First Steps to Solvency

RelievedSheff

There is definitely some room for savings in that budget.

If you really do spend £650 a month on groceries then you should probably look into meal planning and only buying what you need. We eat well and get nowhere near that amount per month!

The BMW is another obvious big monthly saving.

ladyholly

I am sorry if I sound harsh but if you think £2000 on clothes and another £1000 on hair and beauty treatments is sensible when (a) you are trying to repay debts and (b) live a more sustainable life with your disposable income you are not taking it seriously. I am sure your wife has a wardrobe full of designer stuff which either she needs to wear or sell. If she cuts her coat according to the cloth she would be wearing less expensive brands. Certainly at the moment no one is going anywhere so I would assume she is in jeans and jumpers or similar much of the time. Your son is a growing lad so supermarket brands wold be ok for him with one or two decent outfits for occasions but I would buy these for an occasion not on spec else he will grow out of them before he wears them  I understand there are shops and possibly on line where you can buy and sell designer clothes. I dont know because I dont either have the interest or the income to buy them but it might be worth a look. . Incidentally you can also hire designer outfits for special nights out. That way you can have a different outfit for every occasion and spend a lot less. You have previously said she has loads of make up so why more? 

How do you think people on minimum wage manage. I can tell you - they dont have luxury cars, they eat the cheapest food they can get (and often are forced to use food banks), they buy their clothes of ebay, charity shops etc, they cant have days out except to play in local parks or similar.  Do I need to go on? You are, whether you believe it or not, in a very privilleged group of people but you have made the choice to have expensive cars, send you son to private school and have a house with a good sized mortgage. That is your choice but now you are facing the reality of where you need to cut back your spending to sustain these.

Only you can decide how to do it but I would strongly advise not meddling in risky investments. As others have said the returns can be amazing but so can the losses and you could end up losing the lot.

I think you have to think long and hard what is important to you both and work on a sustainable budget.

rugbymadfamily

I'd advise staying well clear of the stocks and shares. I work in finance and have had a few friends take the plunge (reasonably knowledgeable people in finance) and its been stressful to say the least. Recommended leaving investments in place for min 5 years so its no quick fix to clear the debts....also potential for addictive behaviour and constant t review / obsession.

As for budgets, as others say it is about priorities. We earn fairly well but have a sizeable mortgage (London based). Our priorities are socialising and holidays so we have large spends there, but neither of us care about clothes so the spend is minimal. My husband loves cars but now recognises that we have a finite amount of income and has decided he loves holidays, eating out and socialising more. So his previous habit of getting a brand new high end car on finance every few years has gone (I never supported this lol, in fact I hated it!). We recently bought a 2 year old solid car that does the job we needed, he doesn't enjoy driving it but does recognise that we have more money now for things we enjoy more. That's not me saying that you should down grade your car, I'm saying you have to decide on prioritising somethings or reduce spend a bit on everything - its a personal decision to make.

I was like you in that I previously just had a few spend categories and a misc one so it meant I didnt really know what was going on. My spreadsheet now has about 30 different categories so I can really hone in on where our money is going - it has revolutionised our finances and it was @getmore4less who originally suggested it to me so I am glad I took the advice on board!

theoretica

Any new field you go into think of the generic advice you would give someone new coming into your field - research, be cautious, if it seems too good to be true it probably is, don't expect an easy get rich quick scheme, be prepared to make mistakes...  I suspect someone's own field (for everyone, whatever the field) is the one in which they are best equipped to find any good short term opportunities.  So add me to the list of people who think speculating on the financial markets would be a very bad idea for you!

alt80

Thanks all some stuff to think about definitely. 

Don’t really know why my res mortgage is coming into this? Agree it would be big if I’d bought the house I wanted to buy and the mortgage was say £650k. Irony is if I wasn’t in debt would get it ha. As it sits I owe less than £290k on a £625k house - I know plenty of people some my staff with similar mortgages, less income and much worse LTV. @rugbymadfamily don’t know what you earn tbf but £320k mortgage not that dissimilar to mine, assume similar ltv being London based really not massive imo, wouldn’t worry about it at all mate.

@enthusiasticsaver could be interesting, idk whether it’s something I’m serious about or not was more thinking about flipping stocks than long term, turn a bit of extra profit towards RR balloon. Agreed re high risk/ high rewards or losses - understand the principle just not the instrument iyswim. 

@ryanm8655 yeah wasn’t looking at funds mate more doing something like your mate, I’d not going to get a buzz off sticking money in a managed fund as others say on here that’s a long term game. Actually reckon I’d enjoy trading though but do see your point re it being gambling.

@getmore4less actually reckon I’d get a buzz off it and keep me away from other stuff mate but probably should just stick to what I know tbh. 

I’d actually be up for the longer term stuff but not really an option for me def not whilst I’ve got all these debts and ultimately when out of debt I’m probably not going to pass on an AM/ higher value res home to invest in anything other than more units so was thinking short term/ higher risk.

Re budget - I agree mate tbh I am keeping track of all spends - mark them off in traffic light too ha. During lockdown not spending anywhere near what we were apart from my slip up but that’s been and gone not be doing that again. 

I’d 100% like to get to the point it was all planned out properly but the wife is not going to stick to that - she’s told me that this was as good as it got worked out together. Eg I told her I don’t need clothes this year, she just said well if I don’t spend it she can - true if it’s accounted for I suppose. Not really sure how I get around that one tbh mate?

@RelievedSheff/ @getmore4less re food we spend £90-100/w on actual food spends. Could be a bit less if more careful I think. Rest is for contingency/ coffees out etc. Actually did say we need to cut the ‘food’ and add another category for the other stuff possibly 2/3 categories she outright refused to let me do that so again idk. 

@ladyholly My wife has already cut the spends she won’t cut more. I wish she would tbh but she won’t. Not sure how I deal with that tbh ultimately it is what it is. She has said she’ll stick with this if I stick to my end of the bargain but won’t be punished more for something that’s ultimately my issue.

I agree re son’s clothes tbh they don’t last a long time and he wrecks some stuff so if I were a single dad or something I would probably just raid the kids clothing section at Sainsbury’s once every few months, even suggested wife could buy school shirts and other stuff school allows to be bought from other places from Sainsbury’s rather than uniform supplier but she won’t have that feels it could get him bullied - don’t think so personally but she is where she is on it. 

She’s agreed to no makeup the beauty is beauty treatments not makeup eyebrows and the like. Stopped having the lips done so one step in right direction I suppose. 

@theoretica ha given people that advice on here re property on other diaries lol. You’re 100% right and tbh I think I probably won’t do it just one of those fleeting thoughts as I do think I’d get a buzz from it.

enthusiasticsaver

If you are thinking you will get a buzz from investing then you definitely should not do it.  Seasoned investors or those who do it professionally research constantly and have advisors and consultants who are constantly weighing up the management of funds and investment processes and wider global economy (only way to invest really, investing in individual shares or currencies really is gambling and inevitably leads to losses, you should know that given your dad lost everything).  It is long term, sustainable and best done in a tax efficient way via pensions or isas not on a whim in the hope you "may" make a profit.  

I can see why you think people should not be focusing on your res mortgage as in proportion to your income it is not huge (LTV is irrelevant unless you plan on selling which presumably you do not) BUT the reason they are is because as someone else said yesterday if people spend a disproportionate percentage of their income on one area of expenditure they compensate elsewhere or they do as a lot of us do and spend a reasonable proportion across the board.  So if someone pays for private school fees  then they don't do holidays or buy a cheap car.  Or if they like luxury cars they have a low mortgage or no private school fees.  You are doing as I said yesterday and have upgraded your lifestyle in every area which is why you have debt.  You have a fairly high mortgage, high private school fees, a high standard of living and very expensive luxury cars so to make your budget balance enough to repay the debt you  have incurred you have to drop either the lifestyle, the cars, the private school or the mortgage.  Given it is not going to be the mortgage, your wife won't compromise on the lifestyle or the private school then the only other area is cars.  You are good with figures so you need to convince your wife that she cannot have everything in the lifestyle costs or reduce the cars outgoings or do away with the private school. Once the debt is gone you will have more in your budget so it is temporary. I know you don't think your lifestyle is anything special but it is compared to most normal families. Most do not drive £100k+ RRs or pay out £13k a year on private school fees or fork out £50k or whatever on a BMW as a second car and a £320k mortgage is not obscenely high but it is not low either. Having almost £2k a month in living expenses on top of all that is also relatively high although I think for your income it is actually low.  I have said before our net income is less than half of yours but our monthly disposable income is more than twice yours because we don't have expensive cars, a mortgage or private school fees.   It is always a question of priorities unless you are a multi millionaire and there are less of those than you think.  I think your mates situation has also skewed your thinking into assuming his position is normal.  You have tenants on ordinary wages so you know that is not usual. 

getmore4less

alt80 said:

Thanks all some stuff to think about definitely. 

Don’t really know why my res mortgage is coming into this? 

might be confusion over the 
Rest of budget (/m):
House: £1810

as that includes all the other house bills  not all mortgage.

alt80

@enthusiasticsaver My dad was into horse racing / casino type gambling but thinking about the stocks/ currencies a bit more, yeah it’s gambling and avoided that for my life so far as know all too well where it can lead. I know I could get a massive buzz off the risks paying off. Get it on the units as I’ve said before would buy one everyday if I could and property is a lesser risk for me and don’t invest outside known area so it’s not quite got the excitement of will it or won’t it work out iyswim but I still love it. Probably need to park the investing idea tbh.

Long term I’ll sell if I sort my debts out and can upgrade it but I’m not getting desperate about it like I was. Still love living here and parked the obsessing over the val of my res home not felling ashamed about it anymore. Things difficult with the wife, she doesn’t get it - doesn’t see why she should be punished for my problems and feels cutting her lifestyle is punishment which I suppose it kind of is. I’ve talked her through the figures. Realistically I think if the C300 works out the BMW will be going so that’ll be something sorted at least. 

Don’t really look at my staff/ tenants as the competition tbh. Yeah I want to compete with the big boys always have not there though yet agreed and suppose always wanted to say up yours to my JV mate and a few others I know with the big family money, big portfolios would be nice to be able to say yeah I made it too not gonna lie still a factor for me but not through getting into further debt aware I can’t carry on like that for an image. 

RelievedSheff

alt80 said:

@enthusiasticsaver My dad was into horse racing / casino type gambling but thinking about the stocks/ currencies a bit more, yeah it’s gambling and avoided that for my life so far as know all too well where it can lead. I know I could get a massive buzz off the risks paying off. Get it on the units as I’ve said before would buy one everyday if I could and property is a lesser risk for me and don’t invest outside known area so it’s not quite got the excitement of will it or won’t it work out iyswim but I still love it. Probably need to park the investing idea tbh.

Long term I’ll sell if I sort my debts out and can upgrade it but I’m not getting desperate about it like I was. Still love living here and parked the obsessing over the val of my res home not felling ashamed about it anymore. Things difficult with the wife, she doesn’t get it - doesn’t see why she should be punished for my problems and feels cutting her lifestyle is punishment which I suppose it kind of is. I’ve talked her through the figures. Realistically I think if the C300 works out the BMW will be going so that’ll be something sorted at least. 

Don’t really look at my staff/ tenants as the competition tbh. Yeah I want to compete with the big boys always have not there though yet agreed and suppose always wanted to say up yours to my JV mate and a few others I know with the big family money, big portfolios would be nice to be able to say yeah I made it too not gonna lie still a factor for me but not through getting into further debt aware I can’t carry on like that for an image. 

Your wife needs to be aware that she is a big a part of your debt problem as you are!

If she has seen the figures written down and still doesn't get that then it is time to start thinking about getting her a prepaid card with a set amount of money each month. When that money is gone there is no more until the monthly reset. Maybe that way she will start to understand.

You have to find a way of getting through to her because if you don't your debts will start to spiral out of control again when lockdown restrictions are lifted.

enthusiasticsaver

This is one reason you need to step away from the keeping up with people like druggie mate. They have other issues than money. I agree with RS that your wife still sees this as your problem. It isn’t. 

Glad common sense is prevailing on the novice trading idea.