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.

Your wealthy parents will leave you some inheritance surely?

Sorry just seen you’d discussed that, I think you’re underestimating how much that will help.

How long is your mortgage deal for? I don't understand why you think you'll be working way beyond 70 to pay off your mortgage when that's 30 years away and most mortgages are for 25 years (in my experience, maybe I'm wrong).

Presumably your daughter will move out in twenty or so years and you can downsize then, potentially becoming mortgage-free depending on house prices.

I still find inheritance tax a total piss take, those people have paid tax on the money already and 40% is so high!

When your DD eventually moves out, will you have enough money to downsize and buy somewhere in cash? That’s pretty much our plan right now. We’ve currently got a detached 4 bed with a garage but when it’s just the two of us we’ll be fine in a terraced/semi two bed. I don’t want to work for longer than I have to just to service a mortgage.

OP, my DiL is renting at the moment. She has applied for a mortgage to be able to buy. If all goes well then she will have a mortgage the same size as yours; she says it's scary on your own with DC but the rent is higher than her mortgage payment will be. She told me she prefers to struggle and have her own roof than pay for someone else's.

Op

First of all see a gp about how you are feeling. Lack of sleep makes everything so much worse. I have been there. Agree re magnesium or something like sleepeaze from boots. Even one nights sleep will help

Secondly stop panicking over paying interest on mortgage and capital not going down. That's just maths. At the end capital goes down quickly.

Thirdly get on money savings expert to go through budgeting tips and make sure you aren't over spending and are doing the right things. From mobile phones to food to cash back to credit cards and debt And mortgage deals...Watch the program, get the weekly email. You'll feel more in control when you take lots of little actions

Next. Love is free. Your family will be fine. We earn well now but some of our best family times have been on dog walks, playing board games or caravan in a field holidays.

Back to money. I haven't read all the thread so I don't know the full picture but parents can pass on £1m inheritance tax free. Of course care home fees can take away some money but it's likely you will inherit. And downsizing as well

I do hope this helps. I am sure it's overwhelming but you sound very caring. It will be fine

This is an important point to bear in mind.

Even if you don't progress in your role any further (and remember as your daughter gets older that may change), you should get salary rises with inflation (although realise they don't always keep track!)... So your mortgage relative to salary will gradually reduce anyway.

Plus if it helps you feel a bit more in control, pay in even tiny overpayments. I pay in a percentage of any windfall (eg back pay) and also chuck any "lose change" amounts in accounts (eg if an account is 1001.24 I would pay in the 1.24) as over payments. I also have a standing order to over pay an easily affordable amount (along side saving of course) and gradually the overpayment amount is building

This is an important point to bear in mind.

Even if you don't progress in your role any further (and remember as your daughter gets older that may change), you should get salary rises with inflation (although realise they don't always keep track!)... So your mortgage relative to salary will gradually reduce anyway.

Plus if it helps you feel a bit more in control, pay in even tiny overpayments. I pay in a percentage of any windfall (eg back pay) and also chuck any "lose change" amounts in accounts (eg if an account is 1001.24 I would pay in the 1.24) as over payments. I also have a standing order to over pay an easily affordable amount (along side saving of course) and gradually the overpayment amount is building

Loads of them haven’t actually paid tax on the money. My mum bought her house for 87k in 1994. It’s now worth over 500k. She absolutely has not paid tax on the enormous windfall she has acquired due to the rise in property prices.

Exactly.
So many people have gained staggering amounts without "working for it"

Put some figures into an overpayment calculator and try to pay a small amount off each month, fifty quid will help a lot. Try to remember the payments will go down over time as your equity increases, and will feel a lot less as your wage goes up over time.
I worry about this too but doing some long term calculations has really helped.
At 57 you will also be able to use tax free lump sum from your pension if you need to

Look on Rightmove and see how much it costs to rent your type of house, chances are it will be higher than your mortgage. At least buying you will ultimately own it, renters never will. And as pp have said generally your mortgage payment becomes a smaller proportion of your take home pay whereas rents go up.

If your parents are well off you're more than likely to get sone inheritance surely?

Just get a lodger for 1 of the rooms to help with mortgage

Thank you for all the support. Having such a low day today and feel panic striken. Thanks for all the ideas and suggestions and just general telling me to get some perspective. The last year has been an absolute stressful nightmare and I’m only just coming to terms with it all.

That amount won't be wiped out with tax. More chance of it being wiped out with care fees than inheritance tax.
Just keep going through the tunnel with your fingers crossed. Having a mortgage is a better position to e in than renting these days.
I think you are maybe feeling anxious because of all you've been through that's understandable.

i feel such a failure in so many ways. I won’t be taking dd on holiday for the foreseeable and things like helping her do driving lessons or helping buying a car are just not going to be possible. I know not everyone has these things and it’s not the end of the world but like a lot of people I hoped I would be able to do these things for her. I’m disappointed in how things are I suppose but I am doing my best.

How many years on your mortgage?

IIRC, inheritance tax is only applicable over £1m if it's a couple with a home they live in - so you'll get loads from your parents when they die even if there is some tax due!

Why would the payments go down as equity increases? Or do you just mean if you overpay?

I didn't go on holidays when I was a kid.

I paid for my own driving lessons and bought my own car, by having a job (as well as studying) as a teenager.

I'm a very successful adult.

You're being ridiculously negative.

Could you rent out a room for a year? Put the income towards extra payments on the principal mortgage amount?

I'm an avid listener of the Ramsey Show on YouTube which is focused on helping callers get out of debt and repaying mortgages/funding retirement. Once you get past the crazy salary difference between UK and USA the advice is still often sound. Maybe worth a listen.

How old is your daughter? Sounds like it's at least 10 years before she is even legally allowed to have a provisional licence. You don't know what is going to happen tomorrow, never mind decades into the future.
Everyone I know paid for their own driving lessons and their first car and had a great satisfaction from doing so.

She’s nearly 12

From my observations many young adults are not learning to drive until their 20s, for all sorts of reasons. Of all the things to be worrying about, not paying for DC's driving lessons sometime in the future is really rather ridiculous. DC can pay for their own when they are earning enough, both for the lessons, and costs of buying and insuring a car. Why can't you ask your well off parents for help?