Very tricky finances- need some advice/reassurance/anything really!!

[teaandbiscitz]

Morning,

I have been awake most of the night thinking about our financial position. It’s on my mind constantly.
We both work full time as teachers with senior roles. We are a family of 4 with 2 DC’s, both early teens. We live in a fairly modest house, but in a part of the country that isn’t cheap.

We have found ourselves in a very difficult set of financial circumstances and I feel that it is all I am thinking about. I can’t go into massive detail, however early last year we were involved in a legal dispute that ended up with us incurring massive legal fees. We are where we are with this and we have accepted the decision, however it left us with a massive amount of money to pay. It was money that we didn’t have.

At that point we were paying off some debt from house renovations, however our money situation was fine and we were doing ok.

I feel as though we are not in a situation where were are just working working working to get out of this situation. On top of our day jobs, we are both doing private tuition and exam marking. We have cancelled all non-essential spends such as our Sky Package, amazon etc. Mobile phones are on sim only and our only holiday has been a week in my in laws holiday home in Devon ( for free!!)
Re-mortgaging isn’t an option as we failed on affordability, and in reality, we don’t want to put our house at risk.

This situation will ease in 2.5 years when some of the debt will be paid off, but that feels like an age away.

Here is our current situation
My income (net) – 2819
DH income (net) – 4049
Income from tutoring/marking etc – 450 on average
Total net income - £7318

Mortgage- £1476 this is fixed for 3 more years
Council tax - £146
Gas and elec (dual) - £195
Water - £34
House insurance – 38
Life insurance - £48
TV licence - £14 ( I think?)
Internet and phone - £27
4 X sim only deals - £48
Food -£600 – this is something that I try to control as much as I can
Christmas/birthdays - £100 – this goes into a Monzo account. Not sure if we have got this right though
Petrol - £160. This is for my ‘old’ car. DH has salari sacrifice car.
Pet costs - £60. This includes insurance, food etc
Union fees - £65 – this is for both of us
National trust - £15 We use this A LOT
Clothes/uniform/haircuts/prescriptions - £100 – again this goes into Monzo. Might not be enough
Fun - £150 – we try to do a couple of ‘fun’ things each month. I think I would go mad if we didn’t
Total - £3291 – just to survive

Debts
We have tried to structure the debt to make it as cheap as possible. It is spread across loans and credit cards. We try to shift the cards to 0% when we need to, however this is becoming more and more difficult.
Our monthly debt payments come to £2400. This sickens me, however I have to remind myself that It’s only going to be for 3ish years.
So….
Total living costs + debts
3291 + 2400 = £5691. This feels like a scary amount of money to have to find each month.
I know that this means that we have surplus, but I am conscious that this is partly due to the extra work that we are doing. I also worry that things will continue to get more expensive for the next 3 years.

DH thinks that I am overthinking it all and we just need to get on with it and not think too much about the big numbers.

I guess I am just looking for people comments/suggestions/reassurance!!

You have a fair amount left over after bills/debt! Is this a joke thread?

If it's not you need to see how privileged you really are! Most people can't afford
To keep the lights on and have to use food banks!

What are you doing with the £1627? Can any of that go towards getting the debt down faster?

You think you don't know anyone in this situation, but remember, no one knows you're in this situation.
It's no one's business but yours. It's clearly causing you a lot of distress. The idea of speaking with a financial advisor is good. It may help you gain perspective.
You should consider putting the remaining cash into the debt each month, or if it's the extra working that's the issue, then stop doing that to give yourself breathing room, you can afford to.

DH thinks that I am overthinking it all and we just need to get on with it and not think too much about the big numbers

In the nicest possible way, he's right. You've posted about this a few times over the last few months and nothing's changed, because you're currently in 'the slog' where you just have to get on with it and look forward to being debt free in a few years time.

Stick to your budget
Minimise all costs incl the interest charged on your debt
Keep plugging away at it all, concentrating on the highest interest debt first
Allow a little for treats/nice things but remember that the debt is priority and time will pass quickly
Forget about the big scary number and what others think
Look forward to being debt free, being able to save money and spend more freely at the same time.

You're going to be ok. I think the issue is (apart from whatever the legal bill is from) that you have a good joint income, but you don't have very much to show for it, because you're 'wasting' £2400 per month paying off the debt. You just need to get on with it, brighter days are ahead.

Hey OP. Legal fees really suck. I have been stuck in a lengthly legal battle in high court for approx 7 years, now ended but have accrued legal fees of approx 70k not counting about 25-30k I have already had to pay for. Throw this in the mix with a cheating exH, shared custody and separation, having to leave the marital home and a job I loved to have to accommodate my childcare needs in another way.
Has it been easy? Fuck no. I have to now sell a house I inherited (legal issue was due to inheritance issues) to pay for my legal fees.
I am NHS and wages for a long time were not over 2k a month ( now they are rarely over 2.5k a month) and have had to pay that on my own.
I ended up with more debt after I left exH as I could not work the hours I needed to meet the bills I had coming out that I had from living a previous life with 2 wages coming in.
OP it sucks knowing that you have all this money to pay out for legal fees and yes it looks like you have nothing to show for it.......however there is always light at the end of the tunnel.
You have good jobs and two wages coming in.
Roof over your head and food on the table.
I get it that it's stress and shit buy every payment you make is less to pay off. Every trip or item you go without now, allows you to knock the debt on the head quicker.
I just saw it as short term pain (excuse my French but I mean yes fucking awful awful heart squeezing pain) long term gain.
You are good to have a plan in place and you need to grin and bear it til you get to the other side of it.
You don't have anything to be ashamed about. Everyone has stuff going on behind closed doors, you included. You don't need to advertise your issues but it does help to have some close family members or friends in the loop so you can vent now and again.
I haven't written this as a pity party or to say....my life/situation was worse than yours. Please don't take it like that. I just mean that despite everything I have gone through, I'm nearly at the end of my debt journey as a result of legal fees, and once I get them paid, I can truly have my life back. It really makes you appreciate the small things when that's all you can temporarily look forward to.
I just see it as its only money and you can make more. As long as you have your health, your kids are OK and somewhere to call home, you will get there.
I hope you are OK OP. Keep talking to your OH, and keep your chin up. You will get there and it will sort out. You are well on the road x take care x

It sounds really difficult OP. I knew you were going to get some hate when I saw your net income but I'd feel very stressed in your situation too.

£1600 left means that savings and covering unexpected expenses is manageable but not without constantly budgeting and always thinking about money so I understand why you're feeling down about it.

On the bright side, it's temporary, you have a plan and you'll have a lot of disposable income in a few years so keep going and you'll get there!

I'd be looking to pay down the debt quicker too, using whatever excess you have.

I also think you can shave a bit off your food bill.

I'd be getting rid of the pet and halving the fun money as well.

Getting rid of the pet???? Seriously??

Yeah 100%. If I was in 87k of debt the pet would be going.

I completely empathise with the shame and burden feelings of having debt.

Personally, I would throw everything I could at the debt to clear it asap. Forget saving, for now. And maybe get rid of the pets and union memberships. Imagine how you’re going to feel when the debt isn’t hanging over you every day.

@westisbest1982 I really wouldn't get rid of the union memberships. Not in teaching, no way. That'd be the last thing I'd cut OP.

The OP has plenty of income to pay the debt off reasonably quickly without living a particularly frugal life and it's certainly not necessary to make any drastic cuts like 'getting rid' of a pet.

What are people suggesting? Rescues are bursting at the seams with pets that people have given up because they can't afford to feed them and pay vet bills. It's ridiculous to suggest that the OP adds to their burden.

I’m a retired teacher and live alone. My teacher’s pension and state pension combined are about the same as your monthly surplus! I don’t have a mortgage to pay, but all other household expenses have to be paid from this income and unlike you the situation is never going to improve.
YABVU

I'm a bit confused as you have £1.6k unaccounted for? That is a lot of money to have spare after essentials. I appreciate you will be wanting to save for an emergency fund but can you increase your debt payments at all, so you're debt free sooner? If are really finding it stressful I'd suggest speaking to your GP or a debt charity.

We will have to agree to disagree.

87k of debt is a drastic amount, which is why I suggest getting rid of the pet.

Good luck with it OP.

I appreciate everyone's comments. Getting rid of the pets is not an option. They are part of our family and I would be totally lost without them

You say you’ve “got nothing to show” after your expenses. What do you mean by this? It seems you have a home which you can afford to run, two cars, “fun” activities every month and secure employment. Your biggest debt is from legal action which you lost. I hear a lot of bitterness and regret from you about that. I think you might be better directing your energies at dealing with that. You do not have financial difficulties if you are saving each month. (And for what it’s worth you should be using any surplus to pay down the debt as quick as possible because the interest on that will be more than you can earn in a savings account, and you need to anticipate a hike in your mortgage rate at the end of the fixed term).

You should never be a pet owner then. What a vile thing to do

You say dispute but don't mention other children.

So it would appear dispute, you lost.

Have the fees been properly assessed.

For example, if you have lost and been asked to pay the other side expenses have these been audited and approved as accurate.

It does seem a rather unusual situation. I don't practice now but was scotland. I would never have allowed fees to reach such a level ever. So have to assume expenses award, yet even that seems high.

Why are people talking about getting rid of the pets when the OP is saving £1600 pm 😳

looking at your budget, the power/gas and food bill seem a little high to me, you could probably make cuts there if you wanted.

you do need savings, do you currently have any? if not i'd save all that spare money especially with an old car and boiler. If you have some savings, you should use some of your spare to overpay your debts

I understand the desire for a buffer of savings in case of issues but you need to be using that £1600/month surplus to pay off your debt quicker.

Build a savings buffer of say 3 months expenses, recommendation is at least 6 but get 3 months worth and then add smaller amounts each month if you feel you have to.

This is what I would do:
You need £3300 to survive each month (ignoring debt), with £1600 surplus each month it will take 2 months to save a 1 month buffer I.e. £1600x2 = £3200. You've probably already saved at least 2 months worth by now and maybe more. Once you have £10k (6months to get this amount) in savings park it, this pot can be used for boiler, car etc if needed.

Then put every single spare pound towards your debt. Pay off the highest interest first. Once the highest interest amount is paid off, move to the next highest and so on. Eyes on the prize. Reduce where you can on treats, food etc. it's rough but loads of people are in far worse positions.

You don't know anyone else in this amount of debt but no one knows you are either.

Don't get rid of your pets. That's a cruel thing to do and the £60 a month on them is the least of your worries. Get rid of treats, days out, holidays etc ahead of pets.

I think you are a pretty good position. Personally I wouldn't change anything, except perhaps use a bit of that 1.6k for some more fun.

The debt will go eventually, you are not accruing more debt and you have stable jobs.

If you think you have nothing to show then start comparing your life to those below you rather than above. You have every mark of success. Jobs, a house, cars... The rest is just fluff.

Hi OP, as a worrier I completely understand where you're coming from on this. It sounds like you and your husband have got things under control. The only few bits of advice I have are - definitely save a good buffer. 6 months worth of accessible money is recommended and it will make you feel less twitchy about something going wrong, Once you have that saved then you can put extra money into paying down the debt. Don't turn unsecured debt (credit cards, bank loans) into secured debt (extending your mortgage). Finally, I would say make sure you spend some of your spare money on things which bring you and your family pleasure - clubs, holidays, activities. You could benefit from counselling. Good luck!