I am struggling for money and feeling down about it

[DaisyDooxox]

Hi all.

For context, I am a primary school teacher and have been in the profession for 5 years. Three years ago, I bought a house with my ex partner. All of our money went on renovating the property and therefore I have no personal savings.

We separated 5 months ago, and he was refusing to sell the property, so I had to pay for a solicitor to help me legally which has proven expensive. I borrowed money from my parents in order to do this and there is still an invoice from the solicitor I am waiting for.

In the meantime I have been living with my parents who charge me £200 rent (for which I am extremely fortunate). Because I have been feeling so down these past few months, I’ve been out with friends a lot and have not been careful with my money. Last month I was into my overdraft. I got paid a few days ago and most of that has been taken up again paying off the overdraft. I am now £20 away from being in my overdraft again and I still have until 31st August when I am paid again. Not to mention it is the summer holidays and I have a weekend away planned, meals out planned and two birthdays. I have also recently met somebody new, and have spent a lot of money on dates etc. I am embarrassed to even write this as I know how irresponsible this looks.

I have never had a credit card and have never been one to live in my overdraft. However, for the first time in my life I am and I am really worried about it.

Anyway, it has finally been settled that my ex partner will buy me out of the property, meaning I will walk away with approximately £102K.

A couple of months ago, when finances were better, I was approved for a mortgage in principle as I saw a flat I liked. The flat is £230K. I am again about to view this flat and some others. I am now worried that I will not be approved for a mortgage due to currently being in my overdraft.

I have sleepless nights over this and over having to tell my parents how much of a pickle I have got myself into.

Does anyone have any advice on this? Many thanks.

I work in mortgages. Overdraft usage is fine as long as you are always within your limit and its not a ridiculous amount. I have seen some people who are taking home thousands a month and are still well into their overdrafts once they've been paid
Where I work we take any OD usage into account at 2% of the balance but if its less than £500 we usually ignore it
As long as you weren't right at the very limit of affordability when you did the AIP then it won't be a problem

@Jmaho Thank you for your response. This has really helped to ease my worry. So, if I see the flat I like, I may still be accepted for a mortgage, even though I may be in my overdraft at that point?

my overdraft limit is set to £500, of which I am not in yet this month, but will be in my overdraft very soon.

I earn around £1,871 per month and my bills currently are £1,113. This means I have around £750 disposable income on paper. But due to not being careful I have nothing at the moment.

thanks.

It sounds like it might be helpful to look at your outgoings. If your parents are only charging you £200 board what is the rest of the over 1k going on currently?

You may try to give private lessons in the weekends as you said you are primary teacher? Or another part time job? Or if you have spare room you may rent to somebody?
Dont worry and think positive. Wish you all the best and luck🙏🏻🤍

@Woolandwonder Please see my comments above. I should have around £750 disposable income a month, but a couple of months ago I had to pay an unexpected bill and now I’m trying to catch up. It doesn’t help with it being the summer holidays either. It’s embarrassing to tell people I don’t have the money to go out with them. I know I need to be more responsible but I’m trying to keep up with everything.

No that makes sense, and don't beat yourself up some months it's easy for us to just get carried away and forget to budget properly particularly hard when you are wanting to do things with friends and go on dates etc.. socialising is often expensive! I suppose what I meant though was you said your current bills are over £1k a month, which seems like quite a lot assuming your rent to your parents includes council tax etc.. or are you paying for those separately?

Why are your bills £1100 a month if you are only paying £200 rent?

i would immediately cancel the meals out you have planned, what about the birthdays? Are they people you could explain things are tight while you get a mortgage sorted who would be happy with a card and a cheap gift like chocolates or wine? The sooner you reign spending back in the sooner you’ll be on track.

@Woolandwonder @Quitelikeit

My bills include:

• Car finance
• Car insurance
• Dog insurance
• Dog healthcare plan
• A previous loan (£145 per month, of which I plan to clear when my money for the house my ex is living in comes through).
• My mobile phone contract.
• Half of the mortgage of the property my ex is currently living in.
• £200 per month rent to my parents.

I think be a bit kinder to yourself. You're coming out of a big break-up! Do you have to be back on the property ladder before the legals are even settled?

At this time in your life dinners out and friendships are important. You need to think of your wellbeing in the round, not be judging yourself against a yardstick of how your spending worked a year ago.

I think you should relax a bit. I saw the other day that the Bank of England had told mortgage providers to remove the affordability criteria that was previously used.

also go to London and country they will get you a deal in no time

Could you tutor for extra cash

Ahh that makes sense if you are still paying a mortgage etc.

Your mortgage application should be fine.

It's good you're worrying about your finances at this stage though because it would be easy for you to get into debt from here and it spiral from there. Sit down and do a budget.

Hi,
Just tell your friends you are saving for your house purchase costs and ask to do something cheaper. That's not embarassing. You don't have to say you are struggling.

I wonder if you might be better to wait until you have the cash to do viewings. Is there a chance that you will get your heart set on a property but not be in any position to buy it while waiting for your money. Your ex might drag things out.

Have you costed out your new mortgage and bills yourself to check you can afford it.

Would you fancy a second job even just for the hols. Even if you spent all the cash it would save some of your main salary. If you work in hospitality e.g. a pub it could be quite social.

Just tell your friends you are saving for your house purchase costs and ask to do something cheaper. That's not embarassing. You don't have to say you are struggling.

I agree. Forget the weekend away, do meet ups rather than a meal, suggest you take nibbles and a bottle of wine to someone’s house rather than eat out. There are loads of ways you can not spend so much this month so you aren’t in the same boat next month.

See your bank - rather than accruing charges, get an agreed extended overdraft - when is your money coming through?

1. Pay off overdraft
2. Pay off loan
3. Pay off solicitor

Then see what you are left with, iirc some are doing 4.5 x what you are on now. You should still make sure you have some contingency for cost if living crisis. Splurge less from Sept obvs. You should still have a decent deposit.