# Cash poor...looking for advice



## Upstart (31 May 2018)

My first post. Please be gentle.


Age: *47*
Spouse’s/Partner's age: *46*

Annual gross income from employment or profession: *46k*
Annual gross income of spouse:*29k (three day week)*

Monthly take-home pay *4400*

Type of employment: e.g. Civil Servant, self-employed : *Both Civil Service*

In general are you:
(a) spending more than you earn, or
(b) saving?
*Spending more than we earn*

   Rough estimate of value of home: *280k*
Amount outstanding on your mortgage: *31k
What interest rate are you paying? ECB +1.15*

Other borrowings – car loans/personal loans etc *750pm (Credit union)*

   Do you pay off your full credit card balance each month? *No credit cards*
   If not, what is the balance on your credit card? *n/a*

   Savings and investments: *3k Credit union (tied up with the loans)*

   Do you have a pension scheme? *Both have Civil Service pensions. I also have a small AVC*


   Do you own any investment or other property? *No*

Ages of children: *16/15/11/3*

Life insurance: *Yes (€80pm)*


*What specific question do you have or what issues are of concern to you? *
At the moment we are just about getting by. Its very tight at the moment but overdrafts on our three accounts (total overdraft 7.5k). We are always in the red. No problem servicing the loans and mortgage with no payments missed. Both will be paid off in less than 3 years.

We would like to do a few bits with the house that would probably come to 15/16k in total. However I would be willing to wait a couple of years until the mortgage/loans are paid off. However the struggle with day to day finances leads me to think that if I got another credit union loan (over 5 years) to pay the mortgage off/deal with overdrafts while getting the work done on the house would relieve money worries somewhat.

Any advice would be welcome please.


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## mccoypat94 (31 May 2018)

To me you are in a fairly comfortable position,  its all relative though I suppose.

Whats your mortgage per month, should be small enough Id imagine?

Do you have an expensive lifelstyle?  Kids are very expensive I know!!


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## Brendan Burgess (31 May 2018)

Upstart said:


> Monthly take-home pay *4400*



You have a net income of €4,400 per month and can't live on it? 

Then it's a budgeting problem. You need to go to MABS and they will help you to budget and live within your means. 

There isn't a financial engineering solution to overspending.

Brendan


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## elcato (31 May 2018)

Upstart said:


> leads me to think that if I got another credit union loan (over 5 years) to pay the mortgage off/deal with overdrafts while getting the work done on the house would relieve money worries somewhat.


Under no circumstances should you do this. Credit union loans are flexible in the sense that you can overpay and the like but the rate is around 15%. Your mortgage is about 2.5% now.
If you could tell us where you are actually spending the day to day money maybe we could give a few suggestions for alternatives.


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## Upstart (31 May 2018)

mccoypat94 said:


> To me you are in a fairly comfortable position,  its all relative though I suppose.
> 
> Whats your mortgage per month, should be small enough Id imagine?
> 
> Do you have an expensive lifelstyle?  Kids are very expensive I know!!




Thanks for the reply.

Mortgage is 1k per month.

I don't really have an expensive lifestyle. I go out for a few drinks once a week (twice on the very odd occasion). My wife doesn't really drink. I have four boys all stuck in sport so that's probably where the bulk of it goes.


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## mtk (31 May 2018)

Brendan[/QUOTE]


Brendan Burgess said:


> You have a net income of €4,400 per month and can't live on it?




4400-750-1000=2650 
not sure I agree with the boss that its excessive for 2A plus 4 kids


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## elcato (31 May 2018)

Upstart said:


> I have four boys all stuck in sport so that's probably where the bulk of it goes.



No offense but I think this generic statement of where your money goes shows you don't really have a firm hand on your expenditure. How much is your electricity, gas, petrol, phone, TV, lunch, weekly shopping etc. You'd be surprised at how much you can save in unison with all of these. Your overdraft alone (on three different acconts) is costing you extra money. How much is owed currently to the credit union ? Tell them to take the 3k in savings and put it against the loan immediately.


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## Monbretia (31 May 2018)

I don't agree either, it's not excessive and we don't know the half of it, there may be two cars on the road with long commutes and the associated costs plus all the other normal bills not to mention teenagers!  Three big lads would eat you out of house and home!

You could have a look at the budget planner on the Mabs site and stick in a few figures to see if there is anything obvious that can be cut down on.


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## Upstart (31 May 2018)

Brendan Burgess said:


> You have a net income of €4,400 per month and can't live on it?
> 
> Then it's a budgeting problem. You need to go to MABS and they will help you to budget and live within your means.
> 
> ...



Thanks Brendan. You are probably right with regards to the budgeting. I do need to tackle that somewhat.

There are people in worse situation than me I know.



elcato said:


> Under no circumstances should you do this. Credit union loans are flexible in the sense that you can overpay and the like but the rate is around 15%. Your mortgage is about 2.5% now.
> If you could tell us where you are actually spending the day to day money maybe we could give a few suggestions for alternatives.



Lunches x 2 is about 50pw
Groceries circa 200pw
Fuel 80-100pw
Socialising - 50-80pw

after that it's all the usual domestic bills, insurance etc. All the kids (bar the three year old) are heavily involved in sport. Between boots, gloves, subscriptions etc it's quite an expense. I'd rather not cut back on this part as I'd a big advocate of them playing sport. It keeps them healthy and occupied.

I'm willing to wait a few years to get the stuff done with the house.


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## mtk (31 May 2018)

Upstart said:


> Lunches x 2 is about 50pw



bringing in your lunch is an obvious one tbh


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## mtk (31 May 2018)

another obvious one


Upstart said:


> Socialising - 50-80pw


need to reduce this to once a month or a forthnight


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## Upstart (31 May 2018)

elcato said:


> No offense but I think this generic statement of where your money goes shows you don't really have a firm hand on your expenditure. How much is your electricity, gas, petrol, phone, TV, lunch, weekly shopping etc. You'd be surprised at how much you can save in unison with all of these. Your overdraft alone (on three different acconts) is costing you extra money. How much is owed currently to the credit union ? Tell them to take the 3k in savings and put it against the loan immediately.



No offence taken. If the truth is harsh then so be it. You are right, I don't have a firm hand on my expenditure and its something I need to do.

I'd know what most of the bills are: Electricity - 125 pm  Petrol - 320-400 pm  Phones 60pm   TV - 35pm Weekly Shopping - 800-1000pm

Credit Union outstanding loan is 19k. Can I do that with the 3k in savings?



Monbretia said:


> I don't agree either, it's not excessive and we don't know the half of it, there may be two cars on the road with long commutes and the associated costs plus all the other normal bills not to mention teenagers!  Three big lads would eat you out of house and home!
> 
> You could have a look at the budget planner on the Mabs site and stick in a few figures to see if there is anything obvious that can be cut down on.



I'll have a look at that planner. Thanks.



mtk said:


> bringing in your lunch is an obvious one tbh





mtk said:


> another obvious one
> 
> need to reduce this to once a month or a forthnight



Certainly two options that could be reduced. Thanks.


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## Brendan Burgess (31 May 2018)

Upstart said:


> Credit Union outstanding loan is 19k. Can I do that with the 3k in savings?



Why have you a €19k loan? 

That is one of the problems you need to fix. Borrowing money to buy things you can't afford. 

Brendan


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## mtk (31 May 2018)

Wonder how you fund holidays and car replacement health insurance as I am surprised you can spend all this from 2650.... Looks way more to me !


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## Upstart (31 May 2018)

Brendan Burgess said:


> Why have you a €19k loan?
> 
> That is one of the problems you need to fix. Borrowing money to buy things you can't afford.
> 
> Brendan



The loan was to buy a good family car. Unfortunately my own packed a short time later so I had to get a top up. I can afford the loan. I have never missed a payment. Perhaps in hindsight it wasn't a good idea. Unexpected expenses also pop up that need to be dealt with.

I was looking for advice on where I might be going wrong with my finances. I am by no means broke but as stated previously we have very little at the end of the month. I thought MABS only dealt with persons in debt and while I do have overdrafts I don't consider myself in debt.


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## Brendan Burgess (31 May 2018)

Upstart said:


> I can afford the loan.



I think that MABS will be able to sort out thinking like this.  If you have nothing left at the end of the month, you can't afford the loan. You have no choice now. You have a very expensive Credit Union loan and unless it's possible to trade down the "good family car", you will have to pay it off. 

MABS was initially to help people with general financial issues and poor family budgeting is the cause of  most problems. 

Brendan


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## Autofill (31 May 2018)

15 and 16 year old may decide to go to third level in 2 or 3 years time.  Will probably cost 3500 each per annum in fees alone, accommodation too on top of that depending on where they go, have you anything saved towards that?


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## Steven Barrett (31 May 2018)

First of all, you are a family of 6, life is going to be expensive. Even going to the pub for a bite to eat is going to cost you a fortune. 

What you need to do is print off your last 12 months bank statements and see exactly where all your money went. Put it all on an excel spreadsheet. 

You and your wife sit down and agree on a monthly budget. If you overspend one month, you underspend the next. See if you spend less than you earn. No need to go to extremes though. If you like having a few pints once a week, factor that in unless you can't afford it. 

Try to get out of overdraft, it's costing you a lot to live in it constantly. It is going to take a while to do it. Request the bank reduce your limit bit by bit so you don't have that comfort blanket of going back into it. 

Try to get the loans paid off. 

It's going to take you a while to get into a good place financially and it will require work. You will need to keep an eye on expenditure on a weekly/ monthly basis, otherwise you will fall back into old habits. 


with a bit of work and discipline you will be fine. You are at a very expensive time of parenthood but you have a small mortgage, secure jobs and good pensions. 


Steven
www.bluewaterfp.ie


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## Upstart (31 May 2018)

Brendan Burgess said:


> I think that MABS will be able to sort out thinking like this.  If you have nothing left at the end of the month, you can't afford the loan. You have no choice now. You have a very expensive Credit Union loan and unless it's possible to trade down the "good family car", you will have to pay it off.
> 
> MABS was initially to help people with general financial issues and poor family budgeting is the cause of  most problems.
> 
> Brendan



I'm not sure what you mean by 'thinking like this' but either way the loan is being serviced and I don't envisage it never being serviced. It will be paid off in less than 3 years. If I thought I couldn't afford it I would be straight in the Credit Union to renegotiate the loan. The bulk of that loan was taken out prior to our 4th child (a surprise) arrived on the scene. The extra childcare per week I'm paying now was paying for that loan.



Autofill said:


> 15 and 16 year old may decide to go to third level in 2 or 3 years time.  Will probably cost 3500 each per annum in fees alone, accommodation too on top of that depending on where they go, have you anything saved towards that?



No we have nothing saved for that. But the loans and mortgage will be paid off by then so we will have an extra few quid each month to cover that.



SBarrett said:


> First of all, you are a family of 6, life is going to be expensive. Even going to the pub for a bite to eat is going to cost you a fortune.
> 
> What you need to do is print off your last 12 months bank statements and see exactly where all your money went. Put it all on an excel spreadsheet.
> 
> ...



Thanks for your advice. We plan to sit down over the weekend and do what you suggest above. Yes hopefully in 3 years time we'll be in a better place financially.


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## MrEarl (1 Jun 2018)

Hello,

The original poster has indicated that they meet all monthly loan repayments, but would they still be met all payments if the overdraft disappeared tomorrow ?  My bet is the answer is no !

The original poster will find   this document helpful, (particularly from Page 25 onwards)  - it is provided by the Insolvency Service of Ireland and gives indication on expected household costs.  Compare these costs to those in the household and identify where there are large differences - that's where cutbacks / changes are necessary.

As Steven has suggested above, review the bank statements to see where the money is going every month, that will compliment what I'm suggesting above.

Having first gone through the detailed monthly living costs and identified some cut backs, then look at moving all service providers, to get cheaper deals.  Websites like Switcher.ie and Bonkers.ie may help identify the best deals where money can be saved (and remember, you don't need the likes of movie and sports channels, so cut them out, even if only for the summer period).

The original poster and their spouse / partner should also try and identify some ways of making some extra money, even short term, to help pay down the credit union debt faster. Apply for promotion, look for overtime, take on a part time job, ensure you are claiming all tax allowances etc.  Anything that can be done here will also help pay down the short term debt faster.

In theory, some of the original poster's debt could be moved / restructured, but that's the wrong move at this stage, first the original poster needs to get their living costs sorted out.  Once that has been done and some cut backs made, with those savings going into the credit union to help pay down the borrowings faster, it may then be appropriate to discuss the debt position further.


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## LS400 (1 Jun 2018)

Brendan Burgess said:


> You need to go to MABS and they will help you to budget and live within your means.


#

I think thats an irritant to the people who really need the services of Mabs. It shouldn't be for everyone.

If this person earning €70k combined, and they cant manage, then they should pay for financial advise.

Mabs should be giving their time to the couple earning €30k combined who are finding it difficult to manage.


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## Monbretia (1 Jun 2018)

In fairness you'd be waiting a long time in most MABS offices for an appointment if it was just a budgeting advice case similar to what is outlined.   

People with debt and difficulties are obviously prioritised, people just looking for budgeting advice are far and few between and bottom of the list for appointments, they would be offered an information pack which would be posted out to them which contains the spending/budget diary and lots of info.  They would have to do the spending diary thing first before they would even get an appointment and that alone would give someone a good idea of where they were at.


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## POC (1 Jun 2018)

You say you’re spending more than you earn. Does this mean your overdrafts are continuing to get bigger? You seem to think that you’re doing ok because the loan and mortgage continue to be paid, but your debts are increasing. You have no savings you can use for unexpected large expenses. I know your mortgage and loan will be paid off in a few years and you seem to think that everything will be ok then. But this will coincide with your eldest kids going to college. If they can live at home while at college, it mightn’t be too hard to get your finances back under control but if they are going to need accommodation (and you could have 2 or 3 in college at the same time), then you’re likely to continue to struggle.
You’ve already been given good advice about budgeting in other replies. 
There is plenty of information you haven’t provided here (and you mightn’t want to). I’m wondering do you have any childcare costs at the moment? Do you go on holidays? Gaeltacht and school trips for the kids? You provided a cost for 2 mobile phones - does that mean the kids have Prepay phones? Do the kids get pocket money or have jobs (some kids can fund their phones and social life through babysitting or referreeing)? Do the kids bring packed lunches to school? You seem to think your lifestyle spending is low but maybe it’s higher than you realize. You don’t need to answer these questions here - just things to think about.


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## Clamball (2 Jun 2018)

Hi Upstart,  it is clear that you are considering your spending and ability to raise/spend further money on home improvements etc which is a great start.  It is also clear that you do not want to live beyond your means and are proud of your ability to keep your family life going and your children happy and healthy. 

You have your mortgage and credit union loan covered, so I think before you take any further spending decisions you need to get rid of the overdraft.  It is costing you money you could be spending or saving to service this overdraft.  So I think if you work to pay off this overdraft you will be in a much better place.  Can you pay it off st a rate of €300-€500 pm?   That would be 15-25 months.  Would this be possible?  Can you get the two adults and the two oldest around the table and get agreement on this, that daily spending will be curtailed until this is paid off?  You may need to take payment holidays for Aug (back to school) and Christmas, but agree to this up front.  And then as a family agree where you can find this few hundred every month.  Lunches, coffee out, discretionary clothes, pub nights, gifts to others, parties, driving less (can you car share, get others to drive the kids around, get them bikes?).  Can anyone get side gigs, (summer jobs, overtime, sat work, dog walking, bbsitting?) to reduce the overdraft to zero.   Think of the sense of achievement when this is reached.   I would say by then you will be ready for college for the oldest, you will have all your loans paid off and you can use the spare income to fund college, do the house improvements, build up an emergency fund.   Best of luck!


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## moneymakeover (3 Jun 2018)

You're paying mostly capital on the mortgage
Which will be paid off at young age eg 50

Is there an option for a 3 month mortgage break from your lender?

If so take the resulting 3k plus your 3k credit union savings and pay off the overdraft.


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## Brendan Burgess (3 Jun 2018)

Upstart said:


> Amount outstanding on your mortgage: *31k
> What interest rate are you paying? ECB +1.15*





moneymakeover said:


> You're paying mostly capital on the mortgage



This is a very good point. 

Talk to your lender and ask for a payment break.  They will probably refuse as it's a tracker. 

Then ask them to reschedule it by 10 years, which they might also refuse.

Then offer to switch it to a non-tracker rate in exchange for an extension. Unfortunately, while this would make sense for both of you, they probably wouldn't do it in case they get accused later of stealing people's trackers from them.

Brendan


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## MrEarl (4 Jun 2018)

moneymakeover said:


> You're paying mostly capital on the mortgage
> Which will be paid off at young age eg 50
> 
> Is there an option for a 3 month mortgage break from your lender?
> ...




If the original poster goes that route, and assuming that the CU will release those savings (that they are not pledged as security for the CU loan) they need to cancel their overdraft in full at the same time - otherwise, there's a risk that they'll just run it back up again.


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## AlbacoreA (4 Jun 2018)

mtk said:


> not sure I agree with the boss that its excessive for 2A plus 4 kids



I'd be thinking the same. 

I don't understand the advice about getting out of the CU loan or the overdraft. I don't see any funds available to do this. 
or even to change the car. You'll lose money switching and possibly end up with a less reliable car. 

As Mr Earl, says the immediate task is to reduce the living expenses. 
But a family is expensive, and time consuming. Not a lot of options there. 
I think you'd have to have some short term objectives and see what can be achieved.


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