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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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Original poster

to ask which of these financial/house situations you would prefer?

30 replies

Purplegirlie · 30/06/2011 14:59

As I've posted before, my DH is a bit of a spender but won't get a permanent job. He does self-employed work but it's quite up and down and we don't have any security. He earns decent money from it but wants to live like a wealthy person (tries to keep up with several heavy spending friends of his). I work part time. If his work dried up at any point, we would have to manage on my wage, topped up with tax credits, which with our current mortgage and his spending habits, would be very difficult. I have taken his bank card and now we are trying to save but I'm trying to think of long term solutions.

We currently have a lovely detached 4 bedroomed house in a really lovely village. We have 100k equity in the property. In the same village there is another lovely estate with smaller houses, mainly 3 bedroomed and they are semi-detached. If we were to sell our current house, we could pay off the debts accumulated by DH (13k outstanding on a loan and 1.5k he's since accumulated on a credit card). We would then have enough equity to put into one of those houses and reduce our mortgage by two thirds! Plus we would have no outgoings for the loan each month, and could save and really get back on our feet properly, and would have the added security of being able to manage ok if DH didn't get any work and we were reliant on my earnings, and of course smaller utilities bills. We would still be in catchment for the school, and it's still a lovely part of the village.

DH on the other hand wants to carry on living the life of a pretend wealthy person and refuses to move. I have tried to stress the above reasons to him. He says our house will go up in value and he'd rather sit tight. Okay so yes it will go up in value but then if we move so will the other house, and we will be in a better position overall financially as we will hopefully have savings. our mortgage here isn't ridiculously high, in fact it's pretty affordable each month compared to what a lot of people pay, but if we moved we would be paying about a third of what we're paying now, so it would be a good saving.

His other point is that the other houses only have 3 bedrooms, and we have 3 children, but our two youngest could share and then maybe in a few years we could look at extending. But again he won't even budge.

Which would you rather do? Am I being silly in making us take a bit of a step backwards on the property ladder?

OP posts:

zukiecat · 30/06/2011 15:03

This reply has been deleted

Message withdrawn at poster's request.

Flojo1979 · 30/06/2011 15:08

I think if u moved DH would fritter away the extra money anyway. I dont think moving is really dealing with the actual problem. Until u pay off the loan u cant really expect to save up much money. i think its really horse bolted kinda situation. I dont think with holding the bank card is a good option as DH needs to sort himself out. I think instead of a new house i'd be looking for a new DH!!

Original poster

Purplegirlie · 30/06/2011 15:09

I have to admit it is quite a struggle now and it would be nice to be debt free, and also with a small mortgage we would feel less pressure as there would be less outgoings each month to find

OP posts:

Toughasoldboots · 30/06/2011 15:10

This reply has been deleted

Message withdrawn at poster's request.

Original poster

Purplegirlie · 30/06/2011 15:12

Flojo, we would be paying off the loan with some of the equity from the house, so if we moved we'd have a smaller mortgage and no debt. Yes, he would probably try to fritter away the extra money but we'd have to take steps to deal with that, maybe have the bank account solely in my name. Just thinking of options really as I don't like having an insecure financial situation. My eldest is a teenager and wants to go to uni in a few years so I need to start some sort of saving/planning for that.

OP posts:

Original poster

Purplegirlie · 30/06/2011 15:13

No, because moving would reduce or mortgage by a lot of money, Toughasoldboots. The stamp duty would come out of the equity and even using that and paying off the loan we would still have a fair bit to put down on the new, and much cheaper, house

OP posts:

tazmin · 30/06/2011 15:15

if you pay off all his debts, he will just make more, all you will be left with is a smaller house

thats the way it goes :(

NettoSuperstar · 30/06/2011 15:16

In theory moving sounds like the ideal solution, but it's not really, if your DH doesn't change his attitude.
You could well end up in the same position or worse, but in a smaller house.
Now, it sounds like you don't need a four bed, but that's a red herring really, when the problem is his spending.

Original poster

Purplegirlie · 30/06/2011 15:16

Then do you think I'm just best staying here and potentially letting it be repossessed one day rather than trying to sort things out for the sake of my children?

OP posts:

Original poster

Purplegirlie · 30/06/2011 15:18

I am trying to find ways to tackle his spending. We have had a long hard talk and I now have possession of his bank card and credit cards. I'm taking control of the finances from now.

He knows he has overspent and says he wants to change.....

OP posts:

zukiecat · 30/06/2011 15:20

This reply has been deleted

Message withdrawn at poster's request.

TransatlanticCityGirl · 30/06/2011 15:22

Wow, that's a tough one. If your husband were able to manage his money better, I would say keep your current house. But I honestly don't know what I would do in your situation.

Just a few considerations to factor into your equations:

Have you considered the cost of moving? (stamp duty, moving expenses, selling fees for agent etc)
Have you looked into remortgaging for a better deal on your current property? (either a lower interest rate or an offset mortgage, perhaps)

You idea to "downgrade" your home is a good one, but I must wonder with your DH's spending habits, would he actually be able to save any better with this new found cash balance you'll have?

I think there's a more fundamental problem that potentially needs to be addressed (his attitude towards money), otherwise this could become a bit of a "handbag" problem - the bigger the handbag, the more things you find to fill it. And the bigger your household purse, the more things your husband can find to spend it on, iyswim.

Can you agree to a budget with your DH and stick to it? For example, out of his take home pay he must (in this order):

Contribute X to the essential monthly outgoings
Pay Y off his credit card debt
Contribute Z to a 'emergency' savings account which can only be touched if he were out of work (you can set a ceiling so that once he's reached a magic number you feel secure that you can manage for several months without his income)
And then, and only then, he can use whatever money is left over to keep up with the Jones'.

Sorry if that's not too helpful.... best of luck!

Original poster

Purplegirlie · 30/06/2011 15:22

I think I'm going to have to get him to see something like that, Zukie. A friend of mine suggested relationship counselling so that we can thrash out this issue together and come to a solution we are both happy with, and also so he can see that I mean business about sorting it out and him stopping spending. Where would he be able to see a debt counsellor? Are they at the CAB?

OP posts:

TotemPole · 30/06/2011 15:22

Moving doesn't solve the root of the problem. It might be an initial fix for you financially. But if your OH hasn't sorted out his regular work and over spending issues, then eventually you could end up in a similar situation. It might not be to the tune of £14.5k, but the chances are debt will build up.

coccyx · 30/06/2011 15:23

Your oh is living beyond his means. For more security i would be tempted to move

nbee84 · 30/06/2011 15:24

Could you get a lodger for the 4th bedroom in your current house and use the income from that to pay off debts?

TransatlanticCityGirl · 30/06/2011 15:24

Sorry - x-post. I can see most people have already suggested what I have!

Original poster

Purplegirlie · 30/06/2011 15:25

Thanks for the replies everyone, lots of great advice

OP posts:

Inertia · 30/06/2011 15:31

I think the danger if you move is that your DH will see the house equity as free money to spend as he sees fit.

The house isn't the issue. Your DH is. It sounds as though he has no understanding of the impact of his overspending- just writing off the debt won't help him at all. If repossession is a serious issue, then you need to address that, but it sounds as though other options are open to you first:

-his income goes to family outgoings and debt reduction, with an agreed allowance for spending

sell any valuable but unnecessary items he's bought.

Have you worked through all the mortgage figures? If you bought your house some years ago the mortgage might not be much greater than what you'd need on a smaller house bought now.

Original poster

Purplegirlie · 30/06/2011 15:36

Yes, I've carefully worked through all the figures. We would definitely be a lot better off if we moved.

OP posts:

NettoSuperstar · 30/06/2011 15:41

OP, the problem is, that no matter how much you downsize, if your DH doesn't change his spending habits, any house could be at risk of repossession.

ENormaSnob · 30/06/2011 15:42

Forget the house, lose the husband.

tazmin · 30/06/2011 15:47

how will you get another mortgage on a part time and iffy wage?

sparkle12mar08 · 30/06/2011 16:03

They're all quite correct. Your husband will simply see any extra money left over from a move as free money to do with as he pleases. And you will be back here in another two years or so saying 'we downsized and he's spent the £20/30/40k/whatever, and we've got nothing left'. Do nothing until he commits to some financial counselling, nothing.

TotemPole · 30/06/2011 16:05

Purplegirlie, have you been through a detailed income and expenditure with him?

Work out his average, monthly income, add that to yours plus child benefit.

Then go through all outgoings. e.g:

Mortgage
Council tax
Insurance payments
Household bills: utilities and phone/internet/mobiles
Cost of running the car( as well as petrol, tax, mot, insurance, allowance for repairs/replacements, add it all up and divide by 12 for a monthly amount)
Clothing budget for 3 DC and yourselves.(if you can, find the statements, add up what you've spent over the past 12 months and divide by 12)
Groceries, cleaning & toiletries.
Other child expenses, such as school lunches and clubs/activities.
A budget for household repairs, maintenance and replacements.
Loan & credit card payments.

Then show him what you have left over each month for entertainment, savings, holidays etc.

You could also show him that throwing some of the excess at your debts gets them paid of faster and reduces the amount of interest paid. Put in your current monthly payments, then play around with increasing the amount paid each month and see how fast the debt reduces.

snowball calculator

Being debt free and staying in the same house could motiviate your OH to curb his spending.

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