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

Triker

danlovedough wrote: »

On the + side we do have a lovely home, and very lovely happy healthy children who i intend to make sure i spend more time with from now on. I've been extremely focused on work over the last year, always the last person in the office every day, and realize now that i may have been able to achieve similar results by leaving a bit earlier and making sure i see my son most days before he goes to sleep, which I will be doing from now on.

It does make sense for my wife to get a p/t job, although not sure what work she would want to do.. She is a fantastic mother and it's been great that she has been able to focus on that for the last 4 years.

Hi, this bit jumped out at me so I wondered if your wife would consider doing childminding, kind of hits all the bases really from what your saying.
She could stay at home still to be with your baby but also be paid to look after other people's children.

Some training involved but you sound like a 'can do' kind of family so I don't see that you'd anticipate this being an issue.

Plus I'm not completely 100% on this but childminding earnings are tax free.

Maybe worth a thought?

Good luck with everything else, and welcome aboard, most people here are very supportive.

Triker

Best cards at mo for balance transfers...

http://www.moneysavingexpert.com/cards/balance-transfer-credit-cards#barclaycard22

cottonhead

I would sell one car straight away.Thats going to save petrol, tax,mot,insurance etc etc - nice saving. If your wife doenst work does she really need a car ? Can the kids walk to school etc - if so then you keep the car for work ( only fair as you have to arrive there on time and dry and clean etc ) and your wife and kids can walk. Your wife could do internet shopping for groceries so they are delivered and she won't need to leave the home. I also find shopping online great as it adds up the cost as you go - you can then tweak the basket to get to a figure you like so no surprises at the checkout!
Groceries is huge. Do you really eat all the food or does some go to waste ? We manage on £200 a month. Ok its not the most exciting food and we dont drink, but even cutting down to £400 is going to save you £400 a month. Sky - phone them and see if you can get a cheaper package. I threatened to leave and they reduced the bill. Also do you really need the package you have ? Could you downgrade a little ?
The other things are tricky if you are tied into a contract but when you can - consider cancelling the phones. I pay £10 a month for a pay as you go with Tesco. For that I get £30 free credit and it does last all month! Gym.... if you work hard and enjoy going then perhaps keep it. You need some time to destress. But how often do you go ? if its only 1 or 1 times a week or less its not worth it. Take up running or cycling instead!
Are the kids all at school or will they be from September ? Perhaps then your wife could get a little job ? I work part time in a call centre. OK its not the most brain stimulating job but it fits perfectly around school hours so I dont miss out on the school run at all and it bring in an extra £1000 a month. Thats quite helpful for our family and makes me feel good that I am contributing.
The other thing I would say is dont be hard on yourself. Sometimes when you earn a decent wage like you have been - there is an element of wanting to provide and be the sole breadwinner and also wanting to appear to everyone that you have a certain lifestyle. Its better to adapt to the situation than think you have to maintain things. Having 1 less car and your wife working is nothing to feel uncomfortable about. You sound like you have done a fab job, as has your wife. Working together as a team is going to show your kids what real parents are made of. Good luck.

heartbreak_star

What an awesome post cottonhead!!

Good luck OP - you will manage I'm sure

HBS x

Naomim

Hi,

I wanted to add my tuppence worth about the food shopping and nappies.

Is your wife completely aware of the situation. Have you shown her the SOA?

I agree with the other posters that £800 is massive but to try and drop down to £250 will be unacheivable in one go imho. Especially if your wife isn't used to it.

We are a family of 4 with one still in nappies. My average spend is about £300 - £350 a month but I'm not as "good" as I should be
I buy Tesco own nappies for the day time and use Pampers "simply dry" in the night - these are the one in the orange packs and not had one leak.

Go through your cupboards, fridge & freezer and do a stock take. List everything. Find a recipe builder website and see what you think you may be able/confident to make with the ingredients you have. I also bear in mind what the kids will eat so I try to only cook one meal.

Then - meal plan. I do mine week by week. Make a list of what you need and stick to it. You'll be amazed how the shopping drops.

On your SOA - what is the other £100 income?

Agree about gas/elec being high too. We pay £83 a month for dual gas/elec and were in credit last bill!

You and your wife should both keep a spending diary. You can download apps onto you i-phones to keep track. I bet your wife probably spends more than she realises during the week with the little ones.

HTH

Naomi x

brizzledfw

Hi there

These are all good pieces of advice..by the way if someone else hasn't already said WFTC are working Family Tax credits which you may well get if your salary drops to £30k odd

I think the shock is hard..I have been in the same place. LIght Bulb Moment (LBM) was flickering for years but my very well paid (but exhausting) jobs kept us living the high life in lots of ways. Then I still have a great ( new) job which I love but it's not full time...so about a 40% drop in salary..I thought I could manage but it's been harder than I could have ever imagined and we have run up debt in the interim ( after being clear and building savings for the first time). So as of start of this year am back on here every day, have a diary yadda yadda. Am trying to be MSE permanently..new way of life rather than a lifestyle I flit in and out of..

Changes we have made ( others have said loads of these)

- as a team with your wife, you need to both take control- its not your responsibility. It's a joint one.
- EBay or Amazon anything, kids clothes, CDs..anything. We got £100 for a fireplace last week. It was rusting in our garden..is now money in our account
- we used reusable nappies. Ours were used for 5 kids ( only 2 were mine!) and much cheaper. Try them!
- keep track of every penny you spend. We use iexpensit for the iPhone but you need to treat your finances as if you were a business with the same care and attention as if you were the FD.. ( which you are!)
- cut down on phone and media packages..threaten to leave. The kids will be happy with CBeebies on Freeview
- put goals on the small dfw things threads every day...it helps keep you focussed and they are a really supportive bunch on there
- do a budget and stick to it or at least know where it all goes
- meal plan to within an inch of your life, cook from scratch and use up all LOs..don't throw anything away!!
- make a payment towards any debt every day..even if it's pence..this is a great disciplines,
- my grocery bill is large...but yours is humongous!! ;-) and we buy lots of organic etc. too. So you can definitely get that down to £400 pm and probably further. We now get basics in ALD! and as its a principle thing we stick to the R@verford veg box, milk etc. We keep chickens and have an allotment.
- we still pay a lot for kids activities but now scrutinise every one. Do you need to do this too?

Hope this helps

Best of luck

Brizzle

ms_london

danlovedough wrote: »

The situation feels hard as I've always been responsible for the money in the household since we got married 5 years ago and we've generally been pretty comfortable, although clearly too leveraged up.. I also feel guilty for letting down my wife and lovely children and not being able to fully provide for them the way i could. I'm sure the situation will improve soon though

On the + side we do have a lovely home, and very lovely happy healthy children who i intend to make sure i spend more time with from now on. I've been extremely focused on work over the last year, always the last person in the office every day, and realize now that i may have been able to achieve similar results by leaving a bit earlier and making sure i see my son most days before he goes to sleep, which I will be doing from now on.

Don't feel guilty, so long as they have a roof over their heads, are clothed, fed and more importantly loved, then you are providing for them - the material stuff just does not matter, it is the time spent with them that is more important as you have just mentioned above.

If your wife has to get a part time job then so be it - marriage should be team work and you shouldn't have to bear the burden alone!

Sounds like you are making changes already, well done xx

danlovedough

Hi Everyone,

It's been a little over a year since i posted here and wanted to give a quick update but most importantly say thank you to all who posted in this thread and gave advice. The advice i received here helped me through a very difficult period in my life and i'm grateful.

Thankfully things with work have improved over the last year, and I am now in the process of negotiating a salary increase with the aim of having my basic salary increased to £55k from July. Also will be due an annual bonus at the end of July which will help to repay some credit card debt.

Some of the advice here which i took on board and used / found helpful:

Shopping at Aldi - Very helpful indeed - This place is great, they shopping experience not so fun but great value. I mostly shop at waitrose & sainsburys now but will regularly visit Aldi for essentials and have started did one weekly shop in Asda this month. Overall Aldi is by far the best value.

I did cut back on some things
- TV - Scaled back sports channels and phoned Sky to tell them they needed to discount my package which they took £10 off and gave me £25 towards a new remote as i told them my remote is broken (which it is)

- Gym membership - Cancelled this and went without gym membership for 3 months. Tried a cheaper gym but joined back up a the old gym in January. It's worth every penny as long as i visit at least 3-4 times per week. I also joined up the rest of my family on a group deal so get more usage of the membership at the same time as spending time with the children.

- Phone contracts - I have a work phone now so will end my personal contract within 6 months. Made a poor decision and bought an iPad on 2 year 3G contract which rarely gets used.

I came close to selling my smaller car in August, but eventually managed to persuade my employer to increase my basic salary by £5,000 per year to cover the car cost, as it was seen as a useful thing in my job to have a car.

I'm still not great with money but have become more aware of putting something away for the future and focusing more on paying off debt now and reducing interest payments. I aim to have the majority of my credit card debt and my smaller car paid off within the next 6 months, which would just leave mortgage debt & the 2 remaining years of payments on my larger car at £330 per month.

Medium term I aim to save up deposit for a larger house within 2 years and take advantage of the government help to buy scheme:
http://www.hm-treasury.gov.uk/10012.htm

With this scheme I think buying a £300k house could be feasible with a deposit of £12k so the aim is to pay off debt then save this deposit up as fast as possible.

One of the challenges i'm facing now is having the discipline to save up this deposit money. I'd love a nice holiday or a new car, but I really think it's important to have a larger home as our children are growing up fast and will need more space as they grow.

With basic increased to £55k I would still be entitled to my current management bonus 5% of monthly net profit, and 5% of annual net profit, but not commission for personal billing which i currently receive. The salary rise is not confirmed yet but the indications are that it could be in place by end of July.

Updated Statement of affairs based on expected basic of £55k:

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................ 3238
Partners monthly income after tax....... 0
Benefits................................ 50
Other income............................ 100
Total monthly income.................... 3388

Monthly Expense Details
Mortgage................................ 520
Secured/HP loan repayments.............. 500
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 120
Electricity............................. 100
Gas..................................... 75
Oil..................................... 0
Water rates............................. 45
Telephone (land line)................... 10
Mobile phone............................ 120
TV Licence.............................. 15
Satellite/Cable TV...................... 70
Internet Services....................... 10
Groceries etc. ......................... 600
Clothing................................ 200
Petrol/diesel........................... 100
Road tax................................ 50
Car Insurance........................... 75
Car maintenance (including MOT)......... 20
Car parking............................. 25
Other travel............................ 25
Childcare/nursery....................... 0
Other child related expenses............ 100
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 15
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 25
Haircuts................................ 5
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2935


Assets
Cash.................................... 1000
House value (Gross)..................... 140000
Shares and bonds........................ 0
Car(s).................................. 15000
Other assets............................ 2500
Total Assets............................ 158500


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 125000...(520)......6.8
Secured Debt.................. 12000....(500)......9
Total secured & HP debts...... 137000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Virgin Card....................4000......100.......30
Barclaycard....................5000......100.......29
N/Rock Unsecured...............25000.....110.......7
Total unsecured debts..........34000.....310.......-


Monthly Budget Summary
Total monthly income.................... 3,388
Expenses (including HP & secured debts). 2,935
Available for debt repayments........... 453
Monthly UNsecured debt repayments....... 310
Amount left after debt repayments....... 143

Personal Balance Sheet Summary
Total assets (things you own)........... 158,500
Total HP & Secured debt................. -137,000
Total Unsecured debt.................... -34,000
Net Assets.............................. -12,500

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

danlovedough

Almost forgot - The very best saving tip I can offer to anyone -

This actually saved me when things were really tight and I had been able to save up enough money to cover my quarterly electricity & gas bill:

An tin with a slit in the top. The only way to open it is with a tin opener. You can buy them from £1 shops.
I have 2 of them, and whenever i have any change I give it to the children to put into these tins.
1 for £1 & £2 coins.
1 for other coins.

Keep filling and don't open them unless you REALLY need the money!
It's the most effective method of saving I have ever used. Would recommend to anyone.

Whilst I understand the money in these tins is not working for me, it is a was of saving which means i would not try to access the money unless it is last resort, and so the pot gradually grows into something significant and a very handy safety net.

matttye

No gym is worth £80 a month no matter how often you use it IMO.

My gym is £12 a month.. it doesn't have a swimming pool, sauna etc. but I don't care about that.

Plenty of exercises/weightlifting you can do without even setting foot inside a gym!