Getting a loan to do fun stuff!?

Macc

Not sure this is the right forum, sorry if it's not. I'm 36 and I've always been prudent/tight with money. I think perhaps I have been overly so and now having a bit of a moment! Be interested to hear what other people do.

Never had a credit card and my mortgage is the only time I've ever borrowed money. I've built up decent equity in my house and in a rental property I own. Also own/run a small business that would prob a sell for a little bit when comes time to sell. On paper my net worth is OK and in 15 years or so me and my family (wife, 2 kids - 2 and 4) should be quite comfortable once mortgage is paid off and rental mortgage is paid off with rent coming in.

But we don't have spare money to play with now. My salary covers our outgoings and we have a year or so bills in the bank. But we don't have the spare money to go to Disneyworld with the kids or whatever. Friends of mine who have similar jobs/mortgages etc do and I assume it is on credit.

I feel like maybe I am erring too much on the prudent side and insisting we only pay for things with actual cash and not taking on credit is actually making our life worse now in return for a theoretical comfortable future in later life? Do you guys pay for things like holidays with credit card / loans or do you only go if you have the actual money in the bank?

The kids (2 and 4) are still young and I kind of feel like I'd rather have money to spend now while they are kids to make experiences and memories and pay for it down the line than scrimp now and reap the benefit when we are in our 50s/60s and the kids are grown up. I don't care about "things" or having a fancy car or anything but holidays days out etc are such a great thing when you are a kid and don't want to deprive my kids.

I can get 25k loan over 5 years which would be 1.9k in total interest. Basically 1.9k to be able to do fun things for 5 years. No-brainer? Absolute worst case if something drastic happened to my job or health the equity in the house would easily cover the 25k.

Anyone else have this kind of non-buyers regret!? Never really wanted to take on credit but don't want kids to miss out on fun stuff either. What is the best way of loosening the purse strings a little?

[Deleted User]

Personally, I think it's a no brainer NOT to borrow for something like a holiday.

I'd save for and do it a couple of years.

boo_star

Macc wrote: »

Do you guys pay for things like holidays with credit card / loans or do you only go if you have the actual money in the bank?

Paying for things like holidays on credit is silly, don't do it.

I can get 25k loan over 5 years which would be 1.9k in total interest.

Are you sure about that? Just because someone is offering loans at 2.9% doesn't mean you'll actually get it. In fact it sounds like you might have a fairly thin file, you'll probably not be offered such low interest rates.

Anyone else have this kind of non-buyers regret!? Never really wanted to take on credit but don't want kids to miss out on fun stuff either. What is the best way of loosening the purse strings a little?

Not by saddling yourself with £25k worth of loan debt that's for sure.

Macc

Just read my post back and don't think I've phrased it very well. The loan wouldn't be to blow on a load of holidays etc that we wouldn't have otherwise had. But more of an advance. Instead of saving for months/years for it, we can do what we want to do when it is right for us and then save in the same way but to pay it off. Does that make sense? It is the freedom to do what we want when we want that we are looking for.

The frustration atm is we are fairly asset rich but cash poor. We've got the net worth of being able to do what we want whenever but the lifestyle of almost living hand to mouth. Looking for a way to re-balance to a more middle ground so can get some benefit now of being in a decent position overall. Locked into a recent mortgage deal for a while so nothing can do there. What would you suggest if not a loan?

The 25k @ 3.0% has been offered yes, Santander. Seems a low rate?

foxtrotoscar_2

Normally people save to do 'fun stuff'...they don't get into debt.

boo_star

Macc wrote: »

Just read my post back and don't think I've phrased it very well. The loan wouldn't be to blow on a load of holidays etc that we wouldn't have otherwise had. But more of an advance. Instead of saving for months/years for it, we can do what we want to do when it is right for us and then save in the same way but to pay it off. Does that make sense? It is the freedom to do what we want when we want that we are looking for.

The frustration atm is we are fairly asset rich but cash poor. We've got the net worth of being able to do what we want whenever but the lifestyle of almost living hand to mouth. Looking for a way to re-balance to a more middle ground so can get some benefit now of being in a decent position overall. Locked into a recent mortgage deal for a while so nothing can do there. What would you suggest if not a loan?

You're going to need to find £450 a month to cover your loan repayments, why not just save that for a year or two and go on a really nice holiday?

Honestly you could probably go on a nice holiday with the £5.5k you'll save in one year.

And you'll have an extra £2k in your bank account at the end of five years to do with as you wish, instead of it being in Santander's back pocket.

The 25k @ 3.0% has been offered yes, Santander. Seems a low rate?

Offered how? I don't think Santander have a soft check for loans so you've done a full application?

foxtrotoscar_2

If you are living hand to mouth where is the money going to come from to service a £25k debt?

Willing2Learn

Macc wrote: »

…we are fairly asset rich but cash poor. We've got the net worth of being able to do what we want whenever but the lifestyle of almost living hand to mouth. Looking for a way to re-balance to a more middle ground so can get some benefit now of being in a decent position overall. Locked into a recent mortgage deal for a while so nothing can do there. What would you suggest if not a loan?

If you want to get some opinions on what your options are, instead of a loan, then you will need to post up your SOA (Statement of Affairs).

Yellow_mango

If you have a years worth of bills in the bank, I’m sure that would fund a holiday or so. I’d borrow from yourself first as and when the time is right (and use the £450 a month you were going to spend repaying the loan to pay yourself back and save for the next holiday).

bspm1

Macc wrote: »

Not sure this is the right forum, sorry if it's not. I'm 36 and I've always been prudent/tight with money. I think perhaps I have been overly so and now having a bit of a moment! Be interested to hear what other people do.

Never had a credit card and my mortgage is the only time I've ever borrowed money. I've built up decent equity in my house and in a rental property I own. Also own/run a small business that would prob a sell for a little bit when comes time to sell. On paper my net worth is OK and in 15 years or so me and my family (wife, 2 kids - 2 and 4) should be quite comfortable once mortgage is paid off and rental mortgage is paid off with rent coming in.

But we don't have spare money to play with now. My salary covers our outgoings and we have a year or so bills in the bank. But we don't have the spare money to go to Disneyworld with the kids or whatever. Friends of mine who have similar jobs/mortgages etc do and I assume it is on credit.

I feel like maybe I am erring too much on the prudent side and insisting we only pay for things with actual cash and not taking on credit is actually making our life worse now in return for a theoretical comfortable future in later life? Do you guys pay for things like holidays with credit card / loans or do you only go if you have the actual money in the bank?

The kids (2 and 4) are still young and I kind of feel like I'd rather have money to spend now while they are kids to make experiences and memories and pay for it down the line than scrimp now and reap the benefit when we are in our 50s/60s and the kids are grown up. I don't care about "things" or having a fancy car or anything but holidays days out etc are such a great thing when you are a kid and don't want to deprive my kids.

I can get 25k loan over 5 years which would be 1.9k in total interest. Basically 1.9k to be able to do fun things for 5 years. No-brainer? Absolute worst case if something drastic happened to my job or health the equity in the house would easily cover the 25k.

Anyone else have this kind of non-buyers regret!? Never really wanted to take on credit but don't want kids to miss out on fun stuff either. What is the best way of loosening the purse strings a little?

Not many people have a year or twos worth of money in the bank to cover bills...

Also you have children 4 and 2, best time to have gone to Walt Disney World is before they start school, bit expensive when they do.

19lottie82

You claim you are prudent with money, if so then why don’t you have any savings?

And if you don’t have any cash left over at the end of the month, then how will you afford a loan repayment?