What would happen if...? (Future finances)

Jojo_the_Tightfisted

matchboxfull wrote: »

a) What would you do if something like a fridge, washing machine, or set of tyres blew up? How would you pay to replace them?

b) What about something more expensive, like a car or a boiler?

c) What would happen, financially, if one of you lost your job through redundancy?

d) And what about long-term ill health?

e) And of course, finally, what would happen - money-wise - if one of you died?

a) We'd go to the launderette. Or buy fresh stuff each day.

b) We'd be screwed. And cold.

c) We'd be screwed until they got another job.

d) We manage like that already. Just about.

e) Stuff the money.The world's just ended and you're asking about cash?

LisaLou1982

matchboxfull wrote: »

I don't know if this thread has a natural home on any particular part of the forum, but it's kind of about planning around your family, so I am putting it here.

Basically, I am just being nosey. We're starting to look at being proper grown ups with money and asking ourselves lots of questions. I wanted to know how other families answer these questions. They're all about how you'd cope financially with things going awry. Things like:

a) What would you do if something like a fridge, washing machine, or set of tyres blew up? How would you pay to replace them?

We pay for replacements out of savings and/or wages

b) What about something more expensive, like a car or a boiler?

Paid for out of savings.

c) What would happen, financially, if one of you lost your job through redundancy?

This has happened previously. We have a redundancy policy which covers the mortgage and savings to live off. All outgoings are doable on 1 salary so no immediate issues although a new job would be sought as soon as possible.

d) And what about long-term ill health?

Again, sadly something that has previously happened. We both have a income protection policy which covers ill health. Mine still pays out a sum each month. Thankfully OH has never had to claim on his. Our outgoings are doable on 1 wage (this was intentional) so we would be able to survive as we are.

e) And of course, finally, what would happen - money-wise - if one of you died?

We both have life and critical illness policies which would pay out if one of us died. I have DIS benefit through work too.

I'll put my answers in the comments. I'd love to hear your answers too, if only to get some gauge on what is normal.

If you haven’t already, join the forum to reply!
[purplesignup][/purplesignup]

Answers in pink xx

Petra_70

I am amazed at the amount of people who claim to have a major amount of savings. I mean, to replace the fridge, washing machine, cooker, boiler, and even the car; just like that!

According to many reports, (I have included 4 here,) almost 10 million people are in debt, and struggle to make ends meet from week to week, and live their lives on credit cards. 1000s of payday loans are being taken out every day, and half of UK adults are in so much debt that they can barely cope. Some people even have to resort to going to food banks!

Yet almost everyone one this thread, has a shed load of savings. Seemingly enough to buy a new boiler and a new car. Only 3 or 4 out of about 2 dozen people have said they don't have savings and would struggle.

Something isn't adding up. How come so many people are in debt in this country, with no savings at all? And on here, hardly anyone is in debt? And in addition, they have multiple 1000s of pounds in savings?

http://www.independent.co.uk/money/spend-save/britain-in-debt-half-of-uk-adults-living-on-financial-edge-8742978.html

http://www.bbc.co.uk/news/business-25108891

http://www.theguardian.com/money/2015/jan/03/new-consumer-debt-reaches-7-year-high

http://www.dailymail.co.uk/news/article-2072372/The-10-000-debt-burden-average-family-doesnt-include-1-24trillion-mortgages.html

theoretica

When I had just bought my flat I couldn't have afforded to replace the car/boiler etc - but I knew they would eventually die. It will be a surprise when they go, but not that they go sometime. Now thanks to saving (and being lucky they didn't break down much earlier than average) it won't be an emergency when they go, just an expected pain.

But I think also people might be less likely to answer the thread without some positive idea of how they would cope.

LisaLou1982

Petra_70 wrote: »

I am amazed at the amount of people who claim to have a major amount of savings. I mean, to replace the fridge, washing machine, cooker, boiler, and even the car; just like that!

According to many reports, (I have included 4 here,) almost 10 million people are in debt, and struggle to make ends meet from week to week, and live their lives on credit cards. 1000s of payday loans are being taken out every day, and half of UK adults are in so much debt that they can barely cope. Some people even have to resort to going to food banks!

Yet almost everyone one this thread, has a shed load of savings. Seemingly enough to buy a new boiler and a new car. Only 3 or 4 out of about 2 dozen people have said they don't have savings and would struggle.

Something isn't adding up. How come so many people are in debt in this country, with no savings at all? And on here, hardly anyone is in debt? And in addition, they have multiple 1000s of pounds in savings?

http://www.independent.co.uk/money/spend-save/britain-in-debt-half-of-uk-adults-living-on-financial-edge-8742978.html

http://www.bbc.co.uk/news/business-25108891

http://www.theguardian.com/money/2015/jan/03/new-consumer-debt-reaches-7-year-high

http://www.dailymail.co.uk/news/article-2072372/The-10-000-debt-burden-average-family-doesnt-include-1-24trillion-mortgages.html

I cant speak for others Petra, but for us we have always lived within our means. If we cant afford it then we dont buy it.

A new fridge/washing machine/freezer etc is available to purchase at around £300/500 each which isnt so much to find in your monthly wages when there are 2 of you.

Likewise, we have a savings pot, plus money in ISAs as "rainy day" money. Maybe its a little easier for us as we dont have a family yet so obviously there is more money coming in to our household. We dont earn a fortune - but we do prioritise saving every month so that we have money to fall back on.

We will be moving house soon and the works the new house requires are extensive. We have a fair chunk of money for them, but expect to have to save a bit more whilst the works are going on.

People always seem surprised that we have the money to be able to do things, but its all about priorities. I was bought up with the ethos that if you dont have the money then you cant have it. We like going on holiday so we save our money up. We shop around and book good deals. We dont spend a fortune on clothes, eating out or buying stuff that we dont need.

scaredofdebt

a) What would you do if something like a fridge, washing machine, or set of tyres blew up? How would you pay to replace them?

Careful budgeting means I have £1-200 a month "spare" so would use that. The idea is to save this spare money for a rainy day fund in case of b) but we have not been able to do this as without fail something crops up every month to take this "spare money!

b) What about something more expensive, like a car or a boiler?

See above - probably borrow from a family member and pay back over a few months interest free.

c) What would happen, financially, if one of you lost your job through redundancy?

I have been made redundant several times. In this part of the world it is very hard to find a job, my last job I was earning ~£40k pa and got £35k redundancy, but that didn't last long enough for me to find another job. I took a call centre job in the end after 3 years looking, applied for over 100 positions and got 6 interviews but I think my age didn't help. I impressed them enough to get promoted into a more senior role after 18 months but still earn £10k less than I did. If it happens again I will have to take a lower paid stop-gap job and hope for another promotion! My wife's income will help support us but will really struggle.

d) And what about long-term ill health?

Employer pays full pay up to 12 months, after that I would have to see what benefits there are.

e) And of course, finally, what would happen - money-wise - if one of you died?

We have life insurance. My wife would actually be better off with me dead, but don't give her ideas

JP08

Petra_70 wrote: »

I am amazed at the amount of people who claim to have a major amount of savings. I mean, to replace the fridge, washing machine, cooker, boiler, and even the car; just like that!

Well, you are on a site called MoneySavingExpert ... it's going to attract those of a more frugal turn of mind.;)

LisaLou sums it up pretty well.

But a lot of it comes down to making do or doing without until you can afford something outright.

Interest is something that is paid to you wherever possible, and not paid to others unless unavoidable.

Eg in my case, both houses I've owned have been just "sufficient" for my needs and well within my range of comfort for affordability. I've moved once in 25 years. Both have had / are currently having the mortgage overpaid to the maximum allowed whenever possible. Interest on credit has totalled £25 since first getting a credit card in 1990. Never had a loan until the current car (and that's 0%). So all that money that would have gone to the bank has stayed with me instead. Never underestimate the power of compound interest over a couple of decades.

tea_lover

It's a money saving site Petra, of course the people on here are more likely to have savings.

Personally I'd struggle to sleep at night without 6-12 months salary in the bank. There's only me paying the bills (and my salary is below the UK average) so I save wherever possible.

Georgiegirl256

Petra_70's post is giving me serious d!jà vu! I can remember a poster months back posting the same incredulous stuff.

As has already been said, most people on this site were probably first drawn to this site because of the money saving aspect of it.

Personally, we don't buy anything unless we can afford it outright, we don't have credit cards anymore. It's simple, of you can't afford it, don't buy it. Unless it's an absolute neccessity.

If we know there's going to be a big job coming up (as in the roof which we got replaced last year), then we save for it.

Shop savvy, then you can afford to perhaps put some aside each month to save.

I'd hate not to have any savings to fall back on if say the washer went and needed replaced, or the car broke down and needed repaired.

cyantist

At the moment we have significant savings, because we are getting a loft conversion soon. But I'm assuming these things happen just after we spend all that money

a) What would you do if something like a fridge, washing machine, or set of tyres blew up? How would you pay to replace them?

We just about have that much left each month after essentials, so we'd pay for it out of our wages and have no luxuries that month

b) What about something more expensive, like a car or a boiler?

Put it on the credit card, or borrow from my family and pay it back over a few months. Though if it was the car we'd just do without it until we could save enough for a new one.

c) What would happen, financially, if one of you lost your job through redundancy?

If I got made redundant I'd use it as an opportunity to become a foster carer. That's my long term goal anyway.

If DH got made redundant we'd probably discuss him being the primary foster carer, or if not we'd have to rent out a couple of rooms in our house just to survive until we found a new job. We could never live on just one wage.

d) And what about long-term ill health?

If you are unable to work, our pension scheme pays out a lump sum and a decent pension but we still couldn't cope. We'd probably move house to somewhere much smaller as we wouldn't be able to manage our current house/garden if one of us had such ill health we couldn't work.

e) And of course, finally, what would happen - money-wise - if one of you died?

Our pension scheme pays 3x salary if you die, plus you get half their pension. The 3x salary would all come off the mortgage, which would bring it down to a level I could just afford on my salary and their pension. It would be harder if I died because I earn a lot less (but don't pick up that much less due to differences in tax and me not having student loan) so the lump sum wouldn't make such a dent in the mortgage, and my pension wouldn't be as high. Hubby just better hope I don't die.