My Story 1 Income, Spouse & 2 Kids

tomtim

Registered User
Messages
26
Age:
27

Spouse’s/Partner's age:
31

Annual gross income from employment or profession:
E40 (Net 2900)
Annual gross income spouse:
0

Type of employment:
Private sector

Expenditure pattern:
Poor Money Management. Small over spend for 4 years, V high rent before home purchase.

Rough estimate of value of home
E150,000

Mortgage on home
E250,000 100% mortgage over 30 years (commenced 2009)
Shared Ownership with DCC

Owing E240,000 - we've been paying our mortgage for 2 years now.
5/6 missed payments to date.

Mortgage provider:
Dublin City Concil

Type of mortgage:
Fixed rate

Interest rate
5.39%

Other borrowings – car loans/personal loans etc
BOI Credit Card Visa: 3k
BOI Loan: 20K
Halifax Credit Card Visa: 5K
Family Loan: 2K
Mortgage Arrears: 6K

Do you pay off your full credit card balance each month?
No, pay off minimum | Extra when available

Savings and investments:
None

Do you have a pension scheme?
No

Do you own any investment or other property?
No.

Ages of children:
1 and 4

Life insurance:
Yes.

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

I'm basically living hand to mouth every month, most months I need to take a small loan from the parents or sell something to get by (Put food on the table)
We dont drink or smoke.

Stuck in a rut the last 6 months with no end is sight.
The credit card dept is a killer (Used when we moved in - we bought an empty shell)
Also we cant make the payments on the 20K loan so expect this to go to court sometime in the future, went to mabs etc... and send in countless offers for payment, all rejected so I'm not too concerned about this. Will be happy when a judge means tests us and agree a sensible payment plan.

I'm looking for some advise the dept is clearly unmanageable for us or is it?

Thanks for any comments, Tom
 

tomtim

Registered User
Messages
26
This is our monthly Expenditure.

Mortgage 1024
Maintenance / Service Changes 65
Food /Housekeeping 550
Electricity 80
Gas/Oil 100
Mobile Phones 65
TV Licence 13
TV / Broadband Expenses 62
Motor Insurance 146
Road Tax 30
Fuel 90
Life Assurance 25
Hailifax Credit Card 180
Bank of Ireland Credit Card 70

Total: 2,500

I think that's everything
 

Bronte

Frequent Poster
Messages
13,357
Tomtim welcome to AAM. You're going to have to be more forthcoming. If your income is 2900 and your expenditure is 2500 there is no problem. Also if you haven't paid your mortgage for 6 months that's an extra 6K you've spent on something. What is that.

Can you explain what the DDC scheme is exactly?

Something not right about the value of the property versus mortgage based on a 2009 purchase?
 

fizzelina

Frequent Poster
Messages
536
Motor Insurance at €146 a month would be €1,752 a year! Surely this is not right either? Also you need to start keeping a spending diary as it's not immediately clear where the extra money is being spent, how did you miss mortgage repayments what did you spend the money on. Also you don't include any spending on children (doctors, clothes etc) A spending diary will let you both see exactly where your money goes.
 

truthseeker

Frequent Poster
Messages
2,577
OP - I think you have listed some of your figures for the month as the bi-monthly figure.

Electricity, gas/oil seem high per month.
So does tv/broadband - mine costs 40 euro every 2 months (basic package).

As fizzelina says - motor insurance seems high as well.

Id also question 550 a month on food/housekeeping - if you shopped to a list in cheaper places like LIDL you could get that down somewhat.

If youre 6k arrears on the mortgage in only 2 years - what was that spent on?

You are also missing 400 from your monthly list of expenditures.

Bronte - it IS possible for the NE to be that high in only 2 years. If the OP had contracts signed they may have bought off plans in 2008 and set the price at 2008 prices and then suffered the massive drops since then.

Can your wife work? I realise this will cost you in terms of childcare but if she could get a part time evening job perhaps she could earn something while you mind the kids?

I agree with Fizzelina - you need to organise a spending diary and see exactly where your money is going.

Are you claiming back everything you can - MED1, bin charges etc? Are you claiming your wives tax credits while she is not working?

Over what period did you run up the unsecured debt? I cant see how you were approved for a mortgage based on the level of unsecured debt (which I assume has not just happened in the past 2 years) and your salary? Have your circumstances dramatically changed, salary drop or something since you got your mortgage?
 

tomtim

Registered User
Messages
26
Thanks for the comments, I understand the 400 shortfall between expense & income but I don’t factor in money spend on the kids, birthday parties, basic entertainment, a couple of games of Pitch & putt etc....

I'm claiming my wife’s tax credits, we would be down money if my wife started working with childcare costs and losing the tax credits.

The 8K CC debt is from making the apartment liveable - needed to purchase everything.
All appliances, beds, kitchen, furniture, floors etc....
20K we got just after the mortgage (Was surprised I got it TBH) - Used to pay back parents.

2 weeks after getting the 20K loan I got a 20% decrease in Salary (No warning)

The 6K arrears came about from childcare costs before my son started school (450 PM) - This pushed us over the edge for a long time (I won’t go into all the details of this - Wife was not at home during this time etc....)
Also trip to London to organise wife’s Visa - needed to bring kids & had to stay 3 days.


I will start by keeping a spending diary and see how we get on from next month.
 

tomtim

Registered User
Messages
26
I should point out the DCC is Dublin City Council - we bought in early 2009 for 250K from Affordable housing, the same apartment 1 year later were €150K :)

Laugh or cry or maybe just desperate to bring my monthly rent expense down – I was paying 1300 for a 2 bed very small apartment.
 

truthseeker

Frequent Poster
Messages
2,577
OK - I understand about the shortfall in expenditure, I think you need to take note of your mental way of prioritising money here - cut down (or out) what you can in terms of basic entertainment, birthday parties etc... The money spent on these could go a long way to helping clear debt and if you prioritise that first and then do free stuff for entertainment after you will be helping yourself.

I have the same comment re the 8k for outfitting the home, you were already 20k in debt plus a mortgage and you ran up the costs of decorating an empty shell - I realise there are some things that are needed new but you werent in a position to spend that kind of money and you did - when I first moved into my apartment, I paid for flooring, curtains and kitchen appliances - and the rest of it was free secondhand furniture, I only replaced the broken down old couch I had been donated 3 years after I moved in - same for the bed, tv, bookcasing etc....

The above is all just about attitude to money and making clearing debt the priority rather than having the things we want to have immediately.

To address your immediate situation, take another look at those monthly expenses, as has been said, some look high and may be bimonthly expenses listed. Keep a spending diary and look at where you can cut costs.
Make changes to lifestyle, cheaper shopping, free/cheap entertainment.

Can you sell anything? A friend of mine did a clear out and sold her 'junk' for nearly 500 euro at a car boot sale - an injection of that kind of cash to a credit card debt would help you a lot.

An evening/part time job for your wife or yourself? Delivering fast food?

Do you or your wife have any marketable skills you could teach - playing a musical instrument, grinds for students, nixers for carpentry/electrical/plumbing/handyman type work?

Have you looked at cutting back any packages/utilities - ie, moving to a cheaper electricity supplier, going to basic for the tv/broadband, cheaper mobile phone package?

How much is your car worth - could you sell it and get something cheaper?

Make sure you have applied for everything you can re revenue/social welfare - I notice you havent listed childrens allowance on income but you must be getting that?

In theory with your salary + childrens allowance, and your mortgage of approx 1000 a month you should be able to live well, pay your expenses, and work on your debt but to do so you will need a disciplined attitude to what you are spending and how to cut back and make lifestyle changes - but I think it is doable.

The spending diary needs to include every single cent that comes in and goes out, sometimes people are spending silly sums on work lunch or coffees or newspapers that can just be cut right out. Leave no cent unaccounted for - there is always some silly drain on the finances that can be addressed with discipline.
 

tomtim

Registered User
Messages
26
Thanks for the detailed reply, just discussed with the wife and I'm determined to sort this budget out. Just like you said it should be manageable.

I have prepared the budget planner for the rest of the year; with every detail for the month of May so will keep a log & find out where our money is wasted.

You hit the nail on the head with regards to our attitude to money - I leave all the finances up to the wife and her attitude is less than perfect - Live for today, you could be dead tomorrow type comments :-O

I think I had my head in the sand for too long, I'll be managing all the finances for the next few months to see if we can get back on track.

Will keep this thread updated, it’s proved to be a real kick up the ass.
 

horusd

Frequent Poster
Messages
1,576
Tomtim a couple of add'l comments in addition to other posters:

1. Your TV/BB package could be cut. Switch to free to air TV (total outlay of 200 approx). My BB & phone costs 45.00. You could reduce down this amount.

2. Check callscosts.ie for best phones deals.

3. Life Ass. at 300 PA seems quite expensive. Check for alternative quotes. There are various brokers & online quote engines. Consider a post in the Life Assurance section of AAM.

4. 550 seems fairly ok for food, but could you budget 10% reduction to 500 and see how you do? Recycle food for sandwitchs etc.

5. The spending log is a great idea, but have you also prepared a budget? Set targets etc?

6. Do you know which are most expensive loans? These should be prioritised for 1st clearance. Can you swtich to 0% offers on any cards?

7. 90 on fuel is not excessive, but can it be reduced? Do you need car ? Could you sell it? Could you walk/bike/ bus it occasionally?

8. You will need a savings plan too for emergency cash, Doctors etc. Could you set aside something for this?

9. Can you reduce temp on heating by 1 degree and save on this somewhat? Have you shopped around for best deals on gas/electricity?

10.You need to bring your wife on board on this. She needs to buy into the plan, and both of you need to see light at the end of the tunnel. A good plan includes little treats so it's not all hard graft. Make saving into a challenge and make it fun. Set out a clear plan that you both can stick with.
 
Last edited:

tomtim

Registered User
Messages
26
Hi, Good points, Answers in bold

1. Your TV/BB package could be cut. Switch to free to air TV (total outlay of 200 approx). My BB & phone costs 45.00. You could reduce down this amount.
I'm using free NTL 12 channels at the moment - The BB costs are €50pm for 50mb from magnet - its been rock solid for 2 years now and we both use it 4+ hours per day.
I could replace with NTL BB but my experience with them was difficult to say the least.


2. Check callscosts.ie for best phones deals.
Bill pay Mobile phones will be out the window when contracts are up in 2 months so can reduce from €65 to €30 or lower

3. Life Ass. at 300 PA seems quite expensive. Check for alternative quotes. There are various brokers & online quote engines. Consider a post in the Life Assurance section of AAM.
I'll have a look into this - I get life insurance with the mortgage but its void if I'm in arrears so I took out a private policy - I'll get clarification on this to be sure.

4. 550 seems fairly ok for food, but could you budget 10% reduction to 500 and see how you do? Recycle food for sandwich etc.
Yes we agreed €500 will be enough.

5. The spending log is a great idea, but have you also prepared a budget? Set targets etc?
Targets are set for spending and the most important debt will get priority.

6. Do you know which are most expensive loans? These should be prioritized for 1st clearance. Can you switch to 0% offers on any cards?
Yes I have a bank overdraft & little woods Ireland overdraft that are top priority. Goal is to have them cleared in 3 months

7. 90 on fuel is not excessive, but can it be reduced? Do you need car ? Could you sell it? Could you walk/bike/ bus it occasionally?
Really need the car with the kids - I walk / cycle to work so its not used everyday. The car is worth €1300

8. You will need a savings plan too for emergency cash, Doctors etc. Could you set aside something for this?
I wont have anything in May, maybe June & July to start this.

9. Can you reduce temp on heating by 1 degree and save on this somewhat? Have you shopped around for best deals on gas/electricity?
Yes - we changed from ESB to Bord Gas and finally to Airtricity - Happy with them now.

10.You need to bring your wife on board on this. She needs to buy into the plan, and both of you need to see light at the end of the tunnel. A good plan includes little treats so it's not all hard graft. Make saving into a challenge and make it fun. Set out a clear plan that you both can stick with.
I feel she is 100% on board now, some serious eye openers today when going through everything. From May on we have a cash budget and no more delaying payments.
 

lionstour

Frequent Poster
Messages
324
10.You need to bring your wife on board on this. She needs to buy into the plan, and both of you need to see light at the end of the tunnel.
An excellent reply horusd. This is the most important element of getting back on their feet. However in his previous post the original poster said

I leave all the finances up to the wife and her attitude is less than perfect - Live for today, you could be dead tomorrow type comments :-O
I think I had my head in the sand for too long, I'll be managing all the finances for the next few months to see if we can get back on track.
Seems to me his wife might end up feeling resentful and unappreciated if he starts calling the shots from now on financially and takes all the financial decision making over.

Was his head really in the sand when all this was going on? In any regards they need to act like a team, they are both equally to blame and both need to be equally involved in the solution.
 

tomtim

Registered User
Messages
26
Hi, Yes we trashed this out today and I made sure, 1000000% sure she was happy with me looking after the finances. As for head in the clouds - Yes I knew things weren't going smoothly but was stupid and lazy I suppose - I should have stepped in much earlier.

I have a great track record of managing my finances but since getting married + kids I took a back seat BIG TIME!!!!

Definitely both our faults, I'm not blaming anyone except myself.
Your right we both need to be involved in the solution, my part is looking after the finances and my wife the allocated spending.
 

horusd

Frequent Poster
Messages
1,576
Sounds like your on the ball tomtim.When you say private policy is this an add'l cover or did you just replace the existing one? You are both non-smokers ( I assume it's a joint cover) the loan is not a large one, I imagine there are better quotes available. You dont mention the overdrafts in the original post. Are these attracting higher rates than the credit cards? If not, prioritise the cards. I have very reliable BB @ 45 pm with Vodafone, 8 mb, it's very adequate.
 

horusd

Frequent Poster
Messages
1,576
As a by the by, the spending targets are great, but remember you want to plan beyond them to a better future. So, plan to have X debts paid off, savings started target Y amount by whenever, maintain income at at least 10% -15 % more than expenditure, have plan to deal with potential interest hike ( know what a 1/2 % change would cost etc). Look up Karl's mortgage caculator, it's on AAM or just google it. Maybe review ways to increase income. Wife minding kids ? Ensure you know and claim all tax credits, including medical expenses. See all this as a challenge, make it a game you both want to win. Your attitudes will be key to all this. Well done to you and the wife, you're making a good start.
 

tomtim

Registered User
Messages
26
Yes overdrafts are attracting the highest rates - Totally €2,200 owed
They came to light today!

The Life assurance is Additional Death cover for €250K just a precaution.

Its perfect timing as I just got paid today and all debts paid first and a clear budget / plan for May. ( I have all the online banking setup so no need to got to the bank / post office for bill payments) NO EXCUSES!!!

I feel I need to get the budget nailed down for the first couple of months & bring any unpaid bills back on track and get the monthly / Bi Monthly flow going.
e.g. Not preparing for the Gas & Electric bill - These will be taken into account every month so no more surprises or payment delays.
 

tomtim

Registered User
Messages
26
Here is this months outgoings,

Mortgage 790 (Interest Only)
Electricity 160
Gas 160
Mobile Phones 65
Internet 50
Food Supplies 500
Littlewoods 60
Maintenance Fees 78
Bank of Ireland Overdraft 169
Bank of Ireland Credit Card 60
Halifax Credit Card 180
Life Assurance 22
Car Petrol 100
Personal Debt 240
One off Overdraft 165

Total Income: €3,010
Total Out Going: €2,799
Remainder: €211

I'm getting hit with the Gas + Electric + Personal Debt + One off Overdraft this month so not much to play with.
These shouldn't be an issue next month.
 

Bronte

Frequent Poster
Messages
13,357
Mortgage 790 (Interest Only)

Electricity 160
Gas 160

Littlewoods 60


Bank of Ireland Overdraft 169
Bank of Ireland Credit Card 60
Halifax Credit Card 180
One off Overdraft 165

.
So you negotiated the mortgage to interest only. How long is this for and what did the bank agree in relation to the arrears.

What is Littlewoods?

In relation to the 4 loans above can you post the interest rate and whether that is a minimum payment or capital plus interest.

In relation to gas and electricity, is that a winter bill, it's very high for one month. Why in your first post was their fuel in addition? How do you heat the house.

As other posters have said it's very important that both you and your wife are completely in line now. It's no good you being in charge of finances if she overspends etc. That's where a budget comes in. If you're not in line there will be arguments and excuses. Number one cause of fights in marriage.

In relation to the small loan to family of 2K is that where the 240 repayment is coming from this month? Would they be willing to give you a six month break on repayments so that you can tackle your other debt first.

There is absolutely no reason why you cannot live on your salary. Have a look at the advice on here to others in the money makeover for other tips.

Could you (to help others) explain how you got on with Mabs. Particularly which institutions wouldn't agree to a payment plan. Also can you clarify if you are being taken to court, as per your first post.

Think you and your wife also need to look at some kind of another income stream for a year or so to get down the debt.

Truthseeker - thanks for that info re 2009, didn't think the prices changed that much in that time period but you live and learn. Doesn't matter to Tomtim though as he can afford everything once he gets his debts down.
 

tomtim

Registered User
Messages
26
Hi, Answers in bold,

So you negotiated the mortgage to interest only. How long is this for and what did the bank agree in relation to the arrears.
On Interest only 6 Months with a view to reducing the arrears - no deadlines etc... Very helpful in that regard.

What is Littlewoods?
Mail-order website - Wife’s Clothes & other useless items.

In relation to the 4 loans above can you post the interest rate and whether that is a minimum payment or capital plus interest.
Halifax 0% - I have a repayment plan of 180pm negotiated.
BOI CC 16.9% - This month is minimum payment
BOI OD 14.9% - This month is capital plus interest
Littlewoods credit 39.5% - Small capital plus interest
One off overdraft 16.9% - Paid by default when I got paid - very rare I have this.

In relation to gas and electricity, is that a winter bill, it's very high for one month. Why in your first post was their fuel in addition? How do you heat the house.
We have Gas for all heating - Water & Central - That bill is for 2 months & still quite high - I'll be adjusting the settings this evening.

As other posters have said it's very important that both you and your wife are completely in line now. It's no good you being in charge of finances if she overspends etc. That's where a budget comes in. If you're not in line there will be arguments and excuses. Number one cause of fights in marriage.
Yes - I feel this will be the most difficult - She now has a weekly budget of €175 for May and has agreed to not spend on any unessential’s.
We'll see how it goes - I'll go over everything from week 1.

In relation to the small loan to family of 2K is that where the 240 repayment is coming from this month? Would they be willing to give you a six month break on repayments so that you can tackle your other debt first?
No the 2K is on the long finger - I needed to borrow an extra 240 last month.

There is absolutely no reason why you cannot live on your salary. Have a look at the advice on here to others in the money makeover for other tips.

Could you (to help others) explain how you got on with Mabs. Particularly which institutions wouldn't agree to a payment plan. Also can you clarify if you are being taken to court, as per your first post.
Bank of Ireland - Spoke to mabs and they explained what procedure I should take - I sent in 5 offer letters & Statement of earnings / expenditure. They point blank refused all of them.
It’s with the solicitors now - again I sent offer letters & Statement of earnings / expenditure. They agreed the figure was acceptable but were under strict instruction to get a judgement against me. 1.5 years later I’m still waiting for the court date.

Think you and your wife also need to look at some kind of another income stream for a year or so to get down the debt.
Yes - I do nixers when available I should have an extra €400 this month, I will look at something more permanent.

Truthseeker - thanks for that info re 2009, didn't think the prices changed that much in that time period but you live and learn. Doesn't matter to Tomtim though as he can afford everything once he gets his debts down.
 

truthseeker

Frequent Poster
Messages
2,577
Well done Tomtim - you are making brilliant progress just getting a handle on all of this and making the mental shift towards change.

Ive a couple of queries for you - electricity seems high even for 2 months - are you guys using electricity hungry devices like a tumble drier? With the weather the way it is there is no reason not to dry clothes in the air (even in an apartment can be put on a clothes horse next to an open window).

Online buying is a killer, you dont feel the pain until you see the credit card statement - try to knock this on the head completely. One useful trick I use for this is to delay buying something for a few days. A lot of the time once the initial impulse is gone and a few days have passed you realise you dont really need the item.

WHat is your wifes weekly budget of 175 for? Does this include groceries? It seems high if not.

I also thought of something in relation to your situation yesterday evening, your wife is at home in the daytime minding your 1 year old yes? Could she child mind someone elses child at the same time for payment? (I see someone else has made the same suggestion - worth looking into).

You havent listed any entertainment expenses or gym etc... Make sure to include these in your budget so you dont accidently run over.
 
Top