EBS refusing to extend interest only; net income €5,100 per month

[alica]

hello frosty,
I hope you won't get offended my post,
but your post looks really more showing off then looking for advice...
let explain what I mean on my family example , our combined salary is 3700 BEFORE mortgage 1300, childcare for 2 kids 1000 and 600 diesel expences ( we are living in country side with no prospects of work around and have to travel 50miles each in opposite directions),
what left us with 800 net for everything... +260 child benefits...
yet we are still managing and we do not think , that our mortgage is "unsastainable" , it is tough, yes, but not unpayable yet... maybe we should start to think so ...

When I see your budget and see expences like - €200 for books and uniforms (every month?) , €200 - xmas and birthday presents (every month?) and MISCELANIOUS €200 (every month as well!) that makes me feel...mmm... a little annoyed...

you kids are having HUGE advantage already having you home half-time, so there is no need to spoil them with additional €400 ...

by the way, you did not include your child benefits in income...

 

[pebbledash]

Hi Frosty

Well done on putting your figures up. It's hard to have your figures analysed by others and be open to misperceptions and judgement. I have often thought that as people compare their figures to others that they can miscalculate their own minimum spends. I've often taken the high moral ground reading figures here only to realise that I spend a bit more than I think I do sometimes.

Here is my honest assessment of what we live on as two adults.
Our combined income after mortgage & life insurance is €2188.
We run one car and my spouse has opted to use public transport and has an annual travel ticket deducted at source from wages - making use of the tax break for transport.
For the last few years my own training expenses have brought our monthly income down to €1,950.

We do a monthly shop spread across Tesco, Aldi & Lidl =€240.
We top up with fruit, veg, milk to about €160 a month. So €400 max a month on shopping for 2 adults. Given that some of this would be non food items I'm confident I could keep 5 of us in groceries and personal care for €700 a month.

Every month I check the price of our shopping list online at Tesco's site. I note the prices and then go to Aldi online to see what their offers are and do the same for Lidl. Automatically doing a full shop in Lidl or Aldi can mean you are missing offers in other places. I then go to lidl, aldi and local veg shop with price checked list and only buy what is actually cheaper there. I plan all of our meals and freeze meat in portions on a monthly basis. I throw out nothing and freeze everything that is in danger of going off.

I still prefer branded products for things like cereal, pasta sauces, yogurts etc. I have also found many brands that I prefer in Lidl and Aldi. I bake and keep a good stock of scones etc to always have something nice to hand. We eat really well and have found that the monthly shop does not have to be a major expense. I refuse now to buy branded hair care products, face creams, toiletries, household products. By trying different brands you can do just as well. I think a lot of people are reluctant to give up branded personal products but once you do there'll be no going back! I love telling people that I only use the Cien brand when they tell me my hair / skin are looking great. Time was I would have spent ten times the amount on skin care etc.

I was struck by your house repairs at €100, car maintenance at €50 and contingency at €200. To me that is total contingency of €350. Perhaps it is really needed for a family of 5.

€1200pa gifts. If you cut out gifts for you and your wife and limited birthday and Christmas gifts for children to €50 each could you bring this down to €300? You might be teaching them a valuable lesson on affordability.

€1200pa family gifts etc. If you are really in trouble financially perhaps you need to tell extended family that you cannot afford gifts at all for a couple of years. Hard to do but I've done it.

€200 per month on prescriptions. Are you signed up for the drugs repayment scheme as a family? Do you ask for generic drugs to keep your costs down? Do you shop around for your prescriptions? Might it be worth a trip across the border or a Ryanair flight to spain just to stock up? I don't know because it's not an issue for me. Are you claiming all of the medical expenses you can at the end of the tax year?

€50 a month of hair care. I think that's pretty realistic. I could shave a little bit off it myself because I have an excellent hair dresser who comes to my house for €40 a cut. If all the family were done together you could really negotiate a good price with a self employed hair dresser.

Are you Dublin based? Check out the Dublin Event Guide for free events. Every week it lists loads of free things for families to do in Dublin. I can rarely do anything that I have to pay for and I still have a nice life and can really de-stress at the weekends.

I also keep a monthly budget spread sheet. Every cent I spend is put down on it. It really does take the stress out of dealing with unexpected expenses. Fill in the monthly spread sheets three months in advance detailing all known regular expenses. When you get an unexpected expense of €100 instead of dipping into the contingency fund see if you can shave it off weekly expenses over the next few weeks. When you see that you have a little extra left over at the end of a week/month you can really enjoy doing something nice because you've been so careful not to overspend. Having treats mindfully is so much nicer than blind anxious stress spending that you know is putting you in the red.

It is stressful and limiting to have to work on a really tight budget, but I do feel very proud that we have no debt other than our mortgage and can still lead a happy life. I do look forward to having a higher income again in the years ahead. When I read the income guidelines set out for debt forgiveness it really gets me because I'm already living pretty close to them and have never missed a mortgage repayment. I'm not suggesting that you yourself haven't woken up to what living on a budget means, but I think there are loads of people out there who need to get a grip and not abandon their mortgages for me to pick up the tab because they refuse to live within their means.

Best of luck with the budgeting and rebalancing. Hang in there. The future will be easier and hopefully we'll never forget how bloody awful it is to have less!

 

[pebbledash]

PS. I should add that due to the recession we've gone from 2 strong public sector salaries to one significantly cut salary and one of us on just €9k a year. Our income used to be more than double than what it is now. I still work in a voluntary capacity in a professional job trying to get back to full employment. I have to maintain a professional appearance for my job. I've had to swallow my pride and rotate just a few outfits and not buy new things all the time.

In our house we spend money on good shoes, keeping our hair nice and a good foundation makeup/powder - other cheaper makeup products can give the same effect. Women can get trapped into believing that personal products have to be really expensive. It doesn't cost a fortune to stay looking good. I still have to keep up with my professional colleagues and professional friends who are still doing well. It hurts sometimes to be the poor relation but no one realises we are as broke as we are!

 

[frosty]

Thanks a mil. pebbledash. Some really good points and helpful advice there.

You take a really good approach to your grocery shop getting as much value as you can from each store. We adopt a similar approach across the main retailers and I've been tracking my spending via spreadsheet too in recent times. Costs do mount up when you add in 3 children but I'll certainly examine things in more detail over the coming months and try to cut things further.

We have found that being in the house with a family for nearly 10 years or so has lead to wear and tear, appliances breaking down, repainting, reflooring etc. thus the €100 there. Note - I would do most of this work myself. The cars are old but get a thorough service, new tyres etc. once per year for NCT purposes. works out at about €300 each = €300x2 = €600/12 = €50 per month on average. After that, I do try to put away that €200 contingency although more often than not it isn't left over.

I take your point about gifts. We cut out gifts for ourselves ages ago and we would spend around €70 on each child for birthdays and Xmas. They never ask for anything for the rest of the year but 3 children will receive gifts from friends so the rest is budgeted for godchildren and return gifts. A "no present parties" trend has started with our youngest and this is a good thing. There's certainly more we can do here.

Yes, we're on the drugs repayment scheme. We pay €144 per month max on this for prescription medication and we submit our Med1 and 2 at the end of the year. Will look into generic drugs. Good advice there.

Best of luck with the budgeting and rebalancing. Hang in there. The future will be easier and hopefully we'll never forget how bloody awful it is to have less!

Thanks a million. Best of luck to you too

 

[pebbledash]

I totally get that it must be harder with kids. I know I can ration my fruit, juice, coffee etc. but explaining that to a hungry teenager must be very hard. In reality we all over spend.

My biggest learning and saviour has been the projective budget and writing down every single thing spent and every projective spend.

I still give in to Godchildren gifts. I'm afraid they'll think I don't love them if I don't!

 

[Bronte]

Life assurance which I pay for is deducted at source from my salary so is therefore not included as an expense item. It's arranged (along with an income continuance plan) at a good price via my trade union. We also have minimum life cover on the mortgages of course.


I appreciate your input though despite the fact that you appear to be quite judgemental at times.

.

So you have at least 3 types of life insurance. Are you sure you need them? Can savings be made there?

The information you gave about Mabs is good to hear and that you managed it so successfully is even better.

Apologies if I came across as judgemental, I'll go back and look at that. Actually it took me a few years to unlearn being frugal, my family tell me I've chilled out no end. My kids while they do not have expensive clothes or haircuts will have the best of braces, glasses and education (and their hair is beautiful !). My point was about priorities and it was also because on the trip of the 8 Euro haircut, at around 8.30 am I was waiting for a hairdresser to open with said price and noticed Peter Marks was open and packed busy but they quoted me 35 Euro's and it was full of kids, I thought it was for a wedding maybe but no it was 7 year olds for first holy communion. Couldn't get over that.

Unfortunatly I don't see your lender allowing you leeway in order to pay off the personal debt first. If anything they have all become much more clear in that they are ordering people to pay them and not pay the short term creditors.

 

[Bronte]

Nope they can't take her off the tracker to put manners on her because she goes in to arrears.

They can do all the ordering they like, it would be 100% unenforceable. Op enters in to MARP and repossession proceedings can't be instituted for a year. .

I can completely see the logic of what you propose. But I do believe there is built into Marb a get out clause for the bank if you mess around with them. OP would risk that if he followed your strategy.

In other words if the borrower abuses MARP then the bank can put you out of MARP and you risk losing the tracker in Froty's case. People have to be very careful on this.