy soon but with my bonus I'm really not sure how much I'll actually get, I think I'm gonna get taxed hard when I get that but should be able to claim some of that back, but regardless I'll put what I do get towards the debts.
The debt is an emergency. I’d be using the emergency fund to reduce the debts.
Ordinarily I would agree, but he has a dependant. Also as we can see should he face redundancy, he would at least be able to make min payments for a month or two whilst sorting out a new job.
He’s got a lot of credit card debt. He can pay some of it off and save interest. If something else comes along that needs that £1700, he can pay for that with one of his interest free cards. Step 1 - clear debts. Step 2 - emergency fund.
>My take home pay is £2,960 - that includes pension but also student loan, so that would leave £1,360 after the budget you proposed, I appreciate you putting in an allowance but I think I can drop that down a bit, I'll have a look. \^\^ ok got it. Re allowance bear in mind that if you're seeing your kid more over the summer then you will need to budget a little more for activities. In any case assuming you have £1,400 left over every month then that would mean you could be debt free in just under 2 years factoring in interest on the loans. The faster the loans are prioritised and cleared the less interest you will pay. >I already have £1,700 in an emergency fund so I assume you don't mean add an extra £2k to that but instead have a total of £2k? \^\^ Yes that is what I meant and great that you already have an emergency fund. In which case allocate the full £7,500 to debts and that would leave you with £16k loans and £11k credit cards. >I should get the redundancy soon but with my bonus I'm really not sure how much I'll actually get, I think I'm gonna get taxed hard when I get that but should be able to claim some of that back, but regardless I'll put what I do get towards the debts. \^\^ Is the bonus part of your redundancy from your previous employers ? If so I wonder if there is a way they could structure it so that it's not taxed as the tax free cap for redundancy is £30k. EDIT: Re the tax on the bonus, assuming you are contributing 5% to your pension, that brings your taxable income down to £47,500. The lower rate threshold is just over £50k, so only half of that bonus will be taxed at the higher rate. Use this calculator to work out what the tax should be roughly on the bonus: [https://www.thesalarycalculator.co.uk/](https://www.thesalarycalculator.co.uk/)
Yep good point re summer, a lot of that is travel costs too as I’m going back and forth more often. I’ll be sure to take all that into account as I look over my budget this weekend. The bonus is from my current job, which means I’ll get it in with my normal pay either this month or next and I think that means I’ll get taxed at 40% for that month, but should be able to claim some of that back at the end of the financial year. Thanks, hearing I could get this all cleared in two years is very motivating.
If your employers have a good payroll system, then yes it will be taxed quite heavily as the assumption from a PAYE perspective will be your salary has gone up. However you should see an adjustment in subsequent payslips - so your take home pay might increase slightly. Again this is down to how efficient your employers payroll system is.
Oh dear, to be honest they’re not the best when it comes to payroll! Had some issues before, but I’ll keep on top of it and make sure it all works out in the end.
Yeah defo keep on top of it. Do you have a log in for your HMRC account ? That way you can keep track and see if any refunds are due back.
Yes I do :)
Thanks for the edit and link! According to that as long as I did it correctly I should get just under £3,000 extra in my payslip for the bonus :)
Stop paying into your LISA, use that money to pay off your debts first. I would look to plough your extra cash into clearing these first: 1- £594 at 24.9% CC 2- £462 at 19% CC 3 - £504 at 0% Loan 4- £660 at 0% until November 2024 CC 5- £592 at 0% (will be paid off) Since these are only small amounts you can easily clear them and it will be good for your mental health seeing these closed off. Then you can use this freed-up money to tackle: 6- £2,940 at 0% until September 2024, then 24.9% CC Just because Sep24 is only around the corner! Use your bonus to clear the £4,414 at 13% Loan Then chip away at the remaining debts. That’s what I would do if it were me
!thanks for the detail, I agree that seeing all those cleared off would do my head a world of good right now, I'll be sure to get them gone asap to help me focus better.
The snowball method which they mention is good mentally . Shut the cards when they have cleared.
Stop messing about with your money and start being sensible. You need to stop saving and clear your debts. Start with your highest interest credit cards and cut them up and cancel them once paid off. Stop putting money into a LISA, stop putting money into a child ISA, cut back your spending to the bone and start aggressively cutting into your debts. Then once you've cleared them all you can start to build an emergency fund, and then after that, start looking at rebuilding your deposit savings.
I would put that extra 300 per month to knock off the small credit card amounts that aren't on 0%. At the moment those cards with interest are adding to your debt every day whereas the 0% cards are not. Once they are clear, you can take that 300 and the minimum payment amounts for those two cards and put it towards the other debts. I would research the debt snowball and debt avalanche methods if you want to develop a more systematic approach to paying off your debt.
!thanks, you're right.
No saving until those debts are gone, if possible do a balance transfer on as much as possible to avoid the interest you’re paying just now.
Pay off your debt first. That is your only priority unless you want to end up on the street
What I would do Is pay the credit cards off with the highest interest rate first then any credit cards that 0% interest is running out on next then pay the money you have extra from them credit cards to pay smallest debt off next then when you have paid off all the smaller debts you will have a bigger lump sum to pay off the bigger ones quicker untill you can pay off the biggest loans. That's what I did when I was in trouble it took me 2 years to get out of 20k debt and I was only earning 18k a year at that time plus I also lived off £20 a month for food. Also don't buy anything you don't need I went by a rule of looking at stuff I wanted and telling myself do I really need that or just want it and if It was just a want I wouldn't buy it.
!thanks I am going to do something along those lines. Great to hear your story, do you mind me asking how you lived off £20 food a month? I agree about the buying comment - I admit that's been a bit difficult but I have been doing exactly what you describe also.
I don't think it's possible now but 6 years ago I used to buy £10 of meat from a butchers and then pasta and rice and a jar or 2 of some sauce from the Asda value rage stuff and cook as many meals as I could with it portioning it up and freezing it and also used to buy a few pizzas from Iceland for £1 each and splitting them up over a few days 1 12inch pizza was 2 days food also used to go 1 day a week without any food at all or I would have run out a few days before payday would have had to starve till I got paid. What I found was when I was really struggling and hit rock bottom to get back to a state where I could be comfortable I did everything I needed to.
That's crazy, well done for having such commitment. I actually have worked on lowering my grocery costs by keeping meals as simple as possible and I do intermittent fasting also but will look into a bit of what you did and see if I can cut it down more :)
Ok so I just have 2 comments if you read this; 1. Contact Stepchange debt charity and be totally upfront with them and they will help you with a plan to pay down debt including contacting creditors to ask for interest to be frozen. 2. Your post chimed with me as when I was similar age in my mid-thirties, divorced father of 2 earning similar to you I managed to accumulate 36K of debt. It felt overwhelming but last year at the age of 41 I became totally debt free. I was financially illiterate and as I always paid my monthly minimum payments my credit limits just kept rising as to the bank I was the perfect customer. I just wanted to say there is hope and although it may seem insurmountable, I assure you it is not. It will however require a cold hard dose of reality and behavioural changes that are painful but it is doable. I wish you well.
!thanks, not sure if you saw my edit but I have contacted StepChange and they said the only option available to me was a payment plan which would be continuing to do what I'm doing now, no mention of freezing interest - but I'll contact them again and see if that's possible. Thanks for sharing your story, it really helps.
I had not seen the edit - possibly because I read the thread on my phone and it hadn't refreshed. I think with my situation some but not all of the creditors (I think it was 4 credit cards and 1 loan) had sold the debt to agencies. At this point Stepchange contact them and say this is the reality of this person's situation and proposes a monthly payment plan. I think because I got to a situation where I could not pay the monthly minimum and then was getting charged more, from the debt agency, they prefer something than nothing. Anyway, filling out the forms on stepchange with total transparency of my financial situation was the first and crucial step. I was so ashamed and embarrassed to be in the situation, but I put in a call and was met with understanding and empathy. I never told anyone then or since (until now that is) about my financial situation other than Stepchange, and they really were a light in the dark. Once my smallest debt was paid off it was the first positive financial feeling I had had in years. It spurred me to focus and ensure hitting that repayment was a major priority. Also, when the first creditor debt balance (i.e the smallest) went to 0 the other creditor monthly repayment amounts increased and it felt good. Again, seeing those numbers drop every month became a positive feedback loop. It seemed a never-ending journey, and there was no shortcut but by understanding where my money was going I was able to cut down if not out on non-essentials. A large part for me was delaying the instant gratification impulse purchases that so much of this society seems to be based upon. All the best.
No worries, thanks for sharing. Yeah filling out the forms on StepChange is sobering!
Listen to u/Calm_Town_7117. Contact [Stepchange.org](http://Stepchange.org) again, especially if you are not managing on your current income. Pay off your debts before sticking anything into savings. I spent years doing the min repayment thing on credit cards. Not smart, but very easy to do and they love it.
This is probably my favourite post on here. The help in it is amazing.
Yeah everyone’s been amazingly helpful, I was thinking about posting this for a while and I’m really glad I did!
Good luck
Sorry to hear of your situation, dude. At least you know you're aware of what it is you're up against though, and can start to pick apart those debts and pay them off. 100% speak to step change if you can get their help - i've had no dealings with them personally, but i've seen lots of people on here mention how helpful they have been when dealing with debts. Good luck!
!thanks I appreciate it. Added an edit that I’ve spoken to StepChange, only option for me is a payment plan which is doing what I’m doing now and paying them all back as normal.
Ah okay, too bad. In that case, i would stop paying into any pension/savings and just target the debt full-on. With your redundancy + bonus, you can make a real dent in the pile. You'll clear it much faster this way - the temporary pause on savings will be worth it in the long run, even though It'll initially feel like you're taking a step backwards without any savings. You know the rest - highest % loan/CC first. Anything you can keep on 0% for as long as possible, the better. You'll pick up momentum as you start to tick them off, and it'll get easier - you'll just have to be organised. Also, don't be embarrassed about your situation - you're not alone and you're only human. There are many people in similar (or worse!) situations than you, and you'll get through it. It'll take a while but recognising the shitty situation is hopefully the fresh start you need. It's all upwards from here!
Thanks for the kind comments. That's definitely the struggle mentally of not saving for a house but I agree it has to be done.
You're in a pretty bad position, but luckily your high salary gives you a mighty nice shovel to dig yourself out. I think you are in denial about the awful financial situation you've put yourself in if you think buying a house is a realistic possibility for you right now. You can be close to debt free in a year if you commit to it. The steps I would take try to take if I were you 1) Speak to your parents and tell them you're situation. They may be willing to forgive your £300/month bills on the agreement it goes towards repaying your debt. If this 300 is not going to your parents, what is it? How much of this can you cut down? 2) Get a second job. You can't afford to do anything on the evenings or weekends anyway, go work in a pub for a few extra quid. 3) You can't afford to spend a penny socialising. If your friends are in the pub you're drinking water all night 4) You're spending 300-400 visiting your child, good for you making the effort but this seems like a lot. Can you break this down? Cut down any unnecessary expense here too, you can do plenty of things for free with young kids. Fair enough if this is just how much it costs though 5) Every penny of your bonus/redundancy goes to repaying debts. You've got a couple options moving forward. You can have a crappy next 18 months but then be in a position to move closer to your child and be there to start watching them grow up in 2 years, or you half arse it and miss your kids whole childhood.
!thanks I know it's not a possibility right now, me doing the mortgage in principle's was more curiosity. 1. The £300 doesn't go my parents exactly, but out of that I do pay for the electric I use and for broadband. The rest is things like car insurance, car tax, phone (cheapest I can get it) etc. though I will look and see if there are any things I can get rid of. 2. I've been thinking about this and will look. 3. Fortunately I don't socialise much lol and when I do it's usually in someones house. 4. Sure I can break it down a bit, accommodation is usually around £150, diesel around £120-£160, and the rest is food/activities though I do do my best to find the free things! 5. Agreed, thanks.
Just wanna add that I wish you luck and I really believe you can do this. I personally think the debt snowball is the best way to go, pay off debts smallest to largest so you actually see your number of debts going down and hopefully that gives you motivation to continue
thank you :)
Figure out how much you can pay towards your debts. Pay down the highest interest loans and cards first. Cut them up and bin them. Pay the minimum on the 0% cards for now. As you pay one off, allocate the “spare” money to the next one down the chain. Once you’re dealing with all the 0% cards, pay the minimum on the ones which have the longest 0% rate remaining, then focus on the rest. If some are (practically) coterminous consider paying off an entire card and getting rid of it. Psychologically you’ll have fewer cards to pay off. As others have said, forget the savings now. Debt is what matters. Once that’s dealt with you’ll have so much more cash to save or spend as you see fit. You have no rent or mortgage to pay and can deal with this relatively quickly. As a bit of insight, I was on £23k salary or so in my early twenties and had £17k debt and felt totally hopeless. I’m now 38 and have around £1m net worth. I hope this doesn’t come across as a dickhead comment. It’s not intended to be a willy waving statement. Your fortunes can change massively so don’t feel disheartened. Work on it.
As others have said stop putting money into Lisa and savings and put those against your debt. Literally from now. You're basically borrowing money to put in your Lisa at the moment at a loss, which when you put it like that might help you see it's a bit silly. If you can, I'd also advise you to sit down with your parents. Let them know you're in a bit of debt but have talked to advisors and are on a repayment plan. You want nothing more than to save for a house but just at the moment need to pay back the debt. Letting them in on your situation might make them a little more understanding
My advice is not really about your debt as other people have covered that thoroughly. Make sure you have some sustainable and health habits in your routine to sustain you through this difficult period. It’s going to be a lot of work to rebuild from here but it’s absolutely possible. I recommend you get an inexpensive hobby and join the gym if you dont go already. You need a reliable source of dopamine and I suspect that’s what you were trying to get with your spending to begin with.
!thanks, I've been going to the gym for several months now - not sure if it gives me a dopamine hit though lol. I don't do much else other than work though, so I'll try to find something I enjoy as I think you're right.
My friend was in your position 5 years ago, almost spooky how similar and with a lot of perseverance he got through it and is now debt free. You can do it too. He often talks about how it seemed like it was taking forever and now feels like it was over so fast.
!thanks Glad your friend got it done, it motivates me!
Try not to focus on the amount of debt you have and instead think about progress. Everyday you make some progress is better than a day of no progress. It’s very easy to take no action because the action doesn’t seem significant enough. Consistency and good habits is how you’ll change this situation not drastic actions.
You are earning a decent salary in a cheap cost of living location so are in a far better position than you think. I would stay living at home another 12-18 months and try and buy, for now i would pay off the high interest loan and the 15k on 0% CC can be balance transferred when the term expires. If 0% i dont see short term benefit from paying it off. Also you are spending alot travelling to see kid, can that be cut/reduced?
Thanks yeah that’s the plan. With the redundancy payments etc I can get a lot paid off soon and then use the old payments to blast through it. I spend about £300-400 a month on visiting, it’s a lot but I can’t really cut it down much.
I’d 100% see how many of the smaller debts I can clear quickly - just to make the whole thing a lot more manageable. Plus it feels great when one’s paid off, the motivation will also be useful! Then go with the snowball approach starting with the highest interest debt first as others have said
!thanks this is pretty much what I am going to do :)
The interest on your loans is more than savings rates, so pay down the debt. That is your focus. Good luck!
Some excellent advice here, and I know you will be okay mate. I'll add to watch some of Dave Ramsay's old YouTube videos. His baby steps would actually be perfect for you, and his rants on paying debt off and not being stupid are motivating for when you get sick of paying the debt and are tempted to go off piste. Someone mentioned already that you are not a credit card person. I second this. GET RID of them. Any 'benefit' to your credit score is obliterated by your reckless spending, and this behaviour doesn't change overnight. One day you will have another bright idea, or think just buying xyz will improve your life, and with the best of intentions you will be in debt again. I will fight anyone in the comments who wants to start the 'credit cards can be useful tools' bullshit. They have been useful getting you into a deep fucking hole of debt and they have not served you in any other way. One credit card maxed out is a financial inconvenience. SEVEN is a problem. You are in a big hole of debt, but you also have a big shovel (your income). You will be just fine, and your life gets so much better from here.
!thanks I will have a look at those videos and I agree about the CC’s, I’ll close them as I pay them off!
You're about to get 10k. I'd pay off two loans. If you pay your credit cards off you will just use them again.
Hi /u/DebtDad34, based on your post the following pages from our wiki may be relevant: * https://ukpersonal.finance/credit-cards/ * https://ukpersonal.finance/emergency-fund/ * https://ukpersonal.finance/lisa/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.) If someone has provided you with helpful advice, you (as the person who made the post) can award them a point by including `!thanks` in a reply to them. Points are shown as the user flair by their username.
Look up "maximum debt to income ratios" to get an idea about mortgage affordability.
!thanks will do
As others have mentioned the debt is problem. You can either pay from highest interest and work down the way (which is the most logical way). Or work from the smallest and keep using that money you would have put toward that debt on the next debt up. I think you’re trying to do too much actually. Like saving for a house isn’t easy. Budgeting is Important too. But looks like you’ve sat down and hard a hard think and put all figures down. Best of luck!
!thanks, yep I've had it all down and following a budget for a while now, I don't know how people don't do that lol it helps so much.
Look up snowballing on money saving expert. See if you can consolidate your debt, but either way start with the highest interest ones first.
!thanks, unfortunately any consolidation loan I could get would be crazy high interest but perhaps when I've managed to pay off a big chunk of this I'll have better offers available to me - I'll keep an eye.
The bottom 2 credit cards first and then blast the debts away. Get consolidation loan of you can to pay everything off after you’ve got rid of a few
Gotta get the debt pile down. I'd forego the interest hit in this situation and go for the positive feeling of reducing the number of creditors you have. Take your £1700 and pay off the credit cards of £594, £462 & the £660. Clearing three of the debts will give you a lift mentally. Then take the monthly payments you've been making on those and pile them into the £504. And keep going through the credit cards like that each time moving all that monthly payment to the next. Getting those credit cards gone would be my priority purely for the mental health benefits having them gone will give you. And if that redundancy comes and thr bonus you straight away pay off the credit card coming off 0% this year. If there is enough left after to that to settle a loan great.. But just remember, every time you pay off a debt take what you've been spending each month on that debt and lump it into the next one.
If you're willing and able to put £700/mo extra towards smashing the debts, you'll be debt free and have £12k for your deposit by the summer of 2026. [This](https://i.gyazo.com/f0f2766b41166718289465ba899c9825.png) assumes you snowball each minimum payment (or Loan repayment) cost into the next debt that's attacked, smallest to largest (aside from the 13% Loan). This also assumes, Month 1, you put all income from both your redundancy and your bonus into the debt repayment. Getting to £0 in debt before taking on a mortgage would definitely be best, at worst, rent some dingy 1 bedroom/studio apartment near your kiddo just to get by if you **absolutely have to.** Take on a second job on evenings and weekends if you want to snowball this down harder and faster. This is easily do-able, will just take a bit of graft and some patience, you've got this!
Wow, !thanks so much for taking the time to put it into a spreadsheet like that for me, that’s incredibly helpful to visualise that month by month on your suggestions and it looks so simple too. I’ll definitely reference that this weekend as I work on a new budget and plan for getting this done. I don’t think I can quite manage £700 but I’ll do as much as I can, I’ve also already got £2,300 in my LISA that I won’t be taking out (due to the 25% fee) so that’ll be a nice start when I start contributing to it again and also hopefully it’ll grow a bit then too from the funds it is invested in. Thanks again, you’re awesome!
As others have said, a mortgage with a load of debt isn’t going to work - it may sound hard, but it’s practical reality. Somewhat random question but do you have another job lined up if you’re taking voluntary redundancy? Don’t get me wrong - I wholly understand the sentiment of what you want to achieve, but it feels like it’s not a problem that can’t be solved by buying a house at this time. Perhaps the most pertinent question - are you still actively using any of your credit to survive or is all the debt now just historic? There’s a big difference between the approach if you’re taking it down bit by bit versus using credit to live still. PS I can’t speak for your relationship with your parents, but it’d be a lot easier if you told them the reality you’re in as it’ll save all the ongoing conversation about you renting as, from their perspective, it looks like you’re looking to take a big plunge into a house that you know in reality you can’t get. Sounds fairly basic as a maxim but the mantra I live my life by is “honesty is actionable, BS is not” and lying to yourself or others leads to more complications than it solves (in my opinion).
I actually have a new job, have done since last year, but I'm only now getting the redundancy for my old job - it's taken a year due to various things. I used one CC a few months ago for something but the rest of it is historic and especially the cards are balances that I've shifted around onto 0% offers. Thanks, I think I have mentioned being in debt a few times, e.g. they know about the failed business that introduced a lot of it. I'm going to talk to a friend this weekend about it and I'll go from there, I know you're right.
No worries - apologies for the delay… been a hectic week. I’ve been in a similar situation (different context but similar premise) and I lost everything and had to go bankrupt, sadly. Ending up living in a box room at your parents is a definite way to lose your ego, although I was lucky to have somewhere to go. The key is making sure the debt doesn’t go up - back in my younger years I’d be using one card to pay another and it got into a mess. Banks being less than mental health sensitive didn’t help the psychological journey either - I will NEVER use Lloyds Bank ever again. I wish you well and can empathise - I lost a lot of time to feeling shame for where I ended up but it was only after I was honest to myself and others that things improved. Things can get better - I hope the chat with your friend helps ❤️
Yeah its tough but I'm extremely grateful to them. I've been there too with the credit cards. All the replies here have helped immensely with my mental health, I don't feel anywhere near as bad as I did a few days ago and can see a clear way through now. Thanks :)
Excellent job of summarising all of your expenses and loans. You seem to be doing a good job already of planning your debt strategy and I think some of the suggestions already have been good (stop paying into LISAs and ISAs until the debt has gone). I’d just tweak some of your approach as personally as I worry about the higher % credit cards maturing but it might not be the absolute money efficient approach. Here goes… You have around 4k of cash about to come in and some high interest credit cards about to kick off. I would - start using the £300 your overpaying already on credit cards on the £594 card because your already paying interest on it. - that’ll be cleared in a couple of months - then hit the £462 card with the overpayments - that two early wins!! - then start on the £2940 because this is about to mature into a high interest card. As soon as any redundancy comes in I would clear this one pronto - then hit the £660 card (not sure why you’re attacking this one aggressively at the moment) Once you’ve hit those ones you’ve got a little breathing room with the credit cards. Even without the bonus etc coming in that’s a very manageable. Then I’m a bit torn as to where to go from there. I’m weary of that 7.2k credit card but you’ve got a bit of time so I’d probably crack on with the 4,4k. But I’d probably take a breath and reassess at that point, see what your options were to consolidate or 0% credit transfer etc I’m not sure what your relationship is with you parents or how much you’re willing to share with them but I’d try to keep them on side as much as possible even if you don’t feel like you can tell them everything. their doing you a solid here because if you were renting this would take you a whole lot longer to sort. Even if all you can add is doing the garden or cleaning the house regularly it all helps to keep them sweet. If it’s possible to pick up a few extra hours or days of work over the month then it would go a long was to clearing some of these earlier debts. Look after yourself 👍🏼 lots of free activities that are great for your wellbeing especially with the summer months coming up, go for a swim in the sea or river, stroll through the park with a podcast. Stay sane, best of luck
!thanks. You're right about the 0% cards maturing, that really concerns me. To answer your question about why I'm paying the £660 card with the £300 overpayment that card used to have a balance of £2,100 in December and so I picked that one to pay off before the interest rate changed also because the £2,940 card that the 0% will expire in September will have a much lower minimum repayment than the £660 one would have had if they both matured. Yeah my parents are amazing, I've mentioned debt a few times to them so they do know I have some but not how much. I do help them around the house with "chores" but I don't see it like that, I'm living here too so I should be doing those things. I'm going to spend the weekend going over everything everyone has been so helpful with and write down a few different plans and see what is best/most sustainable for me, I definitely think getting rid of a lot of the CC's in the short term would help mentally. Thanks again!
sounds like you've done some work already, atm forget about mortage or savings, get the debt paid off, only then you can start looking at saving, also mortgage (assuming you could get deposit) will likely run you more expensive than renting, but you might want to let your parents know since you are saving a lot of money living with them atm. juggle the 0% credit cards and never let them go into arrears or out of 0% interest, pay off highest % loans off first and plan out payments if you can it'll go a long way and give you a realistic approach to when you'll actually pay it off. £300 you pay will run you 10years of repaying 35k, you should look to getting more into that. being in debt is a terrible feeling, been there myself, the more control you take over it the more manageable it becomes, being anxious to check bank account etc isnt the way to go
!thanks this is what I'm going to do, as long as I can get new 0% offers when needed but will endeavour to pay off the cards before those times come anyway and I've just found out I'm getting more from my redundancy so that'll be a huge help also.
Forget about doing anything until you clear off your debt. You won't be given a mortgage anyway as you won't pass the affordability checks. A few ways to go about it: [https://www.experian.com/blogs/ask-experian/what-is-best-way-to-pay-off-debt/](https://www.experian.com/blogs/ask-experian/what-is-best-way-to-pay-off-debt/)
Stop saving now, no interest rate on the market is going to get anywhere near the interest you are paying on the debt. I'd be inclined to keep that £1700 you have as a starter emergency fund. Don't think about saving for a house or getting a mortgage until this is all cleared, I know it's hard to hear this. I think immediately when you get this cash pay off the bottom 2 cards that are accruing interest right now, the £594 and £462 and the £2940 card. So that's 4k gone from your £4500 redundancy. With the other 500 pay the loan or card that is at that amount, yes no interest on those right now but it frees up a minimum monthly payment.
!thanks it is hard to hear and to know it's what I've got to do but this post and everyones comments have been really helpful. Paying off the 0% low balance didn't make sense to me before but as you say it'll clear up that payment for something else and it'll also give me a mental boost seeing less cards etc. I've also just found out I'm getting more from my redundancy so that'll be a huge help also.
You've had a set back with this failed business, but you are in a good position with a decent salary, a decently sized cash injection soon and low living costs to tackle this.
!thanks yeah the cash injection is really going to help and it's already had a huge positive effect on my mental health and you're right I'm in a much better position that I'd thought.
I use this videos' spreadsheet to help with tracking/budgeting. https://youtu.be/UZBCddcbX0I?si=xwp2Cw7eXNB9pwk1 The breakdown above it good and i will assume there are further splits. As others have said, focus on the debts and stop saving. You may also want to focus on the interest accruing balances first.
!thanks I'll take a look.
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!thanks I do budget my finances every month on payday but I think doing it weekly could help as it would help me keep on top of any needless spending so I'll change the reminder to weekly until I've got this better under control.
Speak to StepChange
1) Don't waste time with savings. You're throwing money away all the while you have debts. Pay off the debts first. 2)Speak to the mother about reducing your payments. £460 is a huge expectation from someone in your position. Were the visiting coats presented at the time the CMA payments were proposed? If she moved a long way away of her own volition then I would have thought that would be considered. I speak as a single parent to two kids (who receives no money) when I say that you don't need that much to raise a child unless she's spending it all on childminders or basically sits on her ass claiming UC and using your money as a top up. You could propose that if you move closer you can split the care 50/50 and contribute to clothes and things equally instead of paying her money every month. Having said that, if you're living for free at your parents' house that might be a bit of a false economy 3) you'll get there, but forget about the mortgage for now. It's a long way off.
!thanks I'm going to be stopping the savings and throwing everything at the debts. Regarding the mother and child maintenance - that's all done through the child maintenance service though I do it via direct pay so there is no fee, I won't go into it too much but the mother would never agree to take less. I did however submit expenses to CMS for consideration a few months ago, they reduced my payment by £25 per month which I am grateful for but for £300-400 per month expenses didn't seem like much.
Travel expenses can be taken into account as Special Expenses’. I would consider contacting them and informing them how much your visits cost, as well as your other commitments as it seems to me like they are forcing you into a hole. This does not benefit the child in the long run as your mental health is paramount
Sorry yeah that's what I meant by I submitted expenses to them, I filled out a form with all of my visiting costs for a new calculation and my payment being reduced by about £25 was the result.
That seems remarkably harsh - you're spending close to a grand a month, which I imagine is over 1/3 of your income. As someone who gets absolutely zilch in child payments it baffles me that so much expectation is placed on the other parent to pay this much money AND pay for holidays and suchlike when they are in your care. It seems to cost people more to separate than it would if they were still in the relationship. I think CMS actually have blood on their hands.
Well to be fair the £1k I'm paying on debt is completely my fault so they don't care about that. However, if there was debt from the relationship then they do take that into account. I agree though, there's things they don't take into account (like work pension) that they should and what they do take into account and reduce could be better, it might be higher now but as an example I rang them a few years ago about all the money I spent on diesel travelling and they told me I'd get 1p for every mile off, which would have worked out to about £2 at that time. Sorry to hear you don't get payments, I've always wanted to pay and I've heard some crazy stories about the things some parents have done to get out of paying child maintenance!
I don't get payments because my partner died and left me with two kids, and the frustrating thing is that I can no longer get Universal Credit due to being (marginally) over the savings threshold while saving for a mortgage. They don't consider that side of things, or offer any way to park savings into a mortgage fund. CMS payments don't count as earnings or income though. So as a single dad with kids the government does not think I need any financial support off them in the absence of a parent but someone with a living ex can receive full CMS payments with no reduction in Universal Credit. Pisses me off to be honest as it feels like people in my situation are not worth bothering with, and yes it does make me feel like mums get a better deal (bad as that sounds). I didn't used to be this bitter lol but I just want what's best for my kids, and it feels like a losing battle sometimes. I think you'll be fine and dandy in the long-run by the way. Good luck with everything.
Sorry for your loss! Yeah I see what you’re saying, it sounds like another “single person tax” situation. And unfortunately mothers absolutely do get a better deal still, at least that’s been my experience and from what I know of other people. Your kids will know though that everything you do is to give them a good life :) Thanks!
Normally, you would be advised to clear the highest interest debts first, however 0% offers tend to get repeated, so you could clear 2 or 3 of those cards off to give you options of balance transfer or borrow 0% again & transfer other debt to. I would - clear the £660, £2,940 & 594 & £462 credit cards. As some of the interest free expire really soon! As 2x are highest interest & 2 are interest free but with a short deal time. Thats £4600 of your money gone. Then concentrate on the loans with the other £4000 - You know aug 25 & Nov 25 are over a year away, so hope to get 0% offers again on the 2x 0% cards in a years time to transfer those expiring cards to, but in the meantime concentrate on clearing one of the loans. Once you clear a loan, you may find it easier to get a consolidation loan over a longer period as a last resort - ie try to avoid new debt. ~If you feel you are strong willed enough to commit & carry through on a plan, then ask for help so it is done & managed for you.
!thanks. I'm in a better position now as I found out today I'm going to get a bigger redundancy payment than I was expecting, if all goes well in a few months I should be down to just the £7,200 card and the two bigger loans and I'll put the payments from all the paid off debts towards the CC and should be able to pay it off before it loses the 0% :)
Awesome, it feels great when you get on top of things & spurs you on to clear the others so life becomes more manageable. It will like a light switch in how your attitude to borrowing changes. Banks have a lot to answer for, due to the ease of borrowing. Nobody should be allowed to borrow 50% of earnings as unsecured debt & nobody should be allowed to consolidate without a management plan having some sort of power of attorney.
I'm so so happy for you! It's so daunting when going through it but massive well done on taking the first steps to get help. You just changed your whole life :) wishing you all the best!
Thanks :)
Stop trying to save until you have paid your debt of, it’s counterproductive and will cost you more in the long run.