Any advice - single parent of two spiralling into debt

Sncjw

Do you put £400 anmonth in the emergency fund?

System

What I wouldn't give to be able to put £400 a month away in savings! This is the bizarrest SOA's I've ever seen tbh.
You can well afford to pay off your debt, you just need to change your choices. Half a million pound house, great wage, fancy clothes (assumed). Nearly half a grand into savings every month! :beer: Come on...

EssexHebridean

beany_bot wrote: »

What I wouldn't give to be able to put £400 a month away in savings! This is the bizarrest SOA's I've ever seen tbh.
You can well afford to pay off your debt, you just need to change your choices. Half a million pound house, great wage, fancy clothes (assumed). Nearly half a grand into savings every month! :beer: Come on...

There is a one liner at the top of this board that reminds people that DFW is for help & support, not judgement...

If you read the OP's SOA she appears to have put the £400 figure down as being what is expected of her - and looking at the cash assets it appears that she has done this for one month only. She's posted asking for help and advice so is aware she needs to do something, but taking the "think yourself lucky" approach and making assumptions isn't really very constructive, is it, and in fact is in danger of deterring her from posting again.

theoretica

beany_bot wrote: »

What I wouldn't give to be able to put £400 a month away in savings!

She isn't. She is using that as a category instead of having added extra lines to the SOA for spending that didn't fit anywhere else.

sadcuckoo wrote: »

"emergency fund" contains also emergency childcare expenses / overtime (when I have to work long hours) and domestic help costing £200 (there are chores I cannot do due to health issues).

sadcuckoo

Hi guys, sorry for the long silence - just found some time to sit down. Will answer all questions, apologies for not quoting all individual posts - it seems to make the post a bit messy.
Wanted to say big thank you for the support of all kinds, even friendly kicks up the bum - they also help and mobilise in a way

It is the oldest child who receives speech (and occupational) therapy. He was non-verbal until 4, and now makes slow but steady progress. I am not a native English speaker, so cannot help much myself, and the child does not speak (although understands) my mother tongue. The school seems to be restricted in terms of how much support they can offer without the official NHS diagnosis (I understand this is linked to the local authority funding scheme specifics). They are not accepting a private assessment.

Child maintenance was assigned by the CMS at a rate of £7 a week, I did not include it as it does not make any meaningful difference, and in any case it was paid as a lump sum upfront for 2019 (and I have already spent it). The father is relatively well-off / independently wealthy, but is not employed for some time, and therefore has no income to attach the charge to. He has a new family and - very sadly - zero interest in the old one, i.e. us. He is not a bad guy, but just could not reconcile himself with issues our oldest had (which looked quite severe initially), and it was probably easier to emotionally disown everyone.

I will look into the council tax reduction, thanks - for some reason I thought "students" refer to, errr… younger people, and never thought about it again. My student is approaching 50

£400 in emergency fund consists of £200 for live-in help (pocket money really, £50 a week, same as au pairs get) and approximately £200 for child care overtimes / emergencies (e.g. sicknesses). I just did not know where to put this, there does not seem to be a fitting category. I do not seem to be able to save anything at the moment - quite the opposite, at the end of every month there's another couple of hundred on the credit card.

Comprehensive sickness insurance for myself and the children is compulsory for the immigration category I'm in - confirmed by the immigration solicitor who made my application. I cannot claim any welfare either (like tax free childcare, disability support etc) - and rightfully so.

I will look into getting a lodger instead, that's an idea. Not sure how willing someone will be to live in a madhouse with two small children, but worth a try. Thanks

My employment area is such that all jobs available are long hours (it is unrealistic to expect anything below a 50 hour week), and quite London-centric (my current commute is around 90 mins). I am never home for the children and it looks like what I am doing is still not good enough and just pushes me deeper down the rabbit hole. I had an idea of retraining as a teacher (have a math degree and a doctorate), but a sneak peek into the world of teaching revealed that the hours are not as family-friendly as they look from the outside.

£80 month medical expense is for my parents' medical expenses (not in the UK) - should have clarified this, apologies! One of them has a chronic condition which, unfortunately, can be managed only on paid-for basis.

No fancy clothes here When I had spare money (which wasn't for a while), I was more of an experience shopper. Travel, education, new skills - unfortunately nothing resalable.

brizzlegirl

Well done for starting to deal with what seems like a very stressful and lonely situation.

We have had lodgers and I think that’s a great option. We used Spare Room. instead of live in home help asking students to pop in and do the school or nursery collect and stay with the kids for a couple of hours is a good way of cutting costs. They can also put on washing etc and fold laundry and prepare the kids tea at the same time. Do you use after school and breakfast clubs? They can be good value. I know of people who had a small pool of students who the kids knew well, who would care for them, and meant that they were never let down.

Your grocery bill is way too high. Do you bulk buy and batch cook? It also hugely saves on time which I suspect it also an issue for you. Energy costs look high too, we have a draughty Victorian house and our costs are half yours? It all makes a difference and as others have said you need to be radical, fast.

I would be relentless about every little spend. Think once twice and the three times. If you don’t really need it, don’t buy it. Track all of it. We use an old version of YNAB and log every single thing.

We are here to help and support. We’ve all been in tough times. Stay posting and keep us updated.

Much love

Brizzle x

TheAble

A really positive thing is that you have a lot of equity in your property and a very good salary so you should be able to qualify for the very best mortgage rates.

3.2% is a relatively high rate of interest - if you plug your numbers into the MSE mortgage best-buy calculator, you can get 1.34% with the Chelsea BS which will take your monthly payment down to £810 based on 30 years.

Agree your grocery bill is high. For just yourself and 2 kids with a bit of frugality I'd suggest you could spend £150/month. Or even lower. It just needs a bit of imagination and you CAN do it without really feeling any hardship. Your resultant financial improvement will make it taste all the better! Benjamin Franklin - "Rather go to bed without dinner than to rise in debt"

Mobile phone can be got for £5/month sim-only with ID Mobile.

Internet can be got for circa £13/month with Talk Talk.

The Entertainment budget has to go as you are currently carrying emergency debt (http://www.mrmoneymustache.com/2012/04/18/news-flash-your-debt-is-an-emergency/)

Definitely switch your gas/elec - given house empty during the day you shouldn't be needing to pay £200/month. I pay £100 and my house is occupied day and night (and my missus has the heating on way too much..! Get rid of any incandescent bulbs and replace with LED - makes a big difference). Can save £125/month here.

Even with kids you don't need to spend £1200/yr on clothing. Stick to the sales and use foresight. £25/month should be ample.

Can you get the life assurance via your work instead? Tax deductible.

So that's £950/month of easy savings right there!

What's "Other Insurance"?

I can't comment too much on the Childcare situation as my wife stays home to look after the kids but take heart in that it will get better as the younger child starts school.

In terms of paying off your debts and building some capital, check out "The Camel Trader of Babylon" chapter from George S. Clason's book (free pdf online - the whole book in fact is very well worth reading and may change your life). The method suggested is set aside 10% of your take-home for yourself, use 20% to pay towards debts, and the remainder for *necessary* expenses (yes necessary - examine every area of your spending and optimise. Don't overlook even very small expenses). Building up some savings and investments as well as paying down debts has a very good effect psychologically and will improve your outlook on life.

Good luck

ViolaLass

If you can't expect anything lower than a 50 hour week and your commute is 90 minutes, you might as well look into teaching - it won't be worse.

DoctorStrange

Although your ex isn't contributing to the costs of the childcare, should he not be contributing 30% to the mortgage to maintain his equity share?

tlc678910

ViolaLass wrote: »

If you can't expect anything lower than a 50 hour week and your commute is 90 minutes, you might as well look into teaching - it won't be worse.

Make sure you crunch the numbers if you are considering a move to teaching. I wouldn't expect your hours to be shorter than 50 (although some work can be done at home), you would have the lovely holidays but I wouldn't expect you to earn even half of what you earn now.

Tlc