The Vault with Financielle - Should I Pay Off My Ex’s Debt? | The Vault Episode 33

Episode Date: October 9, 2024

Send us a textWelcome to The Vault with Financielle. In Episode 33 of The Vault, we discuss this week’s controversial opinion, “Your engagement ring should be 3 months' salary, minimum”, before diving into our listener dilemmas: The hidden costs of buying my first home 🏡“Should I repay my ex husband’s debt?” 💸 We celebrate an awesome win from a listener who got a refund and proudly added it straight into her emergency fund instead of spending it - proof of some serious growth! 🤩🌱If you’d like to share your money win, head to the community in the Financielle app or email [e-mail] your (totally anonymous) money dilemmas to [e-mail] and we may feature yours on a future episode 💌Thank you to our partner PensionBee, who are on a mission to help you build pension confidence and create a world where everyone can enjoy a happy retirement. With PensionBee you can combine, contribute and withdraw online. Join over 252,000 customers saving with PensionBee. When investing, your capital is at risk.Sign up and combine your pensions here 🐝Chapters:00:00 Introduction04:09 Welcome to The Vault05:21 Controversial Opinion: "Your engagement ring should be 3 months' salary, minimum" 💍17:33 Dilemma 1: The hidden costs of buying my first home 🏡31:36 Community win 32:58 Dilemma 2: “Should I repay my ex husband’s debt?” 💸43:56 Final ThoughtsThe Vault is an entertaining yet thought provoking podcast that answers our community’s dilemmas and confessions surrounding women and money.Visit https://www.financielle.com to download our app.Watch the podcast on YouTube.Follow Financielle for more:▶︎ TikTok▶︎ InstagramAbout Financielle:Financielle is a female focussed finance app helping women to take back control of their money, ditch debt, increase savings and invest in their future.Recorded and Produced by Liverpool Podcast Studios▶︎ Web ▶︎ Instagram▶︎ LinkedIn

It's redeemable, but I didn't want to have £60 worth of matte products. Maybe when I was 16, but not now. Can we talk about inflation though as well? Because it definitely is probably fair. It used to be £25. I know, I know. But that was funny. How long ago was that?

Oh, it was a steal. You used to go and get our makeup done for £25 and you'd get £25 worth of product, which would be a foundation and a lip gloss probably. I think just go to Charlotte, to her counter. Sorry, Charlotte, if you're listening. But be like, oh, I really would like to try this foundation could you

well I was trying this I was thinking I might dip round to all the things and be like can you just have a little play

in my eyes I was such a it's not good for the same imagine you go to one counter for one eye and one counter

for another yeah no I'll be like Bobby Brown can you do my eyes oh Charlotte Toby can I try this foundation and I'll come out, Bobby Brown, can you do my eyes? Ooh, Charlotte Tilbury, can I try this foundation? But I'll come out

and be fully done for free. Every day and they'll never know. I know. How many people try that on? You've fooled them. No. Probably good. I'm too British.

I'll be like, let me pay you 300 pounds. It is scary how, I think I might do this one time, work out how much, because I'm not a big beauty spender. In fact, my mum buys it for me and I just pay her, but in she goes I don't need anything she's a saucer and so I don't

I need to work out how much I probably spend on it because I don't think we plan for it like my foundation runs out I get annoyed I'm like oh I'm gonna have to get another one I have a hair and beauty thinking fund and I'll probably I can tell if something's running out. So in my budget that month, I'll just top it up. I think I'm scared. That fund for me is exclusively hair. Mine is hair. Yeah.

Mine, my husband's and family's hair. It's not hair and beauty. I'll just DIY everything. I think it comes out grocery. We'll be like, I'm not paying for this. Like what? Give me an example. Eyebrows, we'll never pay for it.

Like lashes, I'll tint them myself. Oh, you won't go to a beautician. You'll just pack it at home. will be like I'm not paying for this like what give me an example eyebrows will never pay for it like lashes I'll tint them myself oh you won't go to a beautician you'll just pack it at home yeah but even buying the product does it come out of grocery

because I think mine does yeah yeah because they've got like I'll only literally buy like Maybelline is the most expensive product like oh really

brand I'll probably buy from because I just hate buying makeup I know we talked about this the other week but it is a trigger for a lot of the community when they write in. They're like,

oh, everyone always says everything runs out at once. It does. And I bought, the last foundation that I bought is a shade too dark. So I'm just going to go with it.

I mean, I'm already orange anyway, so I'm going to get more orange as the winter goes on. Buy a cheap lighter one and play paint yeah that's a good idea I mix

I mix depending on what I've got left yeah I just have to fake tan extreme I'm used to that it's fine what's up this isn't natural

what do you mean she never leaves the house don't show her hands is she ever going to get tan she sat on her hands for a reason yeah they might be

different colour to her face I have a lot of admiration for fake town Thursday girls no you're my idols fake town Friday working from home girls

there you go she's like that is that why you're not on a camera on a Friday put your camera on please nope marinating full marination

mode teeth whitening strips on you don't have to sleep in it there's nothing once then hair's in a

dressing gown cord yeah literally I've seen it she has actually come on a call with a dressing gown cord

this Friday get wet for like hours after yeah so it's my good excuse I'm like Alex can you do those dishes can you just

stir that it's like being one of the m Alex can you do those dishes can you just stir that it's like being one of the mermaids on or the HBO just on water yeah you can't touch water yeah it's a really good excuse fake time Friday yeah okay I'll send you a picture on Friday this winter well I'm gonna be covered up more I'm not fake tanning anywhere just makes you feel so good she can't wear a vest top because you'll only faked out the neck you'll only see my hands but you'll only see my hands and they always go wrong so nothing is getting

faked hand I'm sorry I'm going swimming so I feel good when I got my swimming costume on for all the I am not 60 plus year olds

that go to my gym enjoy this tan ladies guys this Bondi sans for you oh my god we didn't talk about tea and weather so we did quite well welcome to the vault with financial this is a safe space where we talk all things life and money and no topics are off limits

hello everybody hello how are we doing today oh god i'm good i feel like the problem with the vault and pod day is the pre-chat should be recorded because you guys listening we want to include you in all the chat and the chat like we are we so often have to go no no no wait wait save it wait for it I mean we've got we've got Calvin our producer here who has been on a massive money journey haven't you you, Calvin? Yeah. And he has been vicariously learning through you guys and through us

and he is going to get to the end of this month with extra money to smash his goals. Yeah. Well done, Calvin, everyone. Well done. Yeah.

You are. You should be. You should be so proud of yourself. It's no mean feat to get your money shipped together. It's really not. But so much chat is before we get

on the microphone so we'll get better guys at sharing stuff like that with you so obviously well done Calvin can you send in

your win please Calvin do I need to email it or can I put it in the app put it in the app

well done okay I've got a controversial opinion for everybody here and it's something that we've not talked about before so i'm very excited to hear your opinions ready yes your engagement ring should be three months salary minimum this is such an old school

money opinion when it comes to engagement rings and one that probably was made up by an engagement ring company it was it was De Beers oh did you know that no did you know that no yes this was made up entirely so apparently people have been giving rings for years like like Roman times like it was a thing where they're presumably gold and stuff De Beers like I don't remember like 1930s, 1940s, came up with this concept that a diamond is forever, which then later turned into the song.

And obviously because they last and they last forever and the relationship's forever if you have one. But it used to be one month and then they upped it to two and then three. So it was completely a marketing ploy

to pressure men into feeling like they had to spend a certain amount of money to you know justify a proposal but I remember when you know being in my teens or chatting to mum about it me like how much should someone spend on an engagement ring and it was like oh yeah about three months just like everyone says that I think if you googled it it would say traditionally people three months salary three months salary of the man or woman that's buying it you've just said that like pressure for men they deserve some pressure somewhere it's about time it's about time maybe that's why some of them might have to take so long to decide to do it because three months

like imagine if this was flipped right i'm on the man's side if you're in a male female relationship with a male's buying the ring if that was me and i had to save up for a couple who might be like should we just not there should we go on holiday three months salary when you when you are navigating maybe buying a home maybe living in a cost of living crisis and you have to suddenly find you've got children it's and you like we could be spending that on a family holiday together or education or whatever it might be and you're like i'm putting a spending that on a family holiday together or education or whatever it might be and you're like, I'm putting a big wedge of money. And we tell people,

if you can or you want to, to join finances sometimes. How do you navigate that when you're trying to save secretly for an engagement ring? It's impossible. Do you ever think about that if you're doing finances?

Yeah. What are you putting this money away for? And you're trying to like, navigate. The relationship's over. You're trying to navigate big life goals together and then this person's possibly looking distracted

possibly looking like they're not managing the money properly because they're siphoning money off for a very good reason but they want to keep it a surprise

I've never really thought about how you would navigate that for me it's when you see the celebrities with the million pound rings and I'm like definitely

like the idea that my finger would get chopped off by a rubber is forefront of my mind I'd be so scared I think I would not want to have if I knew if you knew that your partner was saving up and it was a three-month salary now knowing what I know and being in a good financial place I probably would be like I actually don't want you to spend that much really and obviously the industry puts so much pressure on you so for example like a a diamond from tiffany which is like you know what amazing marketing you know dreamy situation this like

for like money in a not tiffany you get much bigger diamond which aesthetically looks bigger but if you want a tiffany one you know for the same size diamond it's a lot more money and then i love actually nowadays you've seen a lot more ethical diamonds or non-diamonds that look like diamonds because really what do we all know and is it really important

yeah I think I would get like a vintage one probably just because of diamond mining and stuff I'd be scared it would be like haunted though oh god obviously

or like it'd be cursed I mean from a divorce the big thing is like all this saving and all this planning and a couple of things have happened more recently holly yours broke yeah and how many years did you not have it on oh well it actually

started when covid hit and we're in the middle of the ocean on a cruise ship we were like the last titanic it's giving i love how my brain went i'm like kardashian in the water and you're like titanic and it was when there was loads of like hand like you have to wash your hand so much I love how my brain went. I'm like, God, I'm shearing in the water. And you're like, Titanic. And it was when there was loads of like hand, like you have to wash your hands so much because of COVID. Because it was like literally upon us. Sing happy birthday. Yeah.

And they had like hand gel was everywhere. And it was starting to, you could see it was starting to crack a little bit. And then the minute I got home, the advice was not to wear jewellery because it carries germs. I vividly remember this. I took it off and then I didn't wear it again for about three years and I went to wear it again and it was broken and had to pay for it tried to get the insurance thank you did not come out for me thank you insurance so I had to pay for it myself and it was a big like I don't want to spend that much money on it it just didn't seem that important anymore I'm glad I've done it now I've not worn it for three years yeah and then our friends who's and recently lost hers in the park i mean we're

still looking so if anyone's in our village and metal detectors and stuff honestly like everyone rallied around um and helped to try and find a look for it but basically she'd got a newer one for her 30th and she kept the older one on her beautiful chain and was sorting the kids and it's obviously dropped off somewhere and like they're so sentimental that you know for her I imagine I'm speaking

for you Suzanne but it's not the amount of money that was spent on it it was the ring he proposed with and it's memories and it's like an element it's kind of priceless and I don't think

she sat there thinking oh that was three months salary back in kind of priceless and I don't think she sat there thinking oh that was three months salary back in 20 years ago she didn't even mention that it was expensive no so years later you know

if you were ever in a position where you'd got an engagement ring and then you unfortunately lose it and hopefully I'm still confident

someone somewhere is going to put it on our group chat driving through the village you could just see kids like metal detectors over their shoulder like everyone will be

out this weekend but hopefully for the person that may think oh I hope my partner proposes and I hope she or he spends a lot of money

on it so that I feel worthy I hope you don't think that and you actually think that's not what's important just the idea that someone gave you a gift and asked you to marry them

is a wonderful thing and it's it's more like years later it'll be all about the sentimental value not the splash cast I mean

the other controversial side of it is is like if it was not it's getting it wrong is sometimes the bigger thing

than the money spent like what do you do have you ever had a situation where someone's got a ring and you'll go just a quick one Laura here if you're wanting

to take back control of your money ditch debt make better decisions and build wealth for the future a ring and you'll go. Just a quick one, Laura here. If you're wanting to take back control of your money, ditch debt, make better decisions and build wealth for the future, the Financial app is for you. With Financial, you can track your spending on the go, hit your money goals faster and create a realistic budget that you can actually stick to. Not to mention, you'll be part of an exclusive money community who share tips offer support and celebrate your successes along the way click the link in the description to download financial and start your free trial now this is your sign to take control of your money today okay i'm done

let's go back to the vault that's not what she wants oh that's lovely oh it's really nice. Oh, that's lovely. Oh, it's really nice. Oh, you didn't spend three bucks. Some exchange policy on that now. What would you say? Oh, you can't say anything. You've got like the fugliest ring. You can't say anything. I know, but then do you want to wear it forever? What if it doesn't, what if you're like a gold girl?

And it's silver with blue all the other way around. It's a great, don't you think it's a great relationship test yeah so for example my husband mr indecisive um proposed or kind of proposed with a um thomas sarbo placeholder oh did you get a placeholder because he was wanting to make sure i would say that's a good challenge picked what I would like for my actual one. So he got a placeholder ring. That's a really good idea. That takes pressure off a bit as well. It was like 50 quid, 60 quid.

I thought it was a really good idea. Neil got mine made, but the guy made it in the wrong shape. So he went to pick it up and he was like ready to propose literally that weekend. And Neil literally opened the box and he was like, what is that? And the guy was like, what do you mean? He was like, it was meant to be square or whatever it was and it's round but I kept it.

I didn't want it to be different. Yeah. I loved it just the way it was. I kind of liked the story behind it and stuff. Oh my God. I think I would like to see people on TikTok

doing this where they actually get the ring like buy it or like get it made whatever together and then they know that they're just going to get proposed to

in that like year so you know what the ring is coming yeah because I don't think I would like the surprise of the ring you're too worried it would be wrong Alex has got good taste though well I've added him to my Pinterest board so hopefully he gets the hint add him to a few of your favourite designers mailing lists

and they're going to suddenly come through but i think more and more nowadays it's different if it was a we've only known each other a couple of months and i'm suddenly going to propose and it's all so done whereas actually you know if we are talking about marriage and if we're talking about things together we don't have to pretend that oh but i bet you're not gonna buy a ring oh look something you bought a ring like we're grown-ups you talk surely you talk about it it's like we're ready I don't know we were watching we went watching Joanne McNally the other day a comedy show and one of like in one of her jokes in the stand-up set was about the girls that she went you know

the girls that are on Instagram and they go while you were at home watching below deck i was saying yes in the bahamas she was like i fucking hate those yes girls with the ring like this she's like the fingers like dislocating me just so happy when she was what i thought about when she was saying that was it's a really weird thing like what's the right response when someone proposes to you so the fact that someone gets down on one knee and you're like, oh, yeah. She said, I hate it. They're so surprised.

She was like, you've been planning this for like six months. The drone. Have you seen the girls on TikTok? And it's like, right. I don't want my man to be like, they're like,

straight back. It's icky. Right on your knees. Did you train him? like they're like straight back it's right on your knees and it's like did you do training you want none of this like like

full choreography yeah strength training yeah because it's all about the picture I mean yeah this is not even about

it's just about yeah all the lads reverse lunging in the gym now I know why but even there i mean the molly may iconic ibiza proposal yeah but now oh god yeah he's not still on the home page guys it was great content insane so shocked okay so three months umvert yeah it's irrelevant yeah irrelevant we say it's personal yeah yeah

completely and listen if you if this is like younger marriage other stuff's way more important it's different if um you have like a big disposable income and you'd like to gift something um and if you don't want something like yeah we know a few people like suzanne that's done the whatever was the appropriate thing to do at the time and then they've been more financially well And if you're a man, do you not want something like this? We know a few people like Suzanne that's done the, whatever was the appropriate thing to do at the time. And then if they've been more financially well into the future, they then maybe pick one together. I think that's quite nice. Every 10 years.

Oh. You're backing you and Alex, aren't you? Every 10 years. Get one new diamond. I just remember some... Oh gosh. diamond I just remember some someone in mum's life one gets upgrades every five years or something and she was always quite oh another ring like because she I need to know I can't tell you it's no because she yeah I don't think they'd listen but it is that I don't want to be offensive especially if you've done this as

well but about like I think never liked the first one and insists on five-year upgrades oh my god that's a bit too extra I'd rather have the cash yeah yeah give me an envelope like an appearance bonus do you know like with football when you hit 20 appearances you're like right testimonial yeah like a big holiday yeah every five years yeah instead done okay dilemma number one the hidden costs of buying my first home hi ladies i hope you're well i'm 24 and two years ago started my own business things are going really well and i'm enjoying myself more than I ever did working for someone else. I'm currently living with my mum but I've been asked to move out. I assumed I would be renting but looking at flats in the area I want

to move to I've realised that I will have enough money for a deposit and some left over for any fees involved. My mortgage would be quite small, a lot less than rent and the realisation I might be a homeowner all on my own by the time I'm 25 years old is so exciting to me, as I never really thought I would be someone who could have a place to call their own. My question to you is, what are some of the fees that might pop up first time that could derail me from my goals? I appreciate you probably won't be able to give numbers and exact costs, but averages or ballpark figures and any so-called hidden costs that I might come across would be really handy to know about. I mean, nailing it.

First of all. Insane. Oh, I might just buy my home at 24, 25. That's so good. Not to be underestimated. It's so good that you've been putting that away so you're ready yeah because it sounds like it wasn't it's not a plan so now i'm gonna start saving up for a home yeah and the the fact that she has been doing that and she's been she doesn't say it controversially

but as you know she now has to move out she She has options. I love her. She's gone, oh, I can actually buy. So let's go, let's start at the very, very beginning. So you need a house deposit. So you'll be working out probably the higher deposit you put down, the better rate that you get. And this is all about securing the best mortgage rate for you. So the other thing to think about is we don't like talking about credit scores. Remember, it's an absolute bullshit industry, but you have a credit report and the credit bureaus like Equifax and some of the others do collect data on you and the banks collect data on you to be able to work out, are you a good, a good bet for us? Like if we lend you £300,000, are you going to pay us back? And so you really have to get into their position and think, okay, what makes me look like a reliable lender? So

sometimes it is the fact that you've had credit and paid it off, but it's not essential, but it can help. But other things like, you know, are you registered at your home address on any bills? Have you had like any phones or anything that could attach to that property, utility bills? Because if you have been living in at home

and you've not been on those bills, you're not building up that kind of- Like historical data. Historical data, absolutely. Things like electoral roll at that house and making sure it doesn't sound like you've shared finances with anyone because sometimes if you haven't they've not been in a great place it can kind of drag you down so making sure that you could do a free credit report so have a look at that and see what it says because that will really help you and then two when you're looking for the right size of house and flat a mortgage company

and an advisor will be really good to run through this with you is looking at what's called affordability so they'll look at your budget in fact i've had people say they've showed their financial budget to their mortgage advisor because they send you this really rubbish spreadsheet or like a physical piece of paper to fill out like we're 20 years old like 20 years ago and they just go oh i've got a financial budget but what that shows is the excess is really important here it's room because if rates went up three four percent like they have done in the past you know five years can your budget take it so that's what they're going to look at that's when we say make sure you try and pay off debt before you buy a home it's for that reason that you've

you've got affordability because if a couple of missed payments and suddenly it can kind of escalate so that'll help you know what size of house or flat you should be looking for because there's one thing looking at what an online calculator says they'll lend you but you need to look at what that looks like in your budget sounds like she's done a bit of that so then you work out what deposit 10 5 is a typical first time buyer starting point but the more you can put in the better rate you're gonna get makes a big difference even like a 12% I've seen people like percentages

make a huge difference you don't do 10 to 15 actually you don't you can do like a 13% and it can make that 3% can make a huge difference

across if you're looking at what average for a first hand buyer probably like a 30 year mortgage maybe at the moment 25 to 30 years make a massive difference

3% can you imagine if I said to my husband we're going to put 13.2% down oh he would die oh my god he would die

he'd be like 10 or 15 it's like on the remote control he'll never stop on an even number apart from a 15 yeah it's going to be

a multiple of 5 it could be a 13 or a 17 crazy stuff absolute serial killers so the but the other thing to bear in mind actually is a good point Holly is term so by stretching the term out you kick the payment down the monthly payment

but it takes so much more interest and so obviously more time but more interest so have a look at those calculators because it's sometimes it's it helps to keep that payment down but actually in year one and two you you virtually pay nothing off your mortgage and it's so annoying. So having a look at all that, because what that does is it gets you the right type of mortgage and tells you what deposit you need.

So then extra things that you look out for, stamp duty the first time buyer, you won't pay it in the UK up to, I think 425K or something like that. So if you're a first time buyer, you don't have to pay stamp duty for the rest of us, we would have to. Then what are the other fees?

So you have solicitors fees um we might have heard the word conveyancer in the uk that's either a solicitor or a conveyancer you don't tend to like it's the same thing sometimes people use a lawyer but you don't necessarily have to especially if it's a simple um conveyance as we call it and that's just the fees to transfer it um you won't pay estate agency fees because you're not selling but someone that does have a home has to pay a fee sometimes that's percentage fee like one percent of the sale price or something um but you won't have to pay that there's like searches and stuff so you'd have to pay that

forms part of your legal fee and again it's hard to tell you how much but have ask potential conveyances and solicitors how much all these different things would be for the type of property you're buying um what else is there before we get to like mortgage advisor but generally they're wrapped up in the mortgage product for your mortgage advisor usually they get a commission from the okay listeners i've got a controversial money opinion from our friends at pension b it's easy to sort out your pension agree disagreeree? Disagree? Hard agree but it really does depend on who your pension provider is. I've had them all. A pale stale male coming into my place of work to talk to me about pensions whilst I daydream about what's for dinner or an annual

statement that drops on the doormat left unopened for months with loads of unhelpful jargon. But in the last couple of years I found PensionBee and all that changed. Yeah, I'm a PensionBee girlie too and I've never looked back. It's so easy to set up. You get your very own UK-based account manager or a beekeeper as they are called, who is on hand to support you. With PensionBee, it's easy to combine, contribute flexibly and withdraw your pension money all in one place. Download the app today to get started or head to pensionb.com for more information. And remember, when investing, your capital is at risk. Mortgage provider. The product that you're purchasing, i.e. the mortgage. Exactly. So you shouldn't usually pay, you might pay a product fee, but even that can be whacked onto the mortgage amount. So if you go to a new bank, for example, and some of them have a product

fee and a lower interest rate, some of them have no product fee, but a higher interest rate, but you can still put the product on the mortgage. It's really like, it's a bit silly, really. So those are all, I can't think of any that come to mind that you would need to think for formal fees to actually get the transaction done. The next bit is that people always forget is like cost to move and then costs to set stuff up.

Yeah, sometimes you need to like pay in advance for um not like internet and stuff but some you will have some providers that want like you to pay before like the minute you move in not like like in advance yeah not the month after you've been there like you actually literally have to pay the minute you take out the product whether it's like internet wi-fi whatever you sometimes can't get away with paying at the end of the month so you have got upfront costs the minute you walk through the door not used to that because she's been at home so like what you know doing a in the financial app you can create a hypothetical budget and it's a really good place to do it because have a look at your council tax council tax is based on um band site

property size and you're in certain bands and if you're in a flat hopefully it would be a smaller one actually sometimes with the flat the service fees, which some of them can be extortionate. And if you're buying, it's a really big thing to look at. Leasehold flats, service fees, there's been a massive scandal around these ones that can just be put up and up and up and up.

And sometimes it makes a flat unsellable. So have a look at service fees. Like there could be 1200 a year, 2000 a year more. And it's to help pay for things like hoovering of the, you know, call areas and the maintenance of the building. Yeah.

And sometimes there's leasehold rules and your conveyancer or solicitor should help you with this, where if like the roof needs replacing, sometimes everyone has to help pay for it. Like it's a really weird scenario. Yeah. Because it's owned by, you all own the flats collectively. So there's not someone else that owns it. So, you know, the lift needs breaking, that comes out of the service charge pot.

So having a little look at that. And ground rent as well. Yeah, ground rent. I used to pay that in my old house. Yeah, it's an older thing. So it's when you have ground rent is something where there's a long leasehold where there is a landowner that owns the ground. And usually it can be small small but I've seen lots

of examples of it being big and sometimes people don't know about paying it and forget and they get a large bill one day we at me and that in our second house we had to pay a ground rent every and every and my husband was like god's sake like annoying yeah it's just like this annoying bill that comes around that we never prepared for like it feels like monopoly do you know I own this house but oh I own this house and you have to pay so some like flexible things that you don't have to do you can hack and things like removal fees so just get all your friends to help you like you don't have it's helpful especially she's not been in a house before so she might not necessarily be moving loads of furniture like couches she's gonna need stuff so then she needs to buy one thing i was thinking when you

move i feel like it's a general thing that you just get absolutely lumped with everything that your family members don't want yeah take this bed it's handy at the start yeah when you don't have anything you're like i need a sofa yeah anyone yeah and actually i think lots of people would advise us right your first one or when you first move into places, there's a tendency to rush and get service on finance or buy things or I want this decorated this colour, I want this decorated this colour and you rush it. And actually moving in and having a bit more of an under-consumption core vibe,

which is let's just like have some mismatched tables and chairs and get stuff in the cupboard. Random crockery and stuff. And slow down and do things bit by bit you know you don't have to furnish your entire room from so tempted you see on tiktok don't you the girls like so i've got this is my pinterest board and i bought all this stuff and then within like six months they're like so i'm refurbishing because they just went in on a trend or whatever yeah literally yeah and then one other thing I was thinking about that isn't like a formal thing is having an emergency fund because she said she's

self-employed and it's the first like and she's single so yeah it's all on her if something's going to go wrong if you can't make your rent this month if business is slow one month it is all on you and nobody else like and you can't arrear on your mortgage so I would recommend having a healthy emergency fund to fall back on yeah and also unfortunately and it is getting better and better because more and more people are becoming self-employed but getting a mortgage as a self-employed person is so frustrating because like the typical rule was two years worth of accounts to be able to earn and tax returns to show that you can like earn a regular level of income um and so the bar's a lot higher a lot of big mortgage companies and banks will just not to show that you can earn a regular level of income. And so the bar's a lot higher.

A lot of big mortgage companies and banks will just not lend unless they have so much confidence or so many years' evidence because it's easier for them to go, no, I can't be bothered. Do you know what I mean? You won't take the risk. You won't take the risk. And so working with a mortgage advisor

when you're self-employed is especially beneficial because they know the lenders that are more likely to lean into it. But to your point, Holly, you know, that mortgage payment is your responsibility and having a good emergency fund. You just don't know. The minute you're that homeowner and you've, you know, bought a property and there's suddenly a leak. It's on you. Oh, that's another one then, insurances.

House insurance. Yeah. Which again, to Holly's point, you pay up front for there. It's not like a renewal one where you can save up for it in a sinking fund. They'll ask you for 200 quid off the back. Don't rely that it'll pay out and everything because they actually don't. Like we've got a big leak in the house at the moment and the plumber was like, nah, they probably won't.

I'm like, why the hell do I pay it? Literally, what do I pay it for? So just be mindful about relying on that bit too much. That's why the insurance is key the emergency fund is hard because the insurance may not pay out but yeah do a pretend budget a moving in budget all the stuff that you'll need for that and then do your what my budget would be when I live there and make sure that you fully are aware of that um and more importantly don't rush into purchasing because there's one thing saying I'm in a position to buy but make sure it's the right one because even if rents are expensive it could buy you a bit of patience. It could be

a hell of a lot cheaper than going to the wrong house. You could test an area that you like and rent for a bit and go I hate this. You might decide you prefer a house over a flat. There's loads of different things so don't necessarily see renting as a waste because as I said when you get your first mortgage if it's a rubbish interest rate and if it's a long term you're actually not paying a lot off anyway so you don't own the house you may as well be paying rent for six months yeah and just test it all out so just because you feel you're in a position where you have to move doesn't mean you have to buy um but well done yeah we're so proud yeah keep us updated also minnie won sorry lifetime ices so she might yeah she might have been doing this already but if she's not

because it didn't sound like she was planning to buy if you've got savings dump four of it immediately into a lifetime ISA

because the government will give you a grant I think you have to hold it for a certain amount of time before you can

get it out maybe depends on time can you only that was the help to buy wasn't that gone now

where you had to use it on the feet like you had to use it in I can't remember there were rules around it where you had to spend it you couldn feet, like you had to use it in... Do you remember? I can't remember.

There were rules around it where you had to spend it. You wouldn't just get the cash back. It would go towards the house purchase or whatever it might be. Interesting. Yeah. Okay, I've got a community win. Growth is getting a refund and putting it straight into my emergency fund.

That's like free money isn't it yeah that is it's so it's exciting when you've got this goal and that's why doing one thing at a time really works because your mind goes immediately to that goal whereas if you're trying to do multiple things where should I put that sometimes you'll see in the community like I'm doing this I'm doing this I'm doing this I'm doing this I've just got a tax refund. Where should I put it? And you're like, no, no. How do you spend it? You should know. You should have an idea.

Yeah, a refund, a refund, like, I'm here for this. Refund, birthday money, tax refund, found money on the street, found money in an old handbag. If you find money on the street, you have to give it to charity because something bad will happen. Just going to put it out there. Lucy, I know it goes to conscience. I mean, listen, who finds money on the street you have to give it to charity because something bad will happen just gonna put it out there lucid i know i mean listen who finds money on the street now we're a cashier society yeah but whenever you come across money if you're working one thing at a time to just quickly move it to there is so exciting whereas yeah it'd be very easy to go or just have the refund back from that mentally pretend you spent it so we've got a free phone in the jeans so i'm gonna buy the jumper if you'd like to send us your win head to the community in the app or email it to

the vault at financial.com okay next dilemma should i repay my ex-husband's debt? Hi Financial. Five years ago, I separated from my husband after being together for eight years. In 2017, he started a business with a friend, despite having no savings or a job at the time. They took out a loan and I acted as a guarantor for his friend's girlfriend so they could use the money for the business. The business repaid some of the debt as agreed until 2020, when the company was liquidated. I didn't hear anything more until now when another company bought their debt files. I'm now being held accountable to repay £ a new rental property, but I'm worried that no one will rent to me due to the default on my credit report. For context, I've already started making repayments to this new company. And over the past four years, I've managed to save £27,000 with the goal of buying my first home.

I'm torn about what to do. Should I use my savings to pay off the £7, pounds in one lump sum or continue making the agreed monthly payments i'm 33 now and this default will stay on my credit report for six years meaning i'll be 39 when it's finally cleared i'm even considering leaving the uk if i can't buy a house in the next year what would you do first of all very trusting yeah to be a guarantor for somebody else we were just talking about it earlier like my gut instinct when someone says about being a guarantor for someone is automatically no all the time and it might not be the right thing but personally for me it's just something that I never want to get involved with but it's not something that you can go back in time on and

it was it might have been the right thing at the right time he was your husband building a business like you were putting you know your trust together and for him to build this business but it's a big commitment to make and it tends to come back and and show its face when you least expect it like she's read it she's worked really hard on this money goal about to press go on it and she's still stuck in the past paying off this debt and they've kind of left the country which is a really frustrating rule that they are not held accountable for this yeah and at least you're not married to him anymore yeah true starting a business with i see this so often like if you need to borrow to start a business to start not to kind of help you with like working capital and debt and stuff like investment for the future. If you to start a business and you've got nothing, you're probably going to struggle in business because you've not got the ability to save up, be disciplined.

So even if you've got a normal job and you have to save money, like if've got a plan like you have to start with something even if it's tiny like you see sometimes people go I started a business on a lot of credit cards what like one millionaire made that work but you don't hear about the people that ended up being made bankrupt or running up loads of debt and so this is really a good thing when someone wants to start a business if they can show that they've even raised some money or pulled some money together that's a reflection of whether it's going to work out or not and this poor person ended up being a guarantor for her ex-husband's business partner's girlfriend so that's alarm bells it's not even your husband at the time that you're able to kind of bank on it's like three times removed and so you think he couldn't have lent money definitely

he probably had really bad money habits alarm bell number one yeah think he couldn't have lent money definitely he probably had really bad money habits a lot of bell number one yeah business partner couldn't lend money a lot it had to be the girlfriend of the business partner always the woman yeah yeah it is yeah and and like I said she's been kind of left with it so let's unpack it so first say for people listening if you're ever put in a position where you're asked to be a guarantor as Holly says really think long and hard about it because it's as if the debt's yours. And I think part of is like, pretend it's yours. If you choose to go ahead and do it, it's your debt. And the relationship breakdown that could happen and the difficult position that you're put in, if they renege on that and the credit impact on you, you have to be prepared

to pay it, which you're now having to do anyway. And that's how guarantors works. The interesting thing here, so that's that. So let's all anyway and that's how guarantors works the interesting thing here so that's that so let's all be mindful of lend like being a guarantor for borrowing that's on such a risky basis it's not just a signature you're not putting your signature to be like I can guarantee this person's going to pay it back no no you are signing it to say this is my debt now yeah and so you have to be prepared to do that so then the the next phase to this is um you can do things with your credit file where you speak to the credit bureaus about it because what seems to have happened here is they've like not contacted you about it so if someone it's

someone else's debt and they've defaulted it defaults on their credit file as guarantor it doesn't default on your credit file until they've made contact with you and said this person can't pay it's now your debt so there's a process that should have happened now you may have been contacted but not have had the money and that's a default so if that's happened that's happened if you haven't been contacted they've not been able to find you they've asked you for payment, you've started paying it straight away and it still appears as a default, that's not correct. So it's worth the effort to work with the credit bureau company

and to be fair, the debt collections company who may have some ability to help with this because if you're paying them, they're very happy. Have a look at that because I would hate for you to have assumed a default and you've actually done everything that was possible. In your power to pay it back. Because it's like I said, it's a guarantor journey. So have a little look at that.

But the third element to this is what you've just said about, you know, do you end up leaving the country as well? You've done amazingly well with building up savings. You know, you obviously presumably want to be able to move into a new rental and move on with your life and maybe in the future buy and having defaults doesn't help. But it's not impossible to move forward with a default on your file and you know people don't necessarily refuse to rent if you have a default on your file in fact sometimes I've seen people offering higher deposits if they came back in the event and said and especially if

you can explain what happened but you can evidence savings and stuff like that I'd be really surprised if it held you back I certainly wouldn't be looking to move the country if you love being here and and yes or default on your credit file for six years like don't look at it every day like as long as it's not holding you back practically and it doesn't sound like it will you know you should live the life that you want to live and on whether you use the savings to pay off the debt in full um i would i would it's a personal thing i would why it is a personal thing to just get it off because it's your debt this thing is not going to go away now sometimes by the way with collections you can offer a settlement yeah you could say i'll do it wasn't actually mine to begin with because i'm really struggling to pick because they'll have bought that for pennies and so you don't expect sometimes to not get it back or take years for that person

to pay it back so if you can say let's agree a settlement i'll give you three you can say i've come into some money yeah um i can decide to use it to pay this debt or not um often they'll want the cash yeah and that is not like a default either on the on your credit it's an agreed reduction of settlement so um there's a few different things to try you don't get do you remember the person that was like my friends bought a car she didn't mean it she was having a moment she didn't need to buy the car no she doesn't she doesn't need that car um can you not? And they were like, yes. She explained. She took a minute to explain.

And I think you can pick up the phone to these companies. And the same person had a credit card debt built up and she rang the company and explained that she downloaded Financial. She could show a budget. She was making means to pay back. Like, could we come up with some sort of plan? And they were really receptive.

So you can but try. You don't actually don't get. Yeah. I just think that you're making monthly payments anyway imagine you'll be able to just keep like so much more money

you're clearly able to save you'll be able to just put more and more money away say she's paying off £300 worth of debt repayments

by putting by having £300 excess that is a lot of that savings can build up very quickly and we've seen that time and time again accepting it's your debt it's it's begrudgingly because it's not yours but the minute you become a guarantor it's your debt so if this was your 7 000 pound credit bill and you had 27 we would be saying enough and we were in that position we would make sure we had a good emergency fund tick you got it we would be saying enough and we were in that position we would make sure we had a good emergency fund tick you got it we would get rid of it because it's gone for your life

it would annoy me oh my god every single month that i just want to say how long is it going to take to pay off that seven thousand pounds like exactly how many payments where it's like front of your mind yeah so you can either have a four year d they were feeling shit about it and getting angry about it every single month that the payment goes out. I can make one payment and be done with it. Yeah. And time's a healer so that you'll just get further and further away from that moment where... Remember that crazy time. Yeah, listen, and some people are in a lot worse position for the level of debt that people have taken on for other people, for failed businesses. It's very, very difficult. So if that's your only,

it's not like your penalty but the price that you have to pay for that relationship it might set you up for the next decisions you make and so you'll feel amazing imagine not having to pay anymore but try and get away with paying less legally ring them up and ask i didn't know that so yeah i think i always especially now it's in collections so to Holly's point even proactive formal credit providers will listen for settlements sometimes they will

negotiate on interest rate or breaks and stuff especially if you've got no other debt they're looking at your file and they're like it's not like she borrows

off this person she's literally got this one debt that she's made a valid attempt every single month to pay down and she's come into money

and we could be done with it now and collections a lot of these people expect to get no payment or to get tiny payments so the fact that someone offers them a payment up front to be done is cash for them yeah they've bought this debt for like pennies on the pound because the first company's gone we're not going to get this back sell it on so the you know a good research it beforehand there's probably scripts and stuff and tips that from

other people that have benefited from it but they if they get half of it back they've done amazing they've expected to get none I said go half but go lower yeah

I've got two grand bonus and I could pay this off today and close it should we do that should we do that Laura's husband would say 500 quid

£20 and I would have to 10 and die Laura would have to all of it plus interest and Carl would be like I'll give you 500 pounds

and we'll shake now and actually he would ring that many times that they'd go fine just take it we'll pay you to leave us alone Carl would come away

with money I want her to let us know how we do whether it's emailing the vault back or community I'm not sure how the dilemma came in Lucy but if we want her to let us know how we do whether it's emailing the vault back or community I'm not sure how the dilemma came in Lucy but if we get them to tell us what you do and you're amazing

because all the others buggered off and you literally nailed it so well done that's all for this episode the vault is now closed just a quick disclaimer the vault is just a chat around life and money topics and we are not giving financial advice