Borrow from the Credit Union.

C

CashUser

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Hi there, this is the first time I have posted as I am a new user, when you read this post I know I will be blasted by some, for over spending, but I do need some real advice.

I work for the HSE, my basic income is €31,000 before O/T, Shift, Weekends etc, My wife does not work due to illness and will never work again, so I work all the hours I can to earn more.

Monthly Outgoings:

Insurance 150
Mortgage 1200....21 years left 212,000.00
Credit union's x 2 - 450....1 of 3500 x 3 years and 1 of 1500 x 1 year
Child care 350
Maintenance 400
Car Loan 360 ...5 years on 18,000.... 4 1/2 left
Credit Card's x 3 - 400 ....2 x 2500 and 1 x 3500
Food 400
Home Oil 400
Esb 100
Phone 200 inc mobile's x 2
Diesel 300
Med's 90
Sky 56
Broadband 20
Pension and AVC'S 400
Total euro 5276

Income
Wage 1450 fortnight , excluding over time after tax
Social welfare/long term sick 198.00 week = 396 fortnight
Child benefit is put into bank for long term for collage for 1 child, not included.

Total 1846 per fortnight = 3692 month income before the overtime I do

Savings,

3600 credit union
3200 Credit Union

What we were thinking is to borrow from my CU, the lesser one to pay off the 3 credit cards and the larger Credit union, 12000 in total, would we be saving a bit more with 1 CU loan over 2 CU loans and 3 credit cards?.

I know the sums do not work out with expense v income, but I do work all the hours I can and that brings in approx 1650 month after tax from the overtime.
We find it difficult to save with what is being spent, and yes I know there are more out there on less then me, but we live in a rural area, need the 2 cars, diesel is up, food is up, child care is up, nothing is down.
How can we save a bit more?, we do our shopping in aldi and lidl and some in dunnes, take 1 car when we can etc...

Thanks for taking the time to read this.
 
There are several issues here that others will comment on.

  • Before you go and consolidate your debt on to another credit union loan you have to address the overspending issue. Otherwise you will be in a worse situation in 6 months time. Spending on credit cards should only be done if you actually have the money. You cant afford to rack up CC debt. Cut the cards up
  • Very high - so there should be savings here by tackling the root causes
    • 400 on home oil every month sounds very high. You may need to spend some money on insulating the attic, water tank, etc
    • 200 per month on phones. Have a good look at changing tarriffs and/or not using the mobiles at all. Do you need 2 mobiles, a landline and broadband? Look into "skype"
    • 300 on diesel sounds high as well. What sort of mileage are you doing?
  • I notice that you say pensions and AVCs. Look at the threads on the pensions forum but AVCs may not be the right thing for you at this stage.
  • I know that the horse has bolted but borrowing 18,000 6 months ago (more than half your basic income for a year) was probably a mistake given your outgoings.
  • I also think that you need to seriously look at the "need" for 2 cars
  • and your long term attitude to locking the child benefit away. That money would be better spent reducing your debt (and therefore interest payments) in the short term. Especially if you actually have them in the "bank"
In general, you will not get yourself out of this debt by just making a few economies and refinancing, you have to address the overspending immediately.

anon473
 
You have had a severe change of circumstances (your wife's illness) so I can imagine there are good reasons why you are struggling at the moment as opposed to lifestyle overspend.
First things to occur to me, are you claiming all your tax relief? For example on the medical expenses? Are all your wife's tax credits turned over to you as she can no longer earn?
Have you kept a spending diary? If not I would recommend you start immediately.
Your phone bill seems fairly high, have you investigated ways to reduce it?
Are AVCs wise at the moment? It may be worthwhile looking at contributing the minimum for a while until you get back to more stable ground (ie when you are servicing less debt).
You will probably say you don't want to do this but you have savings enough in the CU to clear your current CU loans. I am assuming you need some balance to be able to take out a further loan with them but perhaps you should investigate if there are other loan options that you could avail of to clear your credit card debt. I would suggest: pay off the CU loans, get a bank loan to clear credit cards, redirect CU loan repayments to supplement CC Loan repayments. This way you remove completely two of your debts, and reduce considerably the cost of another two.
 
anon473 said:
I know that the horse has bolted but borrowing 18,000 6 months ago (more than half your basic income for a year) was probably a mistake given your outgoings.
Click to expand...
OP just to clarify, I am assuming you had good reasons possibly based around your wife's illness that necessitated such an expensive purchase?
 
Thanks too all for the reply's, yep, I did need to borrow the €18,000 as my other car died a sad death,we deceided on a reasonable car due to the milage i have for work, we are living in a very rural area, so 2 cars are needed as I have to ensure my wife has a car for hospital and to drop my son to school, the diesel cost is high as the mileage we both have is high also, the avc's i need as my HSE pension is not worth much, so I have to add the avc's,
I have sought out an adviser and she is making out a plan for us, hopefully this will work out. again, thanks for the reply's and advice.
 
Excluding the car loan you have E13500 in short term debt, all at high rates of interest (credit card & CU). I am an advocate of the CU however so I would suggest that you ask them to consolidate all these loans. You have E6800 in the CU in savings so this will make the actual loan under E7k in effect. Savings are wonderful but not in the midst of a crisis. Certainly never, ever borrow on a credit card.

I am interested in your choice of car - did you get a new car for the 18k (e.g. a punto diesel which are very efficient) or did you buy a second hand larger car?

I don't know what your wife's illness is but is it possible for her to look after the child if she's at home and save on the childcare? Perhaps a relative might be able to help when she needs to go to hospital?

If you wife is at home all day I can understand the cost of heating oil especially if you live in a large house in the country - she needs to consider wearing an extra jumper though - it is healthier than artificial heat for her body and her pocket.

Put your mobile phones on to pay as you go immediately and only use them for emergencies - your wife can certainly use webtexting from home and you may be able to access a PC in work.

Finally I hope you're not paying for your advisor!

Good luck.

While I respect your dedication to your pension provision and to putting aside money for the child's education these may be luxuries while you are sorting out your finances.
 
CashUser said:
the avc's i need as my HSE pension is not worth much, so I have to add the avc's,
I have sought out an adviser and she is making out a plan for us, hopefully this will work out. again, thanks for the reply's and advice.
Click to expand...

With respect CashUser, you can't afford AVC's at the moment. Give yourself a break. Clear some debt and then consider AVC's. Also I would concur with other posters, you need to start using the child benefit. Perhaps what you should do is give yourself a timetable. So say no AVC's for one year and no saving the CB for one year and divert it all into debt reduction. Then after one year, start saving them again.

As to the advisor, perhaps it is a good move but it would be wiser to use MABS as their advice would be free.
 
Oh and cancel some credit cards, why do you have three? You are simply paying €120 pa for the privilege of running up more debt.

You mention maintenance of 400 pm (I am assuming this is child maintenance to a former partner?) - is there any chance of negotiating a lower rate for a period of time to give you a breather?
 
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