Finances!

[LSA102]

I've been with my partner for ~12 years, 2 kids, married 18months & own a house together. We have a joint account which we put a % of our income into each month to cover mortgage and bills - although with recent costs it doesn't always cover it. We have a good combined income (~£170k ~50:50 split) and rent a room out to bring a bit more in.

Yet our finances are always in a mess! ~10yrs ago he told me he had built up £40k of cc debt. I was obviously annoyed, but we agreed to add it to the mortgage to pay it off. A few years ago his credit cards built up again - although we'd had work done on the house so it was understandable and we extended the mortgage again to cover it. At the time we agreed he would limit to 1 credit card and reduce the limit on it to help keep on top of it.

Since then it turns out he has £20k of debt built up - although doesnt know (/won't tell me) the exact amount - and i've just seen a letter for a different credit card so he's got a second one (at least?!) without telling me! He gets really defensive when I ask him about it. I've suggested we speak to a financial advisor and we go fully joint/transparent on all of our finances but he gets moody and won't talk about it. I don't know what to do?!!

Our mortgage is due for renewal soon and we won't be able to afford the increase, so we've put our house on the market to find something cheaper. (Mortgage is currently £2,500k/month)

I honestly trust he isn't wasting money- rarely goes out, no suspicions of gambling or any other money drains, never buys himself clothes etc. I think he is genuinely paying bills on them but lets them build up without mentioning it to not worry me so I don't know how bad the situation is until it's become an issue. I have no spare cash each month after paying for all the kids clothes/clubs/school trips/lunches etc from my account - to the extent where I often have £10 to last me the final week before payday so it's not like I have money spare/in savings etc while he's paying for everything.

He's quite proud / doesn't like anyone to know he's struggling. He likes to get the round in and be seen to be paying our way. The only time I think he's poor with money is Christmas / birthdays where he leaves it to the last minute then goes and buys too many presents for family that cost more than they need to (whereas I shop for bargains in the run up). Last Christmas I got really frustrated as I opened the 3rd White Company gift set (lovely presents, not ungrateful, but I knew we couldn't/shouldn't be spending that much on things we don't need!)

How do I approach this? Any tips for how to manage it? We don't live an extravagant lifestyle - we really should have more money than we do! We can't even afford a week's camping in this country this summer... :-/

I echo other posters OP- you need to insist that you sit down together and account for all of your in and outgoing, expenditures, debts, credit cards etc. ASAP. That is a huge amount of money to be unaccounted for. It's going somewhere, and sounds far above spending for the odd coffee here or a lunch out there.

Your comment about him being proud and not wanting to be seen struggling is a smokescreen- at best he is being obtuse about the true financial situation.

The MSE spreadsheet is a good place to start.

Also remember that you should be a partnership- his financial activities are negatively impacting the rest of the family. If you are anxious about approaching this, keep in mind that you are doing this on behalf of your children

im not sure you even need to be forensic about this tbh. Do you know roughly what the monthly running costs for the family are?

I say this as we have a similar income to you and I can tot it all up pretty quick in my head - I might be out by £500 or so but with the monthly take home you’re on, that’s not really an issue.

Difference being when I do this I come out with a chunky number left over at the end of the month, which I know we’re mostly piddling away on stupid stuff (as would be proved if I went through statements) but I never come even close to running out of cash, and that’s after chunky savings/pension contributions and a £3k mortgage payment. Unless your kids are in private school, I can’t understand how you’ve got debt, and why you haven’t questioned this long before now.

Thanks for all of your comments & advice. We sat down this morning and went through all of the detail line by line. No dodgy stuff going on, we're just poor at managing our finances (collectively!) and need to budget. We've made a start and will speak to a Financial Advisor for how to consolidate the debt - lots of wasted money on interest currently. And will sit down every month to understand exactly where our money is going!

No offence OP but you've tried the consolidating debt option a few times now....

Theres something amiss here….there’s at least 5k a month going on things you don’t know about PLUS another 20k on a credit card PLUS the previous debt … yet you don’t go on holiday or buy new clothes or spend anything frivolous and it’s just down to poor budgeting? Right ok!!

It sounds like you both are living beyond your means.

Don't consolidate or add it to the mortgage. That would be a huge mistake and you have tried it several times and now you are in a bigger mess. It has literally risked the roof over your head by converting unsecured debt into secured.

You need to budget. Go onto MSE on the DFW forum. It is common for high earners to get into debt. They think because their income is high they can spend what they want. However as the debt spirals more and more of the income goes on debt repayment leaving less to live off.

Go through bank statements and cancel all unnecessary DDs. Limit spending on food and entertainment/clothing etc. use a cheaper supermarket and meal plan.

I know you’ve been through the current stuff - just wanted to check that you’ve been through past details and can account for exactly how the debt built up? As someone whose partner has a gambling addiction I’m likely to see red flags everywhere, but I also know how sneaky a gambling addiction can make otherwise well educated and successful people. Have a good dig around in the past bank statements. Check Credit Karma and Clearscore to make sure there aren’t any other debts.

I really hope you don’t find anything. It just sounds worth checking, from here. 🤞🤞

I agree about not consolidating. That is usually only suitable as a one off last chance solution where you absolutely do not borrow any more money until the original debt is paid off, and with a mortgage, you overpay it so your unsecured debt doesn't end up costing more - 25 years of debt at 5% won't necessarily be cheaper than 5 years of debt at 25% (CBA to work it out but you get the point).

You've already done this twice and it's not worked and each time your mortgage has got bigger and you've still not stayed out of debt.

What makes you think that it will work this time, when you don't seem to have any idea where your money is going? Do you plan on keeping trying this plan until you lose your house?

(Sorry if this sounds harsh, but that's the ultimate consequence at stake here).

Never change an unsecured to a secured debt by adding it to the mortgage. That's bonkers.