Time for me to seek advice

Mclovin

Hi all, I've been living with a budget deficit for a few years and now I'm in a tricky situation.

When I met my partner, I had 30k+ savings from my childhood, setup by family. However when I left the nest, I kept dipping into these savings spending it on a lifestyle that I couldn't afford, as I was renting a house and running a car on the minimum wage supermarket job I had at the time plus her part time wage. We had hotel stays, meals out, did a lot of driving about, and had a holiday abroad. Basically enjoying life and not caring about the cost.

We then got married, had 2 kids and my wife stopped working to become a full time parent. I got a slightly better paying (18k salaried) IT job. Also we had more income from child tax credits. I then bought her a car from my savings too so now we were running two. Still on a budget deficit and dipping into diminishing savings. We started to use balance transfer cards as a cushion for our spending. At this point we started trying to be careful with our money.

I then lost my job and things got difficult. My wife found a job and went to work instead, albeit earning less than I did and I became the full time parent. We got a little bit of housing benefit and council tax reduction for a few months too until my wife changed jobs. My savings had run out and my balance transfer cards were filling up.

Now my wife has a 17k salaried job but still not enough to cover bills. She is very stressed with it and it takes over her life. She's not in a good place mentally and is looking to change jobs again. I'm running out of space on my balance transfer cards with over 6k debt, my wife has a card in her name too which is nearly full. I'm almost constantly overdrawn and since January I've been informally overdrawn a lot. Now I'm getting £80 month (the max) in overdraft fees which is not helping!

Now I don't know what to do. We've had handouts from my parents and the in-laws to help us out, but I hate resorting to this. Childcare costs make having a dual income unattractive, especially as we can't get high paid work. Although I've been distributing leaflets and vouchers for my wife's boss for a few extra quid, but I can't do it often as my in laws are getting old and can only cope with the kids (who aren't nursery age yet) a few hours per week.

I've made cuts everywhere. I don't buy luxuries anymore to keep the supermarket shop relatively cheap. My mobile contract is ending soon and I'm going sim-only and keeping my old handset to slash costs.

I'm full of regrets and money anxieties.

I'm contemplating selling my car to help balance the budget. Insurance is expensive and I cannot save up money for MOT/service costs due to my budget deficit. Plus it'd bail me out of my overdraft and pay off a card as I'd get £1500+ for selling it. Although beforehand I'd need to cough up for an interior valet as it's a mess, and pay advertising fees which are steep.

The main budget killer though is the credit cards, which I'm paying about £90 month for and my wife is paying a similar amount for hers. Currently our debt is 0% with most transfer offers ending throughout 2017. I'll struggle to clear it in time though without shifting to a new 0% card.

On the bright side all my bills are paid so I've no nasty letters or bailiffs to worry about just yet. If I leave things much longer it could be a different story. This is why I'm reaching out now. My credit score is also good and so is my wife's.

What should my next move be? Should I sell my car and just share with my wife? Can I challenge my bank about the nasty informal overdraft fees that are dragging me down (and lining their pockets)? What else can I do?

Thanks in advance for any advice

Placitasgirl

Surely if only one of you is working you really don't need two cars? Selling yours would not only net you the sale price (minus advertising), but you'd also save the price of tax, insurance, MOT, routine maintenance, servicing etc. Some of the carwash places near me offer reasonably priced valeting but surely this is something you could do yourself in half a day and with minimal outlay on products? It's a no brainer for me - owning two cars when you've more going out than coming in doesn't make sense.

As for unauthorised overdraft fees, I'm sorry to say that I can't see your bank being sympathetic here. Consider the overdraft as a "service". If you use the service you need to pay for it. If you use it without agreement you pay even more for it. Your priority should be to clear the overdraft and save on the fees first off.

It sounds like you've acknowledged that you can't continue living as you have been and that's a huge positive. You've also clearly made a good start on identifying where you can save money and prevent an even trickier situation happening further down the line.

I wish you luck with selling the car and with your battle to get back on a even keel.

Mclovin

Thanks for confirming that, I agree it is looking like a no brainer now for me too.

I have come to terms with it indeed. I know people are in much worse situations than me and it was tough for me to open up about it because I'm worried about being judged as reckless. The anonymity of this forum has helped.

One issue I didn't mention is my wife still enjoys some luxuries and thinks she deserves a treat, such as a takeaway or the odd bottle of wine etc, occasionally because of her stressful job. Which I think is fair enough, some days are an absolute train-wreck at her work, so I find it difficult to say no, even when I'm paying past my overdraft limit for it.

Money discussion has always been tricky with her, and so I don't like to talk about it as it puts a strain on our relationship. Today was one such day, when I told her I don't think we don't have enough money for bills this month. She got defensive saying she can't work any harder and suggested I ask my mum, who is recent divorced and fairly well off with her new boyfriend, for a handout.

bargainbetty

I'm so sorry to be harsh, but if you and she are still having takeaways when you know it will incur additional overdraft costs, over and above not having the basic spend, then you really haven't faced up to the facts yet. Sort out a statement of affairs on here, detailing all your incoming funds and all your outgoings. Include all the debts, joint and personal, and see what your monthly shortfall is. It will really help focus.


Look at your expenses and see where you can reduce or reapply funds. Do a full inventory of your kitchen, bathroom and clothes to see if you are wasting money on things you already have. Start cooking and baking. If she is coming home from work and you had a good meal prepared for her, she wouldn't be as likely to pay for a takeaway, nor would you to agree to it.


Work through it with her, so she can see that while no one is asking her to work more hours, having a rough day doesn't justify buying a curry when you can't pay the gas bill. Being defensive and expecting other family members to bail you out kind of says that she might not fully grasp the situation.


Sell your car. Valet it yourself, and advertise it for a month on Gumtree or local Facebook selling pages before you pay for advertising elsewhere. Autotrader isn't that expensive, and you don't need to go multi-site or have all the posh highlights - just get a basic ad.


If you can clear the highest interest credit card, or clear a big enough hole in it, you might be able to roll a 0% or low-life-of-balance deal through the cards (pay 1, empty 2 on it, then 3 onto 2 etc). It won't reduce your outgoings much, but it will make the pennies count against the debt rather than the interest.


Good luck

Mclovin

Well we've cut down on fast food a lot. About once a week down from 3 to 4. I usually do cook meals for her and I've downshifted all ingredients I buy to cheapest possible. I have a good idea of what household consumables we have or need so I only buy what's needed. Majority of my supermarket spend is for the kids essentials. Nappies, wipes, milk etc. As for our clothes, we only buy to replace, once holes appear. Usually from charity shops.

Yeah I agree, I think I have a better grasp and overall better understanding of money than she does.

Thanks will try Gumtree first. I've used auto trader before and thought it was pricey.

chelseablue

I would try and cut down on the takeaways, £20-30 a week soon adds up, maybe reduce to once a month?

Happier_Me

Hi Mclovin


Post a true statement of affairs on here and you will receive ideas for further cut backs on your monthly budget. If you are geninely running at a deficit your cuts need to go deeper than they have so far.

You definitely need to discuss your soa with your wife as it sounds like she does need to understand the gravity of the situation. I can understand that her job is stressful and I believe it can be stressful being the sole earner, but if there is no money for treats, then they can't happen.

Budget and stick to it. Some people find spending diaries really useful.

Definitely sell one of the cars, running two is a luxury unless they are both absolutely essential for work which they aren't.

Sell whatever you don't need on ebay/gumtree/carboot and knock this off your overdraft.

Cut off any support from yout family! Might seem an odd thing to say but you need to fix the root cause of your budget deficit. Bail outs will just delay this process and it can't be pleasant asking for help.

Up your income. Your kids are tiny and I take my hat off to couples who work split shifts, I've never done it...but can you not work a couple of evenings a week or during the weekend in a shop/bar/wherever to increase your income?

enjoyyourshoes

Hi

as above have stated:-

1. Sell car

2. Agree as couple what your objective is and be crystal clear

3. Stop spending on WANTS and focus on getting best deal for NEEDS

4. Stop fags, mags, booze, latte, lotto, extended warranty, Sky and other none free tv, reduce mobile to £4 month tariff.

5. Get night job that fits in with your child care needs and wife hours of work, thats what lots of people do.

6. Get on top of your finances (reconcile bank account daily, accrue for annual and 1/4 & 1/4ly costs and set up monthly DD into interest learning account for these cost. Know where you are financially every day!

7. Start living within your own financial envelope not 'everyone else' (£7K annual household debt across UK !)

Good luck

Tyrone_Black

Can one of you really not earn more than £17k?

Gazzafatcityboy

Hiya,


I agree with all the above points. In terms of Job erm, if you don't mind me asking, what IT job do you do? I mean I have worked in IT and that salary is pretty low on the ladder.


Maybe I can point you in the right direction for a new job perhaps?


Regards,


Gaz

Mclovin

I did software testing, and then 1st line application support. So yeah, entry level jobs. I can't program which limits career choices. Will look into evening jobs. My wife is now a manager of a fast food franchise, her boss won't pay more as her store isn't in a very profitable location.

Thanks for the advice folks.