To sell or not to sell,,,Outgoings are too high

Zaffy_2

Hello everyone newbie Zaffy here,
hope this is in the correct section, there are so many !!??.

My wife and I have a dilema and are hoping you guys could give us advice, this posting will be long winded but please bear with me.

Ive recently lost my part-time job so our income has reduced by about £250 a month and my wife has had to drop a day so she's lost about £250 a month too,
So now I earn £1000 and she earns £1300 and with £125 child benifit for our two little-uns we have an income of £2425 per month take home,

However our outgoings are £2950 per month!!!- a massive £525pm short!!,
we have been sbbing the outgoings by using our savings however I cant seem to get a second job at the moment so our savings are getting depleted

I cannot see anyway to make any impact on reducing our outgoings,
The main onces are,
1/£650, Mortgage, Halifax £117k/28yrs remaining.
2/£230, Loan, Abbey £14k/7yrs remaining.
3/£50, Credit Card, Virgin £4600 remaining, interest free until end of year.
4/£50, Credit Card, Virgin 4500 remaining, interest free until end of year.
5/£450, Childminders, Cannot change, so have to live with this cost.

The rest is usual monthly household running costs,
We dont drink or smoke but due to where we live and the childminders and the school and our works we really have to have two cars.

My idea was to sell our home which would (in this poor market) bring in about £150000 and rent for a few years as we would then be able to pay off the debts and be left with about £10000 (which we could save/invest) and we would rent a suitable home exactly where we would like to live for £600pm for a few years,
Doing this and paying off our debts would bring our outgoing down to about £2400-£2500pm/within budget.

However my wife says this is bad as we would never be able to get back on the property ladder again, So I feel like "we are stuck between the rock and the hard place".
I understand where my wife is coming from but I'm concerned that we may end up "going over the edge" and we need to avoid that.
I could post more info/figures but I'm concerned you'll already be bored.

Dont know what else to tell you all but if someone could give is advice or views they would all be greatfully recieved.

Regards Zaffy

jonesMUFCforever

A full statement of affairs is what I would suggest.
Write down every single penny you spend every month and then go on the debt free wannabe board with this information.

JMW77

Hi,Is your property likely to sell is it in a popular area ,lots of sellers are finding it difficult to sell unless they take offers well below market value and it is a buyers market if you value your house in the current market at £150,000 you will recieve offers of 120k to 130k unless it has the X factor.

Is there no way you can try to reduce your childcare costs are your children school age ?

Zaffy_2

Hi there thanks for the replies,
Our house is worth £150k in this market and sadly there is no way to reduce our childcare.
I will get some figures sorted for the debt free wannabe board and then put them on this thread too.
More advice please if possible.

thanks so far.

Zaffy

tyllwyd

Do you claim child tax credit?

Zaffy_2

Hi ya mate yes we do get tax credits but this will go down to £42 per month in July as youngest will be 12 months.

Zaffy

Becles

Look at all your other outgoings - not just the debts. Is there anything unecessary you can cancel - gym membership, magazine subs, DVD rental club etc.

Have a look at your utility bills and see if you can get cheaper from other suppliers. Cut down where you can on gas/electric/phone/broadband use.

Have a look at your food costs. You can probably make savings there by eating more frugally. Try buying supermarket own label/value brands or shopping at discounter supermarkets like Aldi/Lidl, look out for "yellow sticker" bargains, stock up when things are on special offer. See the old style board for tips on cooking cheap meals.

Look at other outgoings you spend regular and can cut out on - take your own food and drink to work, stop buying newspapers, cut back on going to the pub/cinema/eating out - that kind of thing.

See if you can cut costs that way and stay in your home first, and only go for selling if there really is no way else.

firesidemaid

if the childcare costs are £450 a month and then there is the 2nd car costs associated with this etc - would it be just as cheap/cheaper to reduce hours etc ie. would you then get more tax credits etc?

if you are able to do extra work, would you work anywhere ie. pub, restaurant/fast food place/supermarket etc - preferably something that doesn't add to your petrol bill that much and may have free or cheap food on offer as a bonus?

have you thought about going interest-only or taking a mortgage break?

if you have debts, do you have things that you have bought that you can sell on ebay etc? it is amazing what you can sell.

if this is your first time on here do conside doing a full list of incomings and outgoings, including everything - even annual costs worked out monthly.

c0rneL

Hi, do any of your employers offer childcare vouchers(i.e busy bees )? if so; Are you aware that you can save a lot of money by not paying NI and tax on what you pay childminders. I pay my childminder using childcare vouchers ( is around 25% cheaper- because of the tax, etc)

Zaffy_2

Yes my employer does them and thankfully my wifes employer is now starting the scheme so we are going to do £200 through her wages too so that will help a little.

My other point too is that we are about £500 short each month so the savings to enable us to stay where we are need to be rather big.
I am wondering if I could get a better Mortgage deal??

Thanks again so far everyone, keep em coming.

Regards Zaffy.

tyllwyd

You haven't given enough information for anyone to begin to suggest where you could save £500 per month (and to be honest, that is a large amount to be short).

Have a look at the SOA calculator (ie the budget template) on the makesenseofcards website. That's the one that most people on the debtfreewanabee board use, and it is pretty comprehensive. That might flag up areas where you could save.

Then talk to one of the of the debt advice charities - CCCS have a debt remedy questionnaire. If increasing your income & cutting down expenditure won't work, the questionnaire will help you see if you need to consider a debt management plan, IVA or bankruptcy.

Using the equity in your house is another option, but it does depend on £150K being a realistic figure, and obviously paying legal fees, removal costs and all the rest is going to eat into your equity. I think you need to get together all the figures & information on all your options before you rush into a decision.