Tax Credits cuts - don't know what to do

EmmyRoo

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.

EmmyRoo

Forgot to add, we both work in the public sector, so my husband's pay is now frozen and mine will increase by just £250 p.a. I think (which pro rata for me will be £125).

Also our mortgage is a repayment one. We had interest only for the first few years but now really have to pay the whole thing and not just interest.

I am in my mid-thirties and my husband is 40.

melly1980

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.

to be brutally honest it isnt worth you working. You might as well do some crappy little part time job near home that incurs no travelling costs thus saving on petrol, 1 x car and 1 x car insurance. This will drop your income and you may get some tax credits as well.

Some of the "i only get 18K" brigade shopuld take a look at the above and hopefully it will sink in just how much they get themselves.

viktory

Personally, I think it is utterly, utterly ridiculous that a family on £45k a year are entitled to any benefits - but that is a discussion for DT I suppose.

I am delighted that the Government have finally started cutting back on the ridiculous tax credits. Time for frivolous families with big debts to start paying their own way instead of expecting the tax payer to pay their debts. Time to start really thinking about whether they can afford another child and is working part time really a realistic option?

iamana1ias

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 double what it could be - £200 should be plenty
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 why is this so high? was it sold with your mortgage? can you shop around for something cheaper?
Other insurance......................... 18.55 what is this for?
Presents (birthday, christmas etc)...... 50 cut this down to £25
Haircuts................................ 25 every month?
Entertainment........................... 30 (this includes lottery & postcode lottery - have to think positively!) please tell me you're kidding
Holiday................................. 0 (haven't had a holiday, home or abroad, for 3 years.)
Emergency fund.......................... 25 where is this money?
Bank account fee/overdraft costs........ 55 what do you need to do to avoid these fees? can you switch to a free account? you don't list an overdraft, so what are you paying for?
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.

Comments in purple.

£30 a month on the lottery???!! :rotfl::rotfl:

anguk

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.

The first things that jumped out at me were grocery and childcare costs.

Have a look on the Old Style board for ideas to reduce your grocery bill, £433 is quite a lot for 2 adults and 2 pre-school children.

Your childcare costs seem very expensive. I must admit I know nothing about this so I may be posting a load of rubbish but it looks like you pay £830 and your in-laws pay £250 directly to the nursery so that's £1080 for 2 children 2.5 days a week? :eek: Or is the childcare £830 in total and you only pay £580 with the in-laws topping up the other £250? It was hard to tell from your post.

melly1980

viktory wrote: »

Personally, I think it is utterly, utterly ridiculous that a family on £45k a year are entitled to any benefits - but that is a discussion for DT I suppose.

I am delighted that the Government have finally started cutting back on the ridiculous tax credits. Time for frivolous families with big debts to start paying their own way instead of expecting the tax payer to pay their debts. Time to start really thinking about whether they can afford another child and is working part time really a realistic option?

have you really just completely ignored the post by Emmy Roo. Can you not see that she is in **** street soley because of the childcare costs and could be forced out of work?

anguk

Would it be at all possible for you to take a career break for a couple of years, just until the children are at school? You'd be able to cut out the childcare costs and one of the car costs which could save you maybe £1000 a month. You earn approx £650 a month so financially you're actually paying to go to work!

I must admit if I was in a position where my childcare costs were more than I was earning I would stay at home until the children were at school.

welshmoneylover

melly1980 wrote: »

have you really just completely ignored the post by Emmy Roo. Can you not see that she is in **** street soley because of the childcare costs and could be forced out of work?

A lot of people are going to be in $4ite street because they had more children than they could afford and expected the taxpayer to fund them.

It's going to be childcare costs that push many people over the edge.

Even I'm astonished at the amounts people are paying out, its nearing enough the cost of a mortgage in some cases and I'd be frightened to find that amount each month. I think I'd be tempted to give up work and care for them myself!

Just think of how many jobs are going to become available within the next few months!

Just think of the amounts of money childcare businesses are going to lose by having few customers, it might bring their charges down a little bit.

dodger1

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.

Most of your expenses seem reasonable. I won't comment on your debts, we've all been there. However, one or two points. Internet plus landline phone should not be even close to £40. I've got both combined and free calls for £27 without even trying to find something cheaper. Satellite/cable tv at £20 is unreasonable due to your financial restraints. There is so much free tv now available. Sky is good if you have spare money, you don't so cancel it.

Your life assurance seems incredibly high. I just saw on this site joint cover of £200,000 for a couple aged 35 and smokers for a monthly premium of £26.84 through a discount broker.

Your gas/electricity is about to drop £50 per month.

Finally the big one. You have very generous in laws. If you stopped working for just over two years and they still gave you the £250 each month you could clear your unsecured debts saving you £111 per month and the bank account fee/overdraft of £55 per month. You could also then half your car expenses by having only one car.

All your problems arise because of the £166 each month servicing your unsecured debt. Even if you don't want to stop work you only have to make up £88.99 per month which you can do with the above. However the in laws suggestion is the best if they are willing, that makes you debt free (mortgage excluded) in a little over two years.