unemployed person sinking in debt

M

Miracle Girl

Registered User
Messages
35
Age:
40
Spouse’s/Partner's age:
30

Annual gross income from employment or profession:
E72000
Annual gross income spouse:
unemployed on job seekers 197.50 PW

Net combined monthly income:
E5192
Monthly fixed outgoings: ie elec gas telephone sky insurance cc minimum payments etc
E980

Type of employment:
private sector

Expenditure pattern:
spend, dont save

Rough estimate of value of home
E385,000
Mortgage on home
E267,275- we have been paying mortgage since nov 06
Mortgage provider:
ulster bank
Type of mortgage: Tracker, interest only, fixed rate
tracker
Interest rate
5.05
Monthly repayment(after joint TRS applied):
1455

Other borrowings – car loans/personal loans etc
Car loan me 20K left to pay 18K approx E384a month
Car loan spouse: 6K left to pay 3K approx E137 a month (it has PPI on it)
credit card MBNA:6974.34
Credit card halifax:3213.07
Do you pay off your full credit card balance each month?
No, only paying the minimum each month on each card

Savings and investments:
none
Do you have a pension scheme?
no.

Do you own any investment or other property?
No.

Ages of children:
None.

Life insurance:
Yes (me only as house in my name).

What specific question do you have or what issues are of concern to you?
I am really worried about the amount of personal debt that we have built up and are struggling to pay back each month, (ie only paying the minimum on CC) and would appreciate some advice on how to clear it, I have considered remortgaging but dont like the idea of tying up Carloans and Credit card debt in to the mortage, would appreciate advice on this?

We have started a spending diary but we are still struggling to curb our spending on silly everyday things, would like some tough tips on how I can manage myself and my husbands daily spending better, we are as bad as each other TBH, however we do argue a lot over it.
I also want to know if my mortgage interest rate is a good deal or should I consider changing.
I have considered downsizing and selling our house and using the equity to pay on a smaller house with a smaller mortgage and clear my debts, but we love our home and would prefer not to do that.
We are also very anxious to start a family and due to health problems we have to go down the IVF route, this costs approx 4K and again we need help to organise our spending so we can go down this route sooner rather then later.
I am getting a bonus shortly approx 4K net and was considering using to clear some of my CC or save for ivf route what should i do?.
I know there will be comments about my spouse not working, he is looking and we are hopeful he will get a job soon...he needs to if we are successful with IVF!!
I have just read over my post and even to me I cant understand why we cant manage on our income... we are always going into overdraft each month!! what on earth are we doing wrong or not doing? would appreciate all advice and apologies for the loads of questions
 
Re: help with money makeover please

Hi miraclegirl, well your doing the right thing in trying to see whats going on, diary will help! Your personal loans are over 31,000 euro you need to address how you got to this point so that when you do get sorted it doesn't happen again. You could consolidate your loans into your mortgage but personally I don't think this is wise. Can you sell your car and buy a cheaper one? Can your hubby start delivering pizza or chinese to get some extra income while he is actively searching for work? There are lots of jobs out there that may not be what he wants to do but needs must! As ever with makeovers focus on the loan with the highest interest rate and get it done as quickly as possible.
How many rooms in your house? Can you rent a room or two? Or depending on what area you live in can you take in foreign students for the summer?
 
Re: help with money makeover please

You cannot have it all - unnecessary discretionary purchases, IVF, the nice house etc, if you cannot realistically afford it. And right now you can't! I don't really understand why you have problems with the "silly everyday" purchases. Once you are aware of them then just don't buy them. What's the problem with that? If you get a bonus then you really need to use it to defray your debts rather than blowing it on something else. There are oodles of practical budgeting/spending tips already on the site so I can't see how they can be made any simpler or what's to be gained by regurgitating them yet again in another thread. You obviously need to stop using the CCs if you have not done this already. Seems to me that trading down and using any profit from the sale to clear debts is something that you may need to think seriously about as a once off measure to regain control of your finances.
 
Re: help with money makeover please

Hi Miracle Girl,

Do your monthly fixed outgoings include your load repayments? If not what do they cover (how do you manage to spend so much every month)?

Even if your loan repayments are on top of the €980 figure you still have about €500 a week to live on. Shopping should cost no more than €70 for two people (we spend about €130 and we have three kids and a dog).
I can only advise that you continue to cut back where you can; if you have anything other than the basic Sky package then get rid of it, bring packet lunched to work etc.
Ask yourself if you need two cars, they are very expensive to run even without a loan to pay off.


Can your partner get an evening job delivering take-away etc.
 
Re: help with money makeover please

I think your outgoings is more of a problem than husbands lack of a job - your spending seems to be a problem. Even if your husband gets a job, you'll probably still be in the same predicament maybe worse. You won't be able to afford kids. Face it - as things are, you will never have money *for anything* no matter how much you earn.

What are your other outgoings besides your fixed outgoings and the loan repayments? Is it more than you earn? I presume it is.

It's hard to offer advice if we don't know what the money is going on - what is the spending diary telling you?

>>I am getting a bonus shortly approx 4K net and was considering using to clear some of my CC or save for ivf route what should i do?<<

I think you should pay for the IVF but only if you have a plan to get the rest of the debts under control. It is very possible to do this on your income.
 
Re: help with money makeover please

You should be able to afford more than minimum payments off your CC bills. You need to get serious about your day-to-day spending. I see you "started to keep a diray". Perhaps you haven't really analysed the results of that exercise yet and acted on them?

By my reckoning, you have 550 plus each week for discretionary spending. This should be plenty to allow for more than minimum payments off CC. Perhaps you are maintaining the same lifestyle as when your OH was working?

Why 2 cars if only one of you is working at the moment? Sell one and clear the CCs?
 
Re: help with money makeover please

unnecessary discretionary purchases, IVF, the nice house
Click to expand...

IVF is very important to me as my age is against me and it is not discretionary for me as I have no alternative but to go down this route. I know the cost is horrendous and success rate is poor, however I do not want to look back in the future and regret I didnt give it a go when it is def to late.
your other comments around not being able to have it all is very true though and thats why I am on here, I really want to clear this debt ASAP..I was hoping for tips on how to do this without selling the house to be honest, but I know that is something we need to seriously think about, and we have started looking on daft.

Do your monthly fixed outgoings include your load repayments? If not what do they cover (how do you manage to spend so much every month)?
Click to expand...
no this doesnt include loan repayments, does include CC payments (approx 200 a month)
we do have the full sky package and we justify that as neither of us go out much! I would happily give up the full sky package but hubby needs his sky sports!! other fixed costs is electicity, gas which are horrendous!! insurance, pet insurance, telephone, mobile bills, health insurance, car insurance, bins etc I am looking at reducing some of these fixed payments..we are changing mobile priceplans to get the best one, getting rid of eircom phonewatch as we have never needed it, will attempt the sky conversation again!!
dont really want to sell second car as whe he gets work we will need the two cars as I travel a lot with work and we live in the country so no public transport, would prefer to keep my car as it is a fairly new one, but I feel safer driving it as I would prefer not to break down on my own in the sticks somewhere!!
our weekly shop is about E150 a week, eek !!
evening job seems like a good idea while he is waiting to get something half decent! will bring up with him
 
Re: help with money makeover please

hello,
I dont mean to put hubby down but is he really in a position to insist on sky sports when he isnt earning himself? its a luxury, and he could live without it. also - could you not get cheaper cars? my car is very reliable and has never broken down and is only worth a couple of grand. you could clear a lot of debt by looking at downsizing the vehicles, with the knock on effect of lower car tax and insurance on both also.

you mention both telephone and mobile bills - why do you need both? if you have a mobile you dont 'need' a landline.

i mean youre on a great salary, its really just a matter of clearing the debt, tightening the belts for a bit etc...

where else are you spending money? is there any subscriptions that could be cancelled?

what about shopping - can you go cheaper, Aldi or Lidl?
 
Re: help with money makeover please

What about the rest of your non fixed outgoings? It's a basic exercise in comparing all your outgoings to your income. With the figures you have given I see 3106 outgoings pm with 5192 income that means you should have 2086 left over every month.

Your debts are 34187 so if you put the 2086 into the debts every month starting with the CC it would take you 16 months to clear all your debts. So you could be debt free before having a baby.

Those figures are only indicative on what you could achieve given the info so far. You're obviously spending that 2086 which is left over. On what I don't know.

You must be forking out colossal amounts of interest on those loans, you would save all that money too if you just stopped spending and killed the debt.
 
Re: help with money makeover please

Hi Miracal Girl,
Mr Bear and I live on a weekly allowance of €150 between us. Me €50 Mr Bear €100. He buys petrol, since we have started doing this we have managed to get ourselves out of a pit.
It also makes you think about what you are buying. We bring our lunches into work so this is really for additional expences that we might face.

I would really think about selling the car and buying a cheaper one. There are very reliable second hand cars on the market..

You actually have a greater net income than Mr Bear and I have, and a smaller mortgage so it really is just analysing what you spend your money on.

I understand the fact that you want a child - but here is a thought - you are the main earner. If you did manage to sort things out - you might find that your partner might want to stay at home and look after the child, which would be quite nice. And that would spare you child care costs...
 
Re: help with money makeover please

we only started the diary two weeks ago, it has made us very aware of what we are spending daily and we are curbing because of it, but no we havnt started to seriously analyse it and thats what I will be doing today.
without passing blame, i know it is my hubby who spends more daily as he smokes and "sometimes" goes to the bookies and to be honest this is where we fight the most. I want him to give up smoking to give IVF the best possible chance, he wants to as well, but finds it very difficult. I go mad when he goes to the bookies as I know he cant just walk away with any "winnings" he has to carry on until they are gone (thats if there are winnings).
I spend very little daily ( dont smoke)approx 4 or 5 euro for lunch just petrol and while hubby isnt working he drops me in to work and picks me up so saving on parking (though the extra trips may rule that saving out)

we are not using his car at all at the moment.

It does get to me about the daily spending and reading your posts has helped me realise that this is the crux of the problem. I know we can reduce fixed monthly costs, I could look at a better deal for our mortgage, but if the daily spending isnt going to go down then we wil never clear this debt
 
Re: help with money makeover please

Obviously the budgeting/spending suggestions here and elsewhere are useful but you have bigger fish in the form of your accumulated unsecured debt of c. €33K to fry as well. You need to figure out how best to deal with this. Trading down or remortgaging (as a once off measure to sort your finances out) should be at least considered along with any other options (although I don't see any offhand).
 
Re: help with money makeover please

Miracle Girl said:
would like some tough tips on how I can manage myself and my husbands daily spending better, we are as bad as each other TBH, however we do argue a lot over it.
Click to expand...
Miracle Girl said:
he smokes and "sometimes" goes to the bookies and to be honest this is where we fight the most.

...

I go mad when he goes to the bookies as I know he cant just walk away with any "winnings" he has to carry on until they are gone (thats if there are winnings).
Click to expand...
Does your husband have a gambling addiction/compulsion? If so then this also needs to be addressed. All the more so if you are seriously thinking of staying together and having children!
 
Re: help with money makeover please

Hi there,
About the smoking - Mr Bear and I smoke - Mr bear has quit the ciggerettes since yesterday - I am finishing my last packet..!
I was chatting to a friend of mine this am and I was saying that janualry was the first time we did not go into overdraft! We were off the ciggerettes!
He then asked me how mucch do I smoke - I said - not that much - 10 a day - when we worked it out this was roughly €120 per month!!!!! So I am definatly quitting!
 
Re: help with money makeover please

you have given I see 3106 outgoings pm with 5192 income that means you should have 2086 left over every month.
Click to expand...

The fixed costs dont include food and petrol and food is approx 650 a month and petrol is 195 a month. that does still leave us with 1251 a month free and this is what is being frittered away!!..when I was earning less a few years ago I was in a far better state finanically and was able to save easily for a house!!
 
Re: help with money makeover please

Miracle Girl said:
without passing blame, i know it is my hubby who spends more daily as he smokes and "sometimes" goes to the bookies and to be honest this is where we fight the most.
Click to expand...

Miracle Girl - you hubby is being terribly irresponsible wasting money in the bookies like this. Clearly this is either being funded by your earnings or his social welfare payment - neither of which should be funding gambling. This is an area where you really need to put your foot down. How much do you think he is spending weekly between smoking and the bookies?
 
Re: help with money makeover please

He then asked me how mucch do I smoke - I said - not that much - 10 a day - when we worked it out this was roughly €120 per month!!!!! So I am definatly quitting!
Click to expand...
I have worked out that he spends approx €225 on fags and when he goes to buy them he has to get crisps and a drink so thats probably an extra 105 a month...that is 330 a month! He of course will not tell me exactly what he spends in the bookies..prob doesnt know himself but as a guesstimate about €30 a week which is 130 a month.. so all this is comin to 460 a month!!this is a real eye opener
 
Re: help with money makeover please

There is a number of issues Miracle Girl I think you need to think about - who is driving the impetous to address your financial situation?

Does your partner rally behind you in this? How does he think you will manage when you have children?

I think a heart to heart is needed, as I think you might need more support from him. I dont want you to think I am comming down on your partner too heavily - but he doesn't appear to be helping you with the responcibilities...
 
Re: help with money makeover please

How did you run up so much non mortgage debt since then?
Click to expand...
Two cars, We got our garden landscaped, as we moved into a new build there were furnishing costs. credit card just added up and tbh cannot remember what I bought for nearly 10K so I am actually going to get them out and see! wehave not used the Credit cards for 6 months. I just need to start paying them off properly now.
 
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