Our new financial life -how do we approach this.

[MazzSUB]

Morning guys,

Me and my dp have been together for 3 years. We are both mid 40's and divorced with 2 kids each. We have just moved into together and are in the process of sorting our finances. It's a bit messy.

We both left our previous relationships with substantial debts - 45K me and 62K him. This debt came from our previous relationships. Please no judgement on this. We have both structured the debts to make them as cheap as possible - 0% etc so we are doing what we can.

We are trying to work out our household finances, with a massive priority on paying off the debt. We do have the option of remortgaging, however I am not comfortable with turning unsecured debt into secured. I have done a budget to include all of our livings costs, but no debt payment. This shows how much we have left after all of the living costs are paid. I am struggling to work out how much we need to throw at the debt, and how much we should allow ourselves to 'live a little.

I take home £3019
dp takes home £3258
Total - £6277

Mortgage - £797
Gas/elec - £287 ( cheapest as I could get it)
Water - £42
Home ins - £31
Car ins x2 - £73
Council tax - £142
Phone/internet/sky- £69
Food - £400 ( trying to stick to this)
Kids activities/clubs - £200
Mobile phones X 4 - £127
Car - £198
Petrol/diesel - £280
Birthdays/Christmas/random stuff - £150
Pet insurance - £14
Boiler savings - £200

Total - £3010

money left for debts and 'life' - £3267
Our joint debt payments ( minimums) are around £1500 so this leaves £1767 for additional debt repayments/life

Please can I ask for no judgement on the debt. We have both dealt with the guilt and shame of it, but now we have accepted that we are where we are, and we just have to get on with sorting it.

How much of the £1767 would you allow yourself for fun, and how much for extra day payment?

Thanks in advance

I agree with keeping the debt separate. Have separate accounts and a joint account for the joint expenditure which you both pay into. Debt should be paid from your separate accounts and finances only merged when you are debt free.

And I think it would be better to think in terms of how long would it take to pay off the debt based on your interest rates- if you have 0% deals for three years - that is very different from having it for 12 months. So I would want to model some scenarios to see what was realistic. Avoid interest like the plague - it is hugely expensive.

Definitely swap your phones for SIM only (only about £24 for four cards) and maybe do a more detailed budget to include discretionary spending.

This is what i would do

to try and clear debt as quick as possible

yes 3yrs sounds forever but in the long run or things it isn’t

you both have same spending money

take it out cash and once gone that it’s for the month

and yes pay your own debt off each

don’t join them or pay his off first incase you split

Would have 2 months with v little fun money, eg £100 and then the third month an allowance of £750. Cycle this throughout the year and you can make plans to do fun things but just not yet.

I would set myself little targets and when l reach a goal- say the first one could be to get to under £100k, then have a little treat of a day out or a meal out. Then again when it is under £95k and so on. Almost like being on a diet - gives you little things to aim towards.
Good luck op.

I'd do half on the debt. The rest can be "fun" money though it will cover things like your MOT, eye tests, dentist fees, school uniforms, kids clothes, school trips etc that are going to crop up and don't seem to be in your budget. Make a note of them as they come up so you get a true picture of your outgoings over the year and review your budget every month to adjust so in future you can spread those costs across the year. Anything left at the end of the month can be swept into savings and if you find it happening regularly you could increase your debt repayments.

Becoming obsessive about something is rarely positive.