*sigh* this may take a while

savingholmes

Cars can make huge dents in budgets. I don't like leases as they get the benefit of the residual value while you take all the depreciation. I love my current car - I initially got a loan for it and then I moved it to a CC as a money balance transfer as it was cheaper. It got paid off a few years ago now. I bought it pre-registered and that knocked thousands off the price. It's now 5 years old. I'm hoping to keep it until it going as long as poss. 

I think with the amount of kids you have - I'd want to keep 2 cars.

enthusiasticsaver

Cars are money pits and particularly PCPs or leases where the heavy upfront depreciation on brand new cars has to be paid. Is it possible to buy one a few years old even if you have to put it on a personal loan and then you get the residual value? I get why keeping 2 cars may be worth it with a large family. My DD and her husband went down to 1 car in COVID as they now work mainly both from home.  If my son in law is away my DD borrows my car. 

I have never leased but my brother does and gets a brand new car every 4 years but he must pay around £15k - £20k in lease costs and has no asset at the end. 

EssexHebridean

One of the first things we put in place when we started the whole MSE journey was the clearing of a loan to buy my previous car - it was bought brand new, albeit at a massively beaten down price (car dealers hate me, I usually end up getting what I want!) and we then saved a lot of dosh on the loan by paying it off early - it was meant to be a 30 month term, I have a vague memory we cleared it in under 18. We then compounded that saving by reclaiming PPI on it as when I took the loan out I was told I had to also take Northern R0ck's PPI cover. Subsequently we decided we were determined not to do the loan thing again, and I've never done car finance - I'd never feel it was "mine" if it was bought like that. So from early on we began to stash money aside to ensure that replacements were possible without needing any form of debt. That car lasted me 12 years, then got replaced (from necessity - issues around the London ULEZ combined with a couple of issues with the car that weren't going to be cost effective to fix if we kept it allowing that it would have had to be an "out of London only" car) with a three year old one which cost me about a third of what it would have done if it had been brand new. MrEH's first two cars weren't quite "bangers" but were getting on that way. Both cost us circa £2k each, we ran them until they were starting to look as though the next MOT would be expensive, and got shot for a small amount in part-ex. His current car bought last summer is in the same age bracket as mine. the intention with both the current cars is that we keep them as long as possible, but regardless, the replacement funds are already in place. 

ohdearhowdidthathappen

Thanks everyone, all good points and definitely an area we've been lazy in.
We're looking at 3 year old 7 seaters and they're coming in at £18k if low mileage.  That's not very fancy makes/models either.  Depressing.  That's the main reason we leased last time... to buy our lease would cost £35k (which we don't have) whereas we pay £245 a month (which we do).  A personal loan might be an option as long as we're sisciplined and overpay.
If we keep 2 cars, DH would definitely want to keep his current PCP as he loves the car and wants to pay it off and keep it. 

EssexHebridean

3 years old is a really popular age for people to want to buy - it's well worth looking in the slightly older age bracket 4 - 6 years we found when we were searching for MrEH's current vehicle as it can come with a massive reduction in price. Look for ideally around 10k miles per year max for petrol engines, and if looking at diesel then take that 10k miles per year average as your minimum really - buying a diesel vehicle that is "low mileage" is often a false economy as it's not what they're designed to do. Modern cars will easily do more miles than any of us are ever likely to need realistically - so buying a 5 year old vehicle with 50 - 60k miles on the clock will still give probably a further 80k miles (and well above that for diesels - my last car had over 150k on the clock at 12 years old and was still perfectly mechanically sound!) A quick autotrader search suggests that changing your search parameters to a little older would knock in the region of £6k off the sort of prices you're looking at so definitely worth exploring options. 

ohdearhowdidthathappen

Thanks EH, will take a look

ohdearhowdidthathappen

Have been busy plotting and planning, going through our last few months statements and coming up with a strategy for the coming months.  With all the cost of living increases, we're going to feel the squeeze more, especially when our fixed utilities and mortgage end.  We're both much more committed to stop the drip drip of money out of our account.

We're going back to basics and trying the DR method again as it was successful for us when we stuck to it last time.  We've got 12 months to make a good in-roads before our first fixed bills end:

-BS1 - save an emergency fund.  We don't have one, but we will build one as using CCs for this is too easy
-BS2 - clear debt.... I'd love to say we don't have any, but the old culprits of PP and CC1 each have approx £1200 on them again.  We'll clear this within the next 4 months (£600 a month) minimum
In a change for us, I'm adding the car PCP to BS2 as it is a debt and by not including it in the past, it's made it too easy to ignore.  We owe £19.5k on this... £220 a month for 3.5 more years and then a balloon payment at the end.  I'm hopeful DH will agree to get rid of this car during the coming months.
-BS3 - we'd like to save 6 months of expenses, which for us is approx £20k.  This is always our stumbling block, I think because it's such a big sum, we don't bother getting started!  When we get to this stage, we need to come up with a way to reframe it, so it's not so daunting!
-BS4/BS5 - we already do the pension thing and are not interested in saving college funds
-BS6 - OP mortgage... would love to get to this asap, the size of our mortgage annoys me, although the monthly payment is about the 25% of take home that DR says to aim for so.

We're going to aim to save £250 a month into EF and £600 off of debts over the next 4 months.  I know DR says to build EF first, but I don't want to pay any interest, so will be fudging this!

ohdearhowdidthathappen

We've identified our weakest spots and are setting up pots to address these:

- Children pot - £450 a month.  This will cover clothes, shoes, hair cuts, pocket money, swimming lessons, buss passes etc
- Entertainment - £150.  This will need us to be very disciplined!  
- Presents - £100.  This is Birthdays, Easter, Mothers/Fathers Day (for our parents/step parents)
- Christmas - £125
- Holidays - £400

We usually use DHs bonus for Christmas and holidays and we'll have to in March'23 as we don't have pots at the mo.  But for his '24 bonus, we'd like his bonus to be 'spare' money so that it can be put towards whatever BS we're on.

These pots seem generous, but they reflect what we've been spending.  Obviously, we'll aim to come in under these figures and redirect money to the BS

If we stick to our new budget/pots, we should have £500 'spare' a month.  I'm going to leave the first month in our current account and then start transferring excess to whichever BS we're on.

I'm sure there are flaws in this new plan that will come to light!  But this is the most honest and thorough budget we've ever done, so fingers crossed!

I'm going to try and do at least a weekly check in here to keep me accountable  

Debsnewbudget

Would it help to think of your 6 months £20k fund in terms of days?
so every £111 you save is a days worth.  Is that a reframe that would work for you?

mark55man

good luck - ensuring the kids have enough if they do decide to go to Uni will become more important to you (and the DC) as it gets closer.  Could you hypothetically allocate some money to that so at least its there if you do choose you want to support it at that time.  I think we may have had this convo before, but still believe it!!