Cash poor...looking for advice

U

Upstart

Registered User
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6
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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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!!
 
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.
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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.
 
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!!
Click to expand...


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

There isn't a financial engineering solution to overspending.

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

mtk said:
bringing in your lunch is an obvious one tbh
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mtk said:
another obvious one

need to reduce this to once a month or a forthnight
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Certainly two options that could be reduced. Thanks.
 
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 !
 
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
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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.
 
Upstart said:
I can afford the loan.
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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
 
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?
 
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
 
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
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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?
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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.

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
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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.
 
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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