x-post - Salary cut in half overnight - Need help!

danlovedough

I posted about my situation in the Employment & Job seeking forum.. As i'm a new member i don't have the rights to cross post but look it up if your interested..

Basically my work situation has changed overnight from having guaranteed £75k basic to £40k for 3 months, then £30k after that. I've consistently been paid close to £100k for the last 5 years, but managed money very badly.

Until this week my salary gave me £4,175.75pm take home wage. For next 3 months i expect around £2,463.53pm, then after that, £1,896.86pm

Debt:
3 x credit cards totaling £9500 (£270pm)
2 x car loans, £3000 and £12000 (500pm)
1 x 110% interest only mortgage for £145,000 (£630pm)
1 x £1500 overdraft

Bills
2 iPhones = £80pm
SkyTV = £80pm
Gym membership = £80pm
Sofa on credit = £50pm
Energy bills = ~£200pm,
Council tax = £120pm,
Water bill = £50pm
Petrol = £200pm

Total £2260pm before buying food or anything else remotely fun.
3 kids - 1,3,10, wife doesn't work, no real savings.
How can i reduce my monthly outgoings?

:j

danlovedough

Oh, and I don't need to be told that i'm stupid for managing money badly, racking up debt and not leaving anything aside for a rainy day, (Because I already know).
Just didn't ever expect to have my basic salary cut in half without warning.

Hovel_lady

Hello

I'd suggest putting a SOA (statement of affairs) on here which will make it easier for people to help.
You can format it for MSE at the end.

http://makesenseofcards.com/soacalc.html

warwicktiger

Lordy thats hard, how will you manage on £30,000?
£26000 loans for cars and lord knows what else.
-10% Equity but only paying the interest on the mortgage.
Wife not working, no real savings.

How do the rest of the world manage? I wonder. Has the coffee brewed now? Can you smell it?

Well start with a statement of affairs so you know where you stand, but in the meantime a few points to ponder:

2 i phones, £80 pm, my mobile is £15.00 pm, I send/receive texts and make and receive calls but don't need an expensive phone.

Sky TV £80 pm, must be HD+, sports and film I guess. Get rid.

Gym membership £80 pm, why? why not just run, cycle, dig garden, would you believe it they are all free forms of exercise!

Look £2700 pa gone already!

Sorry, but 90% of the population cannot imagine having to struggle by on your income.

sgtbush

get pay as you go phones
cancel sky tv--- 80 quid a month- mine costs 32 quid
cancel gym membership and run round the park
get the wife to get a part time job
sell one of the cars
thats 240 quid a month saved plus whatever the wife can earn part time
who says you can afford fun?
after tax 30 k brings in 1,897pm so theres another 47 quid a month

Hovel_lady

Link to the OP's other post...

https://forums.moneysavingexpert.com/discussion/3843807=

BlushingRose

warwicktiger wrote: »

Lordy thats hard, how will you manage on £30,000?
£26000 loans for cars and lord knows what else.
-10% Equity but only paying the interest on the mortgage.
Wife not working, no real savings.

How do the rest of the world manage? I wonder. Has the coffee brewed now? Can you smell it?

Well start with a statement of affairs so you know where you stand, but in the meantime a few points to ponder:

2 i phones, £80 pm, my mobile is £15.00 pm, I send/receive texts and make and receive calls but don't need an expensive phone.

Sky TV £80 pm, must be HD+, sports and film I guess. Get rid.

Gym membership £80 pm, why? why not just run, cycle, dig garden, would you believe it they are all free forms of exercise!

Look £2700 pa gone already!

Sorry, but 90% of the population cannot imagine having to struggle by on your income.

A fair point but a bit unfair in this instance I feel.
The OP has *lost* 50% of his salary and needs to adjust his spending to fit, but at the same time some sympathy must be felt for his sudden, relative, poorness surely?

danlovedough

warwicktiger wrote: »

Lordy thats hard, how will you manage on £30,000?
£26000 loans for cars and lord knows what else.
-10% Equity but only paying the interest on the mortgage.
Wife not working, no real savings.

How do the rest of the world manage? I wonder. Has the coffee brewed now? Can you smell it?

Well start with a statement of affairs so you know where you stand, but in the meantime a few points to ponder:

2 i phones, £80 pm, my mobile is £15.00 pm, I send/receive texts and make and receive calls but don't need an expensive phone.

Sky TV £80 pm, must be HD+, sports and film I guess. Get rid.

Gym membership £80 pm, why? why not just run, cycle, dig garden, would you believe it they are all free forms of exercise!

Look £2700 pa gone already!

Sorry, but 90% of the population cannot imagine having to struggle by on your income.

I understand your point. I'm not claiming that my reduced wage is terrible, with some warning I would be able to adjust more easily, they literally gave me no warning and cut the wage over-night. I had no reason to think they would do that - My manager knows my financial and family situation and is aware that i have been earning around £100k for the last ~4 years.

The obvious immediate reductions I can make (which i thought of myself!), are to cancel Gym membership (3 months notice) and cancel sky TV. One of the phones is for my wife, but I am tied in to 2 year contracts with these. I will also speak to the mortgage co. to see what payment holidays they can offer.

Pretty sure i'll need to sell 1 of the cars and start biking to work.
After that it gets a bit more difficult to reduce outgoings further without some kind of default, or like you say asking my wife to get a job, which will be difficult due to the baby we have.

danlovedough

The other aspect to my job is that there is a commission structure, where I can earn 10% of all gross profit i personally bring into the company, 5% of the company net profit paid quarterly 1 month in arrears (1st payment due end of July), and 5% of net company profit paid annually.
Thanks for the responses so far. Here is a statement of affairs:

danlovedough wrote: »

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 2463
Partners monthly income after tax....... 0
Benefits................................ 100
Other income............................ 100
Total monthly income.................... 2663

Monthly Expense Details
Mortgage................................ 625
Secured/HP loan repayments.............. 550
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 125
Electricity............................. 100
Gas..................................... 100
Oil..................................... 0
Water rates............................. 50
Telephone (land line)................... 10
Mobile phone............................ 80
TV Licence.............................. 15
Satellite/Cable TV...................... 80
Internet Services....................... 20
Groceries etc. ......................... 800
Clothing................................ 100
Petrol/diesel........................... 200
Road tax................................ 30
Car Insurance........................... 100
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 5
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 20
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 25
Haircuts................................ 0
Entertainment........................... 80
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 3055


Assets
Cash.................................... 100
House value (Gross)..................... 132000
Shares and bonds........................ 0
Car(s).................................. 15000
Other assets............................ 0
Total Assets............................ 147100


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 145000...(625)......4.5
Secured Debt.................. 15000....(500)......7.9
Hire Purchase (HP) debt ...... 500......(50).......0
Total secured & HP debts...... 160500....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Capital One ...................1300......50........34
Virgin Mastercard..............4800......120.......34
Barclaycard....................3750......110.......34
Overdraft......................1500......0.........30
Total unsecured debts..........11350.....280.......-


Monthly Budget Summary
Total monthly income.................... 2,663
Expenses (including HP & secured debts). 3,055
Available for debt repayments........... -392
Monthly UNsecured debt repayments....... 280
Amount short for making debt repayments. -672

Personal Balance Sheet Summary
Total assets (things you own)........... 147,100
Total HP & Secured debt................. -160,500
Total Unsecured debt.................... -11,350
Net Assets.............................. -24,750

Created using the SOA calculator at https://www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using other browser.

secretshopper75

Sorry to hear about your current situation, is there a possiblity that your wife could get a p/t job on an evening or during the day and either you or families members could take care of the children?

Have a look a the family boards and cooking from scratch too as £800 per calendar month is a lot to pay out for groceries.. you should be able to make a great saving there..

Good luck

rising_from_the_ashes

Sorry things are tough ... classic situation of living to what you earn rather than what you need ..... I do think you should have notice of a change but it would appear you've not got a signed contract in place?

How did this come about because you should've received something when your T&Cs changed last year ....