Bit of a philosophical question for this time in the morning. You will be please to know that I am not about to launch into a discussion of life the universe and everything but instead an explanation as to how two sensible people with a reasonable income, without profligate spending habits could have let themselves get into such a financial hole…we planned it.
Yes our financial situation is a result of planned agreed actions, and one or two unforeseen but predictable events.
Two years ago we bought this house, despite the fact it was far too small for 2 households to live in. We put down just over a 10% deposit; obtained a moderate mortgage, well within our incomes, fixed for 5 years. Then 8 months later after more budgeting and planning we moved everything we owned into the garage whilst a very nice man called Chris took the back and front off our house.
Our extension was paid for by the money Husband had left over from selling his house, the sale of an endowment policy (which we had been planning to use in 2011 for a family world trip) and 2.5 years of child benefit. About a month into the build Husband accepted a voluntary redundancy offer – seemed sensible to go now rather than to wait until they finally moved the rest of the office to Poland (or Milton Keynes). Husband concentrated on project managing, ensuring we stuck to the budget.
It wasn’t that we went over the budget really that caused the problem. We redid our sums and estimated that we could afford a bank loan to deal with most of the cost overruns and tighten our belts a bit. The problem was that just as we finished the build the costs of everything else started going up, specifically diesel which, when you have a daily commute of 134 miles, causes a big hole in your carefully planned budget. Add to that the cost of electricity, gas and food and unexpected problems such as the clutch pedal breaking one day in the middle of the commute and you suddenly find that one salary no longer covers the bills and each month the gap gets wider and wider.
We took what action we could. Kept our heads vaguely above water with the occasional sale of a big value item (husband’s motorbike, camera equipment). I periodically sold books through Amazon, switched suppliers, changed insurers, kept an eye on the grocery budget – but we kept sinking. I arranged with my employers to work 2 days in an office closer to home and asked to go back full time whilst Husband looked for employment. Unfortunately it took 9 months longer than anticipated for Husband to find a new job and it took 3 months for employers to agree to me going back to full time employment.
