Disagreement with OH

JourneyToSolvency

Also, I don't care that it may be a little cheaper overall to secure the debt, it's still a remarkably stupid thing to do AND it'll encourage him to spend more money and have 80k mortgage and 20k in new unsecured debt. What happens then?

THIS is what I'm worried about - thankfully I'm not yet on the mortgage and if he wants to do this he'd need to get me to agree to it.

I think the problem is he wants to be able to spend the way we did before the littleun was born (probably more now as he's a costly little blighter) but we CANT and I know this - just can't get it into his skull. He keeps saying things like "but when we get the remortgage we can start saving to do this...and that" which is when I get cross and he gets a telling off and then he gets cross - and NONE of this is healthy.

I think having this rant has been therapeutic though if nothing. :beer:

StopIt

JourneyToSolvency wrote: »

THIS is what I'm worried about - thankfully I'm not yet on the mortgage and if he wants to do this he'd need to get me to agree to it.

I think the problem is he wants to be able to spend the way we did before the littleun was born (probably more now as he's a costly little blighter) but we CANT and I know this - just can't get it into his skull. He keeps saying things like "but when we get the remortgage we can start saving to do this...and that" which is when I get cross and he gets a telling off and then he gets cross - and NONE of this is healthy.

I think having this rant has been therapeutic though if nothing. :beer:

As a parent of a 9 month old, I'm not without sympathy, but sorry, unless if you're able to magic another 5k a year or whatever, you have to budget accordingly.


Yes, that means spending less on yourselves to pay for the squidge. Tell him that once the debt is paid, you'll have more money to save AND an earlier MFD, it's that simple. Debt does not solve debt, ever.


Try to get as many 0% CC's as you can and reduce your interest that way, then pay it hard.

EssexHebridean

Hi JTS - and well done for facing things and posting!

Can your OH answer a straightforward question - why, when consolidating previously hasn't got you out of debt, does he think that consolidating onto the mortgage would work?

I'll comment on your SOA in red as usual, but I will say that an aspirational SOA is not the way to start - idea you need to start with one showing you how things are right now - and from there you adjust your budget, and trim things...otherwise it just creates more questions than answers. You might want to start right now with a spending diary too - so note down everything you spend even if it's just a pint of milk.

JourneyToSolvency wrote: »

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1299
Partners monthly income after tax....... 1119
Benefits................................ 82
Other income............................ 0
Total monthly income.................... 2500

Monthly Expense Details
Mortgage................................ 271
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 112
Electricity............................. 116 Goodness this is high! Assume you use electricity for everything, in which case I imagine you have storage heaters fitted? Have you learned how to use them to the best advantage? If you're on economy 7 do you run dishwasher & washing machine overnight? (running a tumble dryer overnight is not recommended) - have you made sure your immersion heater is set to heat automatically overnight as this is a lot cheaper than during the day?
Gas..................................... 0
Oil..................................... 0
Water rates............................. 15.53
Telephone (land line)................... 0
Mobile phone............................ 45
TV Licence.............................. 10 Really? Are you sure about this? It's usually £12.12...
Satellite/Cable TV...................... 0
Internet Services....................... 35
Groceries etc. ......................... 216You can tweak this downwards a little yet.
Clothing................................ 45 Every month? I'd cut to essentials for now and make use of charity shops/eBay for stuff needed by the little one.
Petrol/diesel........................... 160 Read Martin's guide to driving economically
Road tax................................ 12 Do you actually pay this monthly at the moment? If so bear in mind that's more expensive than paying 6 or 12 monthly would be so might be a plan to start saving money against paying upfront in future.
Car Insurance........................... 62 This is quite high - have you checked you're getting the best deal you can?
Car maintenance (including MOT)......... 25 Where do you save this? You're not showing any cash assets?
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 12
Pet insurance/vet bills................. 0
Buildings insurance..................... 24
Contents insurance...................... 23 very high indeed - you can get this for less than £10. It may be worth looking to switch policies mid-year bearing in mind how much this is currently costing you.
Life assurance ......................... 22
Other insurance......................... 8
Presents (birthday, christmas etc)...... 75
Haircuts................................ 15
Entertainment........................... 53
Holiday................................. 0
Emergency fund.......................... 50 Where are you saving this? Again,
no cash assets showing?
Total monthly expenses.................. 1406.53


Assets
Cash.................................... 0
House value (Gross)..................... 88000
Shares and bonds........................ 0
Car(s).................................. 1500
Other assets............................ 0
Total Assets............................ 89500


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 58000....(271)......3.99
Total secured & HP debts...... 58000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Barclaycard....................3558......80........0
Tesco loan.....................16000.....251.......11
Student maint loan.............3600......150.......0
Catalogues.....................492.......24........37.5
Total unsecured debts..........23650.....505.......-


Monthly Budget Summary
Total monthly income.................... 2,500
Expenses (including HP & secured debts). 1,406.53
Available for debt repayments........... 1,093.47
Monthly UNsecured debt repayments....... 505
Amount left after debt repayments....... 588.47

Personal Balance Sheet Summary
Total assets (things you own)........... 89,500
Total HP & Secured debt................. -58,000
Total Unsecured debt.................... -23,650
Net Assets.............................. 7,850

1) spending diary to track down that £500 surplus you should have each month
2) start attacking other expenditure
3) meal plan and shopping to a list
4) as soon as you know how much is left over at the end of the month, get as much as possible cleared off that catalogue debt - that interest rate is horrific!

JourneyToSolvency

Going to show my ignorance here - but can you pay down a loan with 0% cards?

That loan APR is ridiculous, the second time he consolidated his loan amount was 18k and we're going to end up paying back over 30k with the interest the interest was added on at the start too - had to ring them up to find out how much we owe on it now.

EssexHebridean

I'll add in response to other comments above - having children is a lifestyle choice - it's the same as buying a flashy car, going on fabulous holidays, or buying that dream home in the country with a bit of land...and they all have one thing in common - they cost money! We've got into a mindset in this country that having children is just "what you do" and we've forgotten that we ought to work out how we're going to afford it first. we've also long since forgotten than having a child changes the way you live your life and you have to adjust to that accordingly. Some of those adjustments are financial.

I reckon there is around £100 of savings to be made on that SOA with relatively little pain.
You're already showing a "should have" surplus of £588 - so together that will be nearly £700 a month you should be able to find to throw at debts.
That means that with some determination you can have the catalogue and the interest bearing loan gone in well under 2 years.

EssexHebridean

JourneyToSolvency wrote: »

Going to show my ignorance here - but can you pay down a loan with 0% cards?

That loan APR is ridiculous, the second time he consolidated his loan amount was 18k and we're going to end up paying back over 30k with the interest the interest was added on at the start too - had to ring them up to find out how much we owe on it now.

You can but you need a card that will accept a money transfer rather than a balance transfer. Martin has a guide on this.

The good thing about front loaded interest on a loan is it means you will get some of it back if you pay off early - so there is a positive incentive to make overpayments there. Just double check it allows overpayments then if it does get stuck in - you can request a figure from them for early redemption down the line but basically the sooner it's gone the less you'll pay!

StopIt

JourneyToSolvency wrote: »

Going to show my ignorance here - but can you pay down a loan with 0% cards?

That loan APR is ridiculous, the second time he consolidated his loan amount was 18k and we're going to end up paying back over 30k with the interest the interest was added on at the start too - had to ring them up to find out how much we owe on it now.

Yes, so long as your loan provider allows overpayments. Apply for Money transfer card, pay off large whack of loan, then pay that payment back to the card at 0%. Any amount you can overpay and payback at 0% is money saved. If not, use it to pay off the catalogue debt at least.

JourneyToSolvency

Hi EssexHebridean - I was hoping you'd stop by and give me a kick up the bum

I'll try and address your points (sorry don't know how to do all the fancy multiquote posts yet)

1) Electricity............................. 116 Goodness this is high! Assume you use electricity for everything, in which case I imagine you have storage heaters fitted? Have you learned how to use them to the best advantage? If you're on economy 7 do you run dishwasher & washing machine overnight? (running a tumble dryer overnight is not recommended) - have you made sure your immersion heater is set to heat automatically overnight as this is a lot cheaper than during the day?

This is gas and leccy put together and it's about to go up!! Seems like they've been estimating it wrong for years and we now owe a bit on it so they're increasing the DD to pay it off - I've submitted actual readings and will continue to do so now I'm in charge. I work from home most days - we have storage heaters and a gas fire for heating - I did resort to a fan heater last year in the front room as it was freezing!

2) TV Licence.............................. 10 Really? Are you sure about this? It's usually £12.12...

Just checked YNAB - you're correct! Not sure where I got £10 from

3) Groceries etc. ......................... 216You can tweak this downwards a little yet.

I'm working on this one

4) Clothing................................ 45 Every month? I'd cut to essentials for now and make use of charity shops/eBay for stuff needed by the little one.

I've put this one high for now as I'm very conscious we need to pay for LO's school uniform over the holiday - I'm sure it'll go down soon after.

5) Petrol/diesel........................... 160 Read Martin's guide to driving economically
Road tax................................ 12 Do you actually pay this monthly at the moment? If so bear in mind that's more expensive than paying 6 or 12 monthly would be so might be a plan to start saving money against paying upfront in future.
Car Insurance........................... 62 This is quite high - have you checked you're getting the best deal you can?

These are all OH's - I don't drive, car ins is high because he had a crash not long ago.

5) Car maintenance (including MOT)......... 25 Where do you save this? You're not showing any cash assets?

I have £200 saved to do the MOT so far - it's due in Aug, really hoping nothing needs doing - this has come out of the compensation for the crash - I think he was planning on putting it on a CC :wall:

6) Contents insurance...................... 23 very high indeed - you can get this for less than £10. It may be worth looking to switch policies mid-year bearing in mind how much this is currently costing you.

I will definitely look into this one.

7) Emergency fund.......................... 50 Where are you saving this? Again,
no cash assets showing?

I did manage to put this away last month - it's in the savings account safely tucked away so hopefully if I keep building it up we'll at least have something next time a big expense crops up.

Oh and:

Can your OH answer a straightforward question - why, when consolidating previously hasn't got you out of debt, does he think that consolidating onto the mortgage would work?

I did ask this question yesterday and got the "you're not listening to me we'd be better off every month and can pay the loan down"

I feel stupid at the moment and like I'm sinking in quicksand whilst bashing my head against a wall - is there a smiley for that?

Sorry for the mega long post!

JourneyToSolvency

This is what tesco say about over payments so we look okay there:

Loan applications made on or after 11 June 2010

You can choose for your additional payment to be applied in one of two ways:

Reduce your monthly payment and keep the term of your loan the same, or
Keep your monthly payment the same and reduce the term of your loan.

Both options will give you an interest rebate, which means you will pay less interest overall on your loan, but you will get a greater interest rebate with Option 2.

StopIt

Yep, I'd go with option 2.


Get Money Transfer Card, smash into loan. Anything you get at 0% is interest saved and more importantly, not secured and will get your DFD sooner.