Is there a way out of this?

RAS

I agree with sourcrates and would add that if you planned another child and mat leave, it would have been a good idea to have saved half your salary for at least the same period as the mat leave, in the preceding 18 months. Even a surprise could been saved for over 6 months.

As for re-mortgaging, you can do that by choosing the best option from your current suppliers offers about 6 months from the end of the fix, providing it is for the same amount and same period as your current mortgage. Any idea of buying a bigger property will have to go on the back burner for a few more years.

Any reassessment of your eligibility for a larger mortgage will be based on your high debt levels and providers' attitude is much stricter now than before Truss' budget. Even if you manage to keep up with all the debt payments it doesn't take a forensic accountant to work out that your budget and repayments exceed your income, so there is an additional "income" source somewhere. And that's before you factor in the dead costs of fees and additional tax. So best to wait at least until the youngest is in state paid for childcare. The kids will just have to bank up. 

Once the youngest is sleeping overnight, could you work a day on occasional weekends or an evening a week whilst hubbie babysits?

NeverendingDMP

Yes there is a way out. It's a bit tricky and will involve some savvy budgeting but you can so do it and it will eventually get the debts down once you get started on it.
Yes I'd let eldest daughter pay for phone -as you get older you have to pay for things so accept the offer. Holiday-are you committed to one or could this be ruled out this year? Food and clothing and haircuts, are you sure you haven't been spending more? Family of five here and our budget is higher despite all my best efforts. School uniforms would wipe that budget out before you start on anything else. Our waters and energy is similar to yours so they might be okay.
We have remortgaged twice whilst in a dmp with our current provider. We just renewed on line (with a barrel load of defaults) the difference with you however is you are hoping to move-is this soon, 2-3 years?. I'm not sure that you can afford to move yet/though -sorry.....hiding behind hands here.. 
With regards to working any extra income is gonna help but if you are doing three school drop offs and paying childcare would it actually bring in a lot of extra money. The salary calculator is a good website for working out take home pay and turn to us is good for calculating any benefits for that income. 
First steps I think is doing a spending diary and looking at some of the challenges, the grocery challenge thread is a good one. Then the budget has to somehow match the income. House, food heat, petrol etc is first, the credit cards come way further down the list.  
If the grocery budget is coming out at 600 or less please share some tips with me as I'm failing to keep mine as low as I want to with everything going up so I need all the ideas I can get 😆

TheAble

You can just about trim the £590 needed from your expenditure but it's going to be hard as every "optional" thing e.g. entertainment, holiday, horse riding would need to go. It might be too tough for you.

I don't think £600 on food for a family of seven is too bad. Petrol at £300 is high - obviously if you can trim your car usage it will help.

Get the mobiles onto the cheapest sim only deals you can find. No upgrading of handsets until the current ones actually become unusable (my own policy but then I've no interest in mobiles other than they simply need to do the job)

My own view is you can't keep borrowing from your parents. Borrowing from family when it does happen should be a last resort, for a specific purpose and on a very short term basis with a definite date when the money will be repaid. In your case it's just being wasted - yes it's going towards a debt but you are simultaneously accruing others so effectively no benefit.

When you do tackle the debts, do it in priority of when the interest free periods expire. There's no guarantee you'll be able to roll onto new 0%s - not only are these becoming harder to get but in your own case your credit file probably looks fairly shot. If these do become interest-bearing it's only going to increase your pain.

Finally the mortgage is something to be aware of. You've still got a couple of years on a good rate and you haven't taken out a fortune, both of which are positives, but note at renewal you might be looking at a couple of % points higher which will also add pressure to your budget.

On the plus side, as the debts are gradually repaid you'll find things begin to improve for you. Best of luck

MasterG83

Morning and well done for posting, and being very honest about your spending, SOA and answers, this will go a long way in getting through this.

It looks all too familiar for many years I was in the same situation. I follow and am an advocate of the Dave Ramsey Baby Steps. I listen to his podcasts every day, and have done for 5 years now and I'm Dave (ish) about his teaching.

Firstly I am selling everything that I can, car boot, Facebook market Place and anyone that will listen. I'm then cancelling any subs that are not needed, then I am saving £1000 emergency fund in a new account and this is when I cut up all my credit cards. Your emergency fund is really only for that, car breaks down or roof leaks, You then do a budget every week or day or at the very least the day you get paid, and work out a zero based budget (google it)

We are then going to snowball the debts, from smallest to largest (its phycological and proven) and attack the Barclays debt quickly, this then frees up £89 a month to be snowballed onto the Tesco Credit card, and so forth. 

This is more about mindset than money, if you can earn more money by working all the hours you and your husband can, then the better. Cancel any holiday plans, until you get intense about this, it will continue.

fatbelly

Familyofseven said:

@fatbelly - i’ve read through other posts about defaulting - but what actually happens? Would that mean not being able to remortgage in a year’s time? I’m looking for a full time job and might have to ask parents to do some childcare if needed - my husband is also looking for a second job so I don’t want to jump to defaulting but not sure of any other options as jobs etc take time. 

Thanks for replying! 

I understand the reluctance. You will have to see how sustainable this is with some extra income and help from parents.

Your credit rating (not score) will be being affected anyway by all the minimum payments and you will eventually fall foul of persistant debt rules. The 0% deals will dry up.

Defaults are registered after 3-6 months of missed payments and that means the whole entry drops off 6 years later.

You will always get some remortgage deal from your current lender. It will not be 2.something percent though.

Finally have you kept a record of food/housekeeping expenses? I suspect 600 is an underestimate.

Grumpelstiltskin

Don't be frightened of the children saying ' all my mates have that' when you tell them things like Disney has to go. I can guarantee 90% of their mates parents are in debt as well.

How old are the children you drop off at school? Any chance any of them are old enough to make their own way to school?

MrFrugalFever

Hi,

Well done for coming on to this forum and acknowledging your situation, that's the hardest part. Please, please do check in on here every so often and post, it really will keep your mind focused on the task at hand - tackling your debt. I find it gave me a purpose to read and post on here when I was going through a similar time.

Firstly, there's always a way out of things like this, however, there's always a consequence too, all of which have varying levels of severity and impact to the individual.

Before you consider any drastic approach, sit down with your husband & discuss your SOA in detail. If you both aren't onboard then it can be really tricky to make it work.

Looking at your SOA there are certainly enough savings to be made to bring you to net zero on your income and expenditure (to align your income with both standard spending and debt repayments), however, you need to get to a surplus of income. To do this, some drastic, immediate and difficult decisions will need to be made. As harsh as it may feel towards your children, believe me, doing this now to avoid certain debt management solutions will be far easier on them.

I am an advocate of healthy eating and exercise, so I would encourage you to review this with your family and make amendments where necessary by way of meal planning, change of shop (go to Lidl/Aldi for example), check prices in shops as sometimes bulk is cheaper and negotiate with the sports facilities providers. You may find that there are certain sporting activities which can be free or funded towards for your children, such as after school clubs (normally subsidised).


We do not need all of the streaming services and latest gadgets, didn't have them back in the 80's so can learn to live without them for a short while now. SIM only contracts, one film/tv account such as Netflix at £5.99 would do, freesat is also a great alternative and....reading books! Local library etc.

Are any of your children old enough to get part time job and contribute to household income?

Holidays/Presents/Christmas gifts etc are all luxuries unfortunately (so hard to say because to children they are special) but you need to find alternatives to this. Put your money towards a interest bearing debt and get it paid down.

You spend £600pm on food and £300pm on fuel, have you looked in to a debit/pre-paid debit card which offers cashback on supermarket spend and supermarket fuel? Do you or your husband have access to an employee benefits portal that provides discounted gift cards to spend in supermarkets?

Your absolute focus now is monitoring where EVERY PENNY goes and putting EVERY PENNY towards an interest bearing debt (using snowball method), scrutinise every spend - ask yourself is it a need or a want, if its a want, PUT IT BACK. 

After a few months of being hard on yourself and your family the emotional strain will reduce and you'll get used to it, get all children onboard with clever money savings tricks, make games out of things like who can find the cheapest product alternatives in the supermarket for each item or who can use the least amount of water etc.

I'm a firm believer that once someone puts their mind to something with sheer determination then it can only be a good thing!

NeverendingDMP

Just to add to Mr frugal fever as I'm in total agreement with their advive. Pennies make pounds and there are ways to make small bits of extra cash that make a huge difference along the way. Can you swap banks and get cashback. Does your bank offer any cashback at places you would normally spend (I earn 9 a month in cashback from my bank just by paying certain bills through them.- it doesn't sound much by itself but it's almost the cost of the monthly TV license. I also use chase card for my food shop and get cash back on that. I also collect points in any food  shop that will give me a discount when I'm ready to use them 😂
Each day I round my accounts so they end in zero. E.g 122.57 in the bank then I put 57p into savings. This becomes my slush fund for when the month is longer than the money or on a good month goes to debt.
I don't know if there has been a thread each year but i did a save/ earn and extra 2019 pound in 2019 challenge. I learnt loads of tricks from.other people on the thread. Can't quite remember it's name but I would think there are similar challenges that's worth a read 

Sncjw

Does your daughter pay board. If she is of working age she could pay towards her keep. If will help reach her money management skills for when she flys the nest

This would help with some extra cash. 

MrFrugalFever

Just done a quick check - Santander Edge Current Account (£3pm) gives 1% cashback on supermarket spend and Chase Current Account (currently soft credit check) provide 1% cashback up to £15pm for first 12 months from opening.

Kroo Bank (soft credit search) provide 4.35% AER on all positive balances - with £4,000+ going in to your account once a month, you could get a few £'s back.

Now you're probably reading this and thinking its just a few pounds its not going to make a difference and seems like a lot of hassle for just a few pounds when i'm thousands in debt....well it does all add up and if you can have the attitude of every little bit helps then you'll be out of debt in no time.

I use POCKIT pre-paid debit card for all my fuel spend at sainsburys fuel station and food (although not the cheapest food shop) which is normally between £200-£250pm, this generates me about £7-8 worth of cashback with a £1.99pm fee. I then pay whatever my cashback is, less the £1.99pm fee, in to my NS&I direct saver (accepts debit card payments). I've had over £200 from this in last 18 months and its paid for my return flights next year for my holiday!