Tax Credits cuts - don't know what to do

michelle1506

Well that's up to you, but don't ever expect the rest of us to live by your rules! You want get a medal from me I'm afraid.

calleyw wrote: »

Do you really think what you have paid in over 27 years covers anywhere near what you have taken out up to this point.

Your own education and health care. Let alone that of your to be born children.

Each child cost approx 12K a year to educate. Let alone a birth which is a tens of thousands of pounds.

People managed before tax credits and people will manage with out them.

I choose not to claim tax credits. The extra money would be nice. But my husband takes out far more than he has ever paid in.

My household income has already halved and will drop even further with the changes to benefit system for disabled people. If them deem my husband fit to work.

It will be a blow and our already lowish standard of living will take a further tumble. You either will get over it or you will not.

Labour made too many people reliant on tax credits. And people who should be better off are not going to be any longer.

It does not take someone with a PHD in maths to see that you can't keep paying out more than you have coming in for years on end. That is why the cuts have been so brutal.

Most people on £40K + under pre-labour tax credit system would never have been getting any help for child care and would have a nanny or au pair.

The problem and this is not aimed at particular at the OP. To many people say they can't cut any more out of their budgets. What they means is they don't want to. And that is their choice. But don't moan about it if you choose not to do anything about it.

Yours

Calley

michelle1506

Okay thank you, sorry if I misjudged you.

melly1980 wrote: »

The point is, I never said that.

I have at no point suggested that lower earners should get tax credits removed while higher earners should keep them. Other people have claimed that I have said this and when asked to provide the post / quote they cant. It doesnt exist, that is not my view.

FBaby

Emmyloo, you just happen to fall in the category of those who just don't make it for any benefits, but end up worse off than some people who are able to claim various benefits. You have shown all the evidence that you are not living a life of luxury and not enjoying material things than many getting by without doing any work at all. You don't have to justify yourself, the truth speaks for itself. What you do have is looking at it as a matter of years only, once your children will be at school, it will all be worth it, let alone later in life and when retire. You are not the only one in this predicament and many do sympathise.

jellyhead

EmmyRoo wrote: »

The £55 bank fees are: up to £5 a month for my overdraft (50p per day that I'm overdrawn up to max £5) and up to £50 for my husband's account. He gets charged something like £1 a day or something for being in overdraft, more for going over his limit, hence how it can get so high. We know he needs to look into getting another account somewhere else, it's on the to do list.

I don't get my hair cut every month, it is once every 2 months which costs about £34. The £25 was an attempt at working it out for the year and dividing by 12. It is pricey though so I'll cut this back.

The xmas and birthday present fund may look excessive but we are both from large families and need to get presents for nephews and nieces as well as our own kids and the children of close friends. Plus the ages of our children means we are invited to endless birthday parties which mount up even with me spending only £5 per present. Would you like to have to tell your friends that you can't afford a £5 bit of plastic for their child? Or have your kid be the only one who goes to a party without a present?

Some people have asked why these cuts have come as such a shock, maybe you all have maths PhDs but I couldn't for the life of me work out what the cuts meant in real terms until the HMRC updated their tax credit calculator on April 6th, could you? Of course we have been aware that cuts were coming but without knowing exactly what they would be it's been hard to know what action we'd have to take.

Ouch! Those overdraft fees are nasty I have an account like that, it charges you £1 per day for being in your authorised overdraft but £5 a day if you go over. I don't use the overdraft with that account, i just get my husband's salary paid into it so we get the £5 per month bonus for having the account, then I transfer most of the salary out the next day into a friendlier account. Husband's santander account charges £5 max per month for overdraft, so that's where we go overdrawn where necessary. If you regularly go overdrawn it may be worth working out whether to use credit cards a bit more. When we got desperate we ended up putting £1,000 more onto the cheap life of balance credit card. It's not ideal, but it was cheaper than paying out in overdraft fees all the time.

I think your haircut costs too much, but have you considered a wet cut? I wash my hair before I go, or they can spray it with water, then I leave with it wet. It's much cheaper than a wash and blow dry.

I also have a £5-ish limit for presents. I keep an eye on the 'grabbit' board and get things when they are cheap. I keep a 'presents' stash in my wardrobe, full of cheap things I got in sales to use throughout the year. I bought little girly powder puff sets and hair bobbles in the Boots January sale, and gormiti eggs when there was a glitch so they were 3 for £6. When the Telegraph have a £5 body shop voucher I spend £1.80 on the paper and buy a £5 body shop gift set to put aside for birthdays etc. - the £5 sets are small but are good enough for a present I think. They include a shower puff, which is always nice

I look out for cheap book sets with 'the book people' and plit those into presents for my kids classmates.

Oh, and no, I couldn't work out what the cuts would mean until the calculator went live on April 6th. I did ask in one of the threads about the budget, but nobody could point me to calculators for families with 2 kids.

milliebear00001

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.) This seems very high - why are you in so much credit?
Telephone (land line)................... 24.08
Mobile phones (cheap & basic)............................ 30 Are these really needed? I have pay as you go and probably spend about £10 every three or four months.
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) Get Freesat/Freeview.
Internet Services....................... 16 Could be cheaper.
Groceries etc. ......................... 433 Definitely could be cheaper - even with the nappies.
Clothing................................ 15
Petrol/diesel........................... 303 (see work travel distances above) Downsize the cars? Cheaper to run options?
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.) This is what's crippling you. Why are you working for nothing?
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 Unless you have pre-existing conditions, this could certainly be cheaper. We pay about £45 for both of us.
Other insurance......................... 18.55
Presents (birthday, christmas etc)...... 50
Haircuts................................ 25 A month?
Entertainment........................... 30 (this includes lottery & postcode lottery - have to think positively!) Ditch the lottery - more chance of dying in a plane crash apparently!
Holiday................................. 0 (haven't had a holiday, home or abroad, for 3 years.)
Emergency fund.......................... 25
Bank account fee/overdraft costs........ 55Why are you paying these charges? Are you regularly overdrawn? Change bank accounts?
Total monthly expenses.................. 3134.27


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 155000...(647.9)....6.5%?Is this a fixed rate? It is high.
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.

You're not living extravagantly, but you are obviously living beyond your means. Your main issue is childcare - why is it so expensive and given that it is so expensive, why are you bothering to work for nowt? Can you not stop work, lose the second car (or vastly cheapen your costs) less petrol spend, more time to cook from scratch/spend with your kids etc? Am I missing something?