Advice needed on a realistic budget please

me73

Hi all. I have been an infrequent poster on the forum for a number of years, but am posting under a new name because I’m a little bit embarrassed about my situation.

Sorry this might be quite a long post so please feel free to ignore if I’ve gone on too much.

I am a single mum, with two children living with me full time, and two others who spend half the week with their dad. I work 4 days a week (that is all that my employer can offer me at the moment). My eldest child is 21, has just left uni, but is currently working in retail (the only job she can get so far).

I was struggling with money anyway… I don’t smoke, don’t drink and haven’t been out in forever, but I still never seemed to have any money left. However, my situation has taken a definite change for the worse as my tax credit has recently been cut from £110pw to £44pw. This is because my wage increased slightly from the previous year so when I filled in my end of year form, my tax credit had been overpaid. I know this is my fault for not telling them earlier, so am not complaining about that, just worrying about how I will manage now.

Below is a summary of my income and expenditure (all figures are PCM):

INCOME
Wage - 1164
Tax credit - 189
Child benefit - 88
Board from daughter -60
TOTAL INCOME - 1501

BILLS
Rent/water rates – 425
Council tax – 130 – high because I have missed payments to catch up with
Gas - 89
Electric -55
TV licence – 30
Phone/broadband -30
Car insurance – 100 – ridiculously high because of two claims (not my fault – one accident where other driver didn’t stop and one theft)
Son’s mobile – 35 – agreed to this as a Christmas present when I thought I could afford it and now tied into contract until Dec 2012
Sky – 23 – I know I could probably do without but the kids do watch it a lot so reluctant to cancel – am still considering this though
TOTAL BILLS - 917

LIVING EXPENSES
Food/toiletries/cleaning products, etc. – 260
Petrol – 130
Car tax/MOT/maintenance – 30
Breakdown cover – 16
Clothes and haircuts – 10
TOTAL LIVING EXPENSES – 446

TOTAL ALL EXPENSES – 1363

AMOUNT LEFT TO PAY DEBTS - 138

DEBTS
Rent arrears – 25 (450 owing)
Littlewoods – 89 (1170)
Next – 30 (304)
Freemans – 30 (494)
Credit card – 20 (450) – this isn’t the cheapest rate, but I don’t think I would get another one now as my credit rating is poor due to late/missed payments

TOTAL DEBT PAYMENTS - 190
TOTAL DEBTS OWING – 2870

As you can see, I am currently £52 a month short of what I need to pay my creditors and, to be honest, I am worried that the amounts I have quoted for food and clothing and haircuts are going to be difficult to stick to anyway. I am trying to wear my old clothes for work, but I have put on some weight recently (I’m blaming stress, or the anti depressants I am currently taking) so a lot of what I used to wear is too small now. I feel very embarrassed at work as my colleagues are slim and seem to have lots of outfits, so don’t want to go without a few new items for work.
Luckily, my ex husband buys most of the children’s clothes so I don’t have to feel guilty about that. He also pays their dinner money etc, most of the time so again, it’s one less thing to worry about.

So sorry for the ramble, but I have a number of questions I would appreciate an opinion on…

1. Do you think my amounts for living expenses are realistic?

2. Can you think of any other ways that I could save/make money? (what I am already doing is listed below)

3. Is it possible to be ‘comfortably off’ (able to afford treats, holidays, etc.) when you are a single parent? I worry that I am never going to see an end to this struggle.

Any advice will be very much appreciated.

What I am doing to increase my income

Asked for extra hours at work
Registered as a private tutor
Volunteered for paid revision classes
Paid examining for the exam board
Surveys
Mystery shopping
Competitions
Selling unwanted items on eBay

What I am doing to save money

Two week meal plan
Changed mobile from contract to PAYG
Changed gas and electric suppliers to cheapest fixed tariff
Changed phone/broadband to cheapest deal
Buy clothing from eBay
Cancelled planned visit to family this summer

lazy_daisy

Crikey, you're up early - or are you still up late? I can't sleep either. I have had a quick look at your post and you're working really hard to fix things, I just noticed you comment about Sky - you get children's channels on Freeview and Freesat too, the kids might get used to them if that's all they have, mine did when I was cutting back! Also does your ex husband make proper maintenance payments? Buying clothes and paying for some school dinners doesn't sound like much if you're struggling to keep things going,
Good luck with everything, More clever people will be on here in the morning and I'm sure you'll get much more help!
Love, Daisy
PS I'm going back to bed now, try and get some sleep yourself. Everything tends to look worse this time of night xx

rachelhen

I agree with Lazy daisy things do look worse in the small hours I am always surprised when their are other people on here with me who can't sleep. It is a very hot night tho. Good Luck with sorting things out. I admire how you have faced breaking everything down. I don't know if its relevant but some years ago I was in a similar situation and sat down with a CAB advisor who wrote to all my debt people and offered them reduced payments on my behalf. It worked out well kept it all manageable.

me73

Hi Daisy

Thanks for your reply. I'm up late, my sleep patterns are completely messed up lately! Hope you manage to get some sleep.

No, my ex doesn't pay maintenance as we agreed to split the time spent with the children and the expenses evenly down the middle, and so neither of us pay maintenance to the other.

When we split, all the kids were under 18 so I got tax credits/child benefit for the eldest two and him for the youngest two. Obviously, my eldest is now offically an adult, and the next one down will turn 18 soon, so I get less tax credits now, but I still feel it is better keep things as they are because he earns more and so is happy to pay for most of their expenses. I really only have to pay for food while they're with me, and of course the extra expense of living in a house big enough to accommodate them when they're all with me. That's part of the reason why I don't understand why I'm always so poor!

Thanks again for taking the time to comment at this unearthly hour, and I will take your advice and check the thread again in the morning. x

me73

Another night owl... hi Rachel.

Yes, I agree that things seem worse at night, but I just haven't been able to stop thinking about money at any time of the day or night since I got my latest tax credit notice.

I have thought about going to the CAB, but really didn't want to mess up my credit rating anymore than it already is, as I had hoped to get a mortgage in a few years, when my income goes up and (hopefully) my outgoings go down. I know this might be my only option though. Did you find it had much of an impact on your creditworthiness?

rachelhen

Yes it does affect your credit worthiness but if it gets people off your back until you are in a better position then at least you can sleep for now and when things improve you will be able to build it up again. Defaulting is not good for credit worthiness either or a good night's sleep. I really hope you manage to find a solution it is horrid feeling worried all the time about debt. I have been there.

allydowd

me73 wrote: »

Car insurance – 100 – ridiculously high because of two claims (not my fault – one accident where other driver didn’t stop and one theft)
Sky – 23 – I know I could probably do without but the kids do watch it a lot so reluctant to cancel – am still considering this though
Petrol – 130

*Have you shopped around for cheaper car insurance?

*Lose the Sky. You can buy 2nd hand DVDs and videos in the charity shop for much less than your Sky subscription.

*Shop around for petrol: http://www.petrolprices.com/

Firewalker

Hi Me73,

there seem to be inaccuracies in your expenditure above - TV licence, for example is not 30 per month. This is the one I can be sure about. As to the rest, there are some obvious issues to address:

1) If DD is working £60 per month is hardly enough. I don't believe that you can afford on your income to do that (I have been trying to deal with this one myself and know it is hard emotionally but...).
2) Agreeing to pay £35 per month as a birthday present was a bad thing to do. Have you agreed for how long? This may turn out to be a present that costs you close thousands. May consider discussing the matter with DS and agree either transfer to him (he will have to get a job for this one) or moving to pay as you go (although the costs of cancelling the contract will have to be checked).
3) Your car (transport) related expenditure is very high - is there a cheaper way to get around? At least for sometime.
4) The food bill could go temporary down - you don't have to compromise the quality but could shave off £30-£40 with planning and savvy shopping. For ideas see the Old Style thread on this boards.

As to being so 'poor' you seem to be broke at the moment and it is because of these debt you have (and theu are not even that high.

For ideas about how to sort out your budget (or how to do budgetting) you may consider having a look at:
http://www.themoneyprinciple.co.uk/category/budgeting/

All you need to do is to manage to save about £100 from your current budget and start targetting your debts one by one - will be out of this in a bout a year (possibly less). For more specific suggestions a more detailed budget is needed. Yes, and get rid of Sky - at least for sometime.

Firewalker

Pollycat

Some good points by Firewalker.

I think the £60 per month board paid by your daughter (equals just under £15 per week) is very low, regardless of how much she earns.

I agree about the mobile phone, can you call the provider and ask about a reduced tariff?

How old are your children, btw?

Who do you pay 'phone/broadband' to?
Is that the best deal?

You have 2 adults and probably the equivalent of 3 kids living with you full time (two children living with me full time, and two others who spend half the week with their dad.) so I think your £260 pm for groceries is do-able and you might even manage to trim that a little with help from the OldStyle board.

It looks like you have been spending money on catalogues - are you paying interest on these debts? (sorry, I don't buy from catalogues so don't know how they work).
If so, what are the interest rates?

Re your weight gain (which I hope is only temporary), could you buy some clothes from a charity shop?
You can get good quality clothes at decent prices, although a lot of shops seem to be charging more than they used to.

There's nothing for contents insurance in your SOA, do you have it?

Firewalker

Hi, me again. Pollycat specified the matter of the inaccuracies very well - in fact probably the reasons, as you put it, 'to be so poor' is that not all your bills seem to be accounted for. If you follow the link I provided you will find a thing called the 'balanced money formula' which will help you separate you expenditure into 'musts' (things you have to pay never mind what) and 'optional' (these are all things that you can survive without at least for sometime).

What I have found is that cutting out the 'optional' for sometime is a way to go - this way you will free some money to put agaist debts and will deveop the discipline to think in terms of 'assets' and 'liabilities'. A mobile for instance is a liability because it always and regularly takes money out of your pocket; etc. Achieving financial health requires you to reduce liabilities and increase assets.

As to your question about earning more - this is commendable. But the first step is always to limit your expenditure - increasing income without the discipline of curbing expenditure does not change the overll situation (you can still be in debt; just think of all people who earn £100,000+ and only have larger debts).

BTW, all this was learned the hard way:rotfl:.

Firewalker

fakeplastictwee

Sorry to hear you're having a tough time.

Just to reaffirm what Firewalker and Pollycat have said...
When I was living at home with my mum after I'd finished Uni, I was also working in a supermarket. I was paying her £50 a week! Looking back now I think I still got a good deal really. I know it's difficult to approach but I think it's worth having a conversation with your daughter. After all, if she suddenly decided to move, she'd get quite a shock when she realises how much it costs her to live.