Seriously downsizing your life? Practical tips needed.

[1stMrsF]

DH and I own a decent family home in SE. Have about 50% equity. Pre DC we did not even think we were stretching ourselves to buy it and though we had discussed raising a family we assumed that I would go back to work and it would be well within our means.

Life changes though! Our first baby turned out to be twins and I did not go back to work. DH made redundant whilst I was pg, and me too at the end of my mat leave. We got payouts (this was 5 years ago when the big firms were still offering voluntary packages) we had savings and DH has worked about 3 years out of last 5 on fixed term contracts so we managed, each year thinking it would get better if we could just hang on a bit longer.

12m ago I thought we would have to sell house to survive, but I then got a full time job in a new industry, new career. Earn about half of what I used to, but it has prospects, it's family friendly, I enjoy it and it is enough to live on for a family who are sensible. DH is SAHP so no childcare. He has been seeking work, but no joy (his industry is particularly recession sensitive)

However, due to the house and the mortgage, my salary doesn't cover everything and we are still using our ever diminishing savings. We are very lucky to have family help with e.g. DC clothes so we are managing so far, but it's not sustainable for much longer.

I am frugal, we have cut unnecessary expenditure, we shop around for necessary things, cook from scratch etc. but i can't make enough of a difference through this alone. Its time for some serious changes. I am thinking of downsizing - the house, maybe the cars? What else should I think about? DH is reluctant to sell house so I need options to present to him.

[Fluffycloudland77]

If I had to choose car or house the cars would go. No one cares what you drive anyway.

Next door have a massive house but run two small cars.

[CrazyOldCatLady]

We downsized our car from an SUV-type thingy to an economical little diesel hatchback. We're delighted with it and it has saved us a couple of hundred euro a month, between fuel costs and tax.

[arabellarubberplant]

I assume the twins start school in September?
At that point dh can take any job he can get (women returning to work often don't get to to return to 'their industry', so I assume he is willing to take anything ) which will help a lot?

But cars sounds sensible until dh is in a position to take a lower paid job once the kids are in school?

I know I earn a quarter of my previous earnings in an entirely unrelated industry. It sounds as though he's holding out to return to what he did before, which is often a waste of time. Any income is better than none, if you need it, and your offspring are in ft education.

[DoneWithStruggling]

Unless you are madly rural I just think that a car for a SAHP is a luxury. Do you need a car for work?

What does DH do during the day - are your twins at free preschool/nursery now?

[Tearsofthemushroom]

DH get an evening job? They don't pay a lot but it made a huge difference to us when I did a similar thing.

[rpitchfo]

The Cars have to go first - a house will make money in the longer term...a car never will.

[1stMrsF]

We do need 2 cars as I drive to work and DH cannot get the DDs to school without one (they started last September). We maybe don't need the cars we have though. My hatchback is old now and something newer may be more efficient and have lower tax. I need to find out more. Still not convinced its enough though - we need another 1k a month to stay here but If we moved house we could halve our mortgage repayments on my calculations. I would love to hear from someone who has done it.

Agree about any job - our plan before I got the FT job was that i would work PT once they were at school. I need to talk to DH about it. I think he has previously assumed that he will be able to return to what he was doing but I think that has already taken too long.

The way I see it is if we make changes and he does get a job, then happy days, we will have money spare, but if it takes a while longer we'll be more comfortable.

[RandomMess]

Can you not extend the term of your current mortgage to lower your monthly payments?

[harrietspy]

Do you have a lettable room in your house? We earned about £300 pcm doing that and you can earn significantly more than that without it being taxed. There are some good websites for mon-thurs lets and you have your house to yourself for the weekends.

I know it's a big deal to let a stranger into your house but it worked brilliantly for us and I know quite a lot of families who do this now. Good luck!

[1stMrsF]

Random that is a good idea, however DH is much older than me and it is already extended to his retirement age. This is partly why buying a smaller house might work for us as if we can reduce our mortgage to a size where I can raise it on my own the term could be longer too, thus reducing monthly repayments further.

Thank you for your suggestions everyone. Its helping me write a plan - all these things can go on a list for DH and I to discuss.

[arabellarubberplant]

Oh, if they are already at school ,he just needs to find a job. Any job.
Time for him to accept that he can't return to his previous niche and pay scale, and find something that will enable him to contribute.

He doesn't need to give up looking for something in his previous line, but he needs to start bringing some money in. He can move back to his old industry as soon as he can get a job there. Seems daft that he's wasting time when there there's no reason for him not to work.

[sooperdooper]

You could look into short term lets for foreign students, my friends parents used to do it, at least that way it's not permanent in case you hate it!!

[1stMrsF]

harriet I had dismissed the lodger idea because i hadn't imagined a mon - thur let. On the list, thank you!

[harrietspy]

You're welcome.

[1stMrsF]

Sorry ipad died last night. arabella you are so right of course. I think we have just kept thinking that he would get a 'proper' job soon, and now another 12m has gone by and he hasn't been able to find one.

souper thank you, we are near a regional university so that might be a way to investigate that.

[TheRaniOfYawn]

It sounds to me as though you need to think through a frugal but good future where you are able to live comfortably within your means. So keep your house if the location is in an area that allows for a frugal lifestyle but otherwise consider moving.

Do you live somewhere where you can get to schools, your work, children's activities, the shops etc by foot, bike or public transport? Is it energy efficient?Is it the right size?

If you are living in a centrally located 3 bedroom house, ditch the cars.

If you are in a rural or suburban 4 or 5 bedroom house consider moving and ditching the cars.

[Catrin]

Assuming your dh gets a job, if it is less pay than before, it may then have an impact with regard to childcare and not earning enough to warrant paying for before/after school clubs/childminder etc.

Apologies before I say this at the risk of sounding a bit brutal... you work full time, you have cut all possible corners, your dh doesn't work and you have school age children and he does not want to sell the house? I am not implying he therefore does not contribute, but he can't not have a paid job and then be resistant to your most useful way out of your current difficulties. I appreciate the wrench in selling the family home, but even so...

[foxdongle]

hi just wanted to add if his industry is recession sensitive wouldn't it make sense for him to change course anyway? As you say yourself that you have had to change your career.

two salaries would be the best option and justify the expense of the two cars. or could he work from home cutting down the need for potential childcare?

It sounds that your mortgage is v expensive on your salary alone, personally I would consider downsizing to something that might be smaller but feels more comfortable financially or I would be constantly stressing over it. are you talking 4/5 bed down to 3 bed? or 3 to 2 bed? or similar size but changing location? You are in a good position that you have a lot of equity in your house.

[1stMrsF]

Thank you for these last few comments - this is what i have been thinking so it helps to know that what I am suggesting isn't too crazy. We would be going from 4 big bedrooms plus a tiny one, to 3 (the girls share at the moment but I would like to have the flexibility for them to have separate rooms when they are older). Good point about bills as well as mortgage Precious. I love our location but if we moved to the next village we could potentially walk to school and to train station and we'd only be a mile away so not have to move away from school, from friends etc.

I think two lower salaries is a good option in the long run especially as if we had some other money coming in I have the option to reduce my job to term time only contract - no holiday childcare required. There is still the issue of before and after school but if DH was working part time, we wouldn't need it, or not every day at least, and if he gets a job doing what he was doing before we could afford it.

fox that is part of it, the mortgage is impossible on my salary alone. But if we moved we could get something with a much smaller mortgage. The real asset we have is the equity, so I feel it would be sensible to use it. I'd be happy to be the sole earner for longer as we love that we have both had the opportunities to stay at home with the children and they with us. But if that were to be the case, it would have to be living within our means and we cannot do that with this mortgage.

He is not refusing - we have yet to discuss it really seriously, but before I got this job I know he was gutted that we might have to sell so I am anticipating some resistance. At least this way we have some level of control over it, to envisage the life we can afford as Rani suggests. We are now at the end of that year and so its time for olan B!

[GoodnessIsThatTheTime]

Moving to a 3 bed near school on a good locatikn is a completley different prospect to moving to a bedsit or awful area.

sounds a good move.

[charlieandlola]

What is the rental market like near you ?

Can you rent out your house, with the rental covering the mortgage, and then you rent a smaller house ?

That way you keep your equity protected from overspending, and yet have cheaper monthly running costs.

If not, then sell, and buy something more affordable. What is the point of existing in a big house when you could enjoy life in a smaller one?
It is only bricks and mortar.

[1stMrsF]

Its a good question charlieandlola. I did look at this a couple of years ago and it didn't seem to add up then (there is a real lack of rental family homes is the main issue I think) but its worth another look, at least to crunch the numbers and see if they might work.

[ThoughtFox]

I second the suggestion about language students - they can be a nice little earner if you've got the spare bedrooms. With a 4-bed house, you could even take a couple. It does rely on location, though!

[1stMrsF]

So I had a good chat with DH last night. He was reluctant to talk about it, doesn't want to sell the house as he feels it is a failure He is the silent type, so getting him to articulate how he felt was a massive breakthrough. I pointed out that we have not failed - we have kept the roof over our heads, the DDs have had the security of a SAHP until they went to school, not to mention the strong relationship he has with them that a lot of Dads just don't get the chance to have. Having talked about all the options that were suggested, we feel that moving is realistically the solution that works for us in the long run, although we are going to look into some of the other options in the meantime, especially DH working part time in a different role, as we will need more money to tide us over while we look for a house. I have sent him 3 part time jobs advertised in the area today! Thanks for helping me tackle it, I feel much better today.