I think I fall somewhere between the softly softly and hardline approach that comes across in the thread and I think a bit of pespective from everyone is needed. You earn a lot but are currently overspending. Some simple changes and everything is back to normal
Withouth being judgemental,
@Parazard2, I think you are suffering a bit of FOMO. It's like as if you feel that you and/or your kids are missing out by not spending money on all of these things. But equally, you don't need to have a year of hell to sort out anything. It's very doable in 3 months
Income Monthly
€5575 - salary - higher than you said so are there other deductions.
€280 children’s allowance
€5855 total
Outgoings Monthly
918 Mortgage
607 Loan 1
570 Loan 2
1270 Childcare
1000 Groceries
400 Contingency spend
310 Insurance, is the house, health, life, car?
300 Personal spending
250 Health, is this medicines, doctors, insurance?
250 Car. Is this loan, petrol, repairs, maintenance?
250 Gas and Electricity - is this winter or summer or average over 12 months
250 House maintenance.
200 Clothes, shoes
200 Holidays
100 cleaner
100 pet insurance
45 Sky/Netflix/wifi
30 Subscriptions
30 bins
15 mobile phone
Total expenditure per month 7095, an overspend of 1240
I'll assume most of
@Clamball's list is correct although I think the income is a bit high because they might have missed your pension contribution. In your shoes, I would do the following:
- Pension: Don't touch it, your employer contribution is probably based yours so leave it alone because you have a short term cash flow problem
- Mortgage: Do not touch it unless you have previously made overpayments. PTSB have an unusual perk where overpayments are treated as credit so if you have done this, then make use of it. Otherwise don't consider any payment holidays
- Loans: (- €750) A quick look on Avant shows refinance rates of 7.1%. I would refinance both immediately at €25k for 6 years. This reduces your monthly commitment to €425. You can still attack this new loan to clear it as early as possible but the goal is cashflow to give you breathing space and this reduces your spending by -€750
- Contingency: (- €400): I presume this is not a figure that is actually spent but rather you are trying to budget?
- Groceries: (- €300) This is high, switching stores or away from branded stuff will comfortably knock €300 off.
- Swimming: (- €150) Go as a family to a public pool. It should be €20-25 and do it once a month for the summer
- Gas & Electricity: (- €100) I'm assuming these were winter bills so will naturally come down but over the summer you need to look at your usage and consider some smarter controls for next winter
- Coffee's & personal spending: (- €150) Buy a travel mug, make your own & get out for walks during the week. At the weekend, treat yourself and go to a park/playground and let the kids do there thing while you enjoy it.
- Cleaner: (- €0) I would personally keep them because you can afford it
- Clothing: (- €200) Just don't buy anything for the next 3 months
- House maintenance (- €250): Again just don't spend it unless essential
-Subscriptions (- €30): Cancel for the summer, you already have sky and netflix
I would do all (- €2330) of the above for the next 3-4 months, catch your breath and then re-assess your spending. Over the summer, continue to use excess money to reduce the re-financed Avant loan
In addition to that, you could consider:
- Insurance: You really need to revisit all of these at the next renewal, you seem to be paying way too much. Especially what you have for the kids and pets. I really don't think they are paying for themselves
- Holidays: Ask some of your family to come to you this year and only travel if necessary
- Car: The figure of €250 monthly looks high if you WFH unless this is another loan or PCP. If it is, consider trading it for something you can buy outright
- Credit Card: If you don't have one, you should. But it should only be used for emergencies i.e. if you really needed to travel home. It gives you access to an emergency fund
But in general, don't be too hard on yourself. Focus on getting value out of the things you do rather than the money you spend. With a few simple changes, you can be back on track in a 2/3 months and probably clear the short term debt within 2.5 years.
You also need to remember that debt is not a bad thing as long as it is serving a purpose. You used it to make a clean break from your partner and it is effectively a home improvement loan. It doesn't need to be paid off at break neck speed. Extend the term, reduce your monthly commitment and then accelerate the payments as you see fit.
