Income not enough to pay for my outgoings. Not sure what to do

kaom

I'm in a right old pickle. My monthly outgoings are significantly higher than my income and I'm at a loss as to what I can do.


My outgoings are a combination of standard stuff (no extras at all) and a divorce maintenance fee. I'm remarried and have a child with my wife and 2 children with my ex-wife. My maintenance fee (along with all my outgoings) aren't changeable.


My outgoings are as follows:
Maintenance = £500
Credit card = £120
Rent = £850
Council tax = £132
Electricity = £34
Gas = £50
Food = £280
Petrol = £120
Direct debits (mainly life cover with 2 payments to charities) £40
Clothes £50
Phones £30
Internet £20
TV £15
Home insurance (paid annually)
Water £50 (as it's been pro rata and the water company spent ages before sending the bills)


Outgoings are £2291


My income is £35k per annum. Which works out as £2172. Plus I get £82 every 4 weeks for child benefit. Total income is £2254.


So, you can see it's pretty tight. Trouble I'm having is because of one off payments such as car problems/MOT/insurance/tax/maintenance (which I paid for in one go), unforeseen problems, etc. These one off items add up to £400 to £500 (variable) or so per month which I don't think is too excessive and I really do try to keep a lid on it as much as possible.


I'm in desperate need of help - usually I try to help myself out. As part of the divorce settlement I walked away with some money which I invested in shares. The shares are currently worth £40k (a bit lower than the price I paid) – the idea was to build up a nest egg to use as a deposit on a house (I live in St Albans where £40k isn't anywhere near enough for a deposit).



However by trying to help myself these shares are becoming a problem. I believe that if I didn't own any shares I might be able to get some financial help but because I have “savings” of more than £16k it messes this possibility up for me. Trouble is if I sell all or some of the shares it only helps me out temporarily. I'll still be in the same boat in a few years time. I don't want to be a burden on the state and would rather pay my own way by using the shares in a positive and long term way. It seems that if I'm prepared to lose my future deposit the state will step in to help me after.


I feel like I'm going around and around in circles and am finding it hard to find a solution. To make matters worse I've just learned that my bank has just reduced my overdraft limit which I was actually relying on to get me by for the time being. I know I'm “lucky” to have these shares on the one hand and that effectively I could cash them in and resolve my cash problems, but it's so short termist that I know it can't be the best approach for my family's future, but maybe that's my only option?


Sorry for such a long post - any helpful advise would really be welcomed

Indie_Kid

You may want to look at the debt free wannabe board.

kaom

thanks I'll move the thread to there

Dognobs

Max the card and say you can't pay. Internet you could get down to £10 Clothes £50!!! Carboot sales for the kid clothes and i buy twice a year max! But cash in the shares some people have no money at the moment get yourself on the council list end off.

TOBRUK

kaom wrote: »

I'm in a right old pickle. My monthly outgoings are significantly higher than my income and I'm at a loss as to what I can do.


My outgoings are a combination of standard stuff (no extras at all) ??and a divorce maintenance fee. I'm remarried and have a child with my wife and 2 children with my ex-wife. My maintenance fee (along with all my outgoings) aren't changeable.


My outgoings are as follows:
Maintenance = £500
Credit card = £120 How much is the total balance?
Rent = £850
Council tax = £132
Electricity = £34 Electric and gas is pretty high
Gas = £50
Food = £280 WOW!! What are you eating! You could reduce this easily.
Petrol = £120
Direct debits (mainly life cover with 2 payments to charities) £40 What does mainly life cover mean?
Clothes £50 No need for this EVERY month!
Phones £30 Is this for landline and rental?
Internet £20
TV £15 Is this for licence?
Home insurance (paid annually) This total should be divided by 12 and noted!
Water £50 (as it's been pro rata and the water company spent ages before sending the bills) Is this a month?


Outgoings are £2291


My income is £35k per annum. Which works out as £2172. Plus I get £82 every 4 weeks for child benefit. Total income is £2254.


So, you can see it's pretty tight. Trouble I'm having is because of one off payments such as car problems/MOT/insurance/tax/maintenance (which I paid for in one go), unforeseen problems, etc. These one off items add up to £400 to £500 (variable) or so per month which I don't think is too excessive and I really do try to keep a lid on it as much as possible.
.....

The shares are currently worth £40k (a bit lower than the price I paid) – the idea was to build up a nest egg to use as a deposit on a house (I live in St Albans where £40k isn't anywhere near enough for a deposit).

However by trying to help myself these shares are becoming a problem. I believe that if I didn't own any shares I might be able to get some financial help but because I have “savings” of more than £16k it messes this possibility up for me. Trouble is if I sell all or some of the shares it only helps me out temporarily. I'll still be in the same boat in a few years time. I don't want to be a burden on the state and would rather pay my own way by using the shares in a positive and long term way. It seems that if I'm prepared to lose my future deposit the state will step in to help me after.


I feel like I'm going around and around in circles and am finding it hard to find a solution. To make matters worse I've just learned that my bank has just reduced my overdraft limit which I was actually relying on to get me by for the time being. I know I'm “lucky” to have these shares on the one hand and that effectively I could cash them in and resolve my cash problems, but it's so short termist that I know it can't be the best approach for my family's future, but maybe that's my only option?

Sorry for such a long post - any helpful advise would really be welcomed

Your rent is high, however it depends where you are living. Is there a possibility to move to somewhere cheaper?

I know that you feel you want to keep your shares for the future and have dreams of buying a property somewhere, which is quite natural. However, you may need to cash some in to sort your out your situation.

From your list of outgoings you say that there are no extras but further down you say about one off things about £400 to £500 variable PER MONTH which you say aren't exsessive! I'm afraid that if you haven't got it then anything is excessive.

You really need to list everything in your outgoings - your car insurance, tax etc should be added to the list, where you can divide the total by 12 and allow for it. You really can't afford to think oh well it's a one off otherwise you won't get a true and honest picture of your outgoings.

What about going out and socialising? You have to note these down. What about spending money?

Your food bill is extremely high if you are on a budget!

I don't know how much your credit card total is, what exactly are the direct debits and charity? I'm affraid charity begins at home when you are struggling.

Electricity and gas are a bit high - I pay less and I'm at home 24/7.

If you do have shares why don't you take out enough to pay off your debts - credit card and overdraft at least. Do not use any credit cards unless you can pay it off by end of the month.

karenx

There is no other benefits which you can claim as your income is too high.
You say you have a wife but you have not mentioned her income in all that?

dmg24

I agree with TOBRUK, it would be easy to decrease your outgoings - cut £100 off the food shopping, stop the clothes spending and the charity donations.

kaom

TOBRUK wrote: »

Your rent is high, however it depends where you are living. Is there a possibility to move to somewhere cheaper?

It's a very good price for round here. I need to be local(ish) to my kids as it's really important to me see them as much as possible. I researched for months looking at alternative areas (further away) but by the time I added petrol/costs into the equation it worked out most costly. I live in St Albans where house prices are high to buy but relatively low to rent

I know that you feel you want to keep your shares for the future and have dreams of buying a property somewhere, which is quite natural. However, you may need to cash some in to sort your out your situation.

I think you're right

From your list of outgoings you say that there are no extras but further down you say about one off things about £400 to £500 variable PER MONTH which you say aren't exsessive! I'm afraid that if you haven't got it then anything is excessive.

Take this month: car tax £130. Half the costs for a school trip (part of the curriculum) £145. That's £275 and it's only the 6th

You really need to list everything in your outgoings - your car insurance, tax etc should be added to the list, where you can divide the total by 12 and allow for it. You really can't afford to think oh well it's a one off otherwise you won't get a true and honest picture of your outgoings.

I'll admit I'm sticking my head in the sand a bit on this. I'm very nervous about it (I know I have to though, no choice)

What about going out and socialising? You have to note these down. What about spending money?

This is included in the "one offs" - I've managed to limit my social money to £100 - that's for a family of 3 or 5 (depending on if I've got my girls with me)

Your food bill is extremely high if you are on a budget!

Really? It's about £60 per week and includes non-food items that you buy at supermarkets too. I buy as many BOGOFs that I genuinely need, "value" products where the ingredients aren't terrible and don't buy any unnecessary food items such as puddings/sweets/biscuits. my wife cooks all our food - we don't buy pre-packed or microwave meals (not only expensive but horrible)

I don't know how much your credit card total is, what exactly are the direct debits and charity? I'm affraid charity begins at home when you are struggling.

the charity donations are only £5 & £6 to WWF and Cancer Research. Not much (although I do hear how crazy it sounds that I'm trying to justify outgoings when I need to spend as wisely as possible). £29 is for life cover which I really don't want to end

Electricity and gas are a bit high - I pay less and I'm at home 24/7.

My electricity is on a (damned!) meter. it's just over £1 a day. The gas is a d/d amount.

If you do have shares why don't you take out enough to pay off your debts - credit card and overdraft at least. Do not use any credit cards unless you can pay it off by end of the month.

My credit card debt is £6k. My o/d is £2k (but growing). I've looked at the credit card debt which costs £120 or so per month. I could get rid of my credit card debt at an immediate cost of 30,000 shares which is a big chunk of my future deposit (18%) - but I would "only" be saving £120 per month. Do I sound like an idiot trying to justify this? I'm trying to weigh up the present with the future. I'm genuinely scared of having to rely on the state and if I end up having no deposit to buy a house because of a squeeze now I will regret it for ever more (and always rely on the state)


Thanks for your input. I hope I dont sound dismissive regarding your comments. I'm just trying to justify my position and reasoning so that you or others can "see" my thinking process and then offer counter-advice

intranix

You should pay off your debts immediately with some of that money you have.


So your wife earns £0?

kaom

intranix wrote: »

You should pay off your debts immediately with some of that money you have.


So your wife earns £0?

Yes she earns £0 (housewife)

MissMoneypenny

kaom wrote: »

Food = £280

Someone recently gave the following link to a recipe site, for feeding two adults and two teenagers for £100 a month. They said it was well respected posters from this site that put up the recipes.
http://www.cheap-family-recipes.org.uk/

The debt free wananbe board and old style board will be able to help you money saving ideas.