married couple 1 income

*i am a sahm, husband works in hse, gross 48k,plus overtime was amounting to 60, with hse cuts the overtime will drop by 20%.1 baby
*mortgage 275,000,fixed rate 5.09 till 2013,35 yr mortgage ,33yrs remaning(700 every 2 weeks)
*only 3k in savings
*16k personal loan for college,4years left.200 every 2 weeks
*4k credit card
*4k overdraft
we are sinking,cannot get out of debt, looked at reconsolidating all loans but we cannot afford to do it, any tips before it gets worse

Firstly it would be a good idea to fill out the money makeover template (see other threads on this forum).

Questions & Suggestions:

1) What is your monthly expenditure like? Do you have any big optional expenditure such as a sky dish or lots of take aways?
2) Is there any way you can do a limited amount of work from home to generate income - can you mind another kid etc.? Do you have any qualifications?
3) How many cars have you? If you've two, consider cutting to one.
4) Can you switch credit card to take advantage of an interest free period whilst you try to deal with it?
5) After paying all bills etc. what are you left with each month? i.e. do you spend less than you earn?
6) I can see you'd want to keep the savings incase of emergency, but as long as you are earning more each month than spending i'd encourage you to use at least some of the savings to cut the overdraft or the credit card (depends on interest rate)
7) As much as it might be miserable - could you possibly work a part time job in the evenings when husband is home to mind kids, maybe in a bookies, restaurant etc... I'd encourage you to do this until you clear the "emergency loans" of the credit card and overdraft - it would also teach you not to live beyond your means
8) Is there anyway you could get a family loan (parents, siblings) to get rid of the short term debt. Obviously this should be done on commercial terms (pay them a nice return)
9) Perhaps the best advice - cut up your credit cards, you cannot obviously afford to have them at present.
10) As you are facing a 20% drop in overtime income, I think you should set yourself a goal of cutting expenditure by 20% ASAP - switch to Lidl, Aldi, Tesco Value, stop Sky if you have it, reduce to one car if you have two, reduce to one night a week out if you exceed this, buy cloths in pennys, dunnes, etc...
11) I think your going to have to have a very frugal Christmas and no holidays or breaks for the foreseeable future.

Without more details its hard to know what else to suggest. Read other threads on similar topics, and don't dispair; at present you are meeting all obligations and have recognised that there is a problem.

Just to make things clearer can you fill in the blanks here? (Along with filling out the money makeover template)

Gross Income: 4,000pm
Overtime: 800pm (after drop)
Total Gross: 4,800pm
Net: XXX

Less Expenses:
Mortgage: 1,400pm
College Loan: 400pm
CC Min Repayment: XXX
Overdraft Interest: XXX
Cars: XXX
Bills: XXX
Food: XXX
Going Out: XXX
Misc: XXX

Surplus: XXX

copy and paste this : fill in answers

Age:
Spouse’s/Partner's age:

Annual gross income from employment or profession:
Annual gross income of spouse:

Type of employment: e.g. Civil Servant, self-employed

In general are you spending more than you earn or are you saving?

Rough estimate of value of home
Amount outstanding on your mortgage:
What interest rate are you paying?

Other borrowings – car loans/personal loans etc

Do you pay off your full credit card balance each month?
If not, what is the balance on your credit card?

Savings and investments:

Do you have a pension scheme?

Do you own any investment or other property?

Ages of children:

Life insurance:


What specific question do you have or what issues are of concern to you?

Age: 28
Spouse’s/Partner's age: 30

Annual gross income from employment or profession:
Annual gross income of spouse:
48000
Type of employment: e.g. Civil Servant, self-employed
hse
In general are you spending more than you earn or are you saving?
spending more
Rough estimate of value of home 275,000
Amount outstanding on your mortgage: 273000
What interest rate are you paying?
5.09
Other borrowings – car loans/personal loans etc
16000 personal
4000 c/card
4000 o/draft

Do you pay off your full credit card balance each month? no
If not, what is the balance on your credit card?
4000
Savings and investments:
3000
Do you have a pension scheme?
spouse has public pension
Do you own any investment or other property?
no
Ages of children:
10 months
Life insurance:
mortgage protection joint policy
spouse has job life cover of 200,000

What specific question do you have or what issues are of concern to you?
should i try to consolidate, after i switch to 0% card, what debt do i tackle next, the o/draft or loan?

thanks for replies, as per other posters suggestions, already shop in lidl and penneys,do not have sky etc,have 2 cars,(old bangers 1994) dh needs his for work and we live in country so i need car,re parttime work, same as cars, as dh works as a nchd,he works on call all night and day, so i cannot even work in evenings, no family support nearby etc.
the credit cards are not being used now,we dropped the limit from 6 to 4, and have not been able to pay any extra of them, but we don;t use them on day to day way,
we manage on the wages for daily living, mortgage etc, and use the overtime for car ins and other infrequent bills.but we just don't ever seem to have enought to pay off the card and overdraft. dh is expected to return to college next year and the course costs 6k a yr, do not know how we will ever get that money together.

€48,000 is equivalent to €3,062 a month (Budget 2009).
Plus additional Tax credits (Are you claiming all your tax credits)

Less your mortgage repayments of €1,400
Less college fees xxxx
Less creche fees xxxx
Less bills (Clarify all your bills/month) xxxx
Less food xxxx
Less petrol expenses xxxx

rania said:

should i try to consolidate, after i switch to 0% card, what debt do i tackle next, the o/draft or loan?

Click to expand...

find out the interest rates on the o/draft, loan and ccard (after the 0% rate wears off). and tackle the highest one. Be sure about when and what the interest is charged on for the ccard. There were stories doing the rounds that some ccard companies charged interest on the balance for the whole period (including the 0% rate time). Terms and conditions will tell you.

In general, i dont know of your husbands career plan but is it absolutely necessary to go back to college next year? I imagine that it will help in the long term with getting the elusive Consultant contract but unless you can carve out savings somewhere you may have to postpone it.

one suggestion that has been made before is that you may be able to take on looking some paid childminding during the day (while you are looking after your own already).

anon473

Well from the numbers you have given it seems you are in serious difficulty. Talk to Mabs as soon as you can as they will be able to suggest and help you with ways to repay the cc debt and overdraft.

Will returning to college reduce your husbands income next year? If so, you simply cannot afford it unless you find a way of you generating money.

Can you possibly mind kids for friend/neighbour to generate extra cash?

Your mortgage is 5.7 times your husbands gross income. It simply is too much for the income level you have. Indeed you also appear to be in negative equity. Can you rent out a room of your house to bring in extra money?

I asked earlier do you have any qualifications. If so would it help if you got a job and placed child in childcare. I know you might not want to do this, but your options are very limited.

Best of luck

The figures broken down don't take into account the overtime and child benefit so there's a little extra there too.

Pay the savings off against the credit card. Then apply for a 0% balance transfer card and transfer the rest of the overdraft and credit card debt- some of these are for 6 months or 1 year. During that period try to pay it off, or at least down.

What interest rate is the personal loan? Make sure you are getting a good rate.

Have a look at your tax credits. Most importantly are you claiming TRS relief? What else CAN you claim for? I'm a bit rusty on tax credits since leaving it to my accountant to deal with but others can help- what about bin charges etc. If you havent been claiming some credits they can also be backdated.

In relation to the fees next year- has your husband looked into whether he is entitled to any assistance for these- either in the form of a local council grant ( for post grad or mature students) or even something from the HSE? At the very least are they tax deductable? Ring the council and ask. Ring the college and ask them. Ring the HSE. Ring the tax office. If you don't ask you will not get.

Can you take in a lodger? Possibly not given you have a young family.

In relation to the mortgage, if all else fails you could apply for a payment break for a period to give you breathing space especially when your husband needs to pay those fees.

Remember these years are the hardest- things will get easier- so it's a matter of making sure you are doing everything you can just to get through.

thanks for opinions, vanilla your advice is very helpful, i will use the savings to get rid of the credit card, but you say then get a 0% card to pay overdraft, what credit card co will let me do that, i thought it was only 0% for balances from other credit cards, does a credit card cheque card have anything to do with it>your also right the figures do not take account of overtime which really gets swallowed by insurance etc. reading replies was a wake up call, i knew our situation was not great but never thought it was as bad as you all have said, thanks for pointing me in some direction.

rania said:

but you say then get a 0% card to pay overdraft,

Click to expand...

No she didn't

''pay the savings off against the credit card. Then apply for a 0% balance transfer card and transfer the rest of the overdraft and credit card debt- some of these are for 6 months or 1 year.''
well what does that mean then?

Rania i think your situation is simular to mine.i posted it in the Banking & debt section look at it & read the replys they were very helpful.
hth

Rania - are you happy with your home? Are you planning to live there for the long term? If, when you bought it, you considered it only as a 'step on the ladder', it might be now worth considering selling it and renting.

You are paying approximately 1,500 per month towards your mortgage (you said originally it was 700 per 2-weeks, which is actually 1,500 per month; not 1,400 per your later post). In the current market, you may be able to find somewhere equivalent to rent for 1,000 per month (or even less). This may be a pain for a few years, but think of it as contributing 500 per month towards your debts in the short term.

This, of course, assumes that you are relatively accurate in your assessment of the value of the home at 275k. This also assumes that you would be happy renting, which is really not too bad an option in this current economic climate.

we bought this house as our permanant home, not a step on ladder,, no plans to move,thanks for suggestion though

rania said:

thanks for opinions, vanilla your advice is very helpful, i will use the savings to get rid of the credit card, but you say then get a 0% card to pay overdraft, what credit card co will let me do that, i thought it was only 0% for balances from other credit cards, does a credit card cheque card have anything to do with it>your also right the figures do not take account of overtime which really gets swallowed by insurance etc. reading replies was a wake up call, i knew our situation was not great but never thought it was as bad as you all have said, thanks for pointing me in some direction.

Click to expand...

Hi Rania- I could be completely wrong but I thought when you applied for one of these credit cards that you listed current credit card balances and overdrafts and applied to have all the balances on the new card. I'm certainly no expert on this so stand to be corrected. If that is not possible, then apply for the card, transfer the balance of the credit card as it stands and apply your savings towards your overdraft- or indeed transfer one thousand out of your current credit card towards the overdraft first, then the overdraft should be wiped out if you see what I mean.

Your situation is tight, but your prospects are good. The early years with children and a mortgage are the hardest. As your husband's salary increases and once college fees are over, things will get better. Until then you just have to keep your head above water. There are options out there if you need them- like the payment break on the mortgage, but if you do this then you have to be very disciplined and try to save at the same time any excess.

talked to mabs and am going to talk to bank tomorrow to amalgmate all debts, phoned local credit union to see if they do household budget account but they don't, saw on internet private co that runs one for 75 euro per year, are they a good idea, i would for eg pay 900 every 2 weeks to them to cover all bills, mortgage, loans,elec, ins etc, and when they arise then the co pays them, that way whatever is left in bank account is for daily living exp etc,

rania said:

saw on internet private co that runs one for 75 euro per year, are they a good idea, i would for eg pay 900 every 2 weeks to them to cover all bills, mortgage, loans,elec, ins etc, and when they arise then the co pays them, that way whatever is left in bank account is for daily living exp etc,

Click to expand...

rania I've never heard of this type of service but I wouldn't consider that a good idea. It would be better to tackle payment of your own bills yourself - over time you will get a better feel for how to manage where your money goes, what can be cut back on, etc. Paying someone else to hide all this from you (and take their own cut for providing the service) would not be a good use of your limited funds imho.

just want to say thanks to those we replied, you really helped me see our situtaion more clearly.
have talked to mabs and was into bank yesterday, have reconsilidated all debts into 1 loan over 4 years.
talked to hubbies and we , wrote out all expenses, worked them out over a 25 week period, so that the money is alway there to pay them,ie 1100 per 2 weeks, and will do a transfer of 500 per pay period to a second account to pay for daily living-food, petrol.we have cut up credit cards and are cutting up atm cards to the wages account so that we have to live on the 500 for 2 weeks.hopefully debts will be cleared within 2 year rather than 4 years with the overtime. thanks again, feeling much more positive and focused.

Excellent .... good for you rania!