Sell home and downsize to be debt free? Help!!

Hopelessly_Hopeful

Glad yoou had good news.

Good luck with whatever you decide is right for you and your family. Let us know how you get on.

HHx

[Deleted User]

Hi,

Have had a good read of your threads...

You have come a long way and pared life to the bone, anymore and life will merely become an existence year in year out for a considerable amount of time.Not really a way to live with a young family when you want to be enjoying life not scrimping over every single penny...

Cold hard cash would seem your only option in the form of... earn a lot more cash through both your jobs. If that is not possible then downsize to clear your feet. Other than a huge windfall I don't see a way out of this. Filling out a few surveys in your spare time is not going to help plus you'll be bored of that in no time..

A close relative of mine is going through something similar too so can appreciate why you do not want to downsize etc. I suppose thats why I've been on these forums.. not just to look for ideas for my relative but also ideas on cost cutting for myself. No debt other than mortgage but country life is more expensive so have to be prudent.

I hope I don't sound harsh and wish you all the best.

PS for a 40k a year job your net monthly salary is significantly less than mine. Was that with OT?

cats2012

jeepjunkie wrote: »

Hi,
PS for a 40k a year job your net monthly salary is significantly less than mine. Was that with OT?

Very good point and would be good to clarify incase your tax code is wrong or something? I earn £10k less and take home more even with student loan & pension contributions...

Newchapter

Hi Greenwoodlad

I downsized when I got divorced, I didnt want to but financially I dont think I had any choice. Since then house values have dropped and I have lost all my equity and racked up a load of debt, hence my new status with a DMP.

However, I am now ok with my smaller house and my completely change lifestyle (sold my horses, no foreign holidays, downsized my car from a very lovely audi cabriolet which was stunning!!). As I write this I feel embarrassed, I was living beyond my means. But no more.

I now live much more frugally and its ok most of the time. I no longer panic about cards being refused etc. I rarely buy clothes, if I do they are significantly reduced in price. My kids (now 20 & 18 - both full time education) are learning valuable financial lessons about budgetting, making do, going without - and its all ok.

I dont know what your answer is. I think you have options to explore with your wife. But a dream home is not a dream if you are unhappy, worrying, struggling - its a nightmare.

Have you though of ringing the National Debtline for initial advice?

Best of luck, there is a way forward. One thing I have learned is that consolidation loans do not work, the pattern just repeats itself and moving unsecured debts to secured is probably not a great idea.

Keep us posted
:T

greenwoodlad wrote: »

:rotfl:
SOA
Number of adults in household........... 3 (eldest son 16)
Number of children in household......... 2 (aged 10 and 14)
Number of cars owned.................... 1 (15 year old Skoda on its last legs but not given up get!)

Monthly Income Details
Monthly income after tax................ 1790
Partners monthly income after tax....... 720
Child Benefits................................ 188
Income from 2nd Job............................ 300
Income from Extra Job ...........................200????( seasonal gardening jobs ...summer only but have divided summer income by 12 months but this can fluctuate owing to weather etc)
Total monthly income.................... 3198 can vary taking into account summer job

Monthly Expense Details
Mortgage................................ 1042
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property)....0
Council tax............................. 200
Electricity............................. 60
LPG Gas..................................... 15
Heating Oil..................................... 100
Water rates............................. 68
Telephone (land line)................... 27.50 (Just switched to cheapest deal for home broadband and phone)
Mobile phones x 4..................... 93 ( 3 mobile phones on cheapest contracts – we are restricted to Orange network as we live in a remote place , Orange is only coverage)
TV Licence.............................. 12.12
Satellite/Cable TV...................... Cant afford it , never have had sky or anything – have freeview
Internet Services....................... Included in Telephone (Landline)
Groceries. Toileties, Pet Food etc. ......................... 500 (includes school pack ups, home baking ingredients , Laundry powder / medicines and one bottle of wine each week))
Clothing................................ 0 (we have put all these items on our next account as we never have spare cash to buy any other way)
Petrol/diesel........................... 160
Road tax................................ 19
Car Insurance........................... 26
Car maintenance (including MOT)......... 60 (Based on actual repairs, tyres MOT & small service) We cover 24000 miles a year
School Trips/Activities............................. 30 (Based on last year)
Vet Bill............................ 20(Based on the last year)
Swimming Lessons/Coaching .......................74
School Bus fares ( we live in a village)............ 160
Medical (prescriptions, dentist etc).... 50 (Based on last year – my wife & I needed dental treatment we are at an NHS dentist)
School Dinners for 1 child................. 60
Buildings insurance..................... 15
Contents insurance...................... 15
Life assurance ......................... 62
Presents (birthday, christmas etc)...... 30
Haircuts................................ 30
Entertainment.........................0
Logs/Coal………………..30
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2958.62


Assets
Cash.................................... 0
House value (Gross)..................... 299,000
Shares and bonds........................ 0
Car(s).................................. 500
Other assets............................ 0
Total Assets............................ £299,500


Secured & HP Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... 220000....(1042)......3.95
Hire Purchase (HP) debt ...... 0
Total secured & HP debts £220,000.....-.........-

Unsecured Debts
Description....................Debt......Monthly.. .APR
Next Account.............2100.........210............29 .9
First Direct Loan ....12000.......228.92...........9.1 12 years left
Santander card…..5000…..150………17.9
ODraft …………1000…………………
Total unsecured debts. £20,100


Monthly Budget Summary
Total monthly income.................... 3198
Expenses (including HP & secured debts). 2958.62
Available for debt repayments........... 239.38
Monthly Unsecured debt repayments....... 588.92
Amount left ....... – £349.54

Personal Balance Sheet Summary
Total assets (things you own)........... 299500
Total HP & Secured debt................. – 220000
Total Unsecured debt.................... -20,100
Net Assets.............................. £59,400

*** Currently in order to pay debts we end up reducing our food budget down by the -£349.54
Also we have sold everything we don’t need on e bay mine and my wife’s bikes, kids toys and clothes that are no longer used , our car and we now have a cheap old car that does the job.

NOTES – from last SOA advice !! supermarkets – we live in a remote village 40 miles from cheap supermarkets like lidl and Aldi – we buy fresh meat from our village butchers, and we shop at Morrisons as my wife works there and we get 10% discount.

FatVonD

Could you rent out your 5-bedroom house and rent somewhere smaller? I ask because I downsized when my son was small and, with hindsight, I wish that's what I'd have done.

bouncydog1

On your Orange phones I don't understand why they are on cheapest contracts and costing this much. My DD is at Uni and her contract is £12.50 per month which gives her unlimited free texts, 120 minutes and 500mb data and blackberry messenger. Without the BBM it would be £7.50. I think it's Canary. Going onto this would save you £60 per month which might help a bit.

Cranny44

I second the mobiles not being cheapest. I too am on orange due to poor coverage in my rural location however i am on sim only contract £10.50 per month for unlimited text and 300 mins and if you are all on orange you can do the magic number as well. Not a massive saving but everything helps.

Do you not get free travel to school? I understand that if you live more than 3 miles away should be paid for?

And i agree you net income is low for a £40k job. I dont get much less than you with a lease car and pension payments deducted and a pittance of a mileage allowance and i am nowhere a £40k job.

racing_blue

FatVonD wrote: »

Could you rent out your 5-bedroom house and rent somewhere smaller? I ask because I downsized when my son was small and, with hindsight, I wish that's what I'd have done.

Great point.

The "spend" is in purchasing a house... stamp duty, legal fees, arrangement fees, estate agents fees on the house you have just sold, getting the house how you want it.

You spent once- if you downsize now, and then upsize when your situation improves then that is spend x 3.

Although I have never downsized, I bitterly regret selling 2 houses I used to live in. Incurred all those up front expenses, only to sell them within a few years. What a pumpkin. If only I'd hung onto them, I'd be whittling down the mortgages & have an income stream for life.

unoriginal_uk

You're definitely on the wrong tax code or something else has gone extremely wrong here as your earnings are WAY below what someone on 40k a year earns. What do you get taken out of your wages each month? At 40k a year I would expect you to bring home at least approx 2600 a month if not more....not £1790!

chevalier

I will be interested to see what the outcome is.
I hope that the thing with the tax code might be helpful too.
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