desperate mfw

linda_c_3

hi

i'm new to the site and wanted to see if anyone had any ideas on how i can reduce my outgoings. the aim is to pay off my scary mortgage debt within the next 10yrs if possible. i finally paid all my other debts this month and have my wedding in sept all budgeted for. i owe £147,000 on a flexible discounted deal that has another 3 1/2yrs to run - i'd like to get as much of this paid as poss before this point because i don't earn enough to remortgage it to another lender. i have 2 buy to lets that i put £200 a month towards but i have built up around £60,000 equity in them from 100% mortgage investments and would like to hold onto them for my kids education and my retirement since i don't have a pension. my income is £25 basic plus between £10-20k bonus a yr. my partners income is around £1200 month take home but he has a large newly settled default so is not financially linked with me. he contributes £200 a week towards our outgoings

£660mortgage
£200 rentals
£35 household and landlords insurances
£300 fuel for 2 cars -long commute
£66 gym x2
£20 rates
£46 life insurance
£90 mobile x2 and tv/internet package
£130 food
£100 social
£60 car insurance x2

so our total spend is just over £1700 - my income is £1500 and i get £800 a month from my partner so how much should i be allocating to overpaying and why am i always overdrawn by the end of the month???

Welshlassie

linda_c wrote: »

hi

i'm new to the site and wanted to see if anyone had any ideas on how i can reduce my outgoings. the aim is to pay off my scary mortgage debt within the next 10yrs if possible. i finally paid all my other debts this month and have my wedding in sept all budgeted for. i owe £147,000 on a flexible discounted deal that has another 3 1/2yrs to run - i'd like to get as much of this paid as poss before this point because i don't earn enough to remortgage it to another lender. i have 2 buy to lets that i put £200 a month towards but i have built up around £60,000 equity in them from 100% mortgage investments and would like to hold onto them for my kids education and my retirement since i don't have a pension. my income is £25 basic plus between £10-20k bonus a yr. my partners income is around £1200 month take home but he has a large newly settled default so is not financially linked with me. he contributes £200 a week towards our outgoings

£660mortgage
£200 rentals can the rents be put up to cover these at all?
£35 household and landlords insurances have you found the cheapest insurances, use things like Quidco to take out the best deal to get the cashback.
£300 fuel for 2 cars -long commute do you get any of these expenses back from work? Can you cash share at all
£66 gym x2 are these actually used?
£20 rates
£46 life insurance is this the cheapest quote?
£90 mobile x2 and tv/internet package can these be reduced at all?
£130 food
£100 social can you cut back on this at all? have people around to your house instead of going out, take it in turns to cook?
£60 car insurance x2 is this the cheapest quote?

so our total spend is just over £1700 - my income is £1500 and i get £800 a month from my partner so how much should i be allocating to overpaying and why am i always overdrawn by the end of the month???

Try keeping a spending diary you'll find this will show you all the things that you are spending out on each day and you forget about eg coffee, lunch etc. You'll be surprised how much these things mount up over a month. If you are going into your overdraft each month then you are spending too much each month, you shouldn't be starting to overpay until you have sorted out your budget for each month. Have a look at Martins article on budgeting. Fill his spreadsheet in for all the categories and you'll find there are several categories that you may have forgotten about and need to account for.

If you want to reduce your outgoings then you need to think about cutting back on some of the areas above. I have put some comments in red above.

In order to work out how much you should be overpaying, have a look at some of the overpayment calculators on the stickies at the top of the board, this will give you some idea of how much you will save and how much of a difference your overpayments will make.

Good luck.

Ma77hew

Are your mortgages on your BTL properties repayment or interest only? Is the 200 an additional payment on top of the mortgage or is this to subsidize the rent?

If they are repayment you would be better of switching them to IO and overpaying your home mortgage as you get tax relieve on the interest element of a BTL mortgage but not on the repayment element. Once you've paid down your own mortgage you can then switch to repayment at which point you may find rents have gone up and can cover the whole mortgage.

Subsidizing BTL is never a good idea as it means the numbers haven't stacked up, if your on interest only it means your yield must be less than 6% (average mortgage rate) which isn't good.

financialbliss

Hi Linda_C,

I’ll mention your budget as there’s been other comments on your BTL. I’m in the process of creating my own budget, so may be able to offer a few pointers here.

There’s a MSE budget article here:
http://www.moneysavingexpert.com/banking/Budget-planning

I find it’s best if you try to create a monthly budget. Try to do this as accurately as possible. If need be, start a spending diary.

Eg if your partner is giving you 200 a week towards expenses, it’s really (200*52)/12 ie 866.66 a month and not 800.00, ie 200 * 4.

Do the same for any payments, eg council tax is typically 10 payments a year, so convert that to a monthly amount. Other expenditure needs to be accurate too including things that are irregular, eg Christmas and holidays. The more accurate the budget, the better you can find areas so reduce.

I can’t see any expenditure in your budget for: gas / electricity, (or have you tagged this as rates?), road tax, car servicing, birthdays, Christmas, holidays, clothing, shoes etc.

Sum your income and expenditure, if you’ve done a detailed budget and you’ve got money left over, then perhaps you can throw this at the mortgage. If you’ve overspent, then you need to look at areas to cut back!

Hope that helps!

FB.

Capricorn_One

Hi Linda,

from that list, I would say cancel the gym or find a cheaper one. Does your workplace have a gym that you could join. The local leisure centres have cheap membership.
There are other inexpensive ways of keeping fit like cycling, running, swimming.

You knew this already I'm sure but to me that's one thing to cut back on.

Kind regards, Ed.

phizzimum

there seem to be quite a few things missing from your budget - council tax, utilities, money for car service/MOT, holidays etc

are you sure you only spend £130 on food a month? Don't forget to include all the little extra trips to the supermarket that can easily happen no matter how organised you are!

linda_c_3

hey guys

thanks for the responses its really great to see everyone is so friendly. I've checked around for car insurance and we can't get it any cheaper - i got hit by an uninsured driver grr and also have penalty points and living in northern ireland with joyriders makes insurance over £300 a year each. plus my partner recently gave back his nice ford and bought a cheap as chips 12yr old piece of crap so not many companies will insure him. life insurance is the cheapest thats for us both and covers my btl's too. gym is used extensively and only costing me £30 and him £36 so i wouldn't want to give this up as i'm on a weight loss program. partner's mobile contract finishes in a month and hes going pay as you go so that should save £25 a month. buy to let rents are going up by 85quid each in 2 months when leases are up so that will cut back on that - i borrowed extra on one for my car so i didn't have to take expensive finance and that part is on repayment over 5yrs hence why I'm putting money towards them but it was cheaper than a personal loan 4.49% fixed and i had no other options!!

we've been cutting back on the social life and probably wouldn't even spend the £50 each a month but I would go out for coffee with friends or buy myself lunch at work every couple of weeks instead!

Clothes and makeup etc I buy from giftcards family get me for birthday and Xmas. I even joined the library so I don't need to buy books/magazines.

gallygirl

linda_c wrote: »

hey guys


Clothes and makeup etc I buy from giftcards family get me for birthday and Xmas. I even joined the library so I don't need to buy books/magazines.

Nothing wrong with buying mags as long as you buy the right ones in the right way. If you read Martyn's weekly email (last week's) there were several great offers of say £1 an issue for 3 or 6 issues, plus a great (ebayable) gift. Go through quidco & you'll end up in profit :T .

Also if you don't know where the money goes then start a spending diary & account for every penny! There is also a Demotivator tool on the home page where you can put in your monthly salary, price of a daily Mars Bar etc & it tells you how long you work to pay for it - v v scary :eek:

iieee

I'm going to have to echo what others have said - subsidising a buy-to-let really doesn't make sense to me.

If house prices continue to go down (which looks likely) then your £200 a month is depreciating. You'd be better off putting it in a bog standard savings account. Get your £60k equity out and invest it elsewhere.

Nala

iieee wrote: »

I'm going to have to echo what others have said - subsidising a buy-to-let really doesn't make sense to me.

If house prices continue to go down (which looks likely) then your £200 a month is depreciating. You'd be better off putting it in a bog standard savings account. Get your £60k equity out and invest it elsewhere.

I agree - the buy to let has to pay for itself. You shouldn't be paying towards it out of your own earnings - it isn't working.