Not working, having children, spending as if I’m still bringing home a decent income… these things have left me in a mess.
Financially, things are not good. Ha!
That’s OK, because I’ve been here before.
After completing my second degree, over 10 years ago now, I took a programming job which meant a move across the UK. My salary at the time was less than my monthly outgoings. I had to rent a flat AND buy a car, and I had a huge student loan to pay off. In the first six months I had to supplement my income with credit cards, simply so that I could make ends meet (I wouldn’t advise this).
Luckily, my job prospects were good, and payrises and bonuses meant that within a year I could actually live within my means. Three years later, not only had I cleared every debt, including my student debt, but I’d also saved enough for a house deposit with the husband (then boyfriend).
I vowed I would never get into debt again.
But that was before motherhood and the transition to being a stay at home mum (something I never even imagined I would do).
So, after keeping my head in the sand for the best part of 4.5 years, I’ve finally taken stock.
I owe, today, £5786.06.
One of my 12 goals is to pay this off within 5 years, which means a monthly commitment to at least £96.44 each month towards my debt. That’s almost double what I currently pay back.
Initial problems are that:
a) I’m also paying around £25pcm in overdraft charges. This is £300 a year. I know this figure will reduce as I reduce my overdraft, but by shifting this debt onto a long term 0% credit card, the transfer fee (<£100) will easily beat the overdraft charges, and leave me with more available cash. I’ve made an application, but for the first time in my life I am not sure if I will be accepted. Having to put “homemaker” in the employment field doesn’t fill me with confidence. So, we shall see.
b) Aside from my massive overdraft, I have one other credit card, which actually contains the debt from some work we had done on the house last year. This has been at a 0% rate for 18 months, but runs out in July. This is bad news, as I’m not sure if I can obtain another card to shift this debt to (see above).
So, action points:
- Wait for card application result (not hopeful, as these things are usually instant).
- Either shift debt around, or replan budget.
- Finish monthly budget and consider withdrawing cash at the start of each week rather than using cards.
- Set up payments to meet at least the minimum repayments.
- Start selling on ebay!
- Commit to a monthly summary, to track debt reduction.