Single parent worried about the future

Alwaysanxious

Hello,
I'm not sure if I'm posting in the right place but...
I am a single parent to a 10 year old. I work full time and also get child maintenance and some tax credits. I also have a mortgage.
At the moment I am managing financially due to the help I am getting. However, once my child turns 18, my child maintenance and tax credits are going to stop and I'm worried about how I'm going to manage financially.
I am planning on overpaying my mortgage as much as I can but other than that I'm not sure what I can do and what will happen if I can't afford my mortgage any more.
I'm guessing I'm not the only one in this position so can anyone give me any advise please?

jamiehelsinki

You have 8 years, maybe you could look for ways to boost your income in this time.

DCFC79

Increase your income whether it's a second job or other full time employment elsewhere. Maybe look at your spending and see if you could stretch your income minus to cover all bills etc.

Mojisola

You're thinking about it now so that gives you plenty of time to plan ahead.

There have been several threads on here started by parents whose benefits are about to be cut or already have been and they're at a loss at how to deal with it.

If you want to post a SOA on the Debt-free Board, people will help you reduce costs which can all be put towards the mortgage.

Will you be able to progress in your job or take on some extra part-time work when your child is older?

Alwaysanxious

Thanks for the replies.

Unfortunately progressing in my current job is unlikely so I'm going to have to find another way to boost my income.
I will post on the Debt free board though, thank you.

DeterminedSingleMummy

Hi.

I am in a similar position. After having my DD I had to half my hourly rate and number of hours worked which has had a massive impact on me financially. However my mindset changed and I worried how I would pay my mortgage. I changed my spending habits and lifestyle to stuck to strict budgets. I am aiming to pay off my mortgage by the time my DD is 10 by overpaying my mortgage eveymonth from selling things on Ebae, overtime, cashback etc. Basically every opportunity I have to overpay I will even if it's a small amount.

I have a diary on the mortgage free wannabe forum. It seemed impossible to me when I first started thinking about it but reading other people's diaries and hearing how they manage to overpay helped lots

Xx

Spendless

It's not actually as soon as your child hits 18 that the entitlement to tax credits, child maintenance etc goes. You would lose it if your child does a full-time job (eg an apprenticeship) after they take their GCSE's. If they stop in further education (eg A levels) then it's usually the end of August following their 18th birthday, so it depends on when child's birthday falls and what they intend doing after leaving yr11, as to how long it will be before child related benefits stop. This assumes you are in England/Wales. Other areas of UK may be different due to school years running differently.

Anyway, once your child is old enough to work f-time/do a degree/claim benefits then they will receive money in their own right. At this point they should be helping out financially. This might mean purely funding their own social life and clothes and travel costs or it might also mean contributing to your household bills.

As well as overpaying your mortgage, which I think is a great idea. You could also set up savings accounts for you and your child. Not only would this provide something of a nest egg for you both, you would also get used to living on less money (due to putting it away for savings). You could also look at big expenditures likely to come up in the future for you and your child and plan accordingly now. Eg if child were to have driving lessons, let them start when s/he is 17 and your income is more than it will be later on.

I do something similar for my DC. Last year my DS was in yr11 and wanting to go on to do a computer course. His PC broke but I'd just lost my job and it took 6 months for me to find another. We'd put money in savings accounts for both children from being young, with the idea it could be dipped in around the time of finishing school to starting work with anything needed. We decided this was a perfect example and gave DS some money for his 16th along with the money from their savings account to buy a suitable computer ready for college.

Likewise, I am currently in a temporary job and unsure how long it will last. I have personal reasons for not wanting to look for something permanent yet, but I save some wages each week, partly to tide me over a period of unemployment and also for my DD's travels costs in a few years time as she will need to go to a college further away for what she intends to pursue.

Mojisola

Spendless wrote: »

You could also set up savings accounts for you and your child.

Alwaysanxious - if you haven't already got a rainy day fund, I would prioritise that above over-paying the mortgage.

lika_86

Mojisola wrote: »

Alwaysanxious - if you haven't already got a rainy day fund, I would prioritise that above over-paying the mortgage.

I agree with this. If you're only just coping at the moment the impact you'll make on your mortgage by overpaying is likely to be minimal.

You have eight years until your financial situation is due to change, you have time to prepare. You say there is no room for progression in your current job, what about another? You have time to train and get qualifications for another job that might pay better or have better prospects. Consider evening courses or distance learning.

ViolaLass

Second the call for you to think about qualifications etc.

What job would you like to be doing in 5 years time? What do you need/need to do in order to get there?

Focus first on that and a rainy-day fund.

TBagpuss

You've already had some good advice. Other options when the time comes may be to see whether you can take in a lodger and/or downsize to a smaller property (if you daughter doesn't leave home, then the 'lodger' would be her, with her providing a financial contribution from her wages or benefits)

I agree that looking at ways to reduce your current expenditure and to start to build up something of a rainy day fund and/or make some mortgage overpayments would be excellent, as would thinking about options for re-training, or progressing (for instance, if you can't progress in your current job, think about what transferable skills do you have, and what additional training or skills you'd need to move on.)

As you work full time, are you currently paying for child care? i would expect there to be a period where you can start leaving your daughter alone in the gaps between the end of school and you getting home, so you may find a period where those costs fall and you an make savings.

How old will you be when your daughter turns 18? You might be able to remortgage over a longer period at that time, to reduce your monthly paymetns (although of course this will mean you pay more over all, so it is better to avoid it if you can)