30k debt and stuck

treadlightly

hello all
I'd love some magic solution to our situation but I think it's just going to be long hard graft all the way.
I am one of the most financially cautious people I know, had a good income and until I was 36 the only debt I had was a '(joint) mortgage, I paid my only credit card off every month, always bought cars and phones 2nd hand and in full.
Since my hubby left his stressful teaching job to become SE and made some unwise decisions (largely not saving for tax - he knows, it was stupid) we now find ourselves with 30K of debt and we are living with no monthly surplus. It does keep me awake some nights as it looks like nothing will change in the foreseeable future - the only silver lining is most of it is friends/family debt so we are not paying any interest (the rest is 0% credit cards) but I hate being in debt to them, they bother me more than the card debts for sure.

We have two children under 5 so although I have a good potential wage (I'm a vet) I am only working 2 days a week - this might change when the youngest turns 2 and could go to the nursery up the road. OH is also going back to supply teaching part time as we realised his business just isn't viable for now but we dont have a good idea of what he will be earning yet.

We have recently moved house to a different area and taken on a MUCH bigger mortgage (we didn't know the extent of our tax liability at that point ) and I am still commuting to my old workplace which makes for a 200 mile commute/week so my fuel costs are very high. I am currently looking for local work but I have a 3 month notice period so that isn't going to be a quick fix. OH was also commuting that distance but has just spent £500 moving his business so his fuel costs will likely halve from now on.

I have followed Martin for years and reckon I've been doing the 'painless' money saving for the same time, so it looks like it's just the painful stuff to do now. Neither of us are extravagant in any of our tastes, I do mainly home cooking and only ever buy my and the kids clothes off ebay/charity shops and have a one in-one out policy, but as anyone with young chldren will know they still need stuff regularly and it is hard to do free entertainment all/every holiday. OUr new house has a big garden and I hope to grow lots of veg but that will all take time to get set up.

I have my own budget planner which I will use to post my SOA below, having moved house some of our costs are very different to previously (namely mortgage and fuel for the reasons stated above) . Thanks to anyone taking the time to read all this!

treadlightly

Fixed expenses
Mortgage 823.98
Gas/elec 133.75
Water 33.4
Car tax 32.5
Car ins 50
Car b/down 4.03
Internet 25
House ins 14.62
Life ins 13.79
Pension 20
Council tax 234
Charity 1
TV licence 25.08
Prof subs 13
Income protection 39.64
Church 20
HMRC 30

Variable expenses
Mobiles 14.34
Food/toiletries 286.79
Petrol 408.46
Household 30.23
Hobbies; music/photos/garden 18.98
Exercise/sports 9.4
Medical 60
Savings 0
Entertainmnt incl eating out 78.39
Treats/presents incl beauty 11.2
Charity 10.5
kids 163.38
Pets 35
Cash misc 199.26
xmas misc 50
car maint 12
transport 30
clothes 12
holiday 150
xmas gifts 15

Total

income
OH salary 1250
My salary 1702.38
Child Benefit 149.06
Parents 250

total 3351.44

treadlightly

debts:
credit cards at 0% £ 9700 paying off £ 98/month
friends/family £17000
overdraft £3500 charge 50p/day

Being the financially prudent person I am I'd always managed to keep a good 'rainy day' amount in savings< since we had kids I also felt it was important to make sure we will never be a drain on them in the future, however I recently used half of it to pay off some of the overdraft and repay some of the friend debts so we're now down to £5K in savings.

treadlightly

ive only just come across the idea of piggybanking and wondered whether to set up a Santander 1-2-3 lite for bills especially as we have a Santander mortgage so it seems like a good idea....any advice on this welcome

Craig1981

you need to keep track on your "cash misc" expenses at £200 a month - its a lot to have down as a misc expense.
use your savings to pay off your overdraft, that there saves you £15 a month
are you sure £98 each month on CC debt is correct? thats about 1% of balance total? i would have expected around 2.5 to 3.5%?

if you working 2 days a week and earning £1750 a month, i would recommend trying to go to at least 3 days a week - paying for childcare for that day will still see you net an extra £400 or so monthly

John_G_Jones

Is your husband’s work likely to become more profitable or dependable at some point? He’s on a low amount at present which is going to make it harder than it would otherwise be for you to get on top of things.

Could he cover child care more, allowing you to up your days, or could he take on a salaried job in addition to his self employed work? Either he has lots of spare time at the moment or he’s earning less than the minimum wage, suggesting that changes could be made here.

theoretica

This needs to be tackled from both ends - increasing family income and reducing spending. As others have pointed out, if you earn more a day than he does then it makes sense for you to increase from 2 days and he looks after the children more. Reducing spending needs to look at everything - how are the kids costing £163 a month - is that necessary childcare or entertainment? You have a lot, like eating out, cash, holidays, christmas, which while nice to have isn't strictly necessary.

buythedip

Have you cleared the tax liabilities?

It seems quite suboptimal based *on what you have posted* for you to be working only 2 days per week and your partner working (I assume) full time for approx. minimum wage?

MEM62

Are you sure that you husbands business figures are right? If the business is doing so poorly I cannot see how he ended up with a large tax liability.

EssexHebridean

Definitely worth double checking on the tax calculation to make sure it's right. Is he now putting aside the relevant proportion of all his income each time he receives it to ensure that this year's tax will be covered?

Might be easier to fill in the SOA using the standard format - see the link in my signature then "format for MSE" and it'll give you a far easier to read/follow version. For now though and just looking at the variables:

Variable expenses
Mobiles 14.34
Food/toiletries 286.79 Any scope for dropping brands, buying value, utilising the Super 6 and Pick of the Week type deals more here?
Petrol 408.46 Yes this definitely needs to reduce!
Household 30.23 What's this?
Hobbies; music/photos/garden 18.98
Exercise/sports 9.4
Medical 60 what is this? If any of it is prescriptions does a pre paid card work out better/cheaper?
Savings 0
Entertainmnt incl eating out 78.39
Treats/presents incl beauty 11.2
Charity 10.5
kids 163.38
Pets 35
Cash misc 199.26 You need a spending diary for this then allocate it to proper categories - I bet a lot will come under "entertainment" making that budget look altogether more top-heavy!
xmas misc 50
car maint 12 Is this honestly realistic? Allowing for 2 vehicles, that's not even going to cover servicing.
transport 30 On top of that fuel bill for the cars?
clothes 12
holiday 150 [COLOR="red"Unless you're tied to this I'd suggest that it needs dropping for now - that money can be better used elsewhere for the time being[/COLOR]
xmas gifts 15 Again - you're sure this is realistic? £180 a year doesn't seem like a lot for 2 kids, yourselves and any extended family?

And the fixed stuff:

Fixed expenses
Mortgage 823.98
Gas/elec 133.75 Have you checked you're on the best deal?
Water 33.4 Metered? If so look to cut use - time showers etc (this will also help with power use) and make sure the kids turn taps off while tooth brushing etc.
Car tax 32.5
Car ins 50
Car b/down 4.03
Internet 25
House ins 14.62 Is this buildings and contents combined?
Life ins 13.79
Pension 20
Council tax 234 Phew this is very high - do you pay over 10 months or 12? if 10 remember to track down the payment for this month and March that won;t be going out and pay it straight against the debt - then ask to be changed to splitting across 12 months from the new financial year.
Charity 1
TV licence 25.08 Why do high? if this is the 6 month advance payment when does that end?
Prof subs 13
Income protection 39.64 Is this for you or your OH? If your OH check it will definitely pay out allowing for him being SE.
Church 20 "Charity begins at home" when you are owing 30k, I'd suggest.
HMRC 30 Is this National insurance?

NeverendingDMP

Ive got a 123 lite account . It costs a pound a month and i get cashback on my direct debits for phone utilities mortgage and i think c tax. I get about 8 a month cashback but you would get that just as cash back on your mortgage payment. Worth considering.