Any ideas

tesuhoha

I just wondered if any of you have any ideas how we could improve our finances and decrease our debt. Its a bit messy.

Debt (caused by ~School fees
Buying a BTL flat and getting lumbered with £5,000 roof bill for dry rot, plus selling the flat last year for only £5000 more than we bought it. (did not break even on it)
Going on foreign holidays
Doing up this house to sell)

Current debt

M&S Money £3450 0% apr for next 5 months
LLoyds £5500 0% apr till Aug
Barclaycard £1170 0% till Aug
Citi £3294 0% running out. Paying off this month with egg money.
Capital 1 £3919 0% till Aug
Virgin £0.11 (paying off with difficulty!)
Nationwide £566.39 (not really a debt because i pay this off each month.
DHs petrol card. High amount due to purchase of
router for my laptop)

Total £178995

Also have £9400 out with Egg Card but that is resting in my A&L savings account gathering interest (more about this in a moment) anniversary offer

Monthly Outgoings

Son
School fees £1115 pm (finishing June - 2 payments to go)
Bus fares £40
Allowance £50
Rock concerts £10 (approx)
£10
Total £1225

Daughter
University rent £300
Uni fees £90 approx
contact lenses £19.99
mobile £25 (present of new 02 contract at Christmas)
Isa account £20
(dont want to cut down on this, dont want her to start off life in debt)
Total £454.99 . She is doing Chemistry and cant cope with a job most of the time cos of intensive studies but last summer she had 3 jobs and paid her own way through 1st term.
Mortgage
£668
Council Tax £100
Food £400 (including beer & wine) am working on this but shopping on line at tescos and getting vouchers will go long way towards serious money off new MFI kitchen for new house
Van loan £169.10
Electricity £45 no point changing deal till we move
Gas £43 (am owed £500+ to be refunded when we move)
Water rate £40
TV licence dd £11
Telewest package, landline phone, broadband and tv £50 - £60
Petrol approx £260 (thats for the 2 of us)
cc payments £500-£600
Total £2396.10

Total outgoings £4076.09 (Oh my goodness gracious me!!!!! First time ive added it up and that doesnt include any other bits and pieces)

Income (never fixed so hard to budget) OH anything between £1850 & £4440, usually somewhere in between
me £850-£900 depending on extra duties
family allowance £67 (saving this for christmas plus £32 pm oh i didnt mention that)

We are moving in near future due to reasons outlined in thread, What Caused Your Debt in the First Place. We are moving to an old house in a very good area. Our debt will go up because OH asked for £4000ish less than we need as he plans to take it from the Egg money resting in our account. Also we are going to put up extension in new house because identical others in the same street with extensions are going for £60k more than we are paying. This cannot wait as no improvements can take place without it and house in terrible state. OH plans to carry out all work himself but it will still cost around £30k especially if we have loft extension too. Not bad in the scheme of things but will increase debt greatly. We aim to borrow approx £7500 in a loan to start off extension. Would take too long to save and pay off debt entirely. Am still dedicated to paying off debt (cant stand it but cannot live in dog kennel for long period either) and am wondering if there is any clever way i can do this, anything better i can do. Will have slightly more money in June when school fees cease but new monthly payment on mortgage will be £900+. Wondering whether to pay off certain amount of debt and dedicate certain amount to do house up gradually. Daughter still has 2 more years at uni after this 1. Dont know if son will go. Am claiming back bank charges of £525, just written 2nd letter. Thank you in advance for any help.

Bestthingsinlifearefree

Hi Tesuhoha,

Hope you are well. I have just about recovered from the interesting debate on Friday about education !!!! Almost got blisters on my fingers typing so much.

Why do you have to move ?

Surely once you finish paying the school fees in June you will have 1K spare each month to throw at your debts, you can stay where you are and pay of all your debts in 17 months maximum (and if you snowball probably sooner than that). Problem solved.

Or am I missing something??????

Broken_hearted

I think your daughter is old enough to support herself. I worked when I was at uni and still passed. She needs to learn about money and the real world.

tesuhoha

Ive written about it in detail in that thread, the problems weve been having in this area. We were going to stay here and do what you say but the area is going down and when we were offered the full price of this house we decided to get out while we could. If the housing market drops away again we'll be trapped here because no one could sell at all in this area last year.

tesuhoha

Plus the house we are buying, they dont come up very often in that condition and we can make some money on it.

MrsTinks

I'm sorry but I am likely to come across a tad harsh here... You pay HOW much towards your kids and their education????? I went to a very good school which cost my parents £2500 a year (same for my brother) but at the time we could afford it. Ok your son only has 2 months to go so I guess leaving now would be foolish especially for his education. Your daughter may have intensive studies and you don't want her ending up in debt... well a little debt isn't a bad thing, chances are this will help her appreciate money better, not just now but in later life too. Anyway I appologise but it's a bit of a hobby horse of mine and feel free to ignore me

I have to say I think all this house moving and repairing and so on is very very foolish you are working with a pretty volatile market (the price depends on how much people are willing to pay for it ultimately) and you are having to throw a lot of money at it to see any return. If it is not too late I would either pull out of the house purchase and move or think about moving into rented for a year and throw ALL your spare money at your debts. If you manage to get it right then you might even end up with a fair amount of spare capital to throw at your next project.

I just think you are continuing to add to your debts at the moment instead of really trying to reduce them. Please don't take this the wrong way but I am not seeing a lightbulb moment yet, sorry

MrsTinks

tesuhoha wrote:

Plus the house we are buying, they dont come up very often in that condition and we can make some money on it.

No you MIGHT make some money on it... what about if the housing market crashes? The house has subsidence? Woodworm? More dryrot?

kar

Your son failed his GCSE's and you are paying a fortune for him to go to college and he still gets £50 pm 'allowance' and still pay for his rock concerts too!!!!!!!!!!Why on earth can't he pay for the concerts, what else does he waste that amount of money on a month.

Why does your daughter need £20 a month in an ISA. Not having savings doesn't make her in debt.

PS I'm in the final year of my Chemistry degree (should be writing my project up now but that's another story) and I still manage to work (only 8 hours a week but still it's something) and I'm on target for getting a first class degree. Intensive studies really sounds like an excuse to me especially if shes not in her final year.

Sounds like they are both taking you for as much as they can get to me.

JAMIEDODGER

totally agree with tine im afraid. if you HAVE to move, then rent for a while and put all your efforts into paying off your debt, as youve mentioned before...your DH works very hard and is allready unwell, doing up another house will be more stress for him. ok so you only have 2 months more to pay for your sons fees....plus bus fares, but allowance, rock concerts etc???? tell him to get a part time job. apart from your contribution to your daughters uni fees, she should be supporting herself, children need to learn discipline and hardwork and it is good for them.

i would say, sell up, rent for now, pay off debt, and get on the os board and reduce that shopping bill. i feed me and 4 kids for £40 per week and we eat very well.

Bestthingsinlifearefree

HI Tesuhola,

I can fully understand that if you live in a not so nice area you want to move to a nicer area.

But is there any reason why you feel your area is going down dramatically and need to move ASAP.

(i.e most areas tend to stay the same ish ie a rough estate 5 years ago is usually a rough estate now and a ok area is usually still ok).

If you really want out of the area this is my advice:

Sell the house, rent a property in an area you are happy with (the rent will probably be the same or less than your mortgage).

Put the money from selling your house into the highest possible interest paying account(DO NOT touch it)

Use the 1K saved from the school fees to pay of your 17K debt (by snow balling might only take a year or so).

Then you will be debt free, have a massive deposit for your new house purchase (from the sale of your current house) and as a chain free buyer you will be in a strong negotiating position.

These are your your best 2 choices (in my humble opinion)

1) stay where you are and use the 1K per month free from the school fees June to be debt free in a year and THEN look to move.

2)If you feel you must get out the area / take the offer on the house. Then rent for a while and pay of your debts with the money from the school fees (build your deposit etc)


To follow your current plan of borrowing 30K to build an extention on a new house,increase your mortgage to £900 pcm etc. Is financial madness, you are getting into a whole load of new debt and stress)

You have not had your light bulb moment.

The extension may add value to the house but you will STILL have the debt and if you try to do up the house to sell it on. If houseprices slip back you will still have the debt and a bigger mortgage and be unable to sell it off to pay it off.

Taking on more debt to get out of debt etc is NOT the way forward.

Please for your families financial security follow option one or two. There is no need to to take on fresh debt no matter how great the renovation plan seems.

Do you want to be debt free in 12 - 15 months or take on a load of new debt on a extension / building gamble that could well not work ? (remember the buy to let that seemed a good idea to)

The choice is yours.

Sorry to rattle on about it but I hate to see some one go and make a massive financial mistake (in my opinion).

Well I have had my say. I can not do no more than that.

Good Luck.

wooble

Also you say that your husband works silly hours self employed but he is going to do the renovation himself? therefore he will have no wages coming in during this time.

I apologise if I have got my wires crossed as i have been reading lots on here today.