Advice and Motivation needed for a newbie

dionysia

But your budget is short £328 every month, so you're borrowing £328 every month just to live - is this all going on the overdraft? If so you're not really paying it off, you're turning £1200 owed to family on generous terms (no interest, flexible) to £1200 owed to the bank at whatever interest rate they charge you and they can call it in in full at any time. At least consider pausing it for a month or two while you look at anywhere else you can cut in your budget.

Have you asked HMRC to double-check that they're correct cutting your working tax credits? Have you checked whether there's any other benefits you might be entitled to?

pmlindyloo

What has happened to your tax credits? Running through your figures you should still be receiving child tax credits. Are you not working 16 hrs a week? Did you have an over payment?

I don't know where you live but your rent may be high for a two bed place. Can you do anything about this?

Have you got a water meter? Your water bills are high so this is an area you could reduce.

Have you checked out different scenarios on the https://www.entitledto.co.uk to see if you upped your working hours or reduced them?

sourcrates

There is a very simple way of paying off your overdraught, but it may have a detrimental impact on your credit file, and it requires the cooperation of your old bank.

Its very easy, you simply open a new basic bank account, with a bank with whom you have no debt, and use that for your main banking activities, there is no OD and no credit check involved, and stop using the old account.

You will of course need to learn to budget correctly and to live within your means.

You then write to your old bank explaining your in financial difficulties, and ask them to stop all interest and charges on the account, to allow you to repay what you owe, if they agree, you then arrange to pay an affordable sum to that debt each month until its paid off.

If they wont agree staright away, keep pestering them until they do.

Thats the best way i know of getting out of the OD trap, short of having the cash to pay it off outright.

bubblycrazy

Sorry can't really add much more to what has been said. Have a read of some of the debt free diaries on here which are very motivational, and pop over to the old style moneysaving board which will give you some great ways to reduce the food bill.
Don't wait until your contract is up to ask for mobile and tv to be reduced, call them now and tell them you cant afford it. Your rent amount is frightening. Best of luck.

Emma45622

Profligate I am so sorry, I completely missed your suggestions next to the SOA. I've have now had a read through them.
Re the childcare. It is steep and it's one of the area we constantly feel frustrated at, every 3 months we re-evaluate the actual take home pay for me after childcare expenses and we still come off slightly better with me working than being a full time stay at home mum.
We will be cancelling our Virgin straight away and switching to just broadband (sadly we both need it for work so can't remove it completely)
I have phone O2 twice and explained the financial situation and asked if I can be moved onto a lower tariff and been met with a flat no on both occasions.
Our rent is high. We were forced to move (served notice) 16 months ago. We picked a house that gave us the best value for money. We were looking at having to spend this on rent on a 2 bed terrace so we moved slightly out of town and managed to get a family home for the same price.
Our council tax is currently over 12 months already.
I have just switched gas and electricity supplier and hopefully we will see that switch complete in the next few days.
We will look into a water meter to try to save there.
With regards to the sofas, we took this out in better financial times and in hindsight perhaps wish we hadn't but if we sell it we will still have to pay monthly and not have a sofa surely?
We will look into reducing our family Loan and I will apply for some Saturday jobs.
The £100 on child spending is swimming lesson that from recently of the money is not gifted for it (from Birthday and Christmas) we will not be continuing with.

Thank you everyone for your suggestions, hopefully in a few months time we can come back with a healthier looking balance sheet.
I hope know-one thinks we were not taking on board your helpful suggestions and we are fully accepting of how serious our situation is, just scared and putting on a brace face sometimes.

Lucylocks

Please don't think the children will go hungry - there are some brilliant tips on how to make the most of your grocery budget. As the children are so little you can instill a really healthy yet budget diet. I've recently done similar (although mine are older so eat more!). Things like roast chicken can be stretched over 3 meals, padding out meals with beans, potatoes etc, making stock and soup. I realised that I was being super-traditional and we were eating meat practically every mealtime. A bit of adjustment to include a few meat free days has been quite easy and introduced new dishes to our diet. It doesn't make a huge one-time saving but over the course of a month it does add up.

I do one main shop at Mr A's and try to avoid top ups where ever possible (this may not work for you with little ones). I would suggest not taking kids with you to supermarket- even at 3 pester power is a very real thing! I also do one shop per month for household cleaning stuff - usually home bargains and I have a separate £20 budget for this.

Lucylocks

Is there anyway your OH would consider taking on tutoring? I currently pay a student teacher ad hoc £20 per hour to help DS with maths and that seemed super cheap compared to what others were charging. If he could do couple of hours a week that would cover your grocery spend

Emma45622

We have talked about it Lucylocks but he currently works from 7:30-6 at school, come home helps put the children to bed and then continues the prep, planning, marking (and everything else) work from 7:30/8 until about 11pm almost every night, he also spends all of Sunday afternoon doing the same. I don't think his mental health could really take on any additional on top.

Geoff1963

The Petrol / Diesel at 160 / month sounds a lot. Driving slower, less acceleration etc. might help ; or set off earlier and / or come back later, to reduce stop / start in bad traffic.
That also reduces maintenance costs.
Even if you can't get paid overtime, more hours and results look good on assessments.

Emma45622

Unfortunately I can't change the time I am driving on the 2 days I work due to working around the times childcare is open. I try to maximise hours within the time frames of childcare because partner can not drop off or pick up with his hours. Neither of us do overtime as there is none. Our commute to get everyone everywhere with one car is often right and stressful. We don't always spend £160 - month on fuel, I put down most expensive scenario (if that makes sense).
I have negotiated doing a 1/3 of my hours from home come Oct when my youngest child moves to a closer childcare setting and my eldest starts school. I will not need to drive at all on these days and partner will be utilising lifts from colleagues/commute shares.
We will see if we can bring down our acceleration etc as you have suggested though