To ask how to come to terms with this financial situation

[Justcaant]

I’m 40 soon and last year separated from a long term partner. I now have our DD all week and he has her EOW. CMS is sorted but the real issue is that I now own a home alone (we rented previously as were saving for a house).

I have a 240k mortgage to pay off. I may never actually pay it off. I feel completely financially stuck. I am constantly worried about my job and bills. I have 1.5k in savings and try and add 100 a month but it’s hard. I never thought at 40 I would be in this situation. My parents are reasonably well off and I was brought up in a way that is now totally different to my daughter and I feel terrible about that too. I keep thinking I will be old and alone and unable to pay bills so end up on the streets. I am waking every day at 3am for some reason and just going over and over this and there is no way out. I wish I had made better financial decisions when younger and now it’s too late to fix it. How do I cope with this and accept where I am? I don’t want this to rub off on our child.

This will pass. It may not feel like it, but it will. You have a home, a decent job, a child, you can just about save a little bit. You're doing well.

The mortgage gets easier over time even if you only get basic inflation adjustment pay rises. You'll adjust and find ways to cope. Your daughter has a stable and loving home, which is the main thing.

When you're old, you'll have a pension, you can downsize then if you want. You'll be fine

You're good. Now, look after you, get some sleep and try not to stress

Sounds like a Yabu. I agree with some. You're in a fantastic position to own your own home. If you're struggling to keep your head above water have you considered renting out a room ? The situation may not be as dire as you imagine.

If parents are married cumulative IHT threshold is a million.

OP assuming you have a repayment mortgage with a term of 25 years or less, which is standard now, you will have paid it off by the time you are 65 - well before your retirement age of 67. You have nothing to worry about. Things get easier as you get older and your income is likely to increase with experience.
The value of your home is also likely to rise considerably in the long term.
keep saving small amounts where you can and paying into your pension and you will be fine.

Congratulations on your house purchase and doing it all on your own!

Honestly, if you can afford to put away £100 a month and you’re worried about never paying your mortgage off, I’d halve it and put £50 into saving and overpay your mortgage by £50 a month. Put it into a calculator and you’ll probably be quite pleasantly surprised what a difference it could make!

It’s not your decisions. It’s the ridiculous price of homes now.

I’m late 50s and renting with three DC. I may never own my own home, though hopefully will end up with a little place. I sometimes worry where I’ll live when I’m older or if the DCs will be OK.

But, what I conclude is their quality of life has been no different to if I owned. They were brought up in the same comfortable sized home as our wealthy home-owning neighbours next door. Ours was more ramshackle, sure, but also full of fun stuff, laughter and love. We’ve since moved somewhere smaller. But, again, we’re happy and all get on so well. I could’ve moved to a totally different place and bought, but I would’ve hated it and had to pay tons to commute. The neighbourhood is more important: it’s our home.

You have your own place. It sounds like you’re happy there and will never want to move. As you pay your mortgage off, it’ll get more manageable. You can’t take wealth with you when you cop it. The most important thing to leave your kids is happy memories, inspiration and values. Quite a few of my friends have died young. Some were in a good financial position having worked hard all their lives. But their DP and DC would exchange all that to have them still here.

Echoing many others - you own your own home! I was older when I got a mortgage (late 30s) and I'm set to be paying it off until I'm 68 at the moment. Retirement age is rising and many people will be working to 70 and beyond when we hit that age. I'm public sector so never going to be earning huge money (unlikely to leave as I like my job). I'm also trapped in an area where house prices are high and we are settled because of the children being happy at school.

No stress over my current situation will ever be greater than the relief I feel at no longer having the insecurity that private renting brought with it!

Older than you, mortgages seem overwhelming when you first take them on but you will get there. if you weren’t paying a mortgage you would be paying rent except you are paying into an asset. You are providing a stable home for your DD. At 40 you are still young, you don’t know what positive’s might be round the corner, work wise or your personal life. Try not to overthink on the ‘Negative what could happens’, I’m a fine one to talk, always been an over thinker but there was absolutely no need for me to be like this. You are doing just fine, focus on your DD and try push those negative thoughts away.

@Justcaant try thinking about it this way. You are paying for an asset. It's going to go up in value. In 20 years time it will be worth a lot more. At that point, you can downsize and release equity.

The alternative is you pay a similar amount in rent for the next 20 years. You don't have an asset at the end of it. Rent prices will keep increasing and you will need to pay even more when you are retired and have limited income.

Obviously not. I'm assuming you're in the UK, there's all kinds of supports for older people. You'd get housing.
But you'll probably pay your mortgage just fine and own a house k, a huge asset. You'll be much h better off than renters who probably see your post as rather self indulgent and privileged

If your parents leave less than a million there's no inheritance tax. If it's more you pay the tax then still have the balance. Just work at one day at a time. Your salary will go up, things will become easier it's the way of the world. You're in a good financial position. Cherish what you have.

Can you sell and downsize if it's causing you this much anxiety? Or, you said your parents are quite well off, would they help you out to clear some of the mortgage - or will you eventually have some inheritance to pay it off?

You are doing really well you just can't see the trees for the woods, maybe see a counsellor, or talk it through with someone, you are probably in a better situation than you are.

And ask him to help out more that EOW

Definitely echo everyone else re working on your anxiety

But also I would suggest you sit down with your parents and sibling and have a proper "what might happen in the future" conversation

It can start with your personal situation but it is healthy to talk about what might happen if:

Your parents put some money up to help reduce your mortgage (would your sibling be happy with this if they had it balanced in a will?)
One or both of your parents need care at some point - would you move in together?

Share your worries about the future at the very least - they are your family and at least need to know what is worrying you

I completely understand how you feel. Worrying about finances can be crippling. I felt like you when I was in my 40s, thinking I’d always be in debt. I would be constantly making lists of debts, bills, income etc. However, 25 years later, I’m retired, have a reasonable pension, work PT, have paid off my mortgage (at 59) and have a good amount of savings. I never earned a great deal as a teacher (44K was my max salary) and thought I’d always struggle. I did downsize when I retired and the house I’d bought for £40K was now worth 5x that, so I was able to use lots of the equity to renovate an older cheaper property which will be my forever home.
Just remember, whatever you’re paying in your mortgage won’t massively increase as you get older - the debt will start to fall, the house will increase in value, you’ll have more equity in your home, will get pay increases, your pension will increase as will your savings.
‘It might help if you sit down with someone you trust to look at your financial situation to analyse it and put your mind at rest.

Oh sod off. There are pro and cons to both owning and renting. The OP is allowed to feel overwhelmed.

I totally understand why you are panicking. It is so hard to see the wood for the trees when you're fixating on something worrying. Do try the suggestions of magnesium etc. but also can I suggest you try to adjust your mindset. Do a gratitude list every night just before you get into bed. Just jot down 3 things you're grateful for, doesn't have to be anything major. Doing this consistently really does help to adjust your subconscious and you will feel more positive about things. It works! Give it a go.

Well no because the retirement age is now 67 and it used to be 65 so of course you dont know loads of people working at 70 (although I know several). By the time you retire the age will probably be over 70 (it’s 68 for you now so only 2 years off). By then your mortgage will be small and you can sell and downsize. Imagine if you were living in a small rental and had no chance of ever buying and knew you’d be renting in retirement? Loads of people are in that position.

Kindly I think you are catastrophising. I recognise it because I do it myself.
Perhaps go to the GP possibly take some meds for anxiety and have some counselling.
You've been through a lot so it's not surprising you are anxious, but there are many people in worse situations.
It is tough but honestly you are doing wonderfully, you have a home and can, at a push, save £100 a month.
You have family who can help in an emergency.
You are worrying about things that may not come to pass.
We had an interest free mortgage for years, I'd lay awake worrying that we wouldnt pay it off and be made homeless, but 15 years later circumstances change and we now have managed to pay it off.
Ive spent hours and hours worrying about things that didn't come to pass.
My favourite quote is mark twain:
I've had a lot of worries in my life, most of which have never happened!

Actually the position is quite dire for older renters. A lot of them are forced into HMOs, ie house shares or as lodgers. The housing list is very long and if you’re not disabled you won’t be a priority. The council don’t just hand out nice shiny flats to older people. We don’t hear a lot about it because I think there’s a lot of shame people have around it. But basically any benefits these days don’t cover private rents because they are so high.

As a home owner the OP isn’t in that position though.

I would find out if I could use any surplus income to overpay on the mortgage as it has a huge impact.

Also I would get in a lodger on a Monday to Friday and use that money to overpay mortgage

Realise that inflation will erode the debt eg your pay goes up yearly but the amount you owe does not.

if you are an only child you are in an incredibly luckily position re possible inheritance although some might go in care fees.

Give yourself a clap for having a daughter and own home.

I think it’s time to have an honest conversation with your mum. If my kids ever had the worries that you have I would want them to tell me and see if I could help. This level of stress could impact your health and put you in an even worse position financially. What you need is someone to take some stress off you and that might be something as simple as your mum making you some hot food across the week ;I’ve no idea if she’s local) or paying for a monthly direct debit or something.

you are also in a decent position to meet someone and share you life again. If your ex has your child every other weekend then you have a little down time and again maybe your parents could step in for some childcare. You are young at 40, lots of time to find love again if you wanted to.

IHT is 40% of anything above 325 k when the second spouse dies. So no unless your parents leave it all to the cats home you’re looking at quite a large inheritance.
This is a bit “if you called your dad he could stop it all” I find. I appreciate that you’re not thinking rationally but you own a house, your parents are likely millionaires, you have a job. You have a 240k mortgage now, by the time you retire it will be something like 20k because most mortgage terms don’t go on past your expected retirement. You were obviously brought up to think you’d be better off by now but you’re still in a pretty good position as a property owner.

Look at it long term:

• you have a house, so you don't depend on a landlord, which is great and gives you safety
• when your child goes to university, becomes independent and you get closer to retirement age you can always downsize and buy a flat or small house without a mortgage
• just concentrate on making sure you can pay the mortgage and bills every month and you will be fine. Saving a £100 a month is a perfectly good amount on a single wage. Many people can't even afford that!

That's to be expected - you've recently ended a long-term relationship and bought a house. Huge life changes. It will get easier, you just need to give it time.

I have been in your position and it’s tough. It will improve though.

When DD is older, you can downsize to a flat. If necessary a one bed with a sofabed in the lounge. Even if you can’t buy it outright, you will be able to afford it and reduce the term on your mortgage so you can stop paying at 60 or whatever feels comfortable at the time.

You have been through a massive change and upheaval. Be kind to yourself. I take duloxetine for anxiety and it has stopped me catastrophising. Maybe speak to GP? 💐