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

tallyhoh

Noticed you pay quite a lot out for clothes, you must have decent old ones that your OH could ebay.

I usually ebay my old stuff & use the money in my paypal account to get new or different stuff.

paulineb_2

Approved food is also another good online shop when funds are tight.
Re gyms, look around, there are plenty gyms all over the UK who offer fitness classes, gym membership, places like pure gym, for £25 a month or less.

My gym membership is 20 quid a month, council gym, pool, sauna, all group exercise classes.

danlovedough

Bertrum wrote: »

OP
I don't know how you do it!!
Supporting 3 kids and a wife on that wage!! With Gym etc. I can barely afford that myself and I'm a single bloke earning not a whole lot less than you paying a laughably small amount of rent.

I really do think you are living beyond your means.

Your job is clearly not that safe. I would take a good long look at your companies finances and asses the risk. A financial consultant or accountant friend can help with that. If you have access to D&B reports, I would run them through that and see what you get. Might be time to jump.

There are a lot of jobs out there if you have the right skill set.

Have you considered contracting? The rewards are good and you'd be no less secure.

Thanks Bertrum, I'm not sure you fully understand my work situation as i've not gone into much detail about exactly what I do..

My role is managing director of a recruitment business. I write the budgets, and have a better understating of the figures than anyone else in the company. Whilst I didn't put any money into the business, I own 10% equity in it, and have worked with the people who own the rest of the company for over 8 years.

Whilst the majority shareholders have the power to dictate my salary, or make changes, I have a reasonable amount of freedom, and I believe the company is secure, in a good place financially and has a very positive future.

I took a big risk going for the role i'm in, but we have done well over the last year and are on course to clear a decent net profit of for our 2nd year of trading. (Our financial year ends June '13)

As for my own earnings; while my salary was reduced to £30k, with commission and bonuses my P60 showed ~£70k for the financial year ending March 2013. My basic is currently set at £35k, but hope to increase it to somewhere in the reason of £50-£60k from July this year with profit share bonuses but less personal commission.

I'm 33 now and have never been very good with my own finances - I have generally had access to and have made good money, but i've also had bad spending habits, and have been in debt since the age of 18.

I have always been interested in earning as much money as possible for example i had 2 paper rounds when i was 13, both morning and after school, Saturday & Sunday.
I always had jobs through sixth form, and uni on top of other hustles to make extra money, and have never claimed a penny of benefits in my life.

I also have some blogs which generate a tiny bit of extra money, and received a monthly payment of £63 from google adsense yesterday. Not much but it's a little extra residual income.

Compared to how I've lived in the past i'm a lot more restrained, but i believe I still have a long way to go with personal financial management.
I guess regularly posting here is a good place to start!

No, I wouldn't consider moving jobs or contracting. My company supplies contractors and I understand the contract job market very well. I agree the rewards are good if you have the right experience and skills.

danlovedough

sweetpea26 wrote: »

Hi there

Welcome back. ...

I really do say this with respect but you need to sit down and see where you are WASTING your money.

I don't think you have really had your lightbulb moment yet. You had a wake up call last year but you have increased your unsecured debts. What would happen to you tomorrow if you lost your job or were too ill to work for a while.

With respect I think you need to start really tightening your belt. You need to cut back on everything you really do not need for a duration to get rid of these high interest debts. How long will it take for you to pay the N Rock off? I appreciate you have a good income but you need to be severely overpaying these debts to stop wasting your hard earned money. ......

I wish you all the best for you and your family.

Thanks Sweet Pea. Your post is very helpful and I agree with most of what you're saying here. The high interest debt needs to go asap. I spoke to N Rock today and actually my mortgage interest rate is lower than i thought at 4.5%.
The secured debt is £115 and the unsecured is £30k.

This would be the debt i go about clearing last of all. My main priority now is clearing the higher interest debt, especially the credit cards, which amount to around £10k.

I'm expecting an annual bonus of around £15k before tax on top of my normal wage, at the end of July. The majority of this to go to clearing the credit card debt and paying off one of my cars.

Then i would just be left with 2 years car payments, and the N-Rock debt, which with less going to credit cards i hope to be able to chip away at.

The trouble I have is with being disciplined enough to not keep spending. I will however keep trying harder and will re-focus on being tight with money.

I take all of your points with respect and appreciate the honest feedback. Thanks again!

paulineb_2

The thing is, anyone can learn to be good with money. When I had more money, I used to waste it, not massive amounts, but now that I have very little, I dont.

You certainly dont need to be spending £200 a week on food. You could cut that down to £50 or £60 if you meal plan, shop in Aldi, Lidl, approved foods.

I actually like shopping in Aldi much more than I like shopping in a store like Tesco.

Bottom line is, if you have debt, you need to throw money at it rather than spending it on stuff you really dont need.

danlovedough

paulineb wrote: »

The thing is, anyone can learn to be good with money. When I had more money, I used to waste it, not massive amounts, but now that I have very little, I dont.

You certainly dont need to be spending £200 a week on food. You could cut that down to £50 or £60 if you meal plan, shop in Aldi, Lidl, approved foods.

I actually like shopping in Aldi much more than I like shopping in a store like Tesco.

Bottom line is, if you have debt, you need to throw money at it rather than spending it on stuff you really don't need.

Thanks Pauline; I've had a look at approved food and I think I will give it a go. Looks like a good way to cut down dramatically on grocery bills. Especially for things like pasta.

However they don't have much of a selection and a lot of the food seems to be either failed products which supermarkets could not sell, or it's out of date. Perhaps that's why it's so cheap?

I prefer Aldi to Tesco or Asda, but i do enjoy shopping in Waitrose and the quality and choice they offer is very good. They sell some nice luxury things which you cant buy elsewhere.

If i have time what works for me is to buy the essentials in Aldi or Asda, and then go to Waitrose or Sainsbury's for a few luxuries. I will try throwing the market and approved foods into the mix to make the money stretch a bit further.

Bertrum

danlovedough wrote: »

Thanks Bertrum, I'm not sure you fully understand my work situation as i've not gone into much detail about exactly what I do..

My role is managing director of a recruitment business. I write the budgets, and have a better understating of the figures than anyone else in the company. Whilst I didn't put any money into the business, I own 10% equity in it, and have worked with the people who own the rest of the company for over 8 years.

Whilst the majority shareholders have the power to dictate my salary, or make changes, I have a reasonable amount of freedom, and I believe the company is secure, in a good place financially and has a very positive future.

I took a big risk going for the role i'm in, but we have done well over the last year and are on course to clear a decent net profit of for our 2nd year of trading. (Our financial year ends June '13)

As for my own earnings; while my salary was reduced to £30k, with commission and bonuses my P60 showed ~£70k for the financial year ending March 2013. My basic is currently set at £35k, but hope to increase it to somewhere in the reason of £50-£60k from July this year with profit share bonuses but less personal commission.

I'm 33 now and have never been very good with my own finances - I have generally had access to and have made good money, but i've also had bad spending habits, and have been in debt since the age of 18.

I have always been interested in earning as much money as possible for example i had 2 paper rounds when i was 13, both morning and after school, Saturday & Sunday.
I always had jobs through sixth form, and uni on top of other hustles to make extra money, and have never claimed a penny of benefits in my life.

I also have some blogs which generate a tiny bit of extra money, and received a monthly payment of £63 from google adsense yesterday. Not much but it's a little extra residual income.

Compared to how I've lived in the past i'm a lot more restrained, but i believe I still have a long way to go with personal financial management.
I guess regularly posting here is a good place to start!

No, I wouldn't consider moving jobs or contracting. My company supplies contractors and I understand the contract job market very well. I agree the rewards are good if you have the right experience and skills.

If I may be bold, it sounds like a bit of a bad deal. What sort of return are you getting on the equity?

Are you a genuine director, I.e getting dividends etc. That's what I would push for. It is far more tax effecient than bonuses based on profit share. I got screwed on tax when on a profit share.

It's not alot for an MD post either. But there are clearly long term oppportunities. Just dont let them take the peverbial.

When I was on profit share, I lived off my base. And used the extra as just that. Don't be tempted to factor it in as part of your monthly budget as that can get you into trouble. If you have a bad 3 months it can really hit hard.

Thrifty_Pixie

I hate to say it but i don't think you've learned from last year's experience at all. Anything can happen at any time, however secure you may think your job is. If you're that embedded in the finances and prospects of the company how come you didn't know you were going to be given a pay cut?

You've had a scare and ignored most if not all advice given here once your bubble went back to bouncy.

You really need to build a more secure base with your wealth for your wife and children, instead of spending it lavishly as soon as it starts to come pouring in again.

I would clear all debts and gather together a nest egg before i started saving for a deposit. I would plug all the holes i was haemorrhaging money through for luxuries such as gyms, Sky and Waitrose's extortionate prices. Your mortgage was interest-only yes? Change that, and start actually owning your house instead of the bank.

You're in a VERY blessed position right now, and imho you're wasting it.

You are basing ALL your family's security on your job being secure and your wages never changing again even after you've had a scare once.

I just don't get it.

danlovedough

Thrifty_Pixie wrote: »

I hate to say it but i don't think you've learned from last year's experience at all. Anything can happen at any time, however secure you may think your job is. If you're that embedded in the finances and prospects of the company how come you didn't know you were going to be given a pay cut?

You've had a scare and ignored most if not all advice given here once your bubble went back to bouncy.

You really need to build a more secure base with your wealth for your wife and children, instead of spending it lavishly as soon as it starts to come pouring in again.

I would clear all debts and gather together a nest egg before i started saving for a deposit. I would plug all the holes i was haemorrhaging money through for luxuries such as gyms, Sky and Waitrose's extortionate prices. Your mortgage was interest-only yes? Change that, and start actually owning your house instead of the bank.

You're in a VERY blessed position right now, and imho you're wasting it.

You are basing ALL your family's security on your job being secure and your wages never changing again even after you've had a scare once.

I just don't get it.

Thanks thrifty You are right to a degree.
As I mentioned I have never been great with saving money and really need to improve on this.

My work situation is an usual one, I agreed to start up the business 2 years ago on guaranteed earnings with the view to the guaranteed earnings being reduced eventually. before this i was earning good money and took a risk and a pay cut to take on the opportunity of having more independence and equity in my own business.

The pay reduction was badly handled by the other shareholders imo.
I had a better grasp of the figures than they did and the market we were working in crashed. We had to write off 6 figures+ in bad debt and ended year 1 of trading with £1m turnover and a £9k loss. They based my salary reduction on thinking we would post a 6 figure loss.
Without the debt write off it would have been a successful year.

I expected a salary reduction but not as severe and quickly executed as it happened last year.

Thanks for everyone's feedback this thread has helped me a lot. I must assert that I have taken much of the advice on board and coming back to this thread 12 months on has refocused my mind on money saving.

danlovedough

Bertrum wrote: »

If I may be bold, it sounds like a bit of a bad deal. What sort of return are you getting on the equity?

Are you a genuine director, I.e getting dividends etc. That's what I would push for. It is far more tax effecient than bonuses based on profit share. I got screwed on tax when on a profit share.

It's not alot for an MD post either. But there are clearly long term oppportunities. Just dont let them take the peverbial.

When I was on profit share, I lived off my base. And used the extra as just that. Don't be tempted to factor it in as part of your monthly budget as that can get you into trouble. If you have a bad 3 months it can really hit hard.

The company is still a startup although I am sole director with companies house we have not paid out dividends to date as we have not posted a profitable year yet.

Our 2 years trading ends in 9 weeks and once the accounts are prepared for end of July I will be due a £15-£20k bonus.
I will be talking some tax advice before this is paid out to find the most tax efficient way of getting this money paid out.

If I could get my salary agreed at £55k from July I would be able to do as you suggest and use the salary to get by on & the bonuses to clear more debt and for the odd luxury but nothing too extravagant, although I would be aiming to make an extra £55k in bonuses for the next financial year on top of the basic