Single mother needs to clear loans

[Monbretia]

I'm afraid it's awful boring and no fun but spending has to be cut, definitely agree about classes for kids that age, don't need them, whatever about the 6 yr old but minimum.

Also spending diary, really start taking note and seeing exactly where the money is going, takeaway coffees while nice are a luxury when you are overspending on your budget. Bring a coffee/flask/whatever you need to do to cut that down, bring lunch too if that's another spend. You quite probably have enough clothes in your wardrobe too to see out the year, kids clothes are different obviously as they grow out of them, are you a Next or a Penneys shopper for them?

Are all your utilities with the cheapest provider, shop around I presume for insurance etc. I know it's time consuming when you are a single parent, I was one myself but at least with just one kid and childcare wasn't as expensive back then!

Again boring but spending diary, cannot emphasise enough how important it is to know where your funds are going, without that clarity you can't cut back properly.

A very young new work colleague of mine years ago confided that she could not keep on top of her credit union loan, it was only about 1k at the time, anyway advised her to do spending diary, turned out she was spending 30 quid a week on Lindt chocolate, now she loved it but loved clearing her loan better! It's not no coffees forever, it's just until you get a handle on the whole show.

 

[misemoi]

On the coffees...tbh I have given up now! I get no joy at the current prices and was only really having them out of habit. It sounds so mundane but if you are spending maybe 30 EUR a week on them, I would get more pleasure out of something else that is less costly (eg a new book from the library). It may seem horrible to give up the things you like but I guess assess if you are actually getting anything from them...would sleeping better at night having paid down the loans (I am sure you are up anyway with a toddler!) give you more than the coffee?

 

[Parazard2]

I can fully understand how things can seem tight at the minute but you should be clear that you don't have a problem with debt, you have a short term cash flow problem. At 42, you are earning €102k and your total debt is €221k so it is very manageable

Thank you that is very reassuring.I'm not used to owing money as I have always had cashflow so this is new to me and a bit scary.

- You mention that your take-home is ~5k, is this based on full salary with you taking AL. If you start taking more parental leave you will reduce this further

Indeed. However paying for childcare would only see me E200 better off a month, so I decided way back to have the time with the kids instead. This may have changed again due to changes in NCS subsidies, and may make more sense again once they go up again in September. I've asked the creche for a 'quote' so I can decide.

- Children's allowance: You don't mention it but you should have another €280 coming in every month for this. You are not in a position to 'save' this for the kids so it should be used to overpay your debt. If you have been 'saving' this for the past 6 years and have a lump sum in a savings account, it should be used to clear your short term debt

No lump sums here but yes indeed I forgot to add the 280 as income.

- Health Insurance: It seems like you are paying this yourself and not getting it through work. Make sure you are getting your tax relief

I have both. I have health insurance and the Saturday Hospital Fund. I find it pays for itself and relief is at source.

-Utilities: These seem very high, can you break it down further?

Bins	30​
Mobile phone	15​
Sky /netflix /wifi	45​
Gas and electricity	250​
Cleaner	100​
Pet insurance	100​
spotify / google / disney	30​

The cleaner may look like a luxury but is only forthnightly, only just started and quite key to my sanity tbh.

- Kids activities: Kids really don't need expensive activities, what they want is to spend time with you. My own 4 year old girl loves cycling (free), playgrounds (free), playdates (generally free), the library (free) and swimming (~€16 once, maybe twice a month).

This is coming through strongly. I think I migh have to cut swimming out for now as it's 1:1s as my 6yo will not do anything in groups. Pity because he is learning so well

- Loans: Can you refinance the Avant loan to longer term? While it obviously costs a little more in interest, it is worth paying to reduce your monthly commitment. You can still overpay as much as you want to.

I really really really hate giving money to the bank... it makes sense though, but I will keep it as a last resort I think

A few simple things that you can also do are:
- NCS: make sure you are claiming the maximium here. With your parental leave, your reckonable income may entitle you to a higher subsidy
- myAccount: Make sure that you have claimed for all available allowances and credits for the last four years with Revenue. It's amazing how many people don't do this and are due a hefty refund
- DPS: Until recently I assumed (incorrectly) that the Drug Payment Scheme is not means tested and is available to everyone. It will cap some of your expenses to €80/month if you have prescriptions etc for the family. You may not always reach the €80 but as a family of four, we go through phases of antibiotics and other regular prescription stuff that puts us over that limit
- Review all your utilities, subscriptions and insurance and start shopping around, it will save you a lot

Yes to all these. I have always shopped around but everything seems to have gone up sooo much. I think I only renewed gas and elecrticity so not much than I can do there other than keep doing most of my washing on Sundays when I have free electricity. Gas bill should be going down now hopefully for the summer too.

- Maintenance Order: Despite what your ex may say, you should go through the process and get something from them. They have a duty of care to their children to provide financially for them. Even if that is only €200-300/month, it'll give you a lot more breathing space

Yes I am just going to have to do that unfortunately. Thank you!

 

[michaelm]

I would be tempted to ask PTSB for a three month mortgage payment holiday and use that to clear the AIB loan.

Looking at the rough spending estimates I would endeavour to reduce spending under every heading, even if only by a small % in many cases. As mentioned by others, a spending diary is your friend.

Your house and car maintenance figures surely have some wiggle room and your groceries at €1000 seems quite high to me. I expect that you could reduce that to less than €500. There are 8 in my house (6 adults and 2 teens) and we spend circa €1400 monthly on groceries (which includes toiletries, cleaning materials and alcohol).

 

[Bronte]

A big thank you for everyone who took the time to read my post and made such thoughtful and empathic suggestions. I will consider all of them and if you think of anything else to throw my way please do.

As long as you keep come back with more information we can make suggestions. I'd like feedback on:

- Rent a room ? Why not, put the 2 kids in one room for one year and rent 2 rooms, get Mon to Fri workers
- Grocery bill, down by half, eat chilli con carne, spag bol 3 times a week etc for one year, save 500 a month
- don't agree about touching the pension
- 300 from coffee/meals out for 1 year
- 200 for clothes, bet you've wardrobes full of clothes, one year pain

I reckon one year of hell and you can do it.

Does your ex have any legal right to the house?

You're actually doing great, house with plenty of equity and a well paid job.

 

[Premos]

I can't see anything I can realistically slice out. I plan on using up stuff we have for a month or two before buying more (e.g. pantry, toiletries etc) but beyond that every penny and more is going to necessities mostly. I could cut out all kids classes and all my takeaway coffees and just never get out of bed again I guess

Stop the kids class. A 3 years old who goes to childcare doesn't need classes

 

[Sue Ellen]

I took the Avant loan out to repay my ex as they had loaned me 30k towards house improvements. As we separated and they moved out they asked for the money back. I decided to get a loan while I could (in case I did lose my job) and have things more clearcut with them that way.

Yes you are right I do need to increase income there. I have tried asking before but got nowhere. I've been trying to prioritize establishing access so at least I get a little breathing room to myself. They don't earn much and are saying they can't afford anything given they now have to pay for rent etc. I know...

Sounds as if you are being far too lenient with your ex. They have €30,000, which I would question if they should have received in the first place, and yet they are quoting inability to pay maintenance?

 

[fistophobia]

You are doing well... nothing radical... small changes are needed.

 

[DannyBoyD]

Rent a room ? Why not, put the 2 kids in one room for one year and rent 2 rooms, get Mon to Fri workers

Alternative suggestion - take in language students for July / August & get a lump sum to throw at your smallest loan.

 

[Fortune]

Thank you. I meant to add that info. AIB is the cheapest loan as it was a green loan at around 6%. The expensive one is the Avant one at around 8%. I'd like to tackle that asap and have thrown all cash I was able to reduce it so far (originally a 30k loan in Feb it's already down to 23k).

The budget is just quite tight and I realize it seems crazy but being on my own with 2 kids I am struggling to find where to cut. It is also a very depressing prospect to lose all play money when I should be doing ok given my salary and given I do not get to catch my breath between working full time and having the kids on my own the rest of the time.

Rough breakdown of expenses beyond loans and mortage of 1k:

insurance	310​
utilities	475​
Health	250​
car	250​
kids	1270​
eating out, coffees, events	300​
house maintenance	250​
groceries	1000​
clothes, toys, beauty	200​
holidays	200​
contingency bill	400​
	4905​

Insurance, utilities and health all look pretty high. Shopping around could be worthwhile.

 

[Parazard2]

As long as you keep come back with more information we can make suggestions. I'd like feedback on:

- Rent a room ? Why not, put the 2 kids in one room for one year and rent 2 rooms, get Mon to Fri workers

I don't want other adults in the house tbh as I would lose all privacy (it's a small house). I am however looking into renting it out to movies/ads etc as I hear it pays well and you get put up for the duration at no cost to you. Let's see if that can inject some cash.

- Grocery bill, down by half, eat chilli con carne, spag bol 3 times a week etc for one year, save 500 a month

I thought I was only spending about that until I got a tracking app and it said I spent 1k last month I have no idea how as I'm quite frugal.

- don't agree about touching the pension

Yes I think it's not the best way to go

- 300 from coffee/meals out for 1 year

I think I can cut it back but not out all together. I do need some fun and pleasure in my life or I will just stop functioning.

- 200 for clothes, bet you've wardrobes full of clothes, one year pain

Yes but kids need new shoes quite often...

I reckon one year of hell and you can do it.

Does your ex have any legal right to the house

Thankfully no. The avant money is making sure they definitely cannot make any claims of having financially contributed in any way too as I gave the full amount loaned to me for house improvements back to them.

You're actually doing great, house with plenty of equity and a well paid job.

Thank you. I might get redundancy soonish yet and be back here trying to rejig stuff again

 

[Parazard2]

I would be tempted to ask PTSB for a three month mortgage payment holiday and use that to clear the AIB loan.

Looking at the rough spending estimates I would endeavour to reduce spending under every heading, even if only by a small % in many cases. As mentioned by others, a spending diary is your friend.

Your house and car maintenance figures surely have some wiggle room and your groceries at €1000 seems quite high to me. I expect that you could reduce that to less than €500. There are 8 in my house (6 adults and 2 teens) and we spend circa €1400 monthly on groceries (which includes toiletries, cleaning materials and alcohol).

Thank you I had forgotten about the repayment holiday thing. I'll look at that now.

I have started using the an post app and that's how I realized the extent of the problem. I thought I was spending as around 4-500 on groceries when in fact I was spending twice as much

 

[Parazard2]

No. You may need to convince the bank you're really struggling so lay it on when asking, wits end etc.

I'm wondering about this and as I'm clueless I wonder if there are any pointers as to dos and donts to help achieve this?
Would this option be preferable to a 3 months mortgage holiday someone else suggested?

 

[DannyBoyD]

3 months mortgage holiday

Given your income, I don't believe you need to do this.

Read up on Dave Ramsey's strategy.

If you don't pull in the spending first, mortgage holidays and the like won't make the dent you are hoping for; you still end up owing money.

I think you have lots of areas you can trim.

Personally I'd up the hours your housekeeper/ cleaner does & use that time to batch cook & meal plan.

Ditch the screen subscriptions, or at least choose just one & take your kids to playground / cycling / walks / woods whatever.

Don't buy any new clothes for yourself for 6 months; once you have done 6 months, do another six.

It all adds up & the relief of pressure from debt is enormous.

 

[Mamamia22]

Groceries could be much less, bulk cooking helps. I would question the need for Spotify, google and Disney. I very much doubt you have time for them anyway. You can get free dvds in bulk in the library for the kids and yourself. Plenty of stuff on free satellite tv so no need for anything else. Also pet insurance ? It’s very expensive. If you put away 50 a month in the credit union I would guess it might cover any unexpected pet bills. I don’t buy kids toys other than at Christmas. Clothes only when needed as they grow out of them so fast. Stay completely off the clothes websites and apps. Really ask yourself do I want this or need this. Try NCBI they have nice second hand stuff if you must indulge. 250 on health sounds like a lot. I pay 150 for vhi myself and two kids, kids should be on the most basic cover. If you have prescriptions make sure you are getting them through the payment scheme and claim your med 1 form end of every tax year. It’s the little things that all add up in the long run. Pay off loans and start building pension and savings. I’d be following your partner. He needs to pay his way. That’s for the courts to sort.

 

[arbitron]

Pet insurance

100​

Is this per month?

We had full cover for 2 older dogs (an expensive category) with Allianz and it was less than €50 per month.

 

[Fortune]

Thank you I had forgotten about the repayment holiday thing. I'll look at that now.

I have started using the an post app and that's how I realized the extent of the problem. I thought I was spending as around 4-500 on groceries when in fact I was spending twice as much

Are you sure you can trust the an post app? I had a look at it a while back and it wasn't right

 

[Parazard2]

Is this per month?

We had full cover for 2 older dogs (an expensive category) with Allianz and it was less than €50 per month.

Just got the renewal from Allianz for 2 older dogs for 1k. It's the most expensive it's ever been but I never want to be in a position where I need to make a decision not to treat over money.

 

[Parazard2]

Are you sure you can trust the an post app? I had a look at it a while back and it wasn't right

I double checked the suspicious categories but I will check again. Any other apps that are good? I wouldn't mind something that links up overall budget to individual categories and tracks them

 

[Sue Ellen]

Just got the renewal from Allianz for 2 older dogs for 1k. It's the most expensive it's ever been but I never want to be in a position where I need to make a decision not to treat over money.

Wow, that is expensive alright but Allianz are the best per all the vets. They don't normally quote the small print to worm their way out of claims.

I used to ring every year and ask for a discount and they were forthcoming for maybe 10% if there were not too many claims.

Even after you have paid that large sum, as far as I can recall from my last renewal, you will still have to pay €100 excess and 35% of each claim for dogs over 7

I would still consider it a necessity especially with older dogs. With all the, what I call corporate vets, who have been taken over in the last few years the bills are outrageous.