Tax Credits cuts - don't know what to do

jellyhead

Hi

I know what you mean about feeling that you live frugally, while others seem to have much more disposable income. At least the change in fuel direct debit should cover £50 per month of you shortfall. A few things though:

Do your incomes take into account the increase in tax allowance for this year? It's around £200 each, but NI has gone up. My husband will be bringing home around an extra £10.50 per month.

Where's your water payment?

Your internet/landline/TV could be cut by a third at least I should think? I get XL TV with a V+ box, landline including calls and basic internet for around £40 per month, in a package from virgin. Is that something you can look into?

I'm confused about your £55 payment to your bank - what's that for? You don't mention an overdraft.

Haircuts might be cheaper elsewhere. I go to a local place and get a wet cut, or maybe there's a supercuts in a shopping centre? Ours charges £13.95 for a wet cut. Boys cuts are cheaper. There are 4 of us and we spend less than £25 per month on haircuts.

Also, I think your birthday/christmas fund could be cut, or maybe the emergency fund ... lump them in together maybe, and if you have lots of emergency costs then make birthdays and christmas very frugal on what's left.

As a desperate measure I have recently shifted some of my 6.9% life of balance debt onto a different card at 0% but it's only for a year, then when you take into account the fee to switch it back again when the year is over you've paid as much in fees as you would in interest .... but the 0% card only asks me to repay 1% of the balance each month whereas the life of balance cards asks for more than that - so in desperate times, it might be worth thinking about.

Your insurances seem incredibly high to me. We're on less than you and our house is only worth 100k, but our insurances are nowhere near as high as yours. Is this something you can cut down on? If you give us more information about them maybe someone can help.

Good luck

EmmyRoo wrote: »

Wow, I had no idea my post was going to bring out so many unpleasant opinions and assumptions.

To clear up some of the confusion regarding my personal finances, here's an SOA which I'll also post in the Debt Free Wannabe board for some advice.

Thanks to everyone who has stuck up for me and offered genuine advice.

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2(this is unavoidable as my husband works 25 miles from home, I work 10 miles from home in the other direction and both travel for work occasionally and need to be able to drop everything to collect the kids when they're ill. We live in a rural village in Scotland where public transport links just aren't good enough. Our cars are an 8yr old hatchback & 6.5yr old people carrier.)

Monthly Income Details
Monthly income after tax................ 649.38
Partners monthly income after tax....... 2011.9
Benefits................................ 245 (this is an estimate of tax credits using HMRC calculator, not sure what they're actually falling to, plus CB)
Other income............................ 250(my in laws pay this directly to nursery to help with costs. We have no family living close enough to help with childcare)
Total monthly income.................... 3156.28

Monthly Expense Details
Mortgage................................ 647.9
Council tax............................. 151
Electricity............................. 65.5
Gas..................................... 65.5 (gas & electricity from same provider, have requested direct debit drops from £131 to £80 per month as we're £750 in credit at the moment.)
Telephone (land line)................... 24.08
Mobile phones (cheap & basic)............................ 30
TV Licence.............................. 12.37
Satellite/Cable TV...................... 20 (I don't think this is much to ask when we don't go out to the pub or for meals etc)
Internet Services....................... 16
Groceries etc. ......................... 433
Clothing................................ 15
Petrol/diesel........................... 303 (see work travel distances above)
Road tax................................ 29.71
Car Insurance........................... 74.21
Car maintenance (including MOT)......... 37.92
Car parking............................. 5
Childcare/nursery....................... 831.77 (this is for 2 kids, 2.5 days a week. Works out at approx £4 an hour, the cheapest childcare there is here. Can go for a full day or half day, can't collect them earlier to lessen costs or anything.)
Other child related expenses............ 10
Medical (dentist etc).... 1.67
Pet insurance/vet bills................. 6.67
Buildings & contents insurance..................... 33.8
Life assurance ......................... 116.62
Other insurance......................... 18.55
Presents (birthday, christmas etc)...... 50
Haircuts................................ 25
Entertainment........................... 30 (this includes lottery & postcode lottery - have to think positively!)
Holiday................................. 0 (haven't had a holiday, home or abroad, for 3 years.)
Emergency fund.......................... 25
Bank account fee/overdraft costs........ 55
Total monthly expenses.................. 3134.27


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 155000...(647.9)....6.5%?
Total secured & HP debts...... 155000....-.........-
(mortgage is made up of 130000 on a tracker 0.5% above base rate, which we ported from previous house, and 25000 at 6.5% I think. Doubt we'd get anything better at the moment.)
Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................4500......90........5.9 for the life of balance
Credit Card....................1100......11........0 till Jan 2012
Credit Card....................750.......10........0 till Aug 2012
Total unsecured debts..........6350......111.......-


Monthly Budget Summary
Total monthly income.................... 3,156.28
Expenses (including HP & secured debts). 3,134.27
Available for debt repayments........... 22.01
Monthly UNsecured debt repayments....... 111
Amount short for making debt repayments. -88.99

Created using the SOA calculator at make sense of cards.com.
Reproduced on Moneysavingexpert with permission, using Firefox browser.[/font]

I don't think we live an extravagant lifestyle by anyone's standards, contrary to what a lot of posters seem to think.

Hopefully someone will be able to help out with why we are struggling so much when we do bring in a decent wage between us.

Thanks.

merlin68

Your grocery shopping is high. I only spend £240 a month for 2 adults, 2 kids and a dog and cat. Do you really need £30 for lottery. You'd be better paying it of your debt. £50 a month is a lot to spend on bdays and xmas. I told everybody we're not buying any more and they were all relieved.

viktory

melly1980 wrote: »

Ill point it out to you again since your not that bright.

And you are? :rotfl::rotfl::rotfl::rotfl:

melly1980

viktory wrote: »

And you are? :rotfl::rotfl::rotfl::rotfl:

ahh, spotting errors with spelling / grammar. The last refuge of someone who is talking bobbins. Speaking of which, how are you getting on with that quote of mine?

viktory

melly1980 wrote: »

ahh, spotting errors with spelling / grammar. The last refuge of someone who is talking bobbins. Speaking of which, how are you getting on with that quote of mine?

I don't need to find another quote; that one says it all. Incidentally, lack of basic spelling and grammar is indicative of someone who is less than intelligent.

SingleSue

melly1980 wrote: »

Never said any such thing. By all means show me where I have. Back in the real world what I did say is that higher earners are subsidising the childcare payments for lower earners. So what purpose does it serve to make it impossible for a higher earner to work, because thats what we are talking about here. The sneering from the lower earners is mind boggling. People who assume that they should get everythink and the higher earners nothing. It doesnt even enter their uneducated little brains that their money is being topped to to almost the same as many of the so called rich people. Never mind tho, your entickled to it. You need it for "me fags"




Correct.

And when changes to the tax credits system have meant that higher earners no longer qualify these people now find it uneconomical to work. They have been let down by a system that is still allowing people on a lower income to work but not those that are subsidising it. Only someone with less brains than a molusc would proclaim that this is fair.

Not all lower earners are uneducated.
Not all lower earners talk about their cigarettes and certainly not in the manner you describe if they do!

Conversely, not all higher earners are well educated.
Not all higher earners are non smokers.

Re the question in hand, OP, is there any chance of changing employment for something which fits in with when your partner is at home...the double result being more pennies in your pocket as a consequence of no childcare to pay.

Failing that, dropping a brand at the supermarket, going without new clothes for a month or two and having the haircuts less frequently.

Only little tweaks I know as the childcare costs really is the killer in your SOA.

*Louise*

OP - in your situation I would probably take a career break for a while, until at least one of the children was in school and cutting those fees down a bit.

You're lucky you have inlaws helping out with the costs tbh, or you may have been contemplating this a while back.

Your life insurance seems very high - I assume that is for both of you, it might be worth shopping around to bring that down a bit (I am assuming you or OH don't take part in any particularly death defying sports of course!);)

sugababy

shaftola wrote: »

45K is a lot of money,

I expect the lady is say they earn 45k its their gross income. I feel for her and can understand that the point she is making, many of us get run away by debts and trying to control everything can be hazzardous. I hope she finds a solution to her answers. The last thing she needs is people bashing her head on this forum and all she wanted was a little advice not to be judged.

People should be a little more sensative to others today its her problem tomorrow it could be any one of you.

sugababy

I went online to check my tax credit payment and found they have redued it significantly. I had to phone them up. My income has not change from the year before everyting is the same. I went the HMRC website to check my entitlement and seems I should have gain. I even use the calculation on this fourum and it tells me I should be better off, yet when I phone the Tax Credit office I have been told my Tax credit has been reduced to over £400 I am completely lost and do not understand how they work out my calcualtion, they haven't sent me a letter to say they were going to reduce my payment especially by so much.

I was wondering if any one els had the same problem?

DON79

Hi Sugababy, my tax credits have gone down by £80 this month but mine was due to the baby element not being paid anymore. Is that possibly why they may have gone down? The government scrapped the baby element.