First Steps to Solvency

stymied

The simple explanation is, you can’t just pay the minimums because you’ll be spending more than you’re paying off, will lose access to low interest credit and lose the house / everything. Would she understand it in those terms?

Sun_Addict

Your wife really needs to be involved in the budgeting because how would she cope if something happened to you? My mum hadn’t worked since her 20s, my dad walked out on us when I was 14, she didn’t know where to start with the finances, she never had to worry about them before. Same with me, Mr SA went from being a healthy 47 year old earning good money on the Monday to fighting for his life on the Friday and being unable to work ever again. Fortunately I was able to cope because I’d always been involved in the finances. Just a thought because her parents won’t be around forever to help her out.

theoretica

alt80 said:

Thanks for comments. Not in the best frame of mind so not really going to respond but have read. Someone asked about BTLs and what the point is in growing - they are income producing but rather than taking income to spend one turns into the next and also I invest retained profits from flips/ main business so bit of a winner all round. I do have a plan to deleverage a little so no personal risk and then offset further units to buy some toys. Still get to keep the unit and get the toy but not at expense of my day-to-day living. I enjoy investing in property also and have a bit of an ambitious goal of 100 units at c.60/65LTV by the time I’m done. If it happens great if not I’ve tried. Would like to have something to pass to son, yes.

You make the BTL sound like a hobby - one which pays for itself and might in future pay for some toys, but you talk about growth for the sake of growth/property collecting and getting enjoyment out of it.  I am definitely not saying hobbies are a bad thing, but I can see why your wife might say something resentful when you present it like this. Of course you are gathering valuable and income producing assets which have the potential to be used in other ways in the long term future.  Perhaps you would find it worthwhile to emphasize that a little more? As well as the numbers adding up in financial plans it is worth considering how you present them to other people. 

I guess it all comes down to the balance between growth and spending you have talked about, but acknowledging that that balance for most people shifts over time. Your FIL seems to have done OK for funding his retirement and might confirm to your wife that a retirement portfolio is very worth developing if you called it that.

enthusiasticsaver

alt80 said:

Thanks all

@enthusiasticsaver 100 I’m on board get it gone for good. Realised no miracle cure for this and not going to finance my way out of being in debt.

Wife still being a nightmare and yeah me sorting it out as usual. Not going to make any rash decisions but need to sort it can be rescuing her from herself forever lol. Showed her the Christmas !!!!!! going to take 7 months to clear she doesn’t even see it. Actually said why can’t it just be paid off the card at the minimum amount (the spends card is now cleared because it’s interest baring and I’m not going to BT the balance into another card as there’s a fee). 

FML if your husband is just as bad absolute kudos to you for achieving your retirement goals. 

@Purplelady65 she’s just going to have to forget it or expand the nails empire. I’m not going to miss out on having a holiday for Christmas gifts. I’m willing to have one cheap holiday a year and the rest can go towards paying my cards off and RR after they’ve gone. Not overly bothered about Dubai etc but I would like to get away for a week or two at some point covid permitting.

Tbf my husband was not as bad as your wife. He would not dream of spending hundreds on stuff without discussing it first unless it was from his personal spends account which I have no say over. We sorted it by having a personal allowance each into our own current accounts so he knows when his is gone he has to wait until next month.  Not sure your wife would be on board with that though.

Do you think moving away from using a credit card would help?
Has she ever had to live within a budget?
Can you discuss finances with her more often so she actually gets how much she is spending when she has these blowouts?
Do you think she is doing this to get back at you or do you really think she is like you were and has a spending addiction? 
Not questions you need to answer but something to think about? 

Does she not understand about the spend card having to be cleared or you will start the following month at a disadvantage? I think you have done so well it will be a shame for her to mess up your efforts. I also agree that a holiday should be a priority if you can make the figures work. Make sure you get a say on where it is though rather than her keeping up with Jones mindset. 

I know this is frustrating for you but you have turned your attitude around so brilliantly so keep going. 

getmore4less

There have been a few points raised, some there are options. 

A lot of the budget(plan) is pretty fixed and does not change unless reviewed like the mortgage has you can do the same with others every few months but reality is that money does not exist for anything else..

Once you take those out your real money you can do stuff with is a lot less than the £8k more like £2.2k and even some of that needs spending so reality is you are only tracking and have to discuss around £1,500pm.
she may still be seeing £8k and wondering what the problem is, see if she can get around that smaller  amount, this is regular discussion/review until it sinks in. once it is gone that's it no more from the magic money tree.

BTL, I agree maybe this might need a different story to show that it is there for future income so needs to grow and also be less geared especially the PG.

Maybe one option is that it starts providing an income based on the equity rather than 50:50 of its income now becoming zero later.
I think I worked out before the current drawings are 6% of equity, rather than zero from the BTL maybe as it grows and becomes less geared you could pull 2%-4% of equity which would still allow more growth of that business and income in a balanced way.

The drop dead(unable to work) scenario is succession planning again, it is not just the personal stuff who steps up to keep both  business running and producing income.

alt80

Thanks everyone. Wound up spending day with family yesterday after planning to work/ review this mess. So job for today - will update been useful thank you. On phone now so still can’t read the budget post. 

Variable- £190

Nothing stupid just filled RR with petrol and a coffee out.

As I’ve said before I’m not after a retirement plan- if I get it great and should be a consequence of some of the stuff I’m doing in business tbf. I love buying income producing property. Buy one everyday if I could. Don’t see why I need to justify that to wife she should be pleased. Agreed I need to work towards deleveraging a bit, once the PGs are off I’m 100 growing the portfolio as well as the flips. Right deal I’m growing the portfolio tomorrow. Can’t see why the !!!!!! wanting to make more money is even being questioned on a !!!!!! money forum. 😆I’d make £50k/m net if I could then I’d go for £100k, wouldn’t everyone if they were honest with themselves? Keep reinvesting the retained and it’s like a bonus. No !!!!!! secret I don’t see why people can’t see that. I don’t love where my income level is but not gonna sit about getting depressed about it any longer. Would rather do something about it.

FIL is no great investor lol just stuck with an average house and paid into a public sector pension wouldn’t know how to make a few quid from an obvious deal if it stared him in the face, wouldn’t even lend me £100k for property stuff lol. As he says my appetite ’nothing but avarice’ 😆 even asked if I’m speaking to the counsellor about it Christmas Day FML. 

100 I’m serious about sorting the debts - seen it’s holding me back no point sitting around feeling ashamed of it anymore just need to get on. Could have done with reading this re wife though def good idea re setting out the figures I’ll do that thanks. Lost it a bit with her yesterday told her if she’s going to be a !!!!!! about it she already knows there’s no bigger !!!!!! than me when I put my mind to it ha massively regretting that now, just really upset her and not what I was aiming for. Have a way with words I do lol.

getmore4less

You don't have to consider it retirement planing but do need to think in terms of increased income planning. 

If you don't have a plan to draw income from the BTL it just becomes a inheritance for someone else. 

alt80

@getmore4less longer term plan I’ll draw some income from it slower growth no doubt. Right now need to get into the position of simultaneous deleverage and growth - I’ve missed out on a few years doing the stupid stuff so now under pressure to get it sorted and make up for the lost time a bit.

Hate the idea of retirement- think that word sets me off tbh don’t want to think of a day I make no money. 

rugbymadfamily

Retirement doesn't mean making no money, it means putting your years of hard work and money earning to work so the money you made keeps making you money! Especially with a property portfolio, could still keep earning (maybe with someone else doing the day to day sp you can kick back and relax a bit) and with a fully paid off Res mortgage. 

alt80

@rugbymadfamily I’m all for passive streams of income. What I mean is not actively making money. Not doing that, might as well be dead to me. I get people have different views and I get I’m not going to be able to maintain the same pace forever also that I’ve !!!!!! up some of my 30s so got time to make up for. 

Res mortgage couldn’t give a !!!!!! if I’ve got that still the day I die if I can get a better house. All off in the future though.