Please help...we should be able to manage

sam010185

Hi everyone, not sure if this is the right place so apologies but here goes......
I live with my husband, 10 month old son and dog. At the moment I am not working so we are living on my husband's wage and Child Tax Credits & Child Benefit. My husband has a decent wage (£28,000 pa) and we pay next to nothing for our house as we live in army accomodation so pay around £150 a month for our rent, council tax and water (believe me the state of the house reflects this!).
We were ok until my maternity allowance finished just before Christmas and since then we have slowly been using our savings (there was never much there in the first palce) and this month we have used the last of it. Now I'm really worried that next month we are going to run out of money and we really should be able to manage on the money we are getting in but somehow we are not!
The only debts we have are our car - currently paying £435 a month although in September this will go down considerably as we are trading our car in and using our current car as deposit (we didn't have a deposit when we got this car) so we will have around £8,000 less on credit to start with, and two credit cards which total around £2,500. So I know in the grand scheme of things we don't really have that much debt.
At the end of March I'm expecting a payout from my old employer of around £600 and my husband should be getting backdated pay in April of around £400. Also, my husband is due to go to Afghanistan at the end of the year so I know that this is just temporary situation because he will be earning a lot more whilst he's out there and he gets a bonus of around £3,000 when he returns.
Sorry that I've been rambling but really wanted to try and get everything in here! Any help or advice would be really appreciated. I have thought of getting a part time evening/weekend job but because of my husbands job it's not practical because (like tonight for example) he does have to work overnight at least twice a month and goes away on exercise quite frequently so childcare would obviously be a problem. I have also looked at going back to normal work but after doing all the sums it would work out that we would be worse off because of childcare costs.
Does anyone have any words of wisdom that can help??
Thanks in advance!

copper_saver

First of all you need to do a budget - look through all your bills and bank statements to get an overview of your financial situation. Check you are getting all the benefits you are entitled to and the right rate of benefit (they will do this for you at the job centre or local free advice agency) to maximise your income. Then look through all your essential expenses and see if there are any ways you can cut down on these (e.g switch supplier, cancel unnecessary insurances). There are loads of good web sites with budgeting advice on them -see credit action, money matters to me, direct gov. Might be a case that you are spending more than you think on the non-essentials. Or it might have to be a case of looking at shopping habits and changing these - again those web sites have good tips. Once you have done this see what you have left. If you are spending more than you have coming in seek advice from the CAB or debt charity like national debt line as the situaiton is not sustainable. Some CAB's have financial capability tutors who can help you look at your budget and options for managing your finances. Best to seek advice like you have done before you start falling behind. Also good idea to try to do a projected budget to look at what your situaiton is now and what you think it will be in a few months time.

sam010185

I have done a budget and we don't spend more that we earn but we only have around £200 left after paying all the bils etc. I have looked at changing our gas & electric but because we are in debt with both of them at the moment we can't change as we can't afford to pay the debt off in one go. All of our other bills are the cheapest we can get and we are in no way extravagant with shopping etc., we've always bought value ranges etc. I'm not too concerned about the credit cards because (and I know that people will have a go but) we have decided to pay the minimum payment until my hubby goes to Afghan and we will use his Afghan money to pay them off completely. I just don't get it!

McKneff

When you say yu have £200 left do you mean that the £200 is surplus and you dont have any more bills, food etc to buy
If you have £200 left and nothing else to pay i think your pretty lucky. or am i reading this thread wrongly.
If you have been reading some of the threads some posters havent even got £2 left at the end of the month.

Why not post your budget on here so we can help you with it.

getmore4less

The problem you have is you are spending more than you earn(used up savings) and need to sort this out quickly before it spirals out of control.

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

Is a SOA calculator.

You need to find out where all the money is going first, so you can identify where the cutbacks can be made.

If the initial budget says you are OK then do a spending diary to see if you have missed anything.

Go back over all the spends for the last 12 months to see if there is anything missing.

You have to include all costs for at least a year.

The best place on this site will be to post the SOA on the debt board for help and advice on cutting back and sorting out the debt problem.

you have to get to a point that the budget ballances on basic wages and not rely on the bonuses etc to live.

Why do you need such an expensive car? can you trade down now.

HelzBelz

If you post an SOA, it will give people a better idea of where the money is going so we can make more suggestions.

sam010185

Hi, thanks for your replies.
It is £200 after all bills and expenses and I realise that compared to a lot of people this isn't a situation to be complaining about. I think our problem is that prior to me going on maternity leave, we had in excess of £1000 surplus after all bills so it's obviously a big jump. I guess we're just going to have to get used to not having as much spare money.
And in reponse to do we need to have such an expensive car, can't we trade down...we are due to trade our car in at the end of september and as I explained (probably not very well!) at the time of getting our current car we didn't have any deposit whereas this time we will have this car as deposit (which will have a value of around £8000) so we will have much lower payments each month because there will be less money on credit. The reason we got this car is that due to my husband's job he is away alot and I need the security that if the car does go wrong, it has a warranty, so it's one less thing to worry about when my husband is off in the sandy place.

I know that compared to a lot of people we are very lucky to know that my husband's job is secure, we have a roof over our head and spare money at the end of the month but you have to appreciate that it is a huge jump that we have made from having over £1000 spare a month to only having £200. I do not want to sound ungrateful because believe me I'm not, we've been there, done that.

getmore4less

Why wait till sept to trade down?

Deposit is not relevent when buying cars it does not make them cheaper.

You have a large loan because you have an expensive car.

Will the loan be paid off in Sept?

Plenty of good reliable 1-2y old cars still in warrenty that will do 2 adults and a small child for well under £8k.

It is £200 after all bills and expenses

But if you have used up all you savings and have credit card debt so you have been spending more than this £200.

It realy helps to identify where it has been going so you know where to stop spending.

HelzBelz

getmore4less wrote: »

Why wait till sept to trade down?

Deposit is not relevent when buying cars it does not make them cheaper.

You have a large loan because you have an expensive car.

Will the loan be paid off in Sept?

Plenty of good reliable 1-2y old cars still in warrenty that will do 2 adults and a small child for well under £8k.

But if you have used up all you savings and have credit card debt so you have been spending more than this £200.

It realy helps to identify where it has been going so you know where to stop spending.

From the way OP has worded it I think it may be one of the passport type schemes where after 3 years you either trade the car in or pay a final lump payment

jgallcash

there's not a lot more i can add to this OP, the other posters have covered everything i would have mentioned but i would just like to wish you all the best.

Charmothurlian

Hello Sam,

Apologies if any of the points below have already been covered in other replies: I haven't read them all!

You need to work out how much monthly income you have in total and subtract the total of everything that goes out in dd's and other fixed costs: the amount remaining is how much you can spend each month without going into the red. You will have to update the calculations at least once a month, as your situation seems to be changing a lot at present.

The situation is complicated by having income from different sources which arrives at different intervals, so you have to average it all out to monthly figures, as follows. (Personally, I budget weekly as I find this method more responsive to sudden changes, but everyone else seems to do it on a monthly basis! - but anyway: )

Your tax credit is paid weekly: multiply by 52 (weeks in year) and divide by 12 (months in year).
Your child benefit arrives every four weeks (if it's like ours). Multiply by 13 (4 weeks x 13 = 52 weeks) and divide by 12 (months in year)
Add the above figures to your husband's monthly nett salary. This is the amount from which to subtract dd's, fixed costs, etc.

Make a list of any major purchases and expenses planned for the following month (payday to payday). Some expenses will be unavoidable due to wear-and-tear (car servicing, clothing, for example). Include anything you can think of. Add them all together and subtract this amount from the remaining income.

Now, if possible, or as soon as possible, deduct a small, affordable sum as a monthly reserve for emergencies. They are unpredictable by definition, so all you can do is make provision for them in advance.

Finally, you need to spread the remaining available spending money evenly over the following month. If you divide by 31 (days in month approx.) and multiply by 7 (days in week), you'll have a weekly limit for routine spending.

Stick to this limit and your major expenses list. Try to have something left over at the end of the month: this can also go towards emergencies.

Hope this helps...