Should I sell or can I budget?

EdInvestor

Hello whambamboo

whambamboo wrote:

I went to Greece last year, 2 adults + 1 chld. We got a bargain deal for about £200ish. The whole thing cost little more than £1000 for a week, including food, drinks, etc. while we were there....I probably spend more than that (£541 ) on food, but I spend less than half of my monthly income every month, but if I was short of cash, it's not hard, I'd stop buying champagne and trappist ales, stick to cheap bottled lager, stop buying fine sirloin steaks and duck breasts, and buy cheaper stuff...

....FWIW, I spent £850 in rent and used to spend about another £850 on top of that, with one child, and probably one exotic long-haul holiday every 18 months and a short break to Europe as well. This was living a fairly reasonable middle class lifestyle at the time...

...while we just bought a nice Royal Doulton china set, I hadn't bought it previously despite having admired it, because I thought £140 for 4 people was too much, but at half price I snapped it up.

Now I see why you hate high house prices so much.Paying a modern mortgage would really interfere with your luxury lifestyle, wouldn't it?Quite something for someone who claims to be only 24 years old.:rotfl:

sm9ai

EdInvestor wrote:

Now I see why you hate high house prices so much.Paying a modern mortgage would really interfere with your luxury lifestyle, wouldn't it?Quite something for someone who claims to be only 24 years old.:rotfl:

Paying a modern mortgage would interfere with any lifestyle.

whambamboo

EdInvestor wrote:

Hello whambamboo





Now I see why you hate high house prices so much.Paying a modern mortgage would really interfere with your luxury lifestyle, wouldn't it?Quite something for someone who claims to be only 24 years old.:rotfl:

what are you talking about???? Are you saying I'm not 24? I don't know why you would think that, it's hard to tell from someone's writing on the internet.

Are you being sarcastic about my "luxury lifestyle"???? I'm not sure whether you are being sarcastic that it is not luxury at all.

I don't have a luxury lifestyle: I am fortunate enough to be earning >£10k/month, but I don't see the need to spend it on crap in general, I'm not about to take a holiday in an Aman resort at $650/night, because it's a waste of money, and you can get *very* nice hotels in these destinations for no more than $100. I'm also not going to take my family on business class flights at £2k/each, as I don't think it offers value for 10 hours of my life. We do eat well, but I still drive a 1997 model car worth less than £1,000 because it works, I can't be bothered to 'upgrade, and I see no reason to get a new one to impress the neighbours.

I could pay a £3k/month mortgage out of my income rather than the £1.1k/month rent I pay, but I think it is risky in terms of house prices: the repayments are not the issue, the potential loss of capital value is. Nobody wants to take a £100,000 loss on a house, as is happening currently in the US.

Up to about 18 months ago I had a net income of not much over £2k/month, and I probably spent about £1800/month, now I have a lot more, and I guess I spend £2500/month.



I'm not sure what the point of your post was; I was trying to explain that I managed to pay off about £7k in debt over 1 year, and over 2.5 years take a 1-month trip to the Far East, as well as three short trips to Europe, on an income of £30-£40k. I no longer bother to record my income & expenditure as I used to, as I'm never going to spend more than my income for any given month, but I'm still not about to book a brochure holiday or buy overpriced stuff: I'm off to the West Coast of the USA next week, and I got the flights for about half the usual rate by signing up for Virgin miles: ditto the hotels came much below the usual rate. We'll probably go away over Christmas too, but I'm still too cheap to pay full price.

gingin_2

careless wrote:

Ok I'm going personal...bear with me for the house bit.

I am married with 3 children. I run 1 car. I am trying to work out a budget using Martin's plan.
After monthly direct debits, I have £1781 left to pay for food (£541), diesel (£160) children's activities (£175 all in), holidays(£250), Christmas (£150), birthdays (£80), clothes (£100), car tax/insurance (£45), doing up the house (endless) odds and sods(varies) and fun (no money left for this!!). I am always skint yet I think nearly 2K should be plenty.
What am I doing wrong?
The upshot is that I may sell up to lower my mortgage and have more left after direct debits but should I have to or am I just planning it all wrong?

Please be as blunt as you like - I'm so stressed I've lost all sense of perspective. I can't believe I can't manage on nearly 2K after monthly bills.

Wow! I am going to be blunt (you asked!). I can't believe how much money you waste on unnecessary items.

£541 on food is huge (is that £125 a week?). Without trying, I am convinced you can get that down to £100 per week and £75 should be no problem after a while. Try shopping online, I use Tesco's once every 3-4 weeks, they bring everything I need and I try and only pop out for fruit, veg and milk inbetween.

£3000 on holidays a year, I am stunned! We just had a beautiful holiday in Spain during the summer break £475 for a villa with a pool, and £700 fpr flights for 4 of us. Add on an extra flight for child no.3 that is a family holiday for 5 for under £1400, all booked by myself to get the cost as low as possible.

We like a weekend break too, if you shopped at Tesco's wisely you could have got that break to London for free. There are plenty of offers on herefor clubcard points, 1000 points for a £75 online shop gives you £40 to spend on points at Hilton hotels and London various attractions including restaurants, so for 10 online shops amounting to £750 in total with the appropriate clubcard vouchers (found on this site) you could have had £400 to put towards your London trip, more if you wanted to! We are taking the kids for a weekend to Legoland Windsor in the half term, decent hotel included, courtesy of Mr T's!

£1400 on Christmas is still too expensive. Write a list of everything you will be spending and cross off all the unnecessary items. There are some brilliant threads on here about low cost gift ideas for family and friends. £200 is ridiculous, really what do you buy them that amounts to that and is well utilised? I would rather see my money in my bank balance than lying on my children's bedroom floor.

You talk about selling up to get a lower mortgage, but if you carry on spending the way you are in 5 years time you will be in the same situation again just with less equity. You really need to do some hard budgeting and be strict otherwise you are going to get yourself in a real financial mess.

whambamboo

sm9ai wrote:

Paying a modern mortgage would interfere with any lifestyle.

Agreed. Ed is making out that not paying a mortgage is something to be ashamed of, or alternatively that paying one is something that marks one out as superior to one's peers.

I love the euphemism 'modern mortgage', it's great - in this case modern = twice as expensive as an 'old-fashioned' mortgage, and 50% more expensive than renting.....

Yep, a modern mortgage sounds like a great [strike]millstone[/strike] milestone in anyone's life.

careless

Well - where shall I start! First by thanking you for taking the trouble to reply. Overall, I have got the perspective that I asked for i.e. that it IS possible to manage the money and have the things we want if we do it properly, so thank you all for that.

Specifics:

Gingin - yes £125 is my budget for food. I have 3 teenage boys with hollow legs. For the last 6 months I have been shopping online at Tesco. I hadn't thought about the clubcard deals, though, so that's brilliant advice:T
I go through my favourites and then look at my basket to get rid of anything I can to bring the total down. I aim for £85 to have money left for the butcher (about £20 every 2 to 3 weeks - free range and I won't eat any if it's not free range). There are always a few bits and pieces that we run out of and we may have chippy chips one night a fortnight. All cosmetic/medicine/ cleaning stuff etc comes out of that budget too.
I am aiming for £100. I'll go to Old Style as Hex2 suggested for tips, though, as I've said before, bottled pasta sauce is the nearest I get to a ready meal.

If booking things yourself gets that kind of price, I'll go for that but keep in mind that we usually go camping in Devon (and twice to France) so it'll be a steep learning curve. Fab to know that it's possible, though. We haven't had the break or hols yet. We are hoping to budget for them and picked a figure out of the air to know what we need to put away each month. These are educated guess figures as, up to now, we've just spent what's in the current account and made no budgets at all (I KNOW!!!:o )

Your last point is exactly what we've been thinking which is why we've decided to start some financial planning.

Sm9ai - the diesel cost is based on Microsoft Money records of what we have been spending and we've guestimated an additional amount because I am starting a second job soon. I hope I have overestimated but time will tell. As it's our only car, it's a people carrier, which we need to take 5 and camping gear on holiday. I hope from your figures that we have overestimated the cost.

Clothes - for me M+S and charity shops. I buy what I like rather than what's in fashion and wear it for years. I really don't think we spend much on clothes. The lads do the hand me down thing. It's the shoes. We all have tricky feet and go to the Clarkes outlet shop for shoes and trainers.

Prudent - all your tips are fab. You are an :A If this was my class, you'd have a sackful of house points!

Clutton - yes we did this in the spring and will do it next spring too. Thanks.

careless

careless wrote:

Ok I'm going personal...bear with me for the house bit.

I am married with 3 children. I run 1 car. I am trying to work out a budget using Martin's plan.
After monthly direct debits, I have £1781 left to pay for food (£541), diesel (£160) children's activities (£175 all in), holidays(£250), Christmas (£150), birthdays (£80), clothes (£100), car tax/insurance (£45), doing up the house (endless) odds and sods(varies) and fun (no money left for this!!). I am always skint yet I think nearly 2K should be plenty.
What am I doing wrong?
The upshot is that I may sell up to lower my mortgage and have more left after direct debits but should I have to or am I just planning it all wrong?

Please be as blunt as you like - I'm so stressed I've lost all sense of perspective. I can't believe I can't manage on nearly 2K after monthly bills.

So now we are looking at Food and supermarket stuff £475, Christmas £100 (to include every tiny little thing) and reassess the diesel when I know my new mileage. This saves £116 each month without cutting into priorites like holidays and birthdays (ie fun). It should be relatively painless and I'm sure we'll be able to go further following Prudent's advice too.

Thanks so much for all your advice. After Jamie Oliver has had his moment of fame, maybe Martin could crusade for financial stuff to be given a leg up in schools. We'd all learn a valuable lesson - even the teachers!;)

whambamboo

careless wrote:

So now we are looking at Food and supermarket stuff £475, Christmas £100 (to include every tiny little thing) and reassess the diesel when I know my new mileage. This saves £116 each month without cutting into priorites like holidays and birthdays (ie fun). It should be relatively painless and I'm sure we'll be able to go further following Prudent's advice too.

Thanks so much for all your advice. After Jamie Oliver has had his moment of fame, maybe Martin could crusade for financial stuff to be given a leg up in schools. We'd all learn a valuable lesson - even the teachers!;)

My parents taught me about fiscal prudence :-)

My dad never did and still doesn't park in a pay-for car park. Why pay £2/hr when you can park on a side road for free? I follow suit. He also *never* buys lunch at work, always brings one from home. He is also very fussy about getting tap water in restaurants, and generally disliked wasting money. So despite only one relatively moderate (sub £40k income), and always had a fairly comfortable lifestye, my parents have a several UK holidays per year, and a nice detached bungalow in Surrey, and also a good final salary pension coming up.

I think by not wasting all your money on crap you will have forgotten about in 10 minutes you save a huge amount of money.

sm9ai

whambamboo wrote:

I am fortunate enough to be earning >£10k/month, but I don't see the need to spend it on crap in general.

Hmm, I need a change of career. What do you do to get paid like that?

careless

Awopbopaloobop?