"Simply not solvent!

CLAPTON

a few suggestions

a. income...work out an average for your income over the last 6 or 12 months and plan your spending on the average and not the actual received in any month. work out a new average each month so systemetic changes in income are recognised.
if your income one month is higher than average save the money so you can drip feed it back when you need it in the months with lower than average income.

b. save the tax and NI amounts each month and dont wait until you need them and simply put them on debt.

c. stop spending on CC...if you haven't got it then dont spend it.

d. with a car and a house you need a emergency fund so if the car need a new tyre or the house needs some urgent repairs .. think in terms of builing up at least 1,000

e. after deducting these amounts then your spending budget has to be based on whats left.

f. spending

phone : BT option 1 at 11 per month, lots of broadband at 15 (e.g.Tiscali) use call1899.com or call18185.co.uk ...these give landline calls at 3/4p per call (not per minute) and cheap calls to mobiles....should be able to reduce your phone bill to 30-35per momth

mortgage term insurance is huge...are you sure this isnt alway some sort of saving scheme..anyway should be able to reduce this to less than 50

g. start a spending diary to see what you really spend.
some things like clothes seems unrealistically low and you make no provision for car servicing or breakdown.

h. if you rework your budget taking into acccount the above i would suspect that you are simply not really solvent .

i. can your OH get a permanent job....work out his actual average income and see whether it makes sense to continue with his freeelance life.

similarly with yourself ... what do you really earn in a year ...would you be better off working at a permanent job.

j. you seem to have taken out a loan for 27,000 a year ago and another loan of 6,000 0nly a month ago...why is this? what happened to the 27k that required an extra 6k only a month ago.?

k. how much is the house worth and how much is the mortgage?

hypno06

another thought regarding the life insurance/mortgage insurance, if you took out a life insurance policy for, say, £250k, this would cover all the debts and mortgage in the case of the death of either of you, and would cost you less than half what you are paying at the moment.

Seaxwyn

Thanks Hypno - great to know there's another freelancer out there,thanks for the encouragement.

I will definitely shop around for cheaper life insurance, I don't know why I didn't think of this before.

Clapton - thanks - lots of wise points and yes it's very sobering. My earnings last year were 29k and partner's 4k. He hasn't earned much more than that since 1997.

I'm confident that freelancing is the best option for me - the 29k was based on very part-time working, based at home. If I got a job paying the same it would be full-time and involve an expensive commute. For OH - this is the big question. I don't know if he's employable, aged 57 with experience in a now redundant field. Certainly he hasn't had any luck in the last few months, except for the two part-time driving jobs he has. He has now got 18 days teaching work booked. I hope this is something he can build on.

25k loan was for an extension - we built a new bedroom and bathroom onto our house. This was sheer madness. The 4k loan (6k includes interest over the 5 years) OH took to clear his overdraft. This was against my advice.

The only good thing is that we don't spend on the credit cards - I was living on them for food and rail fares but have spent nothing since March I think.

The suggestion about working out an average income is good. My ave income for the first six months of last year was 2334.66 (excluding child tax credit). It was much lower for the last six months because of the part-time job. I can earn more than this if I put my mind to it.

Our house is worth probably 280k (would need some money spent on it though as quite shabby), mortgage is 153k. I really don't want to sell it though as the children are very settled and happy and we wouldn't get anything cheaper in this area.

Thanks for all your advice, this is really thought-provoking. I had perhaps been falsely optimistic so appreciate the reality check.

CLAPTON

i think that income is the key to your situation ....

could OH look at things like B&Q, TESCO (or other supermarkets)...all these seem to be very willing to employ older people and dont require specific experience and even if the pay isn't fantastic its good regular income with overetime opportunities.

Annie_Fanny

Seaxwyn wrote:

Our house is worth probably 280k (would need some money spent on it though as quite shabby), mortgage is 153k. I really don't want to sell it though as the children are very settled and happy and we wouldn't get anything cheaper in this area.

Could you investigate selling the house? You are only paying the interest on your mortgage after all? When could you feasibly see yourself paying off the capital? Surely using the profit to pay off ALL of your debts would make you and your husband feel more settled and happy? Your children I am sure would be delighted to have less stressed parents.

I think you should look into this option as it seems to be glaringly obvious where the quickest solution lies...

Hope this message isn't too harsh!

Good luck with everything.

Annie

Seaxwyn

HI Annie

I know it is glaringly obvious but I really don't want to do it! This house is ideally located for us and we'd never get anything as suitable nearby.

I've been playing with the Snowball Calculator and really hope that we can pay off the credit cards in five years. Once these and the dreaded loans are gone we can then pay much more off the capital.

I'd rather give it six months of seeing if we can't massively increase our earnings. I've just showed my OH the Snowball Calculator and he was visibly impressed. He's been depressed and earning next to nothing for a number of years but I really think he's turned the corner so would rather wait to see if this is true before doing anything drastic.

I plan to post regular updates here so I trust you and others will tell me if I am really deluded.

Thanks again

Seaxwyn

hypno06

Have you included all your loans etc in the snowball calculator as well as the credit cards?

Might as well get the whole picture while you are at it!

Seaxwyn

I didn't include the loans as they have their set finishing dates (although I'm going to deal with the smaller one quicker, I'm determined).

Didn't include the loan to my dad as he really doesn't want us to pay it back until we can afford it. He has just offered to lend my brother a similar amount on the same terms so I am satisfied that he doesn't need the money just now.

I have a few ideas for making bigger inroads into the debt including getting back six months worth of pension contributions I've made, and OH reclaiming his bank charges. So I hope that as 2007 rolls along the picture will look less bleak.

Just being nosy, how did you pay the 50k off yours? That is dead impressive.

hypno06

Sadly I lost my Dad and I received a lump sum from his estate which I used to pay off a chunk of the debt. That really was my lightbulb moment as it made me realise I only have one chance at this life and I have to make the most of it. At the same time I chucked in my "safe" career and retrained, becoming self employed at Easter for the same reason.

So, I feel that I owe it to my Dad to continue battering those debts down and to become debt free as soon as possible in order that what he left me is not wasted. For that very reason I cannot do IVA etc because he would have seen it as a failure, so the only answer for me is to build on the start that he gave me.

Having said that, we do work really hard to keep reducing it - we have beans on toast weeks, egg weeks and pasta weeks, work second jobs, have a student lodger etc etc. I am so determined to make this work. I want my Dad to be proud of me, from wherever he is currently watching!

hypno06

Forgot to say - put the loan amounts in. Even if you don't use it as your "working" model, you should still get the full picture. I accept what you say about the money owing to your Dad, and if he does the same for your brother than fair enough, but the ones that you have with banks etc should really be included if you are to be honest with yourself.