Sell up and rent - thoughts?

lincroft1710

Bossypants wrote: »

Speak for yourself, I got mine dropped (raised?) two years ago for this exact reason, didn't even have to argue for it. There's no guarantee but it's definitely worth a shot!

I worked for VOA for 35 yrs, 12 yr settling CT appeals and as garden size was almost never reflected in the bands (we rarely knew the garden size anyway), it is extremely likely the OP would get a reduction, especially a large house in Band G. Also as he is out of time to make a formal appeal, he will just get a standard "your band is correct" response.

silverwhistle

CarpeDave wrote: »

I'm "self employed",

Ah, I was going to make the same point as Adrian re phones. I understand the need for a decent one as my GF runs her own business and needs to monitor stuff remotely, but it still seems expensive.



I budget £20 a month for my mobile which includes capital cost and a Giff Gaff package, and if it lasts over 2 years without losing/breaking/going down the loo (ahem..) etc. I even gain on budget. Your wife's £49 in that context seems an area to examine.



Satellite/cable TV is an easy gain. Cutting back on food too. Do your nights out include babysitting costs? You could join a baby-sitting circle. Perhaps do a year with a really cheap domestic holiday?


Your fuel bills seem high, but then having solar panels and a log burner everybodies' do! LED bulbs are a worth while investment though, if you haven't already.



Maybe you need to look at your credit card bills again in a little more detail, as it doesn't all quite add up, although maybe I haven't taken into account how much your historical debt is costing you.

Bossypants

lincroft1710 wrote: »

I worked for VOA for 35 yrs, 12 yr settling CT appeals and as garden size was almost never reflected in the bands (we rarely knew the garden size anyway), it is extremely likely the OP would get a reduction, especially a large house in Band G. Also as he is out of time to make a formal appeal, he will just get a standard "your band is correct" response.

All I can do is reference my own experience. The house was changed from D to C, with the only difference being the fact that a big chunk of garden had been cut off to create a new plot next door. I'm in Brighton, if that makes any difference.

In any event, what's the harm in OP trying? It doesn't cost anything, as far as I remember.

getmore4less

Midrange phone £150 unlimited data <£20pm

£10pm should do the wife. The 3 200MBpm free on 321 PAYG might be cheaper overall.

daisyfrau

Hi OP,

Just a quick q: on your SOA have you double counted your home improvement loan? There is 375 listed under secured debts at the top, and then 374 listed again under your monthly repayments.

Just wondering because you may be £375 better off a month than you think?

I’m by no means an expert but I think you are in a very manageable situation if both you and your wife are on board for making serious changes to your spending and lifestyle. So if you’re up for that, be encouraged!

There’s no value in being concerned what other people think of your lifestyle, but even if you wanted to ‘save face’ (sometimes, as silly as it is, the idea of ‘losing face’ is a big psychological barrier to starting moneysaving habits) there’s a heck of a lot of ‘hidden savings’ you can make by keeping a strict budget and doing things like: switching utility providers and using less utilities, meal planning and shopping Aldi (I’d say family of 4 should be spending approx 50-75 per week maximum on groceries even with hungry kids and a big house to clean), not buying new clothes for the adults for a year or two, switching to cheaper entertainment eg i would have suggested National Trust but I see you guys didn’t use it, but maybe a few driving holidays eg in the UK or to Europe seeing as you have the car for it, and a value Airbnb or camping, can be just as much fun as package holidays expensive music festivals but work out cheaper if you plan ahead,m; switching to Netflix/Amazon and getting rid of Sky etc. There’s loads of fab advice on here already but browse the debt-free board and the old style money saving board for lots of good ideas. Selling old or unused stuff is also a good idea. Facebook is often easier and cheaper than eBay for ordinary bits, I find Evay is better for more valuable things that may need a wider audience and more patience to find a buyer.

You’re ‘addicted’ to spending, but it’s possible to harness a ‘tendency towards addiction’, into an addiction for paying off debt, and then for saving. That’s much healthier, but it will take both of you being willing to live very lean for a few years to develop the habit of it. I speak from experience - in my case the figures were much, much smaller and I didnt have an inheritance or rent-free option but my attitude was exactly the same - I wanted the lifestyle I felt was expected of me/I expected of myself - designer clothes, bags, fancy holidays - not the lifestyle my income actually dictated. I was on exactly the same road, so your story really resonated with me. When I started trying to change, I took small steps and then gained momentum as I saw the results. E.g. I just switched my weekly shop to Aldi - didn’t change what I was buying just where and I was buying it - and was gob-smacked we could save so much and eat the same just by switching supermarket. Gradually, I then began to ENJOY spending less :eek: and started wanting to budget properly and save and also started caring much less what people thought of us or what nice things we had in the fridge/house etc. Now my hubby has the bug too and we actively push ourselves to save more and more each month, and I take on extra shifts once in a while to do that (he also works longer hours from time to time, we’re competitive people, sigh) - and it’s a complete turn-around from the person I was 10 years ago. Although we are now on a high income (take home just under 8k a month after tax) I don’t think it would appear so on the surface because I drive a 2003 fiesta and my hubby drives a on old people carrier, haven’t bought new clothes in 3 years, shop Aldi/Lidl. House is nothing special - old 3 bed semi sound but in serious need of updating. Anyway how it looks doesn’t matter - the key thing is we are lining within our means now. After years of debt and living a high lifestyle we couldn’t afford, we finally have some savings (and we will need a much higher proportion of these than other families do as my hubby is self employed). Our mental health and perspective on things and our financial position is much better and much more realistic now. And I feel we are more resilient to sudden financial shocks now than we were before.

I second those who suggest your wife consider a part-time job. I am a mum working part-time and my hubby is so grateful that I take some financial pressure off him and contribute financially. He also helps around the house more to take some domestic pressure off me. Depending on her preferences and skills it might just be in school hours to prevent new childcare costs or whatever. It would help you reach debt freedom much quicker - and maybe even give her less time to spend money, if that’s an issue for her. I know I spend more when I’m off work, than when I have to balance working with everything else I have to do at home!

There’s lots of hope, but you both need to change your mindsets drastically. You BOTH need to understand exactly how you’ve ended up in this position and then both resolve to change. You don’t have to keep up with the Joneses (nice cars, nice holidays, nice toys etc). You’re really not as rich as you think you are. Honestly. Let it sink in. Your money is stuck in your house, it’s not actually available to you to use. You may never get the money out of the house if at retirement you need to pay for care in old age for example, or if you need to downsize to pay for a supplementary pension (state pension will not enable you guys to keep up your current lifestyle by any means, and your wife is only entitled to this. I’m not sure if you have a pension for yourself but it’s always sobering finding out what it’s worth and will pay out - it’s usually a lot less than folks are expecting or used to). So don’t count your house value as money you have or can access. You need to start living much more modestly. Most people on your family income have to pay rent/mortgage as well - so ideally after paying off your debts (will take a few years but with careful planning you can still have loads of quality family time and a few cheaper holidays) - you guys could maybe make it a goal to save what you might otherwise have paid as rent somewhere if you didn’t own a house outright? That would bring your monthly budget in line with most other families and help keep you grounded - whilst building up a nice pot of cash for retirement/emergencies.

Anyway - I think selling your house is a very bad idea - it’s the main positive of your financial situation (besides your drive to make changes) - and it looks like just by changing your spending you can dig yourselves out of this hole with some grit, determination and discipline and keep the asset. Without going into the gory details with them, moneysaving can be a talked-about whole-family acitivity so your kids learn the value and rewards of budgeting, living within our means/spending less and saving. Good luck - and well done for having the drive to do something about your situation!

getmore4less

Just a quick q: on your SOA have you double counted your home improvement loan? There is 375 listed under secured debts at the top, and then 374 listed again under your monthly repayments.

Those are different loans one is secured HP(car?) and the other is a loan.

daisyfrau

getmore4less wrote: »

Those are different loans one is secured HP(car?) and the other is a loan.

Oh - thanks! Thought he might have made a lucky mistake with his figures but apparently not!

getmore4less

One car is a 2015 BMW X3 diesel on a HP plan. WBAC values it at £12,244, finance company settlement figure today is £16,322. So we're in £3658 of neg eq on that. Tax disc is £140pa, servicing is £500 a year. It uses £75 of fuel a week on the school run and on family duties at weekends.
The other car is a 2009 Fiesta Econetic diesel worth £2000. Zero tax, 70mpg, I use that to commute to work 40 miles away. It takes a £50 tankful once a fortnight. I service it myself for under £100 a year.

Looking at the SOA

Secured/HP loan repayments.............. 375
Petrol/diesel........................... 400
Road tax................................ 12
Car Insurance........................... 100
Car maintenance (including MOT)......... 70

What is the school run mix/mileage short runs will be killing the MPG on the X3 you may be better off swapping the duties, a 40m commute will get the best out of the X3 MPG.


The real killer is the X3 here it is costing £5k a year before you take it off the drive.

I would split the car expenses into 2 on the SOA to get the real picture of each, the X3 is probably taking up most for the £1,200 insurance as well.

You could take the hit and get rid, get another £2k runabout probably petrol that will be cheaper on the short runs.

If you can DIY the maintenance you will be at least £5k a year better off after the first year.

..................................................
Its your money and you decide your priorities for you and the family.

There will be somethings you don't want to give up but you may be able to get better value than you currently get.

The SOA and a spending diary will help identify where the money is going and you can work on each element trying to eliminate, reduce or refactor to get better value and analyse your priorities( A lot have never done this).

Some changes may only look like small savings but enough of those and you soon get to break even and then the surplus to start tackling the debts longer term.

once you have the budget balancing and priorities sorted you can make choices.

One thing you do need to do is look at all the debts and the cashflow requirements going forward.
There will be some critical dates as those 0% come to an end you need to have visibility of how much cash is needed month to month to keep on top and think about what actions are needed to ge the cashflow manageable.

getmore4less

Your first goal is to break even month to month, so the debt is not going up.
That goal is fairly urgent and you have allocated money on the SOA that can make that happen from Jan.
Worst case should be you re-spend some of the debt that is paid off with your min payments on the CC.

The second goal which is very important milestone is there is no re-spending of money paid.

Then you can chip away at the rest.

Picking up this point I made earlier

One thing you do need to do is look at all the debts and the cashflow requirements going forward.

looking at the 2 big debts.
Coincident they are around the same amount and same rate?

Hire Purchase (HP) debt ...... 16322....(375)......5.9
Home improvement loan..........16635.....374.......5.9

£16,322 @ 5.9% £375pm 50 months
£16,635 @ 5.9% £374pm 51 months

If we do nothing with these then they sort themselves out in just over 4 years so you could just leave them alone and focus on the others.

They are not great rates so it may be able to squeeze a bit out of them but at 2% there is a saving of around £3k to be had.

Now you have the SOA under your belt and can see where the money goes another very useful tool in debt armoury is the snowball calculator.

There are a few about i use these two
http://www.stoozing.com/calculator/snowball-calculator.php
http://www.whatsthecost.com/snowball.aspx

if you chuck in your debts into the first one

Hire Purchase (HP) debt ...... 16322....(375)......5.9
Home improvement loan..........16635.....374.......5.9
Barclaycard....................5274......112...... .17
Sainsburys Mastercard..........5850......140.......19
Yorkshire Bank Master..........5761......60........0
Tesco Mastercard...............5190......75........0

Without putting in the 0% running out and allocating £1200pm you get 53 months, It also shows you the month by month details

If you put together a 5 year budget it should be manageable and even have enough capacity to absorb the off hick up like the car breaking down or the washer.......
A plan that is too tight just gets taken off track by things and motivation can be disrupted by yet another demand on money, by building in slack for the events your end goal should stay the same and if the events don't happen there is a windfall near the end.

To clear in 4 years needs around £1,300pm-£1,400pm which is also probably managble but would have the slack

silvercar

Red-Squirrel wrote: »

The DFW board guides can't move the thread from here, it needs to be a house buying board guide, does anybody know who they are?

TIA

Thanks for the prompt (and PM).

As Red-Squirrel says, this thread would be better placed on the DFW board, so I will move it.

Good luck to OP, you seem to have some great advice; well done for seeing the problem while it is solvable.