Maternity - spanner in the works

HGBeast

Hi all some impartial advise would be gratefully received.

I was a bit silly and took out a loan to help my parents financial situation in the end got into £20k of debt myself and ended up getting stressed about it

Roll on one year and I have only got £10,527 left to pay off (only) with my DFD being September 2015.

Ive now foundout that I am 6 weeks pregnant and could not be happier - however I am the breadwinner in our house (my partner is a student so earning not a lot) and when i go on maternity leave in November our earnings will be slashed from £2600k to £500. We struggle along at the minute as im trying to get debt free asap.

What I need help with is

a) Do we still continue to pay the debts off so when I go off on maternity leave I will only owe £4,447 half of what I owe now. If I do this I wont have any money saved for when baby arrives and don't have a chance of our basic bills being covered by maternity and OH wages let alone any debt repayment :eek:

b) Decrease the loan repayments and put money away so that when I'm on maternity we will be able to afford the rent and the loan payments - but then ill be paying debt off over a longer period

c) other suggestions?

Any constructive advise would be helpful - we are both chuffed to bits that we are expecting and wasn't totally unplanned just didn't think id fall this quickly!

Tixy

Congratulations!

Tough choices with your debts though.

Have you worked out a theoretical statement of affairs for when you are on maternity (excluding the debt repayments)? Have you worked out what benefits etc you should get? How much short will you be a month?

Does your partner work over the Summer months? or could they?
Do they get any student financing?

Have you considered them deferrring studies for a year and working whilst you are on maternity? (it may well not be suitable but I guess everything is worth considering).

If you do drop to basic/minimum payments now on your debts would it be realistic to save up enough to get you through your maternity leave paying essential bills and at least maintaining the minimum contracted payments?

Are you likely to be able to shift any of your debt around to perhaps get a chunk of it on interest free cards for when you are on maternity?

HGBeast

Statement of Affairs and Personal Balance Sheet before maternity
Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 2159
Partners monthly income after tax....... 600
Benefits................................0
Other income............................ 0
Total monthly income.................... 2759
Monthly Expense Details
Rent ................................825
Secured/HP loan repayments.............. 0
Council tax............................. 136
Electricity + gas............................. 44 elec 33 gas
Water rates............................. 36
Telephone (land line)................... (Includeed in Sky )
Mobile phone............................ 16.34
TV Licence.............................. 12.12
Satellite/Cable TV...................... 63 this includes telephone internet and sky sports (cheaper than him going to the pub)
Internet Services....................... 0
Groceries etc. ......................... 300
Clothing................................ 100
Petrol/diesel........................... 300
Road tax................................ 30 (for 2 vehicles)
Car Insurance........................... 25 (for 2 vehicles)
Car maintenance (including MOT)......... 16.66average
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 7.85
Pet insurance/vet bills................. 0
Buildings insurance.....................0 we rent nothing worth nicking inthe house and dont have receipts for any of it anyway!
Life assurance ......................... 0
Presents (birthday, christmas etc)...... 8 nieces nephews £20 each a year including xmas and partne pressie £21.66
Haircuts................................ £20 (i cut my partners)
Entertainment........................... £200
Holiday.................................£83.33
Emergency fund.......................... 0(I know there should be something here)
Capital one credit card.............................£100
Tesco credit card £25 (min 0%)
RBS credit card £50 (min 0%)
Nationwide loan £438
Barclaycard £200
Total monthly expenses.................. 3082.96

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 3000
Other assets............................ 0
Total Assets............................ 3000

Secured & HP Debts

Unsecured Debts
Description....................Debt......Monthly.. .APR
loan...........................5258.64....438.22...... .4.8%
Capital one cc........................1523......100........22%
Tesco cc......................1741......25....... 0%
RBS...........................2281.22......55....... .0%
Barclays..........................725......200....... .22%
Total unsecured debts..........11528.....818.22


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

HGBeast

As you can see spending more than we earn atm :mad:

redpete

£300 on groceries could drop by at leat £100.
£200 on entertainment has to be drastically less. (What would it be if he went to the pub instead of watched Sky Sports!)
£100 on clothes has to be a lot less, make do with what you've got for a time.
Do you need two cars?

None of which gets close to saving enough to cover the £2100 a month you reckon you'll be losing. How long were you hoping / planning before you get pregnant and what was the plan to cope with the drop in income when you thought that might happen?

How long before he starts full-time work?

harrys_dad

You need to look at benefit entitlement when you have the baby to prject forward an SOA for then Try http://www.entitledto.co.uk/. In the meantime you cannot afford anything like £200 a month for entertainment, £300 a month for groceries, £100 a month onclothes, or £83.33 for holiday. These areas alone should be able to produce savings of £400 a month.

lhead123

You will be entitled to child benefit when the baby is born - thats 81.20 every 4 weeks.

You will also be entitled to some benefits such as child tax credit and working tax credits once the baby is born as they dont count the first £100 per week of statutory maternity pay as earnings. This means in their eyes you earn £36 per week so are entitled to more.

Also talk to your company, some will pay full pay or 90% pay for 6 months depending on the size of the company and how long youve worked there! So you could just have 6 months off instead of the full 9 if you wanted to. There is probably a section about maternity in your contract if you don't want to tell them you're pregnant yet.

X

maganan

Have a look at the maternity alliance website, speak to your midwife at your booking appointment, don't speak to your employer until you've had your dating scan etc. Do some research about your employment rights before you share your fab news with work

Good luck

Happier_Me

Hi

Congratulations on your pregnancy

There is certainly room to cut back on your current SOA and you have had lots of good advice already. I would create a second SOA showing your earnings whilst on maternity leave (inc: any benefit entitlements) plus your reduced outgoings/debt repayments during this time to see what your overspend will be for the period you intend to be off - this is the amount (at least) you need to save between now and the date your maternity leave starts.

A couple of questions:

• Any chance you can move the debt on the 22% cards to interest free?
• Do you really, really need two cars?
• What happens when you go back to work? A third SOA will be needed eventually which factors in childcare costs (assuming there are no family members desperate to help out). If you need full time child care this will cost more than your rent.
• Not sure where you live but your rent seems high. Can you move to a cheaper property and save a little here.
• Your fuel cost is high too, could moving closer to a work/uni cut costs here?

And take it from a mum who spent £600 on a pushchair for baby no 1 that got charity shopped in 'As New' condition because neither of my kids would tolerate it, you do not need to spend a fortune on baby stuff. Second hand, ebay, hand me downs work fine.

samtoby

What is the £200 on entertainment?

Pepperoni

Not ideal but you might want to consider not taking as long off on maternity? It all depends on your childcare plans and what would make you feel less pressure.