£67,031.92 is a frightening number indeed....

enthusiasticsaver · 4 June 2017 at 7:27AM

I have seen some worrying comments on your diary of late re getting fed up of debt busting and thinking why not carry on spending and using up all your credit availability until your youngest is at school then going for a DMP. Now you are talking about adding to your not unsubstantial debt by extending which is always expensive and rarely can be done on a budget unless you are doing a lot of it yourself.

You have done well to reduce the debt by £3000 in 5 months but if your 0% debts dry up, you can't get decent remortgage deals or your DH loses his job or you get ill and can't run your business this could very soon escalate into an emergency situation. This debt could end up jeopardising your whole family's future and you could still be in this situation 10 years from now should you decide to add even more debt on. I urge you to think carefully and perhaps in the interim use partition walls as you said earlier on in your diary.

Treadingonplaymobil · 4 June 2017 at 9:47AM

I appreciate the comments - I knew it would receive some negativity, but there's no point lying in my own diary, or it wouldn't be much use to me. I always see the comments here as a good reality check - whether I agree with them or not, they force me to consider and reconsider our decisions and aims, which has to be a positive thing.

The fact is, our house size isn't close to a problem yet (as I've previously said), but I know it will be at some stage. We're not thinking of rushing off and getting an extension built tomorrow (as some of you rightly point out, we'd never get the borrowing anyway). The aim of getting the architect drawings isn't so we can start asap, it's so we can plan a realistic budget for work that, as far as DH and I are concerned, is absolutely essential to our family wellbeing over the coming 10-12 years. Our loose aim is to get architect plans and a budget set up over the coming 6 months, apply for planning at some stage next year, and have the build start over winter/spring 2018/19, but that plan is subject to change based on the numbers.

We're content with our decision for now. Whether it will prove realistic as the numbers work out over the coming months, we'll have to wait and find out, but it is motivating me to continue to drive down the debt as much as possible so we have as many options available to us as possible when it comes to planning this fairly major bit of work.

It's hard to articulate without it sounding like we have 'given up' on debt payment, but DH and I have basically decided we are prepared to have a longer harder slog against the debt in order to minimise the effect on our children. We intend to teach them budgeting lessons and show them frugal living and not send them out into the world with an unrealistic view of money, but also to let them have some opportunities and the space they will need as growing children and young adults, and we can't do that without compromising our ideal 'debt free in 5-7 years' aim.

Treadingonplaymobil · 4 June 2017 at 10:06AM

Some other thoughts from recent days, while I'm in the habit of writing excessively long posts...

Emergency fund
We need one. Not so much an emergency fund as an 'unexpected stuff we forgot to budget for' fund. Although also for actual emergencies too. I've decided to prioritise that over making extra debt payments for the next couple of months (assuming there is any spare money), and see how it goes. Watch this space.

Debt total
I've dealt with this question a few times, but I think I should change my 'debt total' to the actual amount outstanding, rather than the amount including the interest on my Tesco loan (the true amount is more like £56k I think, although I'd need to work it out). I'm not sure how best to calculate/keep record of this, but I'll figure it out and update things at some stage.

Childcare
I've signed DC3 up to a whopping 3.5 days a week at preschool in September. I can't remember if I've shared that fact already, but I'm hoping that will make a huge difference to our work/life balance, and also slightly increase the amount I can earn, assuming we end up getting the 30 free hours (I can't quite work out if we'll qualify thanks to me being self employed, but I'm fairly sure we do, and we'll get 15 free even if we don't get the 30)

Minimum payments
In the interests of celebrating small victories, I was pleased to note that our minimum payments have gone down another few pounds this month - it's all tiny amounts, but it means if we had to reduce debt payments our minimum outgoings would be slightly lower. This also means (sort of) that each overpayment makes more difference, in that it's even more on top of the minimum amount than it used to be.

warby68 · 4 June 2017 at 10:13AM

May I be frank ToPM?

You are on the brink financially and even architects fees seem rather ludicrous at this point in time, as does starting a project in less than 2 years time. In what ways will your position (debt/income)be MATERIALLY different in 2 years?

I'm sorry - I love reading your diary for its optimism and the way you write and juggle things and what you can achieve in a day - but these recent posts make you seem completely oblivious to how severe your debt situation really is and how little margin for error your family truly has.

You haven't managed to get a grip on the food budget yet and keep overspending in other categories - does that not tell you how far there is to go?

I know I'm thoroughly raining on the parade and wouldn't even butt in if you didn't sound such a lovely family with 3 precious children to bring up. Perhaps many years of living as if you're in an income bracket and lifestyle somewhat different from reality is a harder nut to crack than you thought. I know you're keen to keep up appearances at any price but that price might just be a very big one.

If you want to ban me from your diary as a 'Debbie Downer' I'll accept it gracefully but I really think you still need another lightbulb moment and something of the high voltage stadium variety

Meant kindly and with concern - I have a family, we juggle some very large balls and I have a long career in finance so I'm speaking from experience too

Silver_Queen · 4 June 2017 at 11:39AM

To be honest, I can see it from both perspectives. I think that warby68's points are very valid and need to be considered carefully. TOPM, I am a serial planner like you and if I were in your shoes I would do exactly the same - get someone in so that you know the lay of the land and can plan out your future long-term. I myself have a 10 year financial plan and I love knowing that I at least have a vague plan of how things will shape up, so I can prepare myself and take the appropriate steps earlier on to make my life easier. BUT, as warby68 says, can you actually afford to start taking these steps? Can you afford to pay the architect's fee?

I'll be honest, if I were you, I would bite the bullet and get the architect in just so that I knew whether or not it was feasible, how long it would take for me to save, and to set out all my options. From an outsider's perspective, it does sound like making do with a partition wall would be the best option. Otherwise, is there a possibility of you partitioning off a small room downstairs as well? That way you could have four small bedrooms so the DC each have one small room?

Also, I'm personally finding it hard to believe that it would only cost £45k for an extension including all the plans, permits, building work, electricals and decoration up to a standard that you'd like. The disruption to your family and your business will be very significant. Building work often runs over. How will you cope if you have clients due and a builder traipses around with his muddy or dusty shoes?

Alternatively, if you put up a partition wall, how big will the rooms be?

Otherwise, is it worth considering moving to a slightly cheaper area?

Also, since you are consistently overspending in your food category, do you think it is worth revising your food budget?

charlies_tribe · 4 June 2017 at 12:14PM

Hi TOPM. Yours was one of the first diaries I sat and read when I first came back to the boards. It's rare I write on other peoples diaries as I always panic it doesn't come across how I mean to say it.

Today I just wanted to let you know our situation. We have 5 children in a small 3 bed house. We've had comments about having to move to a larger property etc. We would have love to have an extension but would never afford it. My 2 boys share and my 3 girls share, the girls are 15 (16 in a few days) 9 and 7. They have never known any different and get along great. Most of the time they are pretty close. We do get arguments, 1 wants the light on the other doesn't, 1 wants to watch a different programme etc.

Dh was unsure when we had the third girl as he had always had his own room. The girls did have the largest room in the house but a few weeks ago asked to more into the middle room and they love the 'cosyness' in there.

The boys are 14 (today) and 11 and and share the box room. it's got easier as they've got older as there isn't many toys in there now and again, they get on great as they have never known any different.

What we did do, and was a big contributor to our debt, is have a large conservatory built on. It's used as a play room/den. They have an extra tv/ games console in there. The little ones can play and the older one can disappear into her room (where she seems to spend 90% of her day!).

I just wanted to post to say it has given us a lot more room but hasn't cost anywhere near as much as an extension would have done.

Honeysucklelou2 · 4 June 2017 at 12:35PM

Like Charlie's tribe, I have a large family ( 8 children) and we are in a 4 bed house. Sharing a bedroom with siblings is part of their childhood and mine have been happy with it. They each have their area within the bedroom and their own storage spaces. Making a partition wall to create a room for your daughter and a room for your sons sounds a good cost effective option. Just wanted to point out the positives of room sharing!

Treadingonplaymobil · 4 June 2017 at 2:38PM

Interesting views. I grew up in a relatively big house, and didn't share with my sister from the age of about 8, and would have hated to have to share with her - we are incredibly close and get along well, but the idea of my teens not having their own space is very hard to get my head around. Even partitioning the big room would involve some cost, as there are currently no windows in the back of the house, and there is just no way I am giving one of my children (or myself) a poky room without even a window.

I think Silver Queen has hit the nail on the head - I am too much of a serial planner not to at least see what the options are. It may be that we talk to the architect and decide that actually none of the options we want are financially feasible and have to shelve the whole thing, but I know that I won't be happy continuing without that knowledge.

We do have financial goals in place, and without reaching them the extension can't/won't happen - for instance, I have ambitions to up my income from September when DC3 starts preschool, and then up it again the following year when she starts school. If that doesn't look like happening by about November we will obviously have to rethink - we need to be paying a minimum of £1k off our debts per month, by my reckoning, for a year before we can consider taking on more debt. We also won't book the architect until we have the money to pay for him - we are clear that we won't go into more debt just to investigate the possibility of the extension (so, again, if I don't earn some extra money in the next couple of months, the whole thing will be delayed until I do!).

Which is all a very long winded way of saying we're going to walk this path for a while as if the extension is going to happen, and if it becomes impossible we'll abandon it, but meanwhile we're set on this course. Nothing is going to change in terms of how the diary looks and acts in the near future (except maybe a slightly more efficient food budget!).

Treadingonplaymobil · 4 June 2017 at 2:47PM

DEBT REVISION

Right. I've decided to revise my debt to the total level excluding interest, as it's irritating me on a daily basis that I added it up including the interest to be paid on the Tesco loan. I'm not including the interest payable on any other debt, so I'm not going to include the interest on the Tesco loan. I've calculated how much the debt is at currently and how much it's reducing by each month,

So I can officially declare the actual debt total, rather than the total including interest payable, to be currently standing at...

£56,216.10

So, still a fairly freaking huge number :eek:

The DFD isn't affected, as obviously if I continue at the same payment rate it will still continue as long, as interest will be added along the way.

I will add a brief edit to my opening post, and update my signature.

Kittencat · 4 June 2017 at 3:06PM

Just a quick post as parents have just pulled up

Have you thought of building up instead of out. in our old house we had a builders around to quote putting a Dorma on the attic room. Half the price of an extension.

Catch up later xx

£67,031.92 is a frightening number indeed....

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