First Steps to Solvency

Bargainhunter30

I spent the last few days reading through your diary alt80. Not surprised you have such a following and support on here, I was hooked. You've had so many ups and downs in such a short space of time, but your real character really shines through. I agree with so many supporters on here, you've achieved so much at such a young age and you should be so proud of yourself. Hopefully your counselling will help improve your self worth and deal with all your regret and guilt, we all have that but mistakes build character and help make better future decisions. I agree also counselling would help your wife too with all her insecurities. But she loves you so obviously and shows this by sticking by you and supporting you. The best presents to give her and your son are your time and and love. Dont ever underestimate their value, they are worth so much more than an expensive bag or toy.

To give you some perspective on money: for our family of 4, take home is around 2k per month, with essentials about £1200. This is more than enough for me, partner would love a better car, but understands he'd have to sacrifice valuable spare time to achieve. We both work part time and share child care of our kids (3 & 5), whilst having time to enjoy ourselves doing hobbies: running, cycling, surf, SUP, travelling. We have a beautiful 4 bed detached house, achieved by saving well and prioritising our spending. I spent my 20's travelling in search of something, the grass was always greener, but realise now that happiness is not what I thought. Not the highs of drinking, parties and thrills of adventure but just contentment of spending time as a family and with friends. Seeing you families happiness is something else and I think lockdown has shown you this too. I hope you carry on, dont let your friend on the path of self destruction affect your life too, otherwise you'll end up in the same position with no family or friends. You can only help him once you're in a good place. Good luck and stop belittling your achievements!

enthusiasticsaver

alt80 said:

@enthusiasticsaver he’s a mate and I’m concerned about him. Definitely goes through some bad phases with it. Hear you re wasted evening. Agree tbh.

Except he does not behave like a mate.  He puts you down at every opportunity.  To help him you first have to get clean yourself and you are making brilliant progress on that but if you come off a phone call to him feeling ill and craving the substance he will drag you back down to his level. It does not sound like he is in a place to accept or even want help at the moment either. 

Weekend plans sound good.  

ladyholly

With regard to your mate could you insist he only contacts you during working hours. You can say you are trying to spend more time with your wife and son. If he rings out of hours try ignoring him at least some of the time. He might get the message eventually.

alt80

Been having a play with the numbers for the debts whilst half watching tv with wife lol.

Just paying current mins and shuffling card deals onto 0% when required I’m looking at being free of the cards Nov-23 starting April (when I’ve cleared the o/d). This gives me £325 in card overpayments that I’m currently paying towards the RR balloon – (£325/m x 36 months = £11,700) + (£780/m x 5 months = £3,900) = £15,600 towards the £48.5k balloon payment. This leaves me with a balance of £32,900 to find either by refinancing the balloon or some other way.

 

Same conclusion I keep arriving at – if I want to get rid of the cards and the RR balloon I need to get rid of the BMW. If I don’t move the BMW on I’ve got another balloon payment to find if I’m keeping it or I’ll have paid for the use of the car but still need to say goodbye at the end of the term anyway. Going by current values of 4 year old 440i cars I’ll be able to clear the balloon and see about £5k in my pocket if I sold at that point. However the BMW costs £590/m including its running costs (which are accounted for in my monthly budget so could realistically be put towards the RR balloon) – Effectively by keeping the BMW I can recoup 8.5months of payments back. However, that means I’ll be keeping the car for a further 23 months so from a purely fiscal point of view I’m down by 14.5 months of payment / maintenance, so £8,555. Moving the BMW on in April after the o/d is clear I’m looking at an additional £590/m x 36 months towards the overall debt total of £72,755 (cards+RR balloon). Currently I have £1,105/m going towards debt repayments and can release £590/m which can also go toward debt repayments if I VT the BMW, this gives £1,695/m towards debt repayment leaving me with a total debt of £11,735 at the point the RR balloon is due.

 

I have considered keeping the current RR until the end of the term and p/x it against a new one. At that point I would be free of the credit card debt and the upside is always having a work/ family car that is new/ in manufacturer warranty (or warranty extension for years 3-4). Downside is it’s a debt I never quite get rid of unless I worked towards putting money away to buy one outright way off into the future and just save the cash to offset the depreciation each year to buy another at the 4 year point so still costing ha. TBF would be better just keeping retained and putting into income producing units which offset the cost of financing the RR. Anyway - There would be c.£10-12k equity in the current car at the end of the term if values remain the same. Realistically I won’t get another Supercharged FFRR for £11k deposit and current payment. I would get a Supercharged RRS for £11k deposit and current payment. If I wanted another Supercharged FFRR I’d have to find an additional c£4k deposit to keep current payment unless there was some kind of deal on. – The deals tend to be on the diesel / hybrid models I found rather than the Supercharged. Clearing the cards at the current rate of £1,105/m I’d be credit card free Feb-23. This is accounting for no sales/ overpayments to the credit card accounts so I’m basically choosing to live a bit. From Feb-23 to April-24 I’d have £33k if I chose to put the credit card payments away + c.£11k equity in the Range Rover – so c.£44k to put down on the hypothetical new RR. Say I put £45k down as by then I will have built a £6k EF (which some may be used but there’s nothing big coming on the house). I’d be looking at being able to HP it over 49 months paying c.£1,350/m. OR I keep the current Range Rover and save towards it’s replacement. I’d have £11.7k debt outstanding at the end of the term but own the RR outright at 4 years old. Could pay the £11.7k debt over 6 months (current RR payment and card payments). At 42 months I would be debt free with the RR. If I kept it until it was 10 years old it’d be worth about £20-25k looking at current values of a 10 year old Supercharged or I run it until it really probably would be past it’s best at about 20 years old. Problem then is almost undoubtedly I won’t be able to buy another petrol one. So if I bought a new on when the current one is 10 and ran that until it was past it’s best I would be about 70 years old and possible wouldn’t care the car I bought then would no doubt have to be electric.

 

Seems to me the big decisions are on the car front rather than the cards. Initially I hardly regarded it as debt but ultimately it is and costs a fair amount a month. Tbh I sort of wish I wasn’t bothered about the Supercharged, if I could put up with a hybrid RR I could buy through the business and it’d cost me personally £670/m. Supercharged accounted for in this way would cost me personally £1,450/m. I know everyone on here will tell me it’s !!!!!! madness being 5.0 V8 or !!!!!! but I love mine. Love the engine, had the same in my Sport and it 100 suits the car in a way a diesel or hybrid never would. Wife tells me it’s ridiculous when the Hybrid is just over a second to 60 slower and it’s nothing but a big truck anyway. Logically I know it is utterly stupid but I can’t face having a Range Rover without a V8 soundtrack and I can’t face not having a Range Rover at all. Realise this probably reads a bit ‘first world problems’ lol. Few on here have said why spend on the Range Rover rather than having a cheaper work/ family car and have a more expensive toy – honest reason I drive my RR all the time, a toy I’ll do about 5k miles a year max in and tbh probably not even that in future as a lot of the car mates also like the other stuff – looking to avoid. So probably only do about 2k miles a year if I’m spending more time with my family which is my plan therefore to me it makes sense to have the best car as the one I use all the time. As much as I’ve banged on about AMs, I’d rather have my RR and no AM than an AM in the garage and a small electric car to use everyday through work because realistically what are you driving everyday and getting at least some value from? – It’s not going to be an AM lol. Dream would be FFRR for everyday Bentley GTC for the wife and AM in the garage haha.

 

Second car I’m considering if we do get rid of the BMW is a Merc C300 coupe through the business – would cost £250/m BIK. Slower than the BM but still a really nice motor for wife/ split with RR for business. Gets the wife’s approval and we’ve never owned a Mercedes so something a bit different.

 

Sorry to go on about the cars again – this seems to be the real problem/ dilemma going forwards financially or is as I see it? No other diaries seem to have this going on tried to work out what everyone else is doing with cars tbh ha so what is everyone on here doing for cars – just accept it as a monthly drain on the income or own outright for a very long period of time? Perhaps I’m the only one it’s a big priority for remember the comments when I started this basically why the !!!!!! do I owe £95k to Land Rover FML lol put it like that sounds !!!!!! crazy I know. I have accepted the cards and am now living to a budget and should be able to live within my means going forwards so no further balances on credit cards are accrued just through over spending. Another note I have cancelled some of the unused cards, was a good feeling tbh almost end of an era being able to say I don’t need a load of available credit – going to live within my means instead.

 

@Sun_Addict Thanks, yeah really looking forward to it, not wanted to have a weekend off in a long time, looking forward to this one. Computer off Friday night check in Saturday x2 and Sunday x1, my work plans for the weekend there.

 

Also thanks for vote of confidence but don’t think that’s the case re jealously but not good for me will agree there. Tried to call today, I sent him a message said I’m a bit tied up with work, he's been messaging so is ok. Lied but don’t want another night of him on the phone at 1am tbt.

 

@Bargainhunter30 Thanks for your post. FML though reading my dross over the past few days, lol. Really am trying to engage with counselling tbh it’s painful at the moment but I’m trying to do everything they suggest and the cbt element is helping a bit. Yeah we all have a past, I know that and do hope with the professional guidance and working at it myself I can continue to move on. I know my family deserves more, it’s the thing I hate myself for the most tbt can’t go back, can only learn from it and move forwards one day at a time.

I’ve literally no idea how you survive on £2k/m but kudos to you for doing so and still having a life. I have said before on here I do think really making it is being happy with where you’re at. I never have been so far. Had tenants truly happy to be moving out of rented into a £100k house of their own, it’s great to see them move on and happy so I’ve seen it first hand people who don’t have a lot but are there with life.

 

@enthusiasticsaver Thank you. I know he doesn’t always behave like a mate, I think it’s just banter tbf but doesn’t come across that way very often and yeah he knows what presses my buttons. Do agree re meeting / conversations - I don’t want to be back to square 1 and am aware it could be very easy for me to slip back into the habit. Main reason I don’t really want to meet him even when lockdown ends. He’s 100% in denial it’s a problem and he does it most days for most of the day and into the night, got really bad for it recently. Can’t stand by whilst a mate kills himself, realise that probably sounds a bit dramatic but I think he could tbh. The more sober I am the more I worry about him, wife thinks I’m an idiot for it but he’s a mate and he’s got kids that’d be left without a dad, parents without a son if he carries on down the road he's going.

@ladyholly fair point re work hours - thing is he won't get off the phone haha. Just another !!!!!! nightmare to deal with.

TheAble

I typically drive my cars until they die. My first car was a second hand jobbie I got for my 18th and drove it until I was 32 lol. Then got another car second hand which wasn't great tbh - a nice drive but it cost me a lot in repairs. My latest two I leased initially and bought them at the end of the leases, now I will probably drive them until petrol cars are eventually banned

alt80

@TheAble First car for 14 years, wow that's a long time. Had mine from 17-21, thought that was a while. 

Know what you mean re repairs - my Sport was getting like that when I p/xed it for this one. Also it was the sort of age you wonder whether to take to main dealer or risk the independents cost me about £3-4k/a in maintenance and it had a c.£6k bill hanging over it for common problem too. 

Something we have in common I'll have to be dragged out of a petrol car ha.

enthusiasticsaver

The big decisions were always going to be about the cars as so much of your disposable income goes on financing the debt you took out to pay for them.  Quite honestly though it sounds crazy taking out a new RR when the term finishes to avoid paying the balloon if you are adamant that you will only drive a RR.  I agree it makes sense to put most of your money into a car you use most of the time rather than a toy though. Also bear in mind if you go for the Mercedes to replace the BMW and have a £250 BIK monthly bill then the savings won't be £590 a month but £340 and that is assuming maintenance goes through the business. Can you not go for a cheaper one until the RR is sorted and then look at the second car again? 

We have always looked on the price of cars as a  travel cost and look to fund it in as economical a way as possible.  For us that means buying in cash as borrowing your own money is cheaper. We don't have £100k cars though. 

alt80

@enthusiasticsaver I never really saw it that way but think you're right - the cars were/ are a massive part of the debt. I've basically written off the idea of paying back the refinance through my personal income so cars are the biggest debt. The additional gearing that paid my previous card balances will unwind with time, I've had to accept that. Can't keep going around in circles over it though realise I am with the cars until I have a real plan which I feel I need to get and stick to. 

Ideal world I'd pay the balloon on current RR and keep until it's 10 years old and buy last petrol one they will produce if the government plans happen, run that until it is probably 20 years old. Last of the V8s. Hope son doesn't grow up to be a tree hugger, he'll hate me ha. 

If I buy the Mercedes, maintenance will be covered by the business. As I'm no longer taking a bonus I'm sure the £250/m can be absorbed. Until this year (covid), I used to take a big dividend end of financial year, never did anything with it, always went towards paying card debt tbt only time I paid more than minimum. Another prompt for wanting to sort this out lockdown 1 realised that wasn't happening this year. Know it's better staying retained if I can life within my means, reinvested and contributing towards ongoing sustained growth which will pay off long term iyswim. Know where you're coming from re going for something cheaper - not only me, wife now not so sure about the electric mini, specced one online and upset it doesn't have much kit could have told her that before ha but anyway.

Some days I wish I had that attitude to cars tbh - if I didn't care I'd probably feel rich lol. 

enthusiasticsaver

I have to say I would not want a mini either but only from a totally practical viewpoint in that it is too small and not sure what it would be like on a long journey which I often do in normal circumstances. Also not too sure about electric until infrastructure there which will be a few years yet I think. Hybrid not so bad. 

I think the debt came about because of the cars primarily in that you were spending so much on financing them it did not leave you enough to cover your life style. Hence the credit card debt and refinancing the BTL portfolio. Your situation is now getting better but PCP is a notoriously expensive way of purchasing cars and buying brand new cars is even worse because cars depreciate so quickly. I read somewhere cars lose 30% of their value in year 1. 

I think people choose particular types of cars for different reasons. I used to think when your diary started that you chose yours, the RR, the BMW and the FType as they were status symbols showing people you were rich and had made it especially as you only buy new cars. However I am not sure now that this is the only reason as you genuinely seem to love cars and have an enthusiasm for them so maybe my first impression was harsh but I still think what people think of you is important  to you. Some honest reflection on why you only seem to go for brand new luxury cars might be useful. Even a Mercedes fits that mould. I genuinely think that you cannot afford two luxury cars which are almost entirely financed with no deposit when you still have £28k on credit cards and are paying private school fees. 

stymied

I didn’t quite follow your train of thought but keep your current RR and finance the balloon seems to make the most sense to tie in with what you want. It really doesn’t sound like you want to go back to the Sport and starting the new RR finance cycle again immediately doesn’t sound like forward progress.

I understand that you need to grow the business but could you compromise with no dividend this year and a smaller than usual dividend next year to give you a bit more of a boost towards the balloon?

The 5K return from the BMW sounds useful - how long is it until you could get that?