Looking for advice/help re. large debt

Thanks for the replies everyone. Will try to answer the questions...

- Overdraft is an old student one. Balance is -£756. It is currently interest free but reduces periodically so we are trying to clear it before each new interest free limit.

- Mortgage balance is £74,000, House is worth approx £150,000

- Children are between 20months and 8yrs

- Child costs include: all their activities, sports clubs, after school clubs, school lunches, my eldest is having tutoring as they had been struggling at school, friends birthday presents, school trips, equipment for sports activities and probably a few other things that have slipped the net. We are aware that if we absolutely had too this is an area we could cut back on. But it would be an absolute last resort. They are great kids and are doing so well in their various sports, we would really feel we had let them down if we had to stop them doing the activities they love.

- Interest free periods run out as follows:
Nov 18; 2 cards, one = 1155, other = 6927
Mar 19; 1 card = 6046
Aug 19; 1 card = 2916
Sept 19; 1 card = 4119

- re. emergency fund, I'm aware that's not what constitutes an emergency fund, I just didn't change the name. It's just a separate account we transfer £300 a month into to make sure we can cover the annual expenses when they come around. We have no 'true' emergency fund - so, as you say, emergencies go onto credit cards.

- Groceries: this works out at £107/week which I thought was pretty reasonable for a family of 6 including all household stuff. We have used aldi/lidl in the past but are currently using Morrisons online for a couple of reasons. As we only have a small fridge we have to do 2 shops a week and we were really struggling to find the time to do. Plus we found it easier to keep to a budget when you can see fiddle with the online basket total. We don't use any particular brands - shop based on offers mainly.

- Clothing; I agree it sounds high, trying to be as realistic as possible as we both work in professional jobs that require a certain level of dress code and it includes all 4 children shoe, clothes and school uniforms.

- Gym; this really is a necessity. My OH had a very significant accident last year (part of the reason we're in this scenario) and its for rehabilitation. They do technically have access to NHS facilities but with the costs of getting there, parking and the limited time slots, it makes more sense all round to use our local council one. As I say, we're hoping this will stop within the next 6 months as their recovery progresses.

- My wage; In reality, I can't do an awful lot. I'm taking all the extra shifts going I can but I am fairly constrained. I am at the lowest point, salary wise, for my career. But as I am working PT, the increases are slow.

Sorry for the mammoth post. Hope this clears a few bits up. Please let me know if there is anything else. And very grateful of all the advice.

JayRitchie wrote: »

Thanks for answering. In truth your financial position is way better than lots of people - newish car, low mortgage, good % equity. Seems you've done really well, and managing two jobs with four young kids. At present you have just over £21k debt and pay just under £5k a year - this would clear in 4 years except that the interest rates are about to hit and will kill you.

Against all normal advice I think you need to think about some form of loan or remortgage. I don't think you have a budget with enough slack to really hit the balance for 18 months and get to a decent position. To some extent this depends on how high the card interest rates will be and whether you could get another interest free deal. I hate this advice - you are literally mortgaging tomorrow but you would be better having some savings for emergencies and car replacement/

Thank you - we had been thinking about whether this might be a sensible way forward. I think we need to explore the specifics a bit more in terms of fees/interest rate repercussions but I'm glad we aren't the only ones to have considered i!

Mumoffourkids wrote: »

Just thinking about the kids costs of £500 per month, I have six kids, the four oldest all do activities but I certainly don't spend £500 per month on their activities. Mine are 16, 12, 9 and 8. The two youngest are 3 and 20 months and so don't do activities. They go to nursery the three days a week I work and I will occasionally take them to the local soft play across the road from me, but that would only be once a month.

I think you need to break down the expenses further to see if anything can be saved.

For example, my four all play rugby, this costs me £7.50 per month for all four of them. Two of the girls do gymnastics at £13 per week and the two middle ones do two after school clubs a week at £10 per club per term so say £4 a week for them. At 8 years old for your eldest, I would also assume that the school trips are not that expensive either. Not like my eldest two who are secondary school and their trips are getting very expensive.

I know you don't want to cut down this area but you have four kids, they cannot do every club going. I gave my kids the choice as two of the girls were doing swimming and they wanted to do gymnastics. I told them they had to choose as I didn't have a limitless supply of money. It gives them the option to choose what they really want to do.

Also your SOA shows nothing for presents. I would expect that you should have something in here for presents.

Thank you - totally understand what you're saying. To break it down a bit more...

Tutoring - £100
Swimming - £117 - 2 eldest swim for a club so have pretty high fees and no. 3 has just started lessons
Beavers & Cubs - £25
French/Music in school - £42
Rookie Lifeguard training - £15
School Lunches - £25
Competitive mountain biking - £50
After school club £20

Total = £394.

The remaining £106 should hopefully cover things like: replacing kit/goggles (they spend a LOT of hours in the pool so things do need replacing), school trips, Cubs camp, birthday presents for friends, the odd soft play trip etc. Its a (hopeful) over estimate but I don't want to miss anything out!

I know it's a fair amount. We really struggle with the balance of improving the debt situation vs. sacrificing things in their childhood. We don't go on holiday, we don't have more than one or two 'days out' a year and we feel bloody awful at the thought of taking these things away from them too.