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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 2
    • bertiewhite
    • By bertiewhite 13th Jun 19, 9:33 PM
    • 1,680 Posts
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    bertiewhite
    Just my 2 pence worth - a lot of holiday companies ask for a deposit and then allow you to pay in instalments, don't they?
    • MallyGirl
    • By MallyGirl 13th Jun 19, 9:48 PM
    • 3,975 Posts
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    MallyGirl
    Kids of 2 and 4 will remember very little of a blowout holiday.
    • boo_star
    • By boo_star 13th Jun 19, 11:54 PM
    • 2,619 Posts
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    boo_star
    Kids of 2 and 4 will remember very little of a blowout holiday.
    Originally posted by MallyGirl
    I was going to say this.

    I'd add that they probably won't be allowed on most of the rides anyway.

    Save your money for a few years if you want a holiday in Florida that everyone can remember.
    • Lioness Twinkletoes
    • By Lioness Twinkletoes 14th Jun 19, 9:37 AM
    • 1,513 Posts
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    Lioness Twinkletoes
    You claim you are prudent with money, if so then why donít you have any savings?
    Originally posted by 19lottie82
    He does "A year's worth of bills in the bank"
    • bspm1
    • By bspm1 14th Jun 19, 12:37 PM
    • 265 Posts
    • 439 Thanks
    bspm1
    I think itís great that you are planning so sensibly and that you have managed to accrue a month or so worthís of bills just incase. The loan to me is a tricky one, from the way youíve described it you donít have money left over at the end of the month so Iím 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 Iíve spent a long time repairing that damage (not saying this would be the case for yourself just is very easily done!)
    Originally posted by Mrsn
    The op actually stated he had a year or twos worth of bills in the bank.
    • enthusiasticsaver
    • By enthusiasticsaver 14th Jun 19, 1:11 PM
    • 9,221 Posts
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    enthusiasticsaver
    Personally we never liked borrowing money for holidays. We did a few big trips when our kids were young to USA and Australia but if we did use a 0% credit card it was paid off in the year the holiday was taken. All other trips were paid for in cash.

    I think having a year or two in bills is good though so you do have savings but at the age your two children are big holidays will not be remembered so I would use the next five years to save for big holidays at an age they will be appreciated. I cannot see any point at all in taking pre schoolers on big holidays. More stress than anything else. I certainly would not use equity for such things unless they added value to the house and certainly not if you are self employed. Maybe you overstretched yourselves with the rental property?
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • JimmyTheWig
    • By JimmyTheWig 14th Jun 19, 2:48 PM
    • 11,885 Posts
    • 11,412 Thanks
    JimmyTheWig
    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.
    Originally posted by Macc
    Would it be worth selling the house that you let out?
    • JReacher1
    • By JReacher1 14th Jun 19, 3:18 PM
    • 3,225 Posts
    • 4,493 Thanks
    JReacher1
    I've done something very similar in the past and if you are sensible there is no problem doing something like this. I borrowed £7k over 2 years and in total it cost me £7,200 to pay back (at £300 a month). I used that £7k to have two good holidays over the two years.

    It worked out well and only cost me £200. Was well worth it.

    Of course I only suggest doing something like this if you have a secure income
    • borkid
    • By borkid 14th Jun 19, 4:45 PM
    • 2,197 Posts
    • 4,687 Thanks
    borkid
    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





    You are not depriving the family by not keeping up with the Joneses. When my daughter was little she wanted a rainbow pony, they were too expensive, well we thought they were, so instead of following what others would do I made her one. 30+ years on the first toy she thinks of from childhood is the rainbow pony I made from scraps. There will be enough peer pressure when they start school.
    • adindas
    • By adindas 14th Jun 19, 5:37 PM
    • 4,158 Posts
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    adindas
    When my daughter was little she wanted a rainbow pony, they were too expensive, well we thought they were, so instead of following what others would do I made her one.
    Originally posted by borkid
    That is a very good advice to save money . That is the spirit of the MSE is not it ??

    30+ years on the first toy she thinks of from childhood is the rainbow pony I made from scraps. There will be enough peer pressure when they start school.
    Originally posted by borkid
    Lol. She is now 30+ yo and remember the rainbow pony you have made, she probably just did not want to say that you are the stingiest father on earth. But she remember that you are the coolest dad on earth.
    Last edited by adindas; 14-06-2019 at 6:01 PM.
    • warby68
    • By warby68 14th Jun 19, 6:22 PM
    • 1,362 Posts
    • 10,875 Thanks
    warby68
    If you can afford £450 pm you can save for a good holiday in 12m or so.

    If you want a blowout one sooner than you can save, save half and borrow half. Clear each holiday before you borrow for the next. If you must borrow that is. I really don't get borrowing £25k upfront for 5 years' worth of holidays.

    Generally against borrowing for holidays full stop but the above is a lot less risky than £25k upfront and I can see a rationale for some adjustment if you really see a right time to do a particular thing.

    Also if you have a couple of years' income in the bank why not borrow from yourself? Its the same result - lower savings or higher savings less debt if it all goes pear shaped.
    • RonoB
    • By RonoB 14th Jun 19, 6:23 PM
    • 38 Posts
    • 22 Thanks
    RonoB
    Whilst I am not one for ever agreeing that you should put a holiday on a credit card i absolutely agree if you can afford it take your kids on holiday especially disneyworld. Kids donít care about new kitchens or bathrooms or what car you have but they remember special holidays. Why borrow so much. Why not take out an interest free credit card book the holiday and then pay it back per month before you go or before the interest free period ends.
    My husband works long hours and is self employed therefore the only real quality family time we have is in holiday as relaxed and stress free. We also have our best friend who was exactly like you. Frugal paid off his mortgage at 37 and at 41 struck down with a degenerative illness. Be bad never taken his daughter on holiday ever. So worried and frugal about paying off the mortgage but now itís too late. Sadly yes he has no mortgage but he will probably end up in a care home and the government will take his half of the house anyway.
    So my advice is donít take on debt you cannot manage but do take your kids in holiday and if that means take out a small loan go for it. Life is short abs no one knows whatís round the corner xx
    • Ben8282
    • By Ben8282 14th Jun 19, 7:06 PM
    • 3,552 Posts
    • 1,967 Thanks
    Ben8282
    if you can afford it take your kids on holiday especially disneyworld. Kids donít care about new kitchens or bathrooms or what car you have but they remember special holidays.
    Originally posted by RonoB
    They are aged 4 and 2. They will not remember the special holiday.
    • 8ofspades
    • By 8ofspades 14th Jun 19, 7:57 PM
    • 134 Posts
    • 136 Thanks
    8ofspades
    Lots of great advice but my question would be - why choose somewhere as expensive as disneyworld? If you're not currently having any experiences, then you don't need such a costly holiday to create memories - there are tons of fun things to do that would be much more affordable for you. You could even do them whilst saving for a huge blowout holiday like disneyworld, if you put your mind to it. No debts necessary.
    • bspm1
    • By bspm1 14th Jun 19, 10:17 PM
    • 265 Posts
    • 439 Thanks
    bspm1
    They are aged 4 and 2. They will not remember the special holiday.
    Originally posted by Ben8282
    Mine do, maybe it's the many photos and videos that we took.Lucky for me because I am the one who has forgotten!
    • borkid
    • By borkid 14th Jun 19, 10:22 PM
    • 2,197 Posts
    • 4,687 Thanks
    borkid
    That is a very good advice to save money . That is the spirit of the MSE is not it ??



    Lol. She is now 30+ yo and remember the rainbow pony you have made, she probably just did not want to say that you are the stingiest father on earth. But she remember that you are the coolest dad on earth.
    Originally posted by adindas
    Mum actually. She makes all her own clothes now and does crafty things and is a proper little money saver. She puts me to shame with her bargains.
    • enthusiasticsaver
    • By enthusiasticsaver 14th Jun 19, 10:26 PM
    • 9,221 Posts
    • 21,427 Thanks
    enthusiasticsaver
    I think balance here is the key between preparing for the future, living in the present and hopefully not paying for the mistakes of the past (ie over commitment to debt).

    While no one can predict the future and many are correct in that none of us know what is around the corner by way of health issues, redundancy or even bereavement ignoring plans for the future has its own downfalls too. Living retirement on a breadline pension is not fun and not being able to help your children through university or buying their first car or house through too much living for today is not nice either.

    You have obviously invested in property for your future (one wonders if that was so wise given that is not diversified and subject to property valuations which can go up and down constantly). However you do have that as an asset you could sell albeit depending on the property market and you have the rental income providing you have good steady tenants. If you are considering taking out such a large loan for "fun stuff" presumably you do have some monthly disposable income otherwise how would you repay it? My advice would be like others save for holidays and fun stuff and if a large expensive holiday comes along that you would like to take your family on then borrowing short term providing it is cheap interest wise and affordable on a monthly basis there is nothing wrong with doing that to subsidise your savings. Absolutely no point in Disney world though at 2 and 4. They will not remember it and may not be able to go on many of the rides.


    We always used a percentage of our monthly income by way of saving for things like holidays, home improvements and car replacements. Usually a third of our monthly savings target went on short term savings for xmas, annual holiday, car maintenance and small home improvement projects. One third was medium term savings for bigger holidays, car replacements and more expensive home improvements like new kitchen or conservatory. One third was long term savings for pensions and fixed term bonds to help our children out with university, cars, houses and weddings. Until the mortgage was paid off we also used this to overpay the mortgage to get rid of it before our daughters went to university. Maybe setting a percentage of your monthly income towards holidays, experiences etc would help you see that you can live for today but prepare for the future at the same time?
    Last edited by enthusiasticsaver; 14-06-2019 at 10:28 PM.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • adindas
    • By adindas 16th Jun 19, 4:21 PM
    • 4,158 Posts
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    adindas
    Mum actually. She makes all her own clothes now and does crafty things and is a proper little money saver. She puts me to shame with her bargains.
    Originally posted by borkid

    The coolest but stingiest mum on earth then
    • borkid
    • By borkid 16th Jun 19, 9:07 PM
    • 2,197 Posts
    • 4,687 Thanks
    borkid
    The coolest but stingiest mum on earth then
    Originally posted by adindas
    I doubt 'they' would say stingiest. £1000 for a clarinet when she was 14 and recently £1500 for a loom and £1200 for a spinning wheel. Son similarly had expensive items. When they were young we didn't have the spare money so had to make do once they were older ie teens and later we had money to spare, I had retrained and was back working and OH had been promoted we could spend on them . We just prioritised our spending differently to most people as holidays, new clothes, lastest gadgets weren't important to us and we hate waste of any sort so mended and reuseed where possible. We even send empty animal food pouches to be recycled to raise money for a local charity!
    • Smellyonion
    • By Smellyonion 17th Jun 19, 7:32 AM
    • 248 Posts
    • 185 Thanks
    Smellyonion
    Honestly, spending a lot of money does not mean having fun. You can have a great time and give them plenty of fond memories through museums, parks, adventure centres, themeparks, farms etc.


    LEGOLAND or chessington is fantastic and a fraction of the price of Disneyworld.
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