Married Couple, 3 kids, too much debt

[Greta]

I think we would all prefer this Greta, but HOW would you go about doing
it?

I would start keeping a spending diary as a priority to track down all expenditure, then cut down to the bone, looking for ways to enjoy life that are free or very low cost - like walks in the park, rather than cinema trips etc. Would also look for ways to make extra money, rent a room that you suggested is a good idea, or taking in foreign students over the summer. I would concentrate on paying down debts, starting with the highest interest rate, possibly putting the mortgage on interest only for a while, to generate extra cash towards clearing unsecured debt.

I thinks it's more viable for OP to (eventually) sort out their finances than selling the house, because some people just don't seem able to SAVE (for themselves). It's one thing to make DEBT repayments, as this has got to be done, but, once debt is repaid, they'll start running it up again, rather than saving for themselves.

To me the sale of their house to pay off the loans seems rather like consolidating the loans, which didn't work for them - they consolidated, then run up more debts, finding themselves in the present situation. If they sell the house and pay off debts, my worry is, rather than saving hard, they'll start spending hard and maybe even run up more debts

I think OP's most serious problem is their financial attitude and that has got to change NOW, not relying on quick fix solutions like selling the house or consolidating again.

Besides, OP's estimate of the value of their house may well be too optimistic, so the solution of sell the house and pay off all debts may simply not be available to them.

 

[cairn]

I think we're being a bit negative here, the first thing to say is congratulations for your current budgeting, to be up to date on all of the bills AND paying off the mortgage including the principal is very impressive. OK ye have over borrowed in the past but you can only deal with now and you're doing well.

The cinema trip seems to be your only social expenditure and under no circumstances shoud you cut it out. Simialrly the emergency money you have put aside is necessary and prudent, those yearly bills will come around again soonish.

You have a very good salary with pension and benefits, certianly enough for a family to live on comfortably. The issue is the debt. I'd work on the MBNA and get that cleared, if you get that done you'll free up €300 per month which you can then put towards the other debts. You'll start a type of snowball effect where every month the situation gets a little better and you get a bit more relaxed.

Maybe your spouse could replace his car with an older van, useful for whatever work he gets and much cheaper to run. If there are a few K to be got from the sale of the van put this towards MBNA and you're up and running.

Your spouse probably needs to review their own goals / career be it working in the home, part time work or career change, trying to make construciton pay is probably only going to lead to frustration.

You do have a lot of debt but there's a good salary there and the situation is manageable and you're clearly quite disciplined (now).

 

[wbbs]

OP, just wondering what caused the unsecured debt. A lot of people seem to be suggesting that it was just overspending which maybe it was, or was it due to the downturn in your husbands business. Were the loans and credit cards used to subsidise the business or were they other reasons. It doesnt really matter now as you have the debt anyway but it might clarify if this is a result of a lack of money management skills which needs to be fixed or is it a one off as a result of the economy position, it might change the advice you are getting.