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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 1
    • zx81
    • By zx81 13th Jun 19, 4:20 PM
    • 23,789 Posts
    • 26,441 Thanks
    zx81
    • #2
    • 13th Jun 19, 4:20 PM
    • #2
    • 13th Jun 19, 4:20 PM
    Personally, I think it's a no brainer NOT to borrow for something like a holiday.

    I'd save for and do it a couple of years.
    • boo_star
    • By boo_star 13th Jun 19, 4:24 PM
    • 2,558 Posts
    • 1,911 Thanks
    boo_star
    • #3
    • 13th Jun 19, 4:24 PM
    • #3
    • 13th Jun 19, 4:24 PM
    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?
    Originally posted by Macc
    Paying for things like holidays on credit is silly, don't do it.

    I can get 25k loan over 5 years which would be 1.9k in total interest.
    Are you sure about that? Just because someone is offering loans at 2.9% doesn't mean you'll actually get it. In fact it sounds like you might have a fairly thin file, you'll probably not be offered such low interest rates.

    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?
    Not by saddling yourself with £25k worth of loan debt that's for sure.
    • Macc
    • By Macc 13th Jun 19, 4:57 PM
    • 176 Posts
    • 64 Thanks
    Macc
    • #4
    • 13th Jun 19, 4:57 PM
    • #4
    • 13th Jun 19, 4:57 PM
    Just read my post back and don't think I've phrased it very well. The loan wouldn't be to blow on a load of holidays etc that we wouldn't have otherwise had. But more of an advance. Instead of saving for months/years for it, we can do what we want to do when it is right for us and then save in the same way but to pay it off. Does that make sense? It is the freedom to do what we want when we want that we are looking for.

    The frustration atm is we are fairly asset rich but cash poor. We've got the net worth of being able to do what we want whenever but the lifestyle of almost living hand to mouth. Looking for a way to re-balance to a more middle ground so can get some benefit now of being in a decent position overall. Locked into a recent mortgage deal for a while so nothing can do there. What would you suggest if not a loan?

    The 25k @ 3.0% has been offered yes, Santander. Seems a low rate?
    • foxtrotoscar
    • By foxtrotoscar 13th Jun 19, 4:59 PM
    • 1,438 Posts
    • 2,220 Thanks
    foxtrotoscar
    • #5
    • 13th Jun 19, 4:59 PM
    • #5
    • 13th Jun 19, 4:59 PM
    Normally people save to do 'fun stuff'...they don't get into debt.
    • boo_star
    • By boo_star 13th Jun 19, 5:01 PM
    • 2,558 Posts
    • 1,911 Thanks
    boo_star
    • #6
    • 13th Jun 19, 5:01 PM
    • #6
    • 13th Jun 19, 5:01 PM
    Just read my post back and don't think I've phrased it very well. The loan wouldn't be to blow on a load of holidays etc that we wouldn't have otherwise had. But more of an advance. Instead of saving for months/years for it, we can do what we want to do when it is right for us and then save in the same way but to pay it off. Does that make sense? It is the freedom to do what we want when we want that we are looking for.

    The frustration atm is we are fairly asset rich but cash poor. We've got the net worth of being able to do what we want whenever but the lifestyle of almost living hand to mouth. Looking for a way to re-balance to a more middle ground so can get some benefit now of being in a decent position overall. Locked into a recent mortgage deal for a while so nothing can do there. What would you suggest if not a loan?
    Originally posted by Macc
    You're going to need to find £450 a month to cover your loan repayments, why not just save that for a year or two and go on a really nice holiday?

    Honestly you could probably go on a nice holiday with the £5.5k you'll save in one year.

    And you'll have an extra £2k in your bank account at the end of five years to do with as you wish, instead of it being in Santander's back pocket.

    The 25k @ 3.0% has been offered yes, Santander. Seems a low rate?
    Offered how? I don't think Santander have a soft check for loans so you've done a full application?
    Last edited by boo_star; 13-06-2019 at 5:06 PM.
    • foxtrotoscar
    • By foxtrotoscar 13th Jun 19, 5:03 PM
    • 1,438 Posts
    • 2,220 Thanks
    foxtrotoscar
    • #7
    • 13th Jun 19, 5:03 PM
    • #7
    • 13th Jun 19, 5:03 PM
    If you are living hand to mouth where is the money going to come from to service a £25k debt?
    • Willing2Learn
    • By Willing2Learn 13th Jun 19, 5:06 PM
    • 4,376 Posts
    • 3,912 Thanks
    Willing2Learn
    • #8
    • 13th Jun 19, 5:06 PM
    • #8
    • 13th Jun 19, 5:06 PM
    Öwe are fairly asset rich but cash poor. We've got the net worth of being able to do what we want whenever but the lifestyle of almost living hand to mouth. Looking for a way to re-balance to a more middle ground so can get some benefit now of being in a decent position overall. Locked into a recent mortgage deal for a while so nothing can do there. What would you suggest if not a loan?
    Originally posted by Macc
    If you want to get some opinions on what your options are, instead of a loan, then you will need to post up your SOA (Statement of Affairs).
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • Yellow_mango
    • By Yellow_mango 13th Jun 19, 5:17 PM
    • 368 Posts
    • 640 Thanks
    Yellow_mango
    • #9
    • 13th Jun 19, 5:17 PM
    • #9
    • 13th Jun 19, 5:17 PM
    If you have a years worth of bills in the bank, I’m sure that would fund a holiday or so. I’d 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).
    • bspm1
    • By bspm1 13th Jun 19, 5:18 PM
    • 265 Posts
    • 438 Thanks
    bspm1
    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?
    Originally posted by Macc
    Not many people have a year or twos worth of money in the bank to cover bills...

    Also you have children 4 and 2, best time to have gone to Walt Disney World is before they start school, bit expensive when they do.
    • 19lottie82
    • By 19lottie82 13th Jun 19, 5:19 PM
    • 5,815 Posts
    • 8,716 Thanks
    19lottie82
    You claim you are prudent with money, if so then why donít you have any savings?

    And if you donít have any cash left over at the end of the month, then how will you afford a loan repayment?
    • Mrsn
    • By Mrsn 13th Jun 19, 5:37 PM
    • 207 Posts
    • 187 Thanks
    Mrsn
    I think it’s great that you are planning so sensibly and that you have managed to accrue a month or so worth’s of bills just incase. The loan to me is a tricky one, from the way you’ve described it you don’t have money left over at the end of the month so I’m not sure where the money would come from for the repayment each month.

    I know people who use credit for holidays etc and others that use cash. I can honestly say those that use cash are more savvy generally with their spending and saving habits. Credit cards can be incredibly useful if used correctly but my personal experience is I cannot be trusted and I’ve spent a long time repairing that damage (not saying this would be the case for yourself just is very easily done!)
    • Kentish Dave
    • By Kentish Dave 13th Jun 19, 5:46 PM
    • 806 Posts
    • 1,492 Thanks
    Kentish Dave
    I agree with others. Stop sticking the extra away where you can’t access it, put it into a savings account instead and then choose what to spend it on when you have enough,

    Going forwards keep up the habit, save some “fun” money and blow it on whatever floats your boat.
    • Robisere
    • By Robisere 13th Jun 19, 6:13 PM
    • 2,819 Posts
    • 3,789 Thanks
    Robisere
    Agree with Kentish Dave. We are both in our 70's and have not had a loan since many years ago, when we first met and married. (2nd time for both) We struggled after both had previous OH's whose activities reduced us to nothing. We used the loan to start again, worked hard to pay it off and never looked back. Everything we needed, we bought with what we had. Anything we wanted, we saved for. Think about what your kids will need when they are older, such as Uni. To be able to help them with the increasing cost that is going to take, will surely be better than any Disney holiday now. Have holidays closer to home: a beach and plenty of play space is all they need now. To spend as much time with your children as you can, no matter what activities you do, is very good for a family.

    This year is a big anniversary for us and we decided to splash out on a luxury holiday. We have been saving for it for about 18 months now, with a Savings plan and two accounts. We will have a great time, but after that everything is in the lap of the gods!

    You are doing well with your lives but the rewards should be expected in the future. Don't mess up your plans by trying to do what others do on credit. Their future lives will not be as fruitful as yours. Just read some of the horror stories here from those who ignore what they need because of what temporary pleasure they might want.
    I think this job really needs
    a much bigger hammer.
    • Sncjw
    • By Sncjw 13th Jun 19, 6:17 PM
    • 2,235 Posts
    • 1,360 Thanks
    Sncjw
    How will you afford to pay the loan back if you don’t have money left over in the first place. They will want you to start paying within a month of getting the loan.

    Plus the fun stuff will ending up cost more if you take in account of interest.

    Why not go on debt free wannabe page and post statement of affairda. They can look where you can save money to help put towards fun stuff. You don’t need to get I debt to do ir
    • Ben8282
    • By Ben8282 13th Jun 19, 7:03 PM
    • 3,489 Posts
    • 1,935 Thanks
    Ben8282
    The loan is not a good idea.
    Firstly, there is no guarantee that you will actually get the low APR advertised.
    Secondly, I am not sure that this 'five year plan' is a good ides. What are you going to do with the excess money that you don't spend in year one? You won't earn enough interest in a savings account to cover the interest that you are paying on the loan, even if you do get the low APR that you imagine you will get.
    It really is a shame that you have never previously held a credit card. If you can afford the repayments, I would have suggested that you get a 0% purchases card to do the fun things that you want to do in the immediate future, then repay it over say the next year. When it is repaid, you could think about repeating the process next year. There is nothing wrong with financing a holiday in this way so long as you can afford the repayments and repay the full cost of holiday 1 before booking holiday 2. But unfortunately, as you have never previously held a credit card, you are unlikely to get such a card.
    Also, at 2 and 4, your children are a bit young. If you want to give them the experience and memory of going to Disneyworld, suggest you wait until they are a bit older.
    Last edited by Ben8282; 13-06-2019 at 8:22 PM.
    • Skibunny40
    • By Skibunny40 13th Jun 19, 7:25 PM
    • 247 Posts
    • 286 Thanks
    Skibunny40
    What would the monthly repayments be? Could you just put that amount into a savings account and then use it in the same way, once you've built up sufficient funds for what you want to do. It doesn't sound like you want to blow £25k immediately, so maybe work out what you'd like to do over the next 5 years, how much that would cost and how it matches with how much money you're putting aside each month.

    If you really feel you need to do at least SOMETHING now ( and I do totally understand this desire, especially if you kinda know you're going to be okay financially in the future) then maybe explore getting a credit card for a much smaller amount if you can also get a 0% balance transfer card to transfer it to - then you can part pay that off whilst building another pot of savings for your next family adventure.
    • Macc
    • By Macc 13th Jun 19, 7:43 PM
    • 176 Posts
    • 64 Thanks
    Macc
    Thanks guys, I know you are all correct that it is financially not the right thing to do. I'm just looking at it in a "life's too short" kind of mindset. It's probably a mid-life crisis! Everyone saying don't do it has given me the jolt to re-evaluate.

    I think maybe I've been too extreme in planning for the future and left myself forgetting about the current. I'm now trying to redress the balance a bit, probably in a dumb way. I think I feel guilty at "depriving" the family when our friends are all going on nice holidays etc even though they are worse off than us overall.

    Sorry, this is a loans forum not therapy!
    • zx81
    • By zx81 13th Jun 19, 8:03 PM
    • 23,789 Posts
    • 26,441 Thanks
    zx81
    Trust me - there's plenty of other free and cheap ways you can give your kids a great childhood without the service of Mr M Mouse and his companions.

    And home and financial security is up with there the best of them.
    • JayRitchie
    • By JayRitchie 13th Jun 19, 9:09 PM
    • 283 Posts
    • 289 Thanks
    JayRitchie
    Thanks guys, I know you are all correct that it is financially not the right thing to do. I'm just looking at it in a "life's too short" kind of mindset. It's probably a mid-life crisis! Everyone saying don't do it has given me the jolt to re-evaluate.

    I think maybe I've been too extreme in planning for the future and left myself forgetting about the current. I'm now trying to redress the balance a bit, probably in a dumb way. I think I feel guilty at "depriving" the family when our friends are all going on nice holidays etc even though they are worse off than us overall.

    Sorry, this is a loans forum not therapy!
    Originally posted by Macc
    Hi Macc - you have my sympathies. I think peoples circumstances and decisions are so different we don't really know what 'normal' is. My guess is that there are plenty of people who borrow money year after year, and plenty who get significant gifts from parents for things like exotic holidays. If a fair number of your friends are in these categories you might well feel you are shortchanging your children.

    On the other hand your initial post doesn't really seem particularly extreme in money saving (at 36 years old). You are aiming to pay off your mortgage and that of a rental property by around the age of 50, and have enough money to survive for a year or so with no income?

    I don't think any of that is unusual for people with reasonable but not perfectly secure incomes.
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