Can't afford to repay debts whilst on Mat Leave. Any suggestions?

Dobbibill

You seem to be thinking very short term and need to consider your long term options. Your posts hint that your head is buried in the sand.

In simple terms taking 12m mat leave is not a MSE or practical financial solution.

Getting into more debt to do it is not a solution.

Adding to your mortgage is a short term gain, long term pain and as others have said is not guaranteed and quite possible to fail due to affordability.

I'm sure with other children to consider, they would appreciate the sacrifice to return to work a little earlier than to make a choice that will impact their future standard of living.

One of you needs to increase your income substantially to just keep your heads above water.

Pepperoni

With my first born, I wanted 12m off. I had debts. I had to face reality and accept that I couldn't afford to take 12m off - I ended up taking 9m and actually found it a good balance, you may be surprised. 12m is a LONG time to go without much income.

Currently off with my second born, have taken 12m (debts are clear). It's hard going having absolutely no income in the last 3 months - do not under estimate that. I had money stashed etc and still finding it hard. I'm looking forward to getting back to work and actually having money.

I know you've mentioned breastfeeding but you would be much better off investing in a good pump and going back to work early. You need to think about the childrens future - do you really want to bring them up in a household full of debt? Sorry if that's harsh but it's how I had to look at things with my first round of mat leave.

nkkingston

Going into your overdraft is going to cost you a lot of money in the short term, let alone the long.

Adding the debt to your mortgage is dangerous, considering how stretched you are. I don't use that word lightly.

If you can get a 0% card, that would be a good start to balancing things, but credit companies are unlikely to extend you one.

I'm going to go out on a limb and guess that both the Santander loan and mum are in some form consolidation loans, and you've run up more debt on top of them. That suggests any kind of consolidation going forward isn't going to work.

Stepchange have given you good advice. It's scary advice, but until you're in a position with a higher income and lower outgoings, it's the best advice you'll get. If you go into a DMP with a debt charity creditors will stop charging you interest, so it could work out cheaper in the long run than struggling on. It will take longer to pay off, but it'll keep the monkeys off your back.

EssexHebridean

nkkingston wrote: »

Going into your overdraft is going to cost you a lot of money in the short term, let alone the long.

Adding the debt to your mortgage is dangerous, considering how stretched you are. I don't use that word lightly.

If you can get a 0% card, that would be a good start to balancing things, but credit companies are unlikely to extend you one.

I'm going to go out on a limb and guess that both the Santander loan and mum are in some form consolidation loans, and you've run up more debt on top of them. That suggests any kind of consolidation going forward isn't going to work.

Stepchange have given you good advice. It's scary advice, but until you're in a position with a higher income and lower outgoings, it's the best advice you'll get. If you go into a DMP with a debt charity creditors will stop charging you interest, so it could work out cheaper in the long run than struggling on. It will take longer to pay off, but it'll keep the monkeys off your back.

Some great advice here - and I can't urge you strongly enough to listen to hose who are trying to help you here, and especially when that help is given from a "been there, done that" point of view.

NKKingston's bit that I've bolded above is probably your best way out of the hole you've got yourself into here - however going forwards though, you still need a budget that balances, and sufficient income to service your lifestyle - and with 5 kids, that lifestyle isn't going to come cheap I'm afraid!

pelirocco

Kaloloke wrote: »

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 4
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 1250
Partners monthly income after tax....... 600
Benefits................................ 348
Other income............................ 0
Total monthly income.................... 2198

Monthly Expense Details
Mortgage................................ 322
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 109
Electricity............................. 60
Gas..................................... 60
Oil..................................... 0
Water rates............................. 35
Telephone (land line)................... 45
Mobile phone............................ 45
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 450
Clothing................................ 50
Petrol/diesel........................... 160
Road tax................................ 70
Car Insurance........................... 75
Car maintenance (including MOT)......... 50
Car parking............................. 20
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 150
Medical (prescriptions, dentist etc).... 5
Pet insurance/vet bills................. 0
Buildings insurance..................... 20
Contents insurance...................... 0
Life assurance ......................... 20
Other insurance......................... 41
Presents (birthday, christmas etc)...... 40
Haircuts................................ 20
Entertainment........................... 0
Holiday................................. 50
Emergency fund.......................... 0
Xmas.................................... 20
Annual tickets.......................... 25
Labour.................................. 6
Union................................... 6
Total monthly expenses.................. 1954


Assets
Cash.................................... 0
House value (Gross)..................... 140000
Shares and bonds........................ 0
Car(s).................................. 6300
Other assets............................ 0
Total Assets............................ 146300


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 60000....(322)......3.29
Total secured & HP debts...... 60000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
MBNA...........................3300......25........0
Tesco..........................1600......70........0
Santander Loan.................6500......147.......8
Mum............................2000......0.........0
Total unsecured debts..........13400.....242.......-


Monthly Budget Summary
Total monthly income.................... 2,198
Expenses (including HP & secured debts). 1,954
Available for debt repayments........... 244
Monthly UNsecured debt repayments....... 242
Amount left after debt repayments....... 2

Personal Balance Sheet Summary
Total assets (things you own)........... 146,300
Total HP & Secured debt................. -60,000
Total Unsecured debt.................... -13,400
Net Assets.............................. 72,900

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


My income is going to fall to approximately £600 per month in September 2017 and then £0 in February 2018 until May 2018. Wages will then be £1100 per month from June 2018.

This is a deficit of approximately 8250 on our income.

I think my child benifit will increase by £13 per week. So 676 for the year

We obviously won't be able to spend on anything but the absolute essentials whilst on leave.

My phone contract ends in June so I will get a much cheaper deal. I am hoping to save at least £180.

We are converting our van into a 7 seater so that we can sell our car in June 2017. We should make approximately 1500 from selling the car and save approximately 1500 per year on not having a 2nd vehicle. So hopefully a £3000 saving

I want to get a better mortgage deal in June as that is when my current deal ends. So there will hopefully be a saving of £360 per year there.

I have got email advice from stepchange who have suggested that I pay £1 a month to each debt. My concern is that if I do this I will then end up owing far more money to my debts because of defaulting and the creditors trying to get their money via debt recovery, charging me interest and for the debt recovery.

I really don't want to add the debt to my mortgage but it is an option that would probably end up costing another £15000 on top.

Would we be better off going into our £3000 overdraft and paying £60 a month OD fee so that we don't default on the loan and cards? Or should I try to get another 0% card to see us through the next year? Or both?

I could pay £25 a month to the tesco card but at £70 it is paid off before the end of the 0% deal. At £25 I would start to get interest before I can pay it off.

Any advice would really be appreciated.

Yours is the main income and showing £1200 per month now? and you are showing a £2 a month surplus
When it drops to £600 per month , you will obviously be short by that amount per month , and again when it drops to zero you will be £1200 per month short , and then when you do go back to work your income will be £1100 , still £100 per month short ...Unless I have completely miss read .
You have nothing allowed for emergencies, and only £40 a month for birthdays and christmas ( and i am guessing you havent been saving this ), So you may have written your SOA to fit
You also need to remember your bank could pull your overdraft at any time , and you are assuming your mortgage provider would be willing to advance you further funds .

sugarcube84

warby68 wrote: »

There are plenty of families who earn more and have fewer children and still can't afford a full 12m of maternity leave, as much as its lovely to have. I know I couldn't have. I think it was 9m max when I had mine and we felt stretched at that and I only had 2. I fully understand why you want it but try and stay a little flexible as you also have your longer term family 'survival' to consider.

I agree with this, I earn a decent amount (higher tax band) and the main earner whilst hubby does the pick ups drops offs of our ds., he also works full time night shifts. When we decide to have another I will be going back to work before the 12 months as the combo of SMP/then no pay would put us under pressure financially. As much as I want to stay at home our long term finances and security to provide for the family are more important.

sam.4000

After the 6th of April you will not get any more child benefit if you already have 2 children.

chelseablue

sam.4000 wrote: »

After the 6th of April you will not get any more child benefit if you already have 2 children.

I knew it was no child tax credits for any more than 2 children, but I didn't realise it applied to child benefit too?


When I had my son I would have loved a full year off, but sadly wasn't able too at the time.


I had 3 months totally off, then started working 3 days a week, 2 from home and had to go into the office 1 day.
Did that for 3 months then increased to 3 days working from home with one in the office.


Went back to full time in the office when my son was 9 months

Kaloloke

Thank you so much for all your advice. Thankfully I have finally got an answer from the tax credit universal credit people and my tax credits will thankfully increase by a good amount meaning that we can just afford to get through the year once the car has sold. If we can't sell the car then back to work I go at month 9.

Just for info to anyone with expected 3rd or more babies reading this you do get child benefit for each child regardless of how many past the 6th April 2017. It is only child tax credits that you don't.

We will definitely be living close to our limit this year but I am sure that my children will benefit far more from me being at home then wishing I had bought them more stuff. My daughter recently had her birthday at home costing approximately £10 and had a pair of rollerskates from the charity shop at a grand total of £3.50. She was over the moon. Last year I had spent about £100 on a hall and present and she had cried most of the day. Less is definitely more. I am sure once this year is through I will have learnt some very good money saving ways and hope to continue them when I am back at work to try and slash the debt.

I just wish the tax credit and universal credit people were transparent and knew what they were doing. It took over 2 wèeks of calling around and searching the internet to find the correct information.