Tell me I am doing the right thing

Smurggle

Hiya,
I have only been on this forum a couple of times but I really need some reassurance that I am doing the right thing. I was a student for 10 years and have been earning for 2 years now, my husband also works and we have a little boy who is 20 months. We got ourselves into loads of debt and tried to climb the ladder too quickly. We moved into a lovely house last year (97% mortgage) and really didn't budget very well. Anyway we have loans and overdrafts and credit cards and we are trying to sort it now. We are currently running 2 cars as me and my husband work quite a way from each other, public transport from where we are is lengthy and costly so we are thinking about selling my car (which gets rid of one loan and car expenses) and just doing a really long journey everyday. It means I will hardly ever get to see my baby as our days will be so long and he is looked after at home, I know it is important in the long run but I just need someone to tell me I am doing the right thing by sacrificing time with my son to pay off our debts.

Sorry for the lengthy rant, just need some reassurance I guess.

Cheers everyone

HHH_2

There may be other ways round this as it sounds like you dont really want to sacrifice the time with your son, and who can blame you. everyone on this site has debts and they are good with advice. you will be asked to put up a statement of affairs to see where people can help you make savings. do that first and then if that doesnt free up enough money there may be some other ideas.

Horace

Hi and welcome

Perhaps it would help if you posted your SOA so that the good folks on here will be able to see where you are overspending.

https://www.makesenseofcards.com/soacalc.html

I think that a child's formative years are the most important ones but that's my personal opinion, I cannot make the decision for you as to whether or not you are sacrificing time with your child for a wage. (sorry if this sounds strange but I hope you get my drift).

milliemonster

Hiya smurggle, here is the link to put up your SOA, have a go at filling it in and lets see where we can help

http://www.makesenseofcards.com/

DoWhatULove-LoveWhatUDo

Smurggle, selling your car may be one solution but if you post a SOA the kind people on here will offer lots of potential solutions.

In the meantime all I have based on the snippet of info you have given us is what about running a small old banger? Or sticking up a notice on the board at work about a car share?

Or looking for a job closer to home?

Or paying someone "petrol money" to come and get you at night. there are lots of retired people who wouldn't mind a little cash job for a couple of hours in the afternoon How long is the journey? How much does the public transport cost? If you paid that amount to someone else to drive you would it be enough money and would you get home earlier?

If you paid them a little more, would it be less than running a car?

Time to get the calculator out I think!

GeorgeUK

Have you calculated how much your income would be if you didn't work and were only on benefits? And how much the childcare and traveling costs would reduce by?

It you post up your statement of affairs, others may be able to advise if the budgeting will work when taking all that into account. I read a post a few months ago where the poster was going to give up work to stay with the kids. I'll try to see if i can find it later tonight.

Smurggle

OK so here is my SOA, scary.

Monthly income after tax................ 1072
Partners monthly income after tax....... 1496
Benefits................................ 117
Other income............................ 0
Total monthly income.................... 2685

Monthly Expense Details
Mortgage................................ 765- this is interest only
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 125
Electricity............................. 30
Gas..................................... 40
Oil..................................... 0
Water rates............................. 39
Telephone (land line)................... 0
Mobile phone............................ 30
TV Licence.............................. 11
Satellite/Cable TV...................... 35- this includes line rental, phone, internet and sky
Internet Services....................... 0
Groceries etc. ......................... 240- this includes EVERYTHING inc clothes, toiletries, food etc.
Clothing................................ 0
Petrol/diesel........................... 130
Road tax................................ 12.5
Car Insurance........................... 50
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 500
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 12
Contents insurance...................... 10
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2029.5

Assets
Cash.................................... 0
House value (Gross)..................... 185000
Shares and bonds........................ 0
Car(s).................................. 9500
Other assets............................ 0
Total Assets............................ 194500

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 168000...(765)......5.44
Total secured debts........... 168000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Personal loan..................6750......237.......8.4
Career dev loan................1120......131.......8
Car loan.......................4300......107.......6
overdraft......................1500......25........19
overdraft......................2000......0.........0
credit card....................2000......50........3.9
credit card....................2850......50........0
Total unsecured debts..........20520.....600.......-

Monthly Budget Summary
Total monthly income.................... 2,685
Expenses (including secured debts)....... 2,029.5
Available for debt repayments........... 655.5
Monthly UNsecured debt repayments....... 600
Surplus(deficit if negative)............ 55.5

Personal Balance Sheet Summary
Total assets (things you own)........... 194,500
Total Secured debt...................... -168,000
Total Unsecured debt.................... -20,520
Net Assets.............................. 5,980


Ok there are a couple of things changing very shortly aswell, I have a new job (in the same place) which pays a little better (an extra £60 a month)
However our mortgage deal is ending at the end of the year and will go up to £900 a month, we can't remortgage cheaper as we tried to earlier in the year and our credit score isn't good.
My mum looks after my son in the week at our house so there is a full house during the week.

I have worked it out and we wouldn't be better off if I stayed at home, and my mum would be out of a job. I am 28 and I feel like the world is on my shoulders at the moment. I have finished my PhD, had a baby and become my mum's source of income in the last couple of years- I have stress lines!
Any ideas would be really appreciated, thank you!

GeorgeUK

Council tax............................. 125
If paying over 10 months, can you ask to pay it over 12?

Electricity............................. 30
Gas..................................... 40
Check the comparison sites to see if you are getting a good deal.

Mobile phone............................ 30
PAYG?

Groceries etc. ......................... 240- this includes EVERYTHING inc clothes, toiletries, food etc.
Check the old style board for mael plan ideas. Have you moved down a brand (shops own)

Childcare/nursery....................... 500
Are you paying this to your mother?

With the mortgage increase, you should still be able to manage. Can i ask why your credit score is so poor? Defaults , CCJ's?

You will need to prioritise the payments you are making to the cards and loans. Pay the minimum on everything and anything left over, throw at the debt with the highest APR.

milliemonster

Smurggle, half of your net salary is going on childcare, I appreciate this is probably to your mum but you cannot afford this sum, if you were to put your son into a nursery you would be able to claim most of it back in childcare tax, I'm not saying that is what you should do but I think you may need to renegotiate with your mum how much you pay, even if it's just temporary until you get back on an even keel?

Smurggle

Hiya, I didn't know you could spread council tax over 12 months so I will look at that. The gas and elecrisity were changed to the best deal recently, the mobile phone is a contract but it is a cahsbacl one so hopefully is should be reimbursed later in the year.

The credit score was a shock to me as well, basically I thought a couple of months ago that I could put our debts on the mortgage (not very clever) and we were turned down for a mortgage and so what do I do? try another lender and they turned us down to, and instead of stopping there I really stupidly decided to try for a loan to consolidate which was also turned down so my score is pants basically, and it is all my own fault. I have always paid everything on time so it is nothing like that.

The childcare money is paid directly to my mum (who is also in financial trouble thanks to her partner), I really wanted the next best childcare to me looking after him so at least he is at home with his nan. So this is the last thing I want to change even though I can't use childcare vouchers to pay her, and it costs a lot to have them both at home 5 days a week.

It's looking like it's bye bye car isn't it? I just can't stop thinking about debt and money and I am so afraid as to what is going to happen next year with mortgage and credit crunch, recession etc..

GeorgeUK

You can have about 3 credit checks in a 6 month period before your credit score is affected. It sounds as if you may have too many credit checks and also too close together. If you have alot of checks at the same time it can give the impression you are desperate for credit and so are a bad credit risk. You can check you credit file free at experian (if you cancel within 30 days) to make sure there is nothing else there, but 6 months after the last credit check you should be okay again.

Might also be worth getting your mum to either look at this site or go over her SOA to make sure she's ok.

Try not to stress too much over things you can't control. It'll make you ill then you will really have something to worry about.