0% Balance Transfer or Loan?

Troublesum1

RAS said:

Based on your first post I was concerned that you didn't understand how precarious your situation?

You and your wife are spending £6k on living expenses. If you accept redundancy, that's a £2k per shortfall, before even considering debt repayments, £3k with debt repayments.

Redundancy is intended to cover costs whilst you seek replacement employment. You need to use that money to cover costs until you've got employment and at least passed any probationary period. If your employer is shedding people, it's likely others in the same field are also doing so, so don't assume you'll get the same salary. So you need £3k per month to replace your salary?

Now you advise that you are expecting a second child soon. So your wife will be on mat leave when you become redundant? Depending on her workplace benefits, that could be half pay for 6 months or SMT. When she goes back to work, that's another £1750 per month(+) in childcare. At which point even if you were in both full-time employment, you can't cover your living costs. 

OK if you don't get secure employment, you might be able to get income based JSA and maybe HB, apply for CB, depending on the mat pay. But you won't be able to afford the car, the gym, family (is that debt or gift), the current grocery costs or any other niceties.  Wake up?


Sort out a 0% card now, and stuff everything spare to pay off the ccb loan.

Sit down with your wife and work out how you can cover your living costs once she passes the 6 week limit on full SMT? Cut everything you can now, do not wait six months. Use that to pay down the ccb loan.

Seriously consider whether this is the right time to accept redundancy, unless you are very sure that you can get new employment.

Also consider whether the cost of childcare is such that it would make sense for one of you to work part-time, possible you rather than your wife considering the salaries, and reconsider once childcare costs reduce? The other would need to earn enough to utilise their tax allowance.

You might fall lucky, get a good new job, then cover the mat leave and be able to pay a chunk off the debt using your remaining redundancy. But you will need to reduce your living costs substantially going forward, whatever happens.

I'm risk adverse but we've seen some much grief caused by not planning to cover mat leave and increased childcare costs. It leads to a lot of problems with mental health, debt and relationships. Work together now and you'll sort it.

Hi RAS, thanks for your response. I'm a little confused as to your initial summary but yes, I'm under no illusion with regard to the serious nature of the situation.

The redunancy I'm taking is a voluntary redunancy so not necesarily as precarious as how you analyse it but there is of course a risk that I will struggle to find a similarly paid job. That said, I am fairly confident I will be ok - the work starts now finding that job.

My wife is not having a second child (that I know of), I agree that would make things a lot more difficult. So to be clear, no imminent mat leave.

"Sort a 0% card now, and stuff everything spare to pay off the ccb loan" - Do you think its likely I can get a 0% card that will cover the whole £8k?

Again, thanks so much for your response.

Troublesum1

Emmia said:

Troublesum1 said:

Emmia said:

Troublesum1 said:

Emmia said:

Troublesum1 said:

I don't understand what is going wrong with my paste of my SOA sorry I will try to fix that. Something I think I need to clarify is I do not get that redundancy payment untill the end of the year earliest - in actual fact it will probably be Jan of next year. It is also only £30k tax free, the rest tax applies. Many thanks for all your replies!

Looking at your SOA, you do have areas where you seem to be spending a lot of money (more than necessary). One way of tackling your debts, and put you on a better footing financially for the future would be to review your spending in other areas now. 

For example £750 a month on groceries (you could probably reduce that by a third easily) £266 a month on the gym... 

But you've got nothing for the MOT or car maintenance.

Thanks for the response Emma. I am literally on a crusade with the Mrs on the groceries - don't get me started. The gym, again, my Mrs is had a baby and she's doing PT £180 a month, she needs it for her mental health. I have a 24h gym membership and I have a boxing membership which is £50. I can reduce my puregym membership to the standard which will give me an extra £10 - definitely will do that.

My car situation is another can of worms. I have a new car from 2023 on a PCP. So I've not had to pay anything on MOT or maintenance really although that can (and will) all change now that the PCP contract is about to be over in September. I think its best to discuss one thing at a time.

There's lots of good advice available on this board to reduce your expenditure - you've got a combined income currently of £7k a month (this is pretty high) but your SOA indicates you spend nothing on some things (no holidays or emergency fund?) but money drips away on things like a £22 a month current account charge, £150 on "family" (what does that cover?)

You might want to redo your SOA by going through your bank/card statements over the last year to work out where you're spending your cash. Lemonfool has a SOA template that formats for MSE.

Ultimately though your wife needs to get on board with making changes (do you want to buy a property rather than rent?) for it to be successful.

I try very hard to avoid holidays, I don't plan to be on any holiday this year, Mrs and baby will go but that will be financed by the inlaws. We rent and we're in debt to hard to have an emergency fund but of course in the event of an emergency we'd had to do something.. £22 a month on the current account gives us world travel insurance, phone insurance and rewards which we get £5 a month back on. Family £150 is money we give to my side of the family that helps the upkeep of my Mum and Dad.

So I've actually got my own excel document which is even more detailed than the SOA and I've gone through many months of statements to get an appreciation of what we're spending on. It basically comes down to a disgusting amount of money on takeaway food and coffee and my grocery bill has been out of control for a while. All of which I am putting a lot of energy in to reducing (and also facing a lot of resistance).

Yes agree, you are very correct - apart from going to marriage counselling (another expense) I just have to keep banging my head against a brick wall there.

But now with the full context, what would you say to my original question? How should I deal with my current non-zero interest debt while I wait to get my redundancy payment? Many thanks Emmia (and anybody else that can help).

If you don't go on holiday why do you need world wide travel insurance? I'd personally buy a standalone policy if you needed it. You're spending £17 a month if you knock off the value of the rewards.

Cutting out takeaways is an easy move (and could lead to less time needed with the PT). You just decide to stop, delete the apps etc. ready meals are frankly just as quick as delivery and cheaper, if you really don't want to cook.

The travel insurance covers the whole family and the wife is from the US, goes back yearly (minimum). I also get mobile insurance from that account.

Don't want to sit here and blame everything on the partner but yes I agree with you, sometimes its difficult to convince people...

RAS

Firstly a 0% card does not pay off debt, that's magical thinking. 

You need to transfer the debt on your Paypal and Virgin accounts first, as that's more expensive. Close Paypal and massively reduce the Virgin limit.

If your wife goes to the USA every year, with or without you, the cost of that need to be in your budget. Total the cost of everything involved and divide by 12. Then stick it into an instant access ISA, so it's there when the costs are incurred. It might be paid on a credit card for security but is paid off in full before the debt's due. 

Troublesum1

RAS said:

Firstly a 0% card does not pay off debt, that's magical thinking. 

You need to transfer the debt on your Paypal and Virgin accounts first, as that's more expensive. Close Paypal and massively reduce the Virgin limit.

If your wife goes to the USA every year, with or without you, the cost of that need to be in your budget. Total the cost of everything involved and divide by 12. Then stick it into an instant access ISA, so it's there when the costs are incurred. It might be paid on a credit card for security but is paid off in full before the debt's due. 

Yeah, I never had that thinking.
Yes that would be the plan but my question is, is it likely I would be able to get a card that would cover those accounts?
My wife goes to the USA yearly but her parents pay for that so for now I don't need to budget for that.

Thanks for the reply!

RAS

Have you look at the MSE 0% checker. Soft searches. You don't know until you look.

Troublesum1

RAS said:

Have you look at the MSE 0% checker. Soft searches. You don't know until you look.

Didn't know that existed - thanks for that. I had a Vanquis option pre approved, they offered £1,500 limit. I had a 70% chance on a HSBC card, it didn't show a credit limit though. Not sure how deep I have to go into the application to see the limit they would give - do you know? Thanks.

flamingo22

BTroublesum1 said:

RAS said:

Have you look at the MSE 0% checker. Soft searches. You don't know until you look.

Didn't know that existed - thanks for that. I had a Vanquis option pre approved, they offered £1,500 limit. I had a 70% chance on a HSBC card, it didn't show a credit limit though. Not sure how deep I have to go into the application to see the limit they would give - do you know? Thanks.

Hi, from my experience I've only gotten the limit when I've been accepted. Hope you manage to work through things. 

honeybee1234

Hi @Troublesum1

A handful of queries:

1. What does the 100.00 under 'other travel' cover?
2. You mentioned a lot of takeaways - have you accounted for these under 'groceries' or have they not been categorised?
3. Do you have an amount for your own personal spends, or does it just come out of your account? 

I do agree that there's a good amount of scope to reduce the grocery bill, how does it work with grocery shopping? Do you menu plan at all, do a shopping list, do you or your wife go in person, and how often? Where do you usually shop? Does anyone have any particular dietary needs and also do you include household items and toiletries in that total? 

Troublesum1

honeybee1234 said:

Hi @Troublesum1

A handful of queries:

1. What does the 100.00 under 'other travel' cover?
2. You mentioned a lot of takeaways - have you accounted for these under 'groceries' or have they not been categorised?
3. Do you have an amount for your own personal spends, or does it just come out of your account? 

I do agree that there's a good amount of scope to reduce the grocery bill, how does it work with grocery shopping? Do you menu plan at all, do a shopping list, do you or your wife go in person, and how often? Where do you usually shop? Does anyone have any particular dietary needs and also do you include household items and toiletries in that total? 

Hi Honeybee, thanks for your response!
1. £100 for other travel is for when my wife has to go in to the office for work. She works in the city and has to get a train but she's technically fully remote and only goes in when there's a need. Honestly it would be safer for me to put that down as £200 as her manager has had her come in more often lately.
2. I have not accounted for the takeaway under groceries, I would personally like to erradicate them completely but I do need to realise that is not possible and come up with a budget for that
3. I tried to capture this within the "clothing" budget, I honestly buy very little for myself but here and there I'm sure I do get a few little bits that do add up

Toiletries and household items is in the groceries budget. I have to be honest, ever since living with the wife/gf I just assumed we were not overspending on groceries. Within the last year or so I had noticed some ridiculous grocery items and quantites so I decided to start checking the bank statements and realised we had a real problem. All that to say, we currently have no plan, we just buy based on percieved immediate need and we do it in person. 99% of time I buy groceries from Tesco and 99% my wife buys groceries from M&S (reading this thread you would genuinely think my wife is actively trying to bankrupt me), in fairness to her, M&S is easier to walk to than Tesco and she doesn'r drive. I do about 80% of the grocery shopping by quantity but the money split is about 60/40 Tesco/M&S. I try to buy in bulk where I can. I have now embarked on making a list of all the regular groceries we buy and I plan to go through the list and put a marker down for what should be bought where and at which quantity for the week.

Hopefully those responses help. Appreciate all the replies on helping me improve my finances in general and I do desire that advice, I was planning to start a debt-free diary for those more general points but happy to see them fly in here. Please if there's any advice with regards to what I should do with my non-zero interest unsecured debt that would be greatly appreciated.

Many thanks all.

Emmia

It may be worth looking at what you've got in the cupboards and eating through that/using that as the basis of meals before shopping again. 

M&S can be good value / better quality for the price.

You might also find it works to shop via Ocado or similar online, so you can work through the shopping list together, and see a running total.

But if takeaways aren't in your SOA groceries budget - how much are you spending on them?