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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

to ask for your help with my money situation?

39 replies

fastichecastiche · 22/02/2015 11:33

I'm sorry if I'm posting in the wrong place, I'm desperate for advice.

DH and I are both 35 and renting. I am an HCP and he has just changed careers, so on a starting salary. We have 2 dc, school age and new born. We are absolutely skint. In order to stay in our rental home, we are borrowing a sizable amount of money from my in laws while I am on maternity. We have £6000 of credit card debt, mostly on 0% balance transfer.

I realise we are both fairly late starters with respect to our careers - we both dithered in our twenties, which i regret. Money has been a difficult topic in our relationship. We are just about now after a number of years together able to budget and plan our finances (just got YNAB which has helped us set a budget and to get to grips with what we can actually afford.)

My in laws have supported dh with retraining and have promised to lend him what he needs to have a career he enjoys. This is very nice of them, and I realise dh is extremely lucky, and by extension of course I am too. However, I cant help but be uncomfortable with this and dislike the debt. He is sure his salary will rise as he has retrained in an area with lots of jobs and a very complicated skill set. he is totally comfortable borrowing 'from his inheritance' as he sees it. This is a London property that his parents own in an area that was run down in the 70s when they bought it and is is now one of the more shi shi places to live, and his parents have some liquid assets, i suppose its called, which they can access and lend, but they are by no means rich.

It seems unreasonable to me to borrow on the basis of future inheritance and I'm nervous about it. I think it gives us ideas of a lifestyle that based on current salary (me returning on part-time basis, his full time starter salary) is combined at £56k, not including a performance related bonus of £7k, whihc is of course uncertain. While I'm on maternity I will get the statutory minimum till I return to work, so until later this year we are on combined income of 44k.

I'd like to downsize our rental property in order to be able to afford it within our income. Id like to use any money that in laws are offering to use as a deposit to buy a rental flat a nearby city. I feel that this would give us an asset and it may go up in value, and we could make a little each month on the rent. I would be happy to manage it, research how to do it etc. DH does not want to do either. He thinks that it will be too much upheaval for an insignifiant monthly saving on our rent (probably about £300 per month) to downsize. He thinks that there is too much uncertaintly in the property market to invest in a rental.

I am trying to change how I view money into being a bit more entrepreneurial with an eye to balancing our books. I'm thinking of selling things on ebay before buying anything new. I'd like to capitalise on my training and take on private work, but i've no idea how to go about it.

I feel pretty hopeless - i just dont see how to balance the books without taking on debt, and securing ourselves more financial stability without being at logger heads with dh, or without going back to work full time in a stressful contractor role where I could reach my full earning potential of about £50k - which would mean high child care fees as well. I know I can't have it all (in terms of money and spending time with my kids) but how do i go about making a start on living within our means, investing in something which could help dc with uni consts/ our retirement, saving for our own house? I almost feel a bit cross with dh about it all, although I know i shouldn't.

Any advice or signposting very gratefully received.

OP posts:
Purplepoodle · 22/02/2015 11:43

If you can't afford your current rental on your income then you need to move.

Could in laws buy a property and you rent it off them?

Purplepoodle · 22/02/2015 11:44

Or could in laws lend u a deposit to buy a property of your own to live in

Original poster
fastichecastiche · 22/02/2015 11:49

I dont think so, as we would need a sizable deposit for a family home, but thank you for suggestions

OP posts:
Mmmbacon · 22/02/2015 12:07

Is the 300 pm long term or while you are on mat leave, presumably you will be bringing home more to the kitty than 300 after childcare, I wouldn't move for a short term deficit of 300pm, we certainly had a larger deficit for me taking additional unpai. leave, but I suppose the differences are we saved to afford it before not borrowing to fund and 2 mortgage not rent so moving not an option,

Have a look at your outgoings, can you save on groceries, sky, takeaway coffees, depending on your standard of living 300 isn't that hard to make up, especially short term, eg neither of ye buy clothes for few months, agree fewer meals out,
Long term I would advise setting out your essentials, see what you have to live on and budget from that, also 0% won't last forever so look for alternatives to repay the Cc dept,

I wouldn't recommend buying a rental, it doesn't sound like ye are in a position yet to deal with unexpected repairs that as a landlord you would have to make in a speedy fashion, or that you could afford any empty periods,

Original poster
fastichecastiche · 22/02/2015 12:10

thanks mmm - makes sesne that we should save on living expenses, and find an alternatiave to 0% for cc debt - agree about the rental

OP posts:
Purplepoodle · 22/02/2015 12:15

Can you afford your current rental property when u return to work within your budget?

Purplepoodle · 22/02/2015 12:16

Instead of buying a flat could u use in laws money to pay off the cc debt

Original poster
fastichecastiche · 22/02/2015 12:29

we will just about be able to afford the current rental property when i go back to work, yes

OP posts:
laughingmyarseoff · 22/02/2015 12:31

I found this website and the budget tool very useful OP

www.moneysavingexpert.com/banking/Budget-planning

I think if you borrow anything from your in-laws you should stipulate payment back per month in a contract and only borrow to pay off the cc debt you already have, not to ring more money in per month. That way you aren't paying interest, or do you ave 0% interest for a time too?

chimchimini · 22/02/2015 12:55

I second going on the moneysavingexpert forums, they are absolutely fantastic for advice on managing debt, budgeting etc. I have to budget carefully as I've had to give up work (sadly no choice but to do so). If you're worrying about your budget print out your credit card statements, bank statement and look at EVERYTHING you spend, including totting up the amount of cash you take out and where that goes. If you've never done it before it'll be gobsmacking, unless you're the most frugal person in the world! Keep a spending diary. Do the grocery challenge again on MSE, the 'old style' forum.

It's horrible borrowing money but it does look like it'll be short term in your case. But don't buy stuff you don't need if you can't afford it. Keep your debt manageable as you don't want to be paying it off forever.

Final thought, you say most cc debt is at 0%. Can you transfer any more across to get this rate? What % rate is the rest at? Keep an eye on the interest rates in case you can get something better.

Oldraver · 22/02/2015 13:01

I;ve read your post twice and I am really scratching my head to see what the issue is. Your DH thinks £300 a month saving on rent is insignificant and not worth the hassle of moving ? really I think he has been used to handouts from the bank of Mum and Dad for far too long that he has lost sight of what budgeting means

Thats before I boggle at your earning the amounts you say you have and pleading poverty. I do understand you will have some childcare costs but I think you just need you heads banging together...

What do you mean by this and find an alternatiave to 0% for cc debt ... there is an alternative ? maybe the nice CC people will let you off the pesky debt

Original poster
fastichecastiche · 22/02/2015 13:03

thanks, just telling dh that - he would rather borrow more to live more comfortably : (

OP posts:
Original poster
fastichecastiche · 22/02/2015 13:05

i know oldraver - it does seem boggling. rental prices in south east are what we mainly spend our money on, and bills to run house. I agree it seems insane - but short of moving back in with the inlaws, we are in rather a bind. and by alternative, what is meant i think is a low interest bank loan.

OP posts:
lurkerspeaks · 22/02/2015 13:05

Remember if you buy a rental property you have to pay tax on any income from it.

Seems nonsensical to rent the property you live in (and pay for out of taxed income) but buy another property to rent out to generate an income on which you pay tax....

Original poster
fastichecastiche · 22/02/2015 13:07

yes put like that, it does seem bonkers. we cant afford to buy a family home, so it would be a form of investment. what would be better do you think?

OP posts:
countessmarkyabitch · 22/02/2015 13:10

If you can move to somewhere cheaper you should do so, thats a no brainer. But I wouldn't buy a rental property in your position. You have no experience in it, you don't appreciate what an epic hassle it can be, and you have no cushion if things go wrong. What would you do, for example, if your tenant lost their job, stopped paying rent, and refused to leave? It happens. Its time consuming and expensive and stressful. There are many other problems that could occur that cost time and money, I doubt you could even carry a couple of months between tenants if that happened. Would you even get a BTL mortgage?

Ebay selling, private work, all good ideas. BTL, I would say was madness for you.

caroldecker · 22/02/2015 13:17

Generally speaking a mortgage is cheaper than renting, so if you can afford your rent, can you not afford a mortgage on a similar place?

DeliciousMonster · 22/02/2015 13:52

When you have debt and no spare cash, £300 a month is not insignificant.

You need to get onto Money Saving Expert, and do one of their Statement of Affairs; to see the real situation you are in. People on there will help you to identify options.

NotGoingOut17 · 22/02/2015 14:00

Another one scratching my head at 300 pounds not being a decent amount enough of money to move for. Your 1st thing to do is to get on the same page as your DH as it appears you are at cross purposes and I agree that it appears he has got too used to the hand outs, either you are struggling or you are not - if you are struggling than 300 quid a month is worth moving for. It's not a small amount of money - that would pretty much cover my utility bills or in your case would mean that 6k debt could be paid off in about 20 months. Which may seem like a long time, but it's moving in the right direction whereas to keep borrowing, it'll be 8, 10k etc before too long.

LaurieFairyCake · 22/02/2015 14:02

You're in London too?

If either of you are in essential jobs have you considered shared ownership?

www.firststeps.co.uk for London housing association places

That way you get to live in a lovely flat for 200k that you couldn't possibly afford as it costs 600k

(We're doing that next year hopefully)

AntiHop · 22/02/2015 14:13

Sorry if it misunderstood but are you saying you're thinking of buying a place in another city to rent out and carry on renting yourself for your home? Don't do this. It's too risky. If you buy a place to rent and something goes wrong eg the tenants don't pay them you'll be stuffed. It's really expensive to get non paying tenants out. It if you are set in doing it, consider doing a long term let through the local council to give you stability.

If you can find a way to buy a home to live in, that's the best option. Look into shared ownership. www.sharetobuy.com/firststeps

If pils are happy to help you put financially, the best way they can do this is to help you buy a home. Could you get a joint mortgage? Don't feel bad about accepting their help. THat generation of home owners have massively benefited from property prices.

AntiHop · 22/02/2015 14:14

X post Laurie!

Stinkersmum · 22/02/2015 14:15

Mortgages aren't cheaper than renting anymore - not with like for like properties anyway. We rent our house out for £795 a month. The value of the house is approx £330k. A mortgage over 25 years with a 10% deposit and a low interest rate would be anywhere between £1200 to £1500 a month easily.....

MsRinky · 22/02/2015 16:09

I don't want to be mean, but you need to stop thinking about investments for your children going to University, you are in too deep a hole yourself. The best you can do for your children is to aim not to be a financial burden on them when they are adults. You need to clear that credit card debt and then work out how you can support yourselves into retirement. If you're a HCP you can work anywhere. Is your DH new skill set portable?

You won't get a BTL mortgage without your own assets, a mortgaged house of your own is usually the absolute minimum. Landlords have responsibilities, if you don't have tenants the mortgage still needs paying and if the boiler dies you need to have the cash to pay to replace it immediately.

It sounds as if your DH has no qualms about allowing his parents to subsidise a life he can't afford. I couldn't personally find a man like that attractive, but he's unlikely to change. He'd better just hope neither of them need expensive care and that his inheritance doesn't evaporate. Is he an only child?

Viviennemary · 22/02/2015 16:21

My opinion is this. I don't think this is the right time for you to decide to be entrepreneurs. You have to try to live within your means and get down the amount you owe on your credit card. Quite a lot of people these days get handouts from parents. But it must be clear whether they are expecting to be paid back or not. How can you pay back what they lend you when you already have £6K worth of debt to also be paid back. You have to base your lifestyle on what you earn now not on your potential earnings.