# Struggling to make ends meet!



## SMR123 (15 May 2008)

Age: 31
Spouse’s/Partner's age: N/A

Annual gross income from employment or profession: E31,250.00
Annual gross income of spouse:N/A

Type of employment: Private Sector

In general are you spending more than you earn or are you saving? Spending more than I earn

Rough estimate of value of home:E190,000
Amount outstanding on your mortgage: E170,000 
Payment: E868.00 inc. insurances (11 payments per year)
*What interest rate are you paying? 4.39% fixed until July 08*

Other borrowings:
Bank Loan: E7,500 - 245pm
CC1: E4,800 
CC2: E5,200
CU Loan: E2,300 - 132 pm

Do you pay off your full credit card balance each month? No

If not, what is the balance on your credit card? E10,000

Savings and investments: E1530 CU - tied up by loan.

Do you have a pension scheme? Through work. Only paying E75 pm.

Do you own any investment or other property? No

Ages of children: N/A

Life insurance: For mortgage


*What specific question do you have or what issues are of concern to you? *

Am fed up trying to make ends meet. 
Money always runs out about 2/3 weeks after I get paid. 
Have tried to move to 0% CC but Halifax not interested. 
Have also gone to TSB, Halifax and One Direct for a consolidation loan, but have been refused. Got print out from ICB and everything fine...is this the credit crunch kicking in?? 
Am only paying min payment on CCs every month. Can't afford to pay any more. 
Am renting out room in house for summer - should take in approx. E1,350.00.
Don't think second job is practical at the moment. 
Would appreciate any suggestions people can come up with!


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## ClubMan (15 May 2008)

As often mentioned in these cases - have you contacted MABS?

Obviously you need to stop racking up further unsecured and _CC _debts immediately.


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## SMR123 (15 May 2008)

Was on MABS website and had a good read. Think it actually made me feel a little better. 

Also the only reason I went to various banks to 'rack up' more debt, was to try and consolidate. Had checked out rates and repayments and it would have been less than I was paying at the moment. Most were quoting between 400 and 450 a month. And all debt would have been reducing! Leaving me with about 700 a month, and at least with that I would have been able to put by 200 or so a month to save.


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## ClubMan (15 May 2008)

SMR123 said:


> Was on MABS website and had a good read. Think it actually made me feel a little better.


You should consider making an appointment to talk to them in person. They can probably help if you discuss the details of your specific situation with them.


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## Satanta (15 May 2008)

SMR123 said:


> Also the only reason I went to various banks to 'rack up' more debt, was to try and consolidate. Had checked out rates and repayments and it would have been less than I was paying at the moment.


While you would have been paying less than you are currently, the banks have to weigh up your ability to pay and the risk attached to your application. 

At the moment you are struggling to pay your current repayments. From the feedback you've received from the banks, I'm guessing that they feel there is a substantial risk that you will/would also struggle to meet the lower payments on a consolidation loan.

While the information available on the MABS website is great, it's general information put out there for the public. If you meet with them, they can provide detailed feedback on the specifics of your exact situation. I'd certainly look at calling in to the local MABS office for a discussion on your options.

Edit: Post crossed with ClubMan


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## SMR123 (15 May 2008)

I don't want to risk damaging my credit rating. By contacting various financial institutions and going through Mabs about my struggle is there a possibility this will happen?


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## Satanta (15 May 2008)

SMR123 said:


> I don't want to risk damaging my credit rating. By contacting various financial institutions and going through Mabs about my struggle is there a possibility this will happen?


While your ICB report is clear, any credit report (each bank/institution will produce their own credit reports based on your incomings/outgoings/savings/current debt/ICB report etc. ) will already be seriously "damaged" due to the level of outstanding debt.

Contacting MABS will have no negative effects. It's free advice and you can ignore it all if you wish. The banks etc. need never know you spoke with MABS.

Numerous requests on your ICB report can/do show up. Some lenders may view multiple searches on your report as a negative (especially if you have multiple sub prime lenders checking it), but I'm not sure how big an impact this would have when compared to your current situation (you're already a big risk for them as they feel you can't afford the repayments).


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## ClubMan (15 May 2008)

Just talking to _MABS _will have no effect on your credit rating as it will be confidential. Whether or not you decide to follow up on any advice that they give you or have them help you out in sorting out your affairs is another matter and one that you don't have to decide on immediately.

_Post crossed with Satanta's._


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## Brouhahaha (15 May 2008)

SMR123 said:


> Rough estimate of value of home:E190,000
> Amount outstanding on your mortgage: E170,000
> Payment: E868.00 inc. insurances (11 payments per year)
> *What interest rate are you paying? 4.39% fixed until July 08*


 
Are you claiming tax relief on your mortgage payments?


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## so-crates (15 May 2008)

and have you shopped around on the insurance? I notice you lump the mortgage payment and insurance in together so I wonder whether you simply bought what your lender offered?

How long ago did you purchase your house? Is some of the debt you have built up as a result of moving in there? (In other words, is it not actual day-to-day living that has resulted in the loans and the CC debt). Why are you only renting the room for the summer? Can you make it maybe a longer term commitment? The additional income would help chip away at some of those debts.

Have you made a spending diary to see where all your money goes?


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## SMR123 (15 May 2008)

I took out life assurance, repayment protection and home insurance all with mortgage provider...may be time to shop around. 

Only bought house 2 years ago. So not much profit to be made. Also took out 100% loan over 35 years. Had a company car at the time, but when I moved job last year I had to up my personal loan to buy a car - not much value in the car though (maybe 2k). Some of the credit card debt was to furnish house. 

Haven't done formal spending diary, as there is very little left after all the major things are paid, maybe E400/500 to cover petrol, esb, gas etc.

Would really prefer not to have to rent out room permanently. I know, I know...if needs must. 

Am claiming all my tax relief for mortgage. Actually rang to check I had gotten last years full allowance...just in case I was due a refund.


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## avantarklu (15 May 2008)

I wouldn't normally suppose to offer advice on these threads but I have watched this one with interest.  The OP has offered the following information:
 - Gross salary 31,250
 - Unsecured debt 30,000
 - House value 190,000
 - outstanding mortgage 170,000

Given the above, in the current climate how can the OP possibly expect to refinance to  consolidate debts? The LTV is currently 90% (& I suspect may actually be higher). 
The value offered on the house would have to be taken with a pinch of salt.
The outstanding mortgage value would appear very low after 2 years of a 35 year 100% mortgage.

All indications are that borrowers no longer have access to 100% mortgages, let alone 100%+. I would suggest OP forgets about 'rent a room' and consider 'rent a house'.
Am I missing something??


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## Guest117 (15 May 2008)

Sorry SMR - mot what you want to hear - but a spending diary and a visit to MABS is what you need to do. 

You need to bite the bullet, and curtail your spending for a while until you at least clear your credit card loans. Look at the interest you are paying on the 2 CCs every month if you want an incentive.

When you have cleared the CCs then you will be in abetter position to tackle other debts and reduce your interest payments to a minimum.

Spending diary does work and will prob save you 150+ per month


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## Satanta (15 May 2008)

SMR123 said:


> Haven't done formal spending diary, as there is very little left after all the major things are paid, maybe E400/500 to cover petrol, esb, gas etc.


While you say there isn't a whole lot left after the outgoings, the completion of a spending diary will help you identify further areas where some (even small) savings can be made.

As a knock on effect, the actual task of completing a spending diary in itself will lead to (some/slight) savings as you give a little extra thought to every purchase.


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## dtlyn (15 May 2008)

avantarklu said:


> I would suggest OP forgets about 'rent a room' and consider 'rent a house'.
> Am I missing something??


 
I agree.


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## rmelly (15 May 2008)

avantarklu said:


> I would suggest OP forgets about 'rent a room' and consider 'rent a house'.
> Am I missing something??


 
Yes - an explanation for the OP of the tax implications of this advice.


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## ClubMan (15 May 2008)

... such as the ability to collect up to €10K p.a. tax free in rental income under the owner occupier rent a room scheme whereas renting the whole house makes the persona a landlord with all rental income assessable for income tax (albeit with the ability to write off certain expenses). In short to say that they should become a landlord with no qualification or explanation of the issues makes absolutely no sense.


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## avantarklu (16 May 2008)

I'm going to go out on a limb here and suggest that as the property is valued, according to the OP, at €190k, it is either a one bedroom city apartment or alternatively, located in a less-densely populated and perhaps less-sought after location (no offence). Therefore, I would again assume that the possibility of getting any where near €10k in rental income from renting a room would be a long shot.

My point, however badly made, was that needs must! OP has very high personal debt, both secured and unsecured, with repayments due to increase as mortgage rate reverts to standard in July. I have been surprised at the rather 'restrained' advice currently on offer, given the individual circumstances and similar-type threads. I would suggest that perhaps a more drastic solution might be required if the the OP is that concerned about damaging his\her credit rating.  Maybe I should have suggested 'sell your house' instead. OP might find it easier to make ends meet without the financial drain that is home ownership.


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## ClubMan (16 May 2008)

avantarklu said:


> I have been surprised at the rather 'restrained' advice currently on offer


Like what specifically? 


> Maybe I should have suggested 'sell your house' instead. OP might find it easier to make ends meet without the financial drain that is home ownership.


That's always an option. But where would they live then? And would they find rental accommodation for much less than the c. €900 p.m. that they are currently paying on the mortgage? If not then they might be better off keeping the house and looking for other options for dealing with the financial situation.


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## SMR123 (16 May 2008)

Bought house for E172,000 2 years ago, which was an extremely good price at the time. Located in midlands. Currently 2 houses on sale in the development - one of which is 218k, but I gave 190k as a much more conservative estimate. Not sure how much they are looking for the 2nd - think it's in the region of E190-200k (looking for a quick sale), so that's the figure I'm going on.

Also, Avantarklu unsecured debt is at 20k - not 30k as you previously stated...not too much better, but every little counts!

Selling house is not an option as far as I'm concerned. 

Started keeping a spending diary yesterday, as I've just been paid. Also, rang Mabs yesterday to enquire about making an appointment for next week - couldn't confirm day as I've alot on next week. Lady most helpful, so won't be afraid going in!!

Also, following on from the advice about insurances being included with mortgage repayment. I rang ES, and will be saving almost E100.00 on my annual premium for building and contents when the policy renews next month compared with last year.


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## ClubMan (16 May 2008)

SMR123 said:


> Also, following on from the advice about insurances being included with mortgage repayment. I rang ES, and will be saving almost E100.00 on my annual premium for building and contents when the policy renews next month compared with last year.


You should shop around as widely as possible for the best deal on mortgage protection life assurance and home insurance (make sure to insure for the appropriate reinstatement cost). You could make significant savings. Don't just stick with the existing provider. If you have mortgage repayment protection insurance then review this as often these policies are poor value for money.


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## SMR123 (16 May 2008)

Thanks Clubman, actually I rang a number of insurance providers and checked on the internet as well. Eagle Star were coming out with the best policy for the price. 123.ie came in E10 cheaper but with a higher excess and did not include unspecified outside the home.

Just rang my mortgage provider and found out the following:

Home Insurance: E29.60 pm
Mortgage Protection: E17.99 pm covering E400 pm payout
Life Assurance for mortgage: E68.10 (increased due to childhood illness, which will never prove fatal - not even any problems now!).

Does the mortgage protection seem high? Do all insurance providers do mortgage protection?


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## ClubMan (16 May 2008)

SMR123 said:


> but with a higher excess and did not include unspecified outside the home.


Make sure that you really need the lower excess and unspecified/all risks items cover. Personally I prefer to "self insure" for these.


> Mortgage Protection: E17.99 pm covering E400 pm payout


You mean mortgage repayment protection insurance? Many people use "mortgage protection" to refer to mortgage protection life assurance cover.


> Does the mortgage protection seem high? Do all insurance providers do mortgage protection?


Repayment protection policies are often poor value for money especially when the premiums are bloated with high charges/commissions and the policy only pays out in very restricted circumstances and for limited periods of time. If I was you I would read the policy documentation and decide whether or not this policy was worth paying for. If not then cancel it.


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## SMR123 (16 May 2008)

Hi Clubman,

What do you mean by 'self-insure'?

Mortgage protection referred to is repayment protection. E4.50 per E100.00 insured. Will have a look at the documentation this evening. Don't know how much benefit E400 would be to me, in the event of redundancy etc. 

Have never take out payment protection on personal loans etc, but felt differently with the mortgage...and gave into the bank's hard sell!


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## ClubMan (16 May 2008)

SMR123 said:


> Hi Clubman,
> 
> What do you mean by 'self-insure'?


In the (probably unlikely) event that I need to cover such losses I will pay for them myself rather than falling back on insurance. The savings made on the premium can go towards this. If I don't suffer such losses then I have saved. Obviously I would depend on insurance for much more significant losses - e.g. the house burning down etc.





> and gave into the bank's hard sell!


Probably a bad idea so.


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## SMR123 (16 May 2008)

Thank you for your response.

I will enquire with ES again to see if this would reduce premium. I would never have anything really valuable outside the home anyway.

Am feeling much more positive and will continue with my budgeting!


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## ClubMan (16 May 2008)

SMR123 said:


> Am feeling much more positive and will continue with my budgeting!


Well done on contacting _MABS _and starting to keep a spending diary.


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## michaelm (20 May 2008)

If I were in your position I'd probably (concurrently) . .
1. stop spending money (review all outgoings with a view to reducing same)
2. stop paying the pension, freeing up €60/month
3. seeing as you're friendless with the banks, see if the CU will step up with 10k to clear the credit cards. If not use the first €800 from the rent-a-room or wherever to bring the CU loan down to the level of CU saving and clear the CU loan freeing up €132/month
4. maybe the bank will allow you to pay interest only on the mortgage for a while, don't know if they're happy to do this and you wouldn't free up much cash, maybe €100+/month, still, adds up.
5. ask for a pay rise and more hours (also I'd consider getting a Saturday job).
6. ask a close relative for a temporary 'dig-out'.


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## SMR123 (21 May 2008)

Thanks Michael M.

1. Have started using spending diary, and have noticed a difference in the last week. Know I can definitely cut back in certain areas - refuse collection - reckon savings will be approx E170pa, and also saving E115pa on home ins. Shopping has also been cut in half, by going to Aldi and Lidl and only using the more expensive supermarkets for a couple of bits.
2. Not sure about stopping pension...
3. Have already thought about CU, and am going to put all money in from room rental plus a little extra, to obtain loan to clear credit cards by end of summer. Any idea how much credit union will lend...is it two or three times your savings? Also, will they look at other outstanding debts - do they check with ICB for amounts?
4. Don't want to go interest only on mortgage.
5. Won't get a payrise...no chance of extra hours either. Am currently doing part time study as well, which is taking up weekends. 
6. Asking a relative is not an option.


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## ClubMan (21 May 2008)

SMR123 said:


> 2. Not sure about stopping pension...


Saving while carrying significant unsecured and high cost debt makes little sense. The only argument might be to contribute to the extent necessary to benefit from matched employer contributions. Otherwise you should probably stop contributing for now and deal with your debt/cashflow issues first. Once you have your finances under control and can realistically afford to you can start (pension) saving again.

Why are you dismissing the possibility of going interest only on the mortgage seemingly out of hand. 

What did _MABS _recommend?


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## michaelm (21 May 2008)

SMR123 said:


> 2. Not sure about stopping pension...


IMHO those on the lower rate of tax would be as well to save rather than pay a pension, unless their contribution is matched by their employer.





SMR123 said:


> 3. Have already thought about CU, and am going to put all money in from room rental plus a little extra, to obtain loan to clear credit cards by end of summer. Any idea how much credit union will lend...is it two or three times your savings? Also, will they look at other outstanding debts - do they check with ICB for amounts?


Tell them you need to refinance, ask for six times your savings; don't hide anything from them.





SMR123 said:


> 4. Don't want to go interest only on mortgage.


Might make sense to do so for a short time i.e. 12 - 18 months.





SMR123 said:


> 5. Won't get a payrise...


Well, if you don't ask you probably won't.

Good luck with it anyway.  If you pay off debt the hard way you're probably less likely to get into a similar situation in the future.


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## SMR123 (21 May 2008)

Hi Clubman & Michael M,

Haven't been in with Mabs yet. Work and study taking priority this week - that's not just an excuse. Have some time off coming up shortly, so will be doing it then. 

Don't know about interest only. That seems to be mostly what I'm paying anyway. Will be going to bank next month, for a review on mortgage as fixed rate ending July. Will discuss it with them then? Would I actually be paying much less though? Is there a possibility bank will say no to going interest only? 

My pension contribution of 3% is matched by my employer.

I definitely won't get a payrise. Very strict on once a year...unfortunately that doesn't come around til January 09. Am paying E50 to a work Xmas club, so think I'll cancel that. 

Michael M, think you're right about paying it off the hard way. Can't believe I'm in the situation I'm in, although from reading other posts, I don't think I'm the worst off. Have never missed a loan or mortgage payment. It's just those damn credit cards!!


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## ClubMan (21 May 2008)

SMR123 said:


> Don't know about interest only. That seems to be mostly what I'm paying anyway.


You can estimate the interest/capital split of your ongoing repayments using Karl Jeacle's mortgage calculator. 


> Will be going to bank next month, for a review on mortgage as fixed rate ending July. Will discuss it with them then?


Be very careful here. Don't expect independent, professional advice in your own best interests from the lender. 


> Would I actually be paying much less though? Is there a possibility bank will say no to going interest only?


See above. You should save the capital portion of any ongoing repayments although obviously the mortgage will cost you more in the long run since your capital outstanding will remain static as long as you are on interest only. However it may be one small cashflow improvement measure/option.


> My pension contribution of 3% is matched by my employer.


OK - so there could be an argument for continuing to contribute depending on how severe your debt/cashflow issues are. 


> Am paying E50 to a work Xmas club, so think I'll cancel that.


Definitely. And forget about buying presents for the moment or at the very least set a strict budget and stick to it. You simply cannot afford such discretionary spending right now.


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## Captin Sobel (21 May 2008)

badge55 said:


> Spending diary does work and will prob save you 150+ per month



Can you elaborate on the Spending Diary?  

Our monthly expenses are fixed for loan, rent, esb, gas, phone+broadband, petrol(1 car), we buy no alcohol, I take lunch to work, rarely eat out,  take no holidays, [ sounds mortally boring I know  ] the only variable  is the weekly shop which varies from 100 to 150 depending on whether we need certain items that we stock up on.

Wife is going on maternity leave soon and not entitled to maternity pay so we will be getting maternity pay from social welfare, 280 a week.

Anyone else gone from double salaries to basically 1.40 - an tips on not getting stuck? As we have little wiggle room at end of month as it is, can't see much room to maneuver adding nappies to the weekly shopping bills and everything else we will need to buy.  I guess we are far from unique.


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## ClubMan (21 May 2008)

It's simple - but not necessarily easy. You need to budget according to your means and stick to the budget.


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## aishling (21 May 2008)

SMR123 said:


> It's just those damn credit cards!!


I'd start by cutting up the credit cards, you could always keep note of the number if you need them for buying over the internet! Prevent you adding to your debt...


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## annR (21 May 2008)

Captin Sobel



> Anyone else gone from double salaries to basically 1.40 - an tips on not getting stuck? As we have little wiggle room at end of month as it is, can't see much room to maneuver adding nappies to the weekly shopping bills and everything else we will need to buy. I guess we are far from unique.


 
We are in the same situation - would love to budget but I have no idea yet how much baby is going to cost. Even from buying a few bits it seems very expensive. I am already looking into bulk nappy buying and using Boots advantage card etc  There is a lot of info out there on money saving tips in that regard and you can always go back to basics -compare prices and buy the cheapest.
My strategy in terms of not getting stuck is to keep a very close eye on baby costs and try to budget it in along the way without interfering with mortgage or regular savings.  This is easy if you already keep a budget (as you do by the sounds of it).  
A


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## Maid Upname (21 May 2008)

just read to see how you are getting on OP .... looks like you are doing well sticking to a budget - im trying really hard - but finding it hard !! still must just chip away and hope it makes a difference soon.
am taking in 2 students also for the summer months - we cook a lot in our house so adding 2 to the pot - hopefully will mean it will pay a dividend worth the trouble !!!

anyway as for nappies (2 posters above) ... lidl ones are 8.40 for 40nappies and pampers is 17.99 (apx) for 46 !!! go figure ... AND aldi and Lidl nappies are just as good !  

wish you and me all well working out a strategy to keeping on top of things ... seemingly brian cowan has stated today that he will definately improve the costings on everyday household expenses (grocery and service) ... now how is he going to do that ???? emmm


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## Captin Sobel (22 May 2008)

Thanks AnnR and Maid_UpName for the solidarity. and the useful tips. Will see if we can find that Boots Advantage card.

One encouraging thing I did see was that the Child Benefit plus Early childcare supplement add up to 3092 a year - that's 60 a week averaged out added to the maternity Benefit will all help.

http://www.citizensinformation.ie/c...yments-to-families-and-children/child_benefit
http://www.citizensinformation.ie/c...ilies-and-children/early_childcare_supplement


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## ClubMan (22 May 2008)

Depending on circumstances in the longer run the _Home Carer's Tax Credit _may also be relevant. See the _Taxation _forum key posts and www.revenue.ie


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## so-crates (22 May 2008)

Captin Sobel said:


> Can you elaborate on the Spending Diary?


 
Just to note Captain, that there has been quite a discussion on the hows and whys of spending diaries previously, most recently in this thread


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## so-crates (22 May 2008)

SMR123 said:


> 3. Have already thought about CU, and am going to put all money in from room rental plus a little extra, to obtain loan to clear credit cards by end of summer. Any idea how much credit union will lend...is it two or three times your savings? Also, will they look at other outstanding debts - do they check with ICB for amounts?


Check the ICB homepage for the list of institutions that are signed up. Some credit unions now use the services of the ICB but that doesn't preclude you from getting a loan from them and your local CU may not be on the list anyway. Like MichaelM said, tell them what you are planning on using the loan for, it is not an unreasonable purpose.



SMR123 said:


> 4. Don't want to go interest only on mortgage.


 


SMR123 said:


> Don't know about interest only. That seems to be mostly what I'm paying anyway. Will be going to bank next month, for a review on mortgage as fixed rate ending July. Will discuss it with them then? Would I actually be paying much less though? Is there a possibility bank will say no to going interest only?


This early in repaying your mortgage, yes it is mostly (but not all) interest. But every small additional amount of money you can use to clear expensive debt will make the mortgage easier to manage in the future and then you may be in a position to overpay and claw back some of the time/money you have added on by going interest only.
As for the other, there is a possibility the bank may say no, they are entitled to treat each case on merit, that shouldn't stop you asking though and trying for it. Just don't plan to depend on it until you know what they say!



SMR123 said:


> Michael M, think you're right about paying it off the hard way. Can't believe I'm in the situation I'm in, although from reading other posts, I don't think I'm the worst off. Have never missed a loan or mortgage payment. It's just those damn credit cards!!


Just look at all the positive steps you have taken or are about to, it will take time, there is no gainsaying that, but it is do-able for you.


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## Captin Sobel (22 May 2008)

so-crates said:


> Just to note Captain, that there has been quite a discussion on the hows and whys of spending diaries previously, most recently in this thread


 
Thanks so-crates, yes I have used something like that in the past, it was a chore to keep it updated and keeping the other half onboard ( taking reciepts out of deep handbags... ) ( it did make me go to Aldi and Lidl more I must admit )

But will try it again now, as it has its merits in highlighting those trends that you just don't see month to month. And simply stopping spending on all put the absolute essentials.

On another note, but still in the vein of cutting expenditure, anyone find the online monitoring facility offered by Airtricity a help in seeing more clearly their power usage month to month?


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