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  • FIRST POST
    • Macc
    • By Macc 13th Jun 19, 4:09 PM
    • 176Posts
    • 64Thanks
    Macc
    Getting a loan to do fun stuff!?
    • #1
    • 13th Jun 19, 4:09 PM
    Getting a loan to do fun stuff!? 13th Jun 19 at 4:09 PM
    Not sure this is the right forum, sorry if it's not. I'm 36 and I've always been prudent/tight with money. I think perhaps I have been overly so and now having a bit of a moment! Be interested to hear what other people do.

    Never had a credit card and my mortgage is the only time I've ever borrowed money. I've built up decent equity in my house and in a rental property I own. Also own/run a small business that would prob a sell for a little bit when comes time to sell. On paper my net worth is OK and in 15 years or so me and my family (wife, 2 kids - 2 and 4) should be quite comfortable once mortgage is paid off and rental mortgage is paid off with rent coming in.

    But we don't have spare money to play with now. My salary covers our outgoings and we have a year or so bills in the bank. But we don't have the spare money to go to Disneyworld with the kids or whatever. Friends of mine who have similar jobs/mortgages etc do and I assume it is on credit.

    I feel like maybe I am erring too much on the prudent side and insisting we only pay for things with actual cash and not taking on credit is actually making our life worse now in return for a theoretical comfortable future in later life? Do you guys pay for things like holidays with credit card / loans or do you only go if you have the actual money in the bank?

    The kids (2 and 4) are still young and I kind of feel like I'd rather have money to spend now while they are kids to make experiences and memories and pay for it down the line than scrimp now and reap the benefit when we are in our 50s/60s and the kids are grown up. I don't care about "things" or having a fancy car or anything but holidays days out etc are such a great thing when you are a kid and don't want to deprive my kids.

    I can get 25k loan over 5 years which would be 1.9k in total interest. Basically 1.9k to be able to do fun things for 5 years. No-brainer? Absolute worst case if something drastic happened to my job or health the equity in the house would easily cover the 25k.

    Anyone else have this kind of non-buyers regret!? Never really wanted to take on credit but don't want kids to miss out on fun stuff either. What is the best way of loosening the purse strings a little?
Page 3
    • AnotherJoe
    • By AnotherJoe 17th Jun 19, 8:02 AM
    • 15,957 Posts
    • 19,169 Thanks
    AnotherJoe
    You say that borrowing £25k would only cost £1.9k "to be able to do fun things for 5 years" but actually it would be £26.9k because you'd have to pay back the £25k.
    So if you can pay back the £25k, you can start saving that now and instead of waiting until you have the full £25k you can save £5k in a year, earn interest on it and then "be able to do fun things next year" with say £5,500 (including the interest).
    Of course, if you can't pay back the £25k then you need to adjust your lifestyle - is your rental running at a profit? How much ? Can you save money each month? How much?
    FWIW years back I went to Disney with my kids aged 5&7 and some relatives aged 2&4. The 2&4 can't remember it all now so I suggest waiting for 3 or 4 years anyway before going on big expensive holidays, they'll be quite happy playing on the beach in say Devon , and save the money you didn't spend for that big holiday until they are a bit older and can appreciate it more.
    • AnotherJoe
    • By AnotherJoe 17th Jun 19, 8:24 AM
    • 15,957 Posts
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    AnotherJoe
    Mine do, maybe it's the many photos and videos that we took.Lucky for me because I am the one who has forgotten!
    Originally posted by bspm1

    Thats what they are remembering, not the actual experience itself. Its like Total Recall.
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • onwards&upwards
    • By onwards&upwards 17th Jun 19, 4:17 PM
    • 1,159 Posts
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    onwards&upwards
    If you have a years worth of bills in the bank, Iím sure that would fund a holiday or so. Iíd borrow from yourself first as and when the time is right (and use the £450 a month you were going to spend repaying the loan to pay yourself back and save for the next holiday).
    Originally posted by Yellow_mango

    This is the no brainier.

    Why pay interest when you have the cash sitting there? Makes no sense.

    Have a holiday, enjoy life, keep 6 months of bills in the bank.
    • HonmaDP
    • By HonmaDP 18th Jun 19, 2:52 PM
    • 69 Posts
    • 26 Thanks
    HonmaDP
    If you can afford it, do it mate.

    We loved Orlando. Must admit I preferred Universal Islands of Adventure over Disney. Great holiday even if the pound is rubbish at the moment.
    • Gary_Dexter
    • By Gary_Dexter 18th Jun 19, 3:25 PM
    • 6,557 Posts
    • 4,353 Thanks
    Gary_Dexter
    If you can afford it, do it mate.

    We loved Orlando. Must admit I preferred Universal Islands of Adventure over Disney. Great holiday even if the pound is rubbish at the moment.
    Originally posted by HonmaDP
    He can't "afford" it - hence needing the loan?
    • HonmaDP
    • By HonmaDP 18th Jun 19, 3:53 PM
    • 69 Posts
    • 26 Thanks
    HonmaDP
    He can't "afford" it - hence needing the loan?
    Originally posted by Gary_Dexter
    Can he afford the loan?
    • Gary_Dexter
    • By Gary_Dexter 18th Jun 19, 4:12 PM
    • 6,557 Posts
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    Gary_Dexter
    Can he afford the loan?
    Originally posted by HonmaDP
    That's the point - having to take a loan to "afford" something isn't "affording" something
    • onwards&upwards
    • By onwards&upwards 18th Jun 19, 4:14 PM
    • 1,159 Posts
    • 2,330 Thanks
    onwards&upwards
    He can't "afford" it - hence needing the loan?
    Originally posted by Gary_Dexter

    He can afford it, heís got loads of savings but would for some insane reason rather borrow and pay interest than dip into them for a holiday.
    • EssexHebridean
    • By EssexHebridean 19th Jun 19, 10:44 AM
    • 9,510 Posts
    • 48,989 Thanks
    EssexHebridean
    What would the monthly cost of the loan be? £450 a month or thereabouts? That's a pretty healthy "fun" budget as far as I can see....so if you can pay for the loan, you can also afford the things you're saying there is no spare money for currently....

    As others have said, memories are not made with money, they're made with time, doing things together, visiting interesting places - but none of this needs to cost megabucks.
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    • JimmyTheWig
    • By JimmyTheWig 19th Jun 19, 10:56 AM
    • 11,885 Posts
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    JimmyTheWig
    Can he afford the loan?
    Originally posted by HonmaDP
    In theory he can afford the loan at the moment.
    Does he have that money spare each month? If not, then it's only in theory.
    And in any event, it's only at the moment. What would a change in circumstances do to being able to afford the loan?
    • MABLE
    • By MABLE 19th Jun 19, 11:02 AM
    • 3,902 Posts
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    MABLE
    If you can afford it, do it mate.

    We loved Orlando. Must admit I preferred Universal Islands of Adventure over Disney. Great holiday even if the pound is rubbish at the moment.
    Originally posted by HonmaDP
    Thats the issue the OP cannot afford it hence the reason they need to borrow £25k.
    • chelseablue
    • By chelseablue 19th Jun 19, 1:54 PM
    • 2,895 Posts
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    chelseablue
    Regarding Disney its actually better to wait until they are older and can go on everything, so you've got about 10 years to save up for it

    While they're small how about Euro Disney in Paris?
    A man I work with has just booked to go there in December, £1,500 for him and his wife plus 2 children
    • MallyGirl
    • By MallyGirl 19th Jun 19, 3:10 PM
    • 3,971 Posts
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    MallyGirl
    I took my 7 yo to EuroDisney. 10 years on all that she remembers is being scared silly by space mountain. The rest is simply forgotten.
    • Durban
    • By Durban 19th Jun 19, 4:34 PM
    • 209 Posts
    • 362 Thanks
    Durban

    Never had a credit card and my mortgage is the only time I've ever borrowed money. I've built up decent equity in my house and in a rental property I own. Also own/run a small business that would prob a sell for a little bit when comes time to sell. On paper my net worth is OK and in 15 years or so me and my family (wife, 2 kids - 2 and 4) should be quite comfortable once mortgage is paid off and rental mortgage is paid off with rent coming in.
    Originally posted by Macc
    Why not put the BTL on interest only BTL mortgage instead of paying it off. Sounds like you already have good equity in it and this would free up a lot more monthly money for you. It's more tax efficient and inflation would have eaten away at that debt in 15 years.
    Mortgage at highest start date - 25/9/2014 - £92000
    Mortgage now 13/4/2018 - £48,674
    MFD - October 2025 MF Goal Date 2021
    • onwards&upwards
    • By onwards&upwards 20th Jun 19, 7:15 AM
    • 1,159 Posts
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    onwards&upwards
    Thats the issue the OP cannot afford it hence the reason they need to borrow £25k.
    Originally posted by MABLE

    Why is everybody missing/ignoring the fact that they have a yearís worth of bills in savings?
    • onwards&upwards
    • By onwards&upwards 20th Jun 19, 7:17 AM
    • 1,159 Posts
    • 2,330 Thanks
    onwards&upwards
    Regarding Disney its actually better to wait until they are older and can go on everything, so you've got about 10 years to save up for it

    While they're small how about Euro Disney in Paris?
    A man I work with has just booked to go there in December, £1,500 for him and his wife plus 2 children
    Originally posted by chelseablue
    Donít bother, itís crap compared to the Florida one, insanely expensive and terrible customer service/organisation. If you want to do Disney do it properly, if you want to go to Paris donít go near Eurodisney!
    • Bitcoin
    • By Bitcoin 20th Jun 19, 9:32 AM
    • 9 Posts
    • 13 Thanks
    Bitcoin
    Personally, I think it will feel much better to wait a bit until you have the money needed. Not using borrowed money feels so much better
    • JimmyTheWig
    • By JimmyTheWig 20th Jun 19, 2:38 PM
    • 11,885 Posts
    • 11,412 Thanks
    JimmyTheWig
    Why is everybody missing/ignoring the fact that they have a yearís worth of bills in savings?
    Originally posted by onwards&upwards
    You're right. Everyone is ignoring this. Even the OP!
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