Need some financial advice

DWhite

Hi,

I'm in the process of renting my own home, first time I've done this on my own as I'm just coming out of a marriage.
My income is around £1000 a month after tax, though I'm currently going through interviews for slightly higher paying jobs which should give me around £1300 a month after tax.
The house is a small 2 bed, needs 2 beds as I have an 8 year old daughter who will stay with me. Though she will be mainly with her father as I cannot have her full time and work full time, I have to work full time to pay my rent and bills. Please do not post judgemental comments about me not having her full time, I'm more than capable of beating myself up over that.
I'm a part time student doing a distance learning degree, though I don't think that makes a difference in terms of benefiting me financially as it's part time.
I'm struggling to work out how to afford rent and bills on my income, my tax credits will drop due to my daughter not being with me and I'm not sure if I'll get anything based on my income? Will I qualify for tax credits or housing benefit? I've looked at benefits calculators but don't want to trust them as the system is so complicated.
My rent is £750 a month, so that plus bills before I even consider my car or food is near enough all of my income gone
I've had possibly the worst 2 years i can imagine and am determined to get myself back on track. Fingers crossed I'll get one of the jobs I'm interviewing for which will help, I'm scared I'm taking on more than I can afford and will end up in financial trouble. The deposit alone is going to wipe any savings I have and I have little furniture to take into my house which I was hoping to sort out over the coming months.
Also, could anyone give me an idea of what I'll be looking at paying for electricity and water? I'm a bit naive to it all

MallyGirl

Hi

I really hope you manage to move to a higher paid job as 3/4 of your take home on rent doesn't seem sustainable.
If your daughter is not with you then you will need to be contactable by her so either a land line or a PAYG mobile needs to be factored in, then there is council tax, gas/elec, water, TV licence, travel to work?, food. If you are hoping to run a car as well then there is road tax, MOT, insurance, maintenance, fuel.

I can't help on benefits but I am sure someone else will come along who can. There are other areas on this forum (Debt free wannabe is useful even if you aren't actually in debt) which may have more info.

Good luck

DWhite

Thanks for the reply Mallygirl. I have a mobile on contract so obviously need to pay for that, also I have a car on PCP which has to be paid for, though this means no MOT or maintenance, insurance is £35 a month and looks to drop to around £28 a month on renewal in a few months. Tax for the car is £50 a year and due next month.
I'm hopeful of at least one of the jobs I've applied for, I hope to have answers to both by the end of next week, they will hopefully give me a bit of breathing space.

MallyGirl

I suggest filling one of these in - a statement of affairs. You can save as MSE format. It will prompt you for outgoings and see where you stand.

http://www.stoozing.com/calculator/soa.php

monnagran

First let me welcome you to the forum. You have come to the right place. They are a friendly lot and you will not only get good sensible advice but also friends who will listen to your problems with empathy and hold your hand as you step out into your new life. It must be pretty scary just now and the future must look a bit daunting and uncertain. Be brave, there will be a bright future ahead of you. Promise!

I'm no expert on benefits but I would think that as you have to make provision for your daughter when she stays with you, you may be able to get some help with housing costs. By the way, nobody here will judge you for making what must have been the hardest decision of your life. Far from beating you up we will giving you lots of hugs and admiring you for being such a loving mother that you put the well-being of your daughter far above what you would want for yourself.

This is not the practical help you need but someone more qualified can give that. I just want you to know that you are not alone in your struggle.There is a.n army of friends here just waiting to come along beside you, to pick you up when you stumble, dry your tears when you despair and make you laugh at the drop of a hat.

Try the 'garden fence' thread if you have time. They are as mad as a box of frogs but a more supportive group you won't find.

x

GreyQueen

Hello, DWhite, and welcome.

I don't think anyone here would dream about posting judgemental comments about your daughter not being with you full-time, many of us here have walked a hard mile in broken-down shoes in various aspects of our own lives, and seen others in hardship.

As a general rule of thumb, only about one-third of net income can go on rent; or you can't cover the other basics. Even if you obtain the slightly-higher paid position (good luck btw) you will still be looking at paying north of 50%. I don't think you can do this (no one can, really).

From the point of view of accessing state help with your living costs, when housing benefit is paid towards a private sector tenancy, it is called Local Housing Allowance (LHA). Rates vary; check your local council's websites for their LHA rates. Understand that that is the maximum for those on the very lowest income.

Although you say you need the second bedroom for your daughter when she is with you, councils cannot take consideration of the presence of part-time children in either assessing for LHA for for social housing need. Unless you can show that you get the child benefit/ tax creds in your name, they will assess you as a single person.

If you are under 35, you would only be considered for the shared room rate. If over 35, for the one-bedroom self-contained rate. Your monthly net is higher than mine and there's no way I would ever be entitled to help with rent or council tax.

Re council tax, you will be eligible for the SOD - single occupancy discount - which is standard for one adult in the home but you will have to advise the local authority that you're single to get them to apply it. It's 25% off the total bill. You will still have to pay a big chunk of your income across in council tax, mine is my second-biggest bill after rent and takes one-twelth of my annual net income for my tiny one bedroom A band flat. If you fall behind with council tax, you will quickly be taken to court for a liability order and will be in a world of hurt - they can apply to your employer to deduct direct from your wages if you don't pay. Worse case scenario is baliffs at your door.

I don't like to rain on your plans but have grave concerns that you have insufficient income to pay for your wishes. Have you possibly thought of going about your housing needs in a slightly different way? For example, having a one bedroom (cheaper) rented home and giving up your bedroom to your daughter when she stays and sleeping on a sofabed/ inflatable mattress? Or putting up your child on a temp bed in your bedroom?

I appreciate that this isn't ideal and I personally know people who have had to do this for years, and are looking like doing it until their (full-time) children are old enough to flee the nest.

Living solo is expensive (I do so myself). Go on your council's website and check your prospective address for the council tax band. Deduct 25% and then divide into either 12 or 10 monthly installments. You have the right to pay over 12 months, it's just not promoted widely.

Add that to your rent. Next find out if you will be on a water meter. Ring the water company and ask them for an estimate for your household. They'll ask questions about appliances owned/ frequency of use/ bathing habits and should be able to give you a fair estimate. Could be anything approx £40 pcm. If you're not on a water meter, you will be on rateable value and they will be able to tell you what that charge is.

It's hard to answer about electricity because it will be very dependant on your appliances and your habits as well as what tariffs you're on. Does the prospective home have a pre-payment meter? If so, you will be paying more for your electricity than someone on a quarterly meter. Unless you sign up with Ebico, who charge the same tariff for both.

Re tax credits, if your daughter is with her Dad, you'll lose the child tax credit. You may be entitled to working tax credit. If you are accepted by them as a disabled worker, you can work from a minimum of 16 hours and be eligible for help (means-tested). If you are a non-disabled person, you would have to work 30+ hours per week to be eligible on grounds of low income.

I'm a hardcore thrifter, grow some of my own food and can feed myself on £50 or less a month. With a daughter some of the time, I would suggest your minimum spend (so tight it'd hurt) would be in the region of £100 month food and household incidentals.

There are also incidental expenditures which crop up with distressing frequency such as haircuts, motoring expenditures, study expenditures, internet access, telecoms, contributions towards birthdays and christmasses, occasional clothing and footwear, for you and for her.

I'm afraid I cannot see any possible way of paying £750 pcm rent out of £1 or £1.3 k a month and keeping your head above water. You'd need to be earning in region of £2k + to make £750 pcm affordable.:(

MallyGirl

GreyQueen wrote: »

thought of going about your housing needs in a slightly different way? For example, having a one bedroom (cheaper) rented home and giving up your bedroom to your daughter when she stays and sleeping on a sofabed/ inflatable mattress? Or putting up your child on a temp bed in your bedroom?

I appreciate that this isn't ideal and I personally know people who have had to do this for years, and are looking like doing it until their (full-time) children are old enough to flee the nest.

My Mum slept on a sofa bed in the living room for years so that my brother and I could have separate bedrooms (and not kill each other). That wasn't for occasional visits, it was full time. You do what you have to.

GreyQueen

Yeah, one of my colleagues has been sleeping on her own couch for years for the same reason. Won't end until her youngsters can get out on their own (still at school).

You do what you have to get by.:(

DomRavioli

Hi OP,

You don't need a two bed. Get a one bed, with a fold out sofa bed for when your daughter stays. They are usually far more affordable, until you can either get better paid employment or finish uni.

It isn't ideal, but it is what is best for you.

DWhite

Thanks all for the replies, I'm a bit of an on/off lurker on here and knew I could rely on you all.
I've been going over so many numbers to see what/how I can work it I don't really know which way is up anymore.
The one bed thing is probably a better solution, what I resent though is the difference in space for just £150 less pcm. My area is so expensive that £750 for a 2 bed is reasonable. I've looked and there's some one beds that are around £530 pcm which fair enough is in my price bracket.
I've arranged a viewing tomorrow, though having paid £240 referencing already for the 2 bed I'm a bit loathed to start at the beginning again. I should also say that I have 2 cats that are currently with my parents around 100 miles away as I'm staying at my partners' house while I look for somewhere so I'd love to get them back with me which is what makes it harder.

DWhite

Maybe I'm being selfish/unrealistic getting a 2 bed, just wish I'd chosen a profession which pays more, sadly my industry uses and abuses people for minimum pay.
A one bed for a few years wouldn't be the end of the world, i just want my cats with me if I can't have my daughter.