unsure what to do..

amni1987

I just wanted some advice on our current financial situation.

My partner and I recently moved back into my mum's house in order to save for a deposit for a house. Unfortunately at the same weekend we were moving back in, my partner lost their job.

We had originally said we would extend our rental agreement until September, but cancelled that fairly quickly, and thinking we'd got out of that ok, moved back to my mums. Unfortunately that wasn’t the case so have to continue paying rent for the old house, and give my mum money too, which is why our outcome is quite high at the minute.

My partner has got a job for now, it's not anything formal, no contract or anything, but at least a basic amount of £250 paid every week. It's not related in any way to what he previously did or wants to do so he's still looking. Its door to door stuff so not likely to last long.

Income at the minute is;
Mine £1140 net (£16k per year)
Partners £250 per week, sometimes more depending on bonus. So minimum £1000 per month
Total £2140 minimum

Outgoings are
Rent £450 (this will continue until September at the latest, hopefully they will get a new tenant soon and we won't have to pay)
Mum £300
Gym £34 (in a contract so can't cancel)
Loan £253.95
Savings £50
My phone £15
Partners phone £35 (contract ends this month and will then be just £10 pay as you go.
Total 1137.95

Bit more info;

The loan has another 4 years to go. The current balance is £11490. It's on a rate of 7.2.

The savings account we're paying £50 a month into is a Nationwide save to buy, which must have a standing order of a minimum of £50 per month paid into it. We opened this when we thought we'd be saving flat out for a mortgage. It doesn’t allow withdrawals, only a closure.
Current balance is £2250. Pays 2%

I just don’t know what to do. Currently my pay covers our outgoings and goes straight into our bills account. In September we will have £450 of that freed up when we no longer have to pay rent for the other place (hopefully even before then). Partners new job money (which has only just started this month) is sort of spare for now. We have birthdays etc this month so probably won't be a lot of saving done.

However what I'm wondering is, should I close the savings and pay off the loan, or even pay £1150 off the loan and keep £1000 as emergency fund? Then overpay it by say £500 a month and use the other £500 from partners pay for food and petrol and living costs etc?
Or should we leave the savings as they are, and put his extra money into a different savings account we can get at if needs be and just let the loan continue as normal.


Until partner gets a permanent job which a decent wage etc, the mortgage/house deposit plan is a long way off, should I focus on clearing debt until then? Sorry for the ramble but I'm trying to figure out what's the best plan of action.

moohound

The standard advice is to have £1000 or so for emergencies, then pay off debts, highest interest first.

But if your partners job is not secure, I would hang on to all the savings for now. At least until you're not paying the rent anymore. If this job does not work out, you don't want to be left with nothing.


I think you need to do a full SOA, To look at all your outgoings like petrol, road tax, insurance for car etc. was the loan for the car?

I would try not to go mad on gift giving while you have debts and are trying to save for a house, a thoughtful token gift is enough.

amni1987

moohound wrote: »

But if your partners job is not secure, I would hang on to all the savings for now. At least until you're not paying the rent anymore. If this job does not work out, you don't want to be left with nothing.

Thats my worry. My pay covers everything now, and partners is just extra, however he could lose this job overnight (which is what happened a month ago) and then all we would have is JSA.

However my other worry is that what if the worst happened and neither of us was working at some point. I'd want to get rid the debt while we can.

The only other outgoings then are the car related things, and food and petrol. Car tax and MOT are £150 per year, and insurance for both of us was £1100 this year (both still young and only passed last year).

amni1987

I've just realised after typing that that my car is roughly £1250 per year, plus an emergency fund of £1000 is £2250, the exact amount we have in a savings account we cant touch without closing, so it would make sense to leave that there.

So the question is partners income, do we overpay the loan, or save?

moohound

If you stash the extra money in a saving account for now, you at least have control over it, when the other rent finishes you can reassess, and pay a chunk off the loan if you want to.

How did you end up being liable for rent until September?

amni1987

Its a bit of a long story, we initially renewed our tenancy for an extra 6 months by signing a letter sent by the estate agents, but within a week withdrew that and gave notice, because my partners mum hasnt been well and it would give us a chance to save if we moved back to my mums.

They said that was okay so we moved out etc, however they are now holding us liable for the rent until September when the extra 6 months ends, or at least until they get a new tenant. We thought because we hadn't signed a new contract we were ok, but apparently the letter we signed is just as solid so we're stuck now.

Hopefully it wont be the full 6 months, they've had viewings for it this week so just fingers crossed someone takes it.

moohound

It is a shame, I hope they get new tenants, or at least make the effort to get new ones ,you could have done with that money.

I don't know anything about rental agreements sorry, there might be someone else on here who could help you negotiate something, I really don't know.

It might be worth asking at citizens advice if this is right, I don't really trust estate agents much.