Sass' 2008 DFW ramble thread

Sassamac

Yeah you're right, I never used to worry about paying annual bills or what happens if something breaks, as we've always had a bit put by. However, since having admitted were in serious debt, the realisation that any of these things would put us in further debt if we dont allow for them monthly, is a real worry.
The thing is, even once we're debt free I want to start on overpaying the mortgage so Im wondering when will we ever be able to afford days out and holidays and beer money.

Ooh near miss NSD for you then. At least the guides is budgetted for.

Sassamac

Good news to report.
DH phoned the agency about the new job offer and asked what the pay is. Its 50p per hour more then where he is temping now, so he went to the big boss and told him this and he matched it to keep him. So now he's staying and has just a 5 mile drive rather 27, so we'll get to see more of him. Doesn't sound like much but its £20 a week, which means it almost exactly matches his last ongoing job.
I have done some more number crunching - a new SOA each month for March, April and May as theres odd changes each month.

March
Income £1543
Debts £231
Fixed costs £708 (no CT or water)
variable costs £240
Total spare = £364

April
Income £1553 (C Ben up)
Debts £231
Fixed costs £838 (CT + water)
variable costs £230 (petrol down, working closer)
Total spare = £254

May
Income £1569 (TC's up)
Debts £203 (OD interest gone with TC rebate)
Fixed costs £838 (same as Apr)
variable costs £230 (same as Apr)
Total spare = £298

So well over £200 surplus each month with which to overpay the debts or put a bit by. That should knock a good months off the DFD, then we can think about the remortgage in July. Im happy that we're comfortable for the time being anyway, we shouldnt have any reason to rack up more debts for the forseeable future.

Keeping_Positive

Thats great news :j .

Have you allowed for the other extras such as yearly car and bike costs?

Sassamac

No Wendy, not in that budget, because its not something were currently paying / saving for. We need to sort that. All the extra come to £390 per month, so theres not enough surplus to accomodate everything, but there is certainly a fair bit there to play with. Not sure which way to approach because if we save £50 per month for this and £50 per month for that, to allow for the annual things or emergencies, then its just money sitting in an account not helping us. While 4 out of 5 of our debts are costing 15%+ in interest, I think we're better off using the surplus to overpay the debts.
Still a bit undecided really, the car doesnt need dealing with til Nov / Dec and I like to think we'd be in a better position then. Maybe I'll see if we can either pay off all the 15% debt or get it transfered onto the 6.9% and then worry about annual expenses when the debt isnt costing as much.

Was chatting to DH last night about what we should do with this surplus money. He didnt seem to have much of an opinion on the matter (and I thought I was getting him interested in our finances at last!). I have just worked out if we use £200 per month to overpay the debts (obviously this would have to be every month) it knocks our DFD down from 61 to 27 months. Which is well worth doing, although we wouldnt be able to do that and pay the capital on the mortgage.

Im also in a bit of a quandry as to what to do with DD's music class, as if DS goes moves to nursery next term, I will have to either do music with both or neither of them (because of the session times). But DS would get more out of swimming or gym. Tried swimming with DD when she was a baby which she loved but didnt learn anything and Im not paying £4 for 30 mins of nursery rhymes in the water again. At least with DS at his age, they actually teach the kids to swim. I would love to be able to spend more money on the kids activities because I think its so valuable to them, but then I think long term about being DF sooner, which will free up cash when they're at an age they will actually remember the experience.

Or we could just pay the capital off the mortgage (an extra £220) and have very little surplus money, and even less when we remortgage in July as its bound to go up. Part of me thinks if we can pay the capital then we should. Although, Im tempted to keep paying Interest Only 'til we remortgage, by which time DH should have been taken on permanently by his company, hopefully for a better salary. Or we could try and extend the term from 23 to 25 / 30 years. Or we go IO again for a couple of years 'til we're debt free. I am just fearful of being back in the situation of being stretched to the limit and unable to pay if anything happens, as has already happened to us once before.

Blimey that was a bit of a ramble. Still I guess the clue is in the title, thats what this is for.

Keeping_Positive

Some tough decisions but I would overpay credit cards because they are likely to have higher APR's. Also you can take it month by month and overpay whats available in case anything unexpected comes up. If you switch to repayment then the flexability is gone.

With regards to kids activities your children are young and I think the DF target to give you more financial security is more important. I never really did anything with the kids when they were younger. Brownies and Guides are very new. My income has increased quite a bit over the last few years which is why I finally have a bit of headroom for extras. (ignore that fact I was spending on extras I couldnt afford before!!)

Sassamac

Right, mission for the morning was going to be to try and shuffle some credit cards, but..... DS fell out of bed last night, and his head is still sore, plus it gave him a nose bleed, so Im keeping him off school this morning.
He's currently curled up on the sofa and looks knackered so if he stays there, and DD entertains herself (that'll be a first!) and they dont wind each other up, then I can get this done. But generally trying to make phone calls when both kids are around is a nightmare, so we'll see! Plus the house is a mess and I need to do the dishwasher without DD climbing in it!

Sassamac

wendy24g wrote: »

Some tough decisions but I would overpay credit cards because they are likely to have higher APR's. Also you can take it month by month and overpay whats available in case anything unexpected comes up. If you switch to repayment then the flexability is gone.

Thanks Wendy, this flexibility is the entire reason we have always had debts on CC's and not taken out a loan. The CC APR's are almost the same as the OD's actually, but the OD's will be dealt with when TC's pull their finger out their bum and pay us back. But the CC's are still a whole lot more expensive than the mortgage, so I think your right, that should be decision made.

wendy24g wrote: »

With regards to kids activities your children are young and I think the DF target to give you more financial security is more important. I never really did anything with the kids when they were younger. Brownies and Guides are very new. My income has increased quite a bit over the last few years which is why I finally have a bit of headroom for extras. (ignore that fact I was spending on extras I couldnt afford before!!)

Yay for your income going up. Is that because of going back full-time and less childcare, or just pay rises, promotions etc.
If only we knew what the future would bring all this planning business would be a whole lot easier. All I can say in about 3 1/2 yrs (if they dont keep changing the system) I will have both kids in full-time school, so the potential for our earnings to go up are great, but then, its never as easy as it seems. DH doesnt have specific qualifications and hasnt been following a distinct career path. I have the potential to that, but in a low paid industry, where most people my age have spent 5 years gaining experience, not bringing up kids. And most people with my quals are 5 years younger. Im hoping 'life experience' will help me skip a step on the career ladder.
Im rambling again, I'll shut up now!

Sassamac

Finally got into my internet banking this morning on the third attempt. Had to raid a bit more of the mortgage fund as we were right up to the limit again. I forgot that I paid a chq for the whole half terms worth of music class. Normally I arrange to pay cash every week, but a) I didnt have enough cash on me, and b) I knew our new TC payments would kick in this week. At least it wont drain the cash this month.

Keeping_Positive

Wouldnt a crystal ball be great?!

Payrises and promotion the reason. OH has been main childcare provider for 9 years now. Part of me would like to spend more time with the children but Daddy has been good with the childcare and housework so I have been able to concentrate on earning as much as possible.

Are there any training courses you could do from home when your little ones go to part time nusery? I know thats a couple of years off but it might help prepare for when they go full time. Ive got OH to do a computer repair course from home which he can spend more time on now with all three kids full time.

lauradora

looks like things are looking up for you again sass well done :j you seem to have things a lot more under control now, i certainly can't follow your budgeting-you really have done a thorough job!