BIG drop in income help!!!

toria27

Hi all, OH has been very unhappy in his present job for a couple of years so is leaving to do something he is more passionate about. I support him fully the only problem is we are facing a £16500 drop in wage
At the moment he works 6 days a week and 57 hours and this change would mean 37 hours over 5 days so better quality of family life, less stress etc.

He has an interview tommorrow the job has the possibility of overtime and in a few years will hopefully lead to better this would just be a foot in the door.

here is our SOA please help there is me OH & DD aged 2

incoming

me wage £300
Child benefit & tax credit £113.71
OH wage (if gets job) £1282.83
total £1696.54

outgoings

mortgage £1000 (4.59% fixed until sept 08)
water £32.54
council tax £111.62
car insurance £25 (we have 2 cars & yes need both)
car services & mot & breakdown £25.50
car tax £20.83
petrol £50 (actually £90)
gas £35
electric £18
phone & internet (inc calls) £37
mobiles £20
tv £11.29
life insurance £92.37 (will not be getting rid of)
prescriptions £8.20 (pre payment certificate)
dentist (just for basic checkups) £20.83
haircuts (cant do these myself,me & DD) £4
xmas &b'days £43
clothes £50 (shoes main problem DD & me broad feet) (cut to £30)
food £200 (will be £130 from January)
DD savings £20 (first thing to go if needed)
pension £65
home insurance £10
Total £1900.18

New total £1850.18

This gives us a shortfall of £203.64 (now £153.64) The mortgage will be increasing by at least £100 a month in Sept at the best deal. I have not accounted for any emergencies with house or car as who knows what will happen, have just had all new appliances though as they all broke down at once. If we need any dentistry other than checkups this is not in budget.

I am trying to fit in some overtime (depending on childcare) this will bring in extra but wont be counting on that. Also OH is likely to receive £1300 a year bonus, paid quarterly. This bonus is depending on profits of the company and has been this amount for last 3 years but again will not count this in budget, for example if company meet target but not above this is reduced to £850.

Well done if you got through all that I don't think I missed anything!

toria27

Did forget something, I use quidco for insurances etc to get best deals, gas & elec are cheapest for us and am on E7, only do washing at night no dryer. I pay for all insurances in one lump sum not monthly.

saffronflowers

Hi there and welcome

Have you checked to see if your tax credits will increase:

http://www.taxcredits.inlandrevenue.gov.uk/Qualify/DIQHousehold.aspx

Can you increase your hours of work, if you can get subsidised child care?

Could your OH get a second job to top up the monies in the short fall?

Check out the Old Style boards for money saving tips on your daily household expenditure.

SFx

loubie_lou

Hi and Welcome :T

Seems to me like you are doing all the right things! Have you thought of spreading your council tax over 12 months instead of 10 (if your not doing this already?)

Good luck!

Loubie

toria27

hi, thanks for replies, I work 6-midnight on a friday and 1.30-7.30pm on a Saturday, and do work a Sunday when it is available, can not work days as cannot get anyone to have DD and cannot get increased hours just overtime.
We do not get an increase in tax credits.

CLAPTON

Realistically, income 1690 and mortgage of 1000 is not really viable.
It will only be a short time before you will start to get into debt.

Either he needs to stay with currrent job for at least one more year and try to live off the reduced income (and of course save the 16,500) and see whether its possible. (how much have you saved in the past year or so?)
Or get a job with less reduction in salary
Or increase income is other ways (maybe you going fulltime)
Or downside the mortgage to a manageable proportion of your income.

Sorry its probably not what you want to hear but you need to be realistic. The stress of never having any money is also a very real stress too.

peb

I agree with Clapton I'm afraid. I totally understand what it is like to be in a job you hate (I walked out on mine last year with no work to go to) but if he is taking such a substantial cut in salary you cannot afford the same standard of living. The first thing that jumps out is the mortgage - any chance of downsizing the house? Ditto Cars; if you need two (which I understand you may) can you get smaller cheaper models?

It is something to work through as you do not want a stressed husband who hates his job and has little time for teh family.

Good luck

RoxieW

Hi hon
If you and hubby really want to do this then you'll need to make some cutbacks.
I'm no expert but this is what jumps out at me - i'll be totally honest so sorry if you don't like the suggestions.

1) could you get another evening job? Even just an extra night in a bar or supermarket or anything! I know its not ideal but the shortfalls got to be made up somewhere. Or, check out the AQA thread, its a flexible homeworking option. Even an extra £40 a week is £200 a month.

2) switch the council tax to 12mth instead of 10 (if not already)

3) 2 cars. You may not like this but do you really need both? You say you do but £50 a month petrol isn't a great deal so that suggests that the cars aren't used a great deal. If you're working evening and w/ends could you not use the same car as hubby as he'll be at home when you're working with his new, less full on job.

4) mobiles £20 a month isn't too bad. is this payg? can you have just one mobile and trim it down to £5 a month topup - ie just using when essential.

5) Life insurance. You say you pay insurances in one lump sum. Is this figure a sum for the year? If its monthly its very very high (I pay £10 mth). It its for the year then divide it by 12 to get a clearer idea.

6) Get rid of the savings.

7) can you have a break with paying into the pension?? just while things are abit sticky.

8) I know its tough but try to trim this down. But value (as you know) and try to shop around the 2 for 1 offers. Menu plan - it saves a lot of waste. If you shop online get a discount voucher and shop through cash back sites. pigsback gives points for asda which will quickly add up and go towards xmas/birthdays etc.

9) check out the 'make £10 extra a day' thread. i'm raving about this to everyone at the minute. I thought it was impossible to make £10 extra a day without a second job or whatever but I'm halfway into Nov and have made £150. £300 a month extra would def give you abit of breathing room for things like clothes/xmas etc.

Good luck. As CLAPTON said, you need to be realistic. It does seem from your original post that you think its an impossible task but if you and hubby are going to do this then something has to give. Maybe that second car??

I hope you manage it.

Merlot

toria27 wrote: »

Hi all, OH has been very unhappy in his present job for a couple of years so is leaving to do something he is more passionate about. I support him fully the only problem is we are facing a £16500 drop in wage
At the moment he works 6 days a week and 57 hours and this change would mean 37 hours over 5 days so better quality of family life, less stress etc.

He has an interview tommorrow the job has the possibility of overtime and in a few years will hopefully lead to better this would just be a foot in the door.

here is our SOA please help there is me OH & DD aged 2

incoming

me wage £300
Child benefit & tax credit £113.71
OH wage (if gets job) £1282.83
total £1696.54

outgoings

mortgage £1000 (4.59% fixed until sept 08) _ you will need to downsize, that's far far too big of a mortgage on the incomings.
water £32.54
council tax £111.62
car insurance £25 (we have 2 cars & yes need both) - You say you need both, you simply cannot afford both.
car services & mot & breakdown £25.50
car tax £20.83
petrol £50
gas £35
electric £18
phone & internet (inc calls) £37 - too high, check out the Post office for calls, they charge £9.99 line rental plus you get free evening and weekend calls, and change ISP, I suggest pipex, they offer broadband for £9.99 per month also.
mobiles £20
tv £11.29
life insurance £92.37 (will not be getting rid of) - Again, this is far too high, is this attached to your mortgage or is it simply life cover, does you OH not get life cover with his work? There is no point having such large life cover, if you can't put food on the table without using credit cards.
prescriptions £8.20 (pre payment certificate)
dentist (just for basic checkups) £20.83
haircuts (cant do these myself,me & DD) £4
xmas &b'days £43 _ you cannot afford to spend this each month, £516 per year, too much.
clothes £50 (shoes main problem DD & me broad feet)
food £200
DD savings £20 (first thing to go if needed) - Must go
pension £65
home insurance £10 - This is low, is this contents and buildings?
Total £1900.18

This gives us a shortfall of £203.64 a month so far, the mortgage will be increasing by at least £100 a month in Sept at the best deal. I have not accounted for any emergencies with house or car as who knows what will happen, have just had all new appliances though as they all broke down at once. If we need any dentistry other than checkups this is not in budget.

I am really struggling to cut shopping down and I know that is the first thing you will suggest I already buy value a lot and bulk cook everything from scratch, use vouchers etc.

Well done if you got through all that I don't think I missed anything!

I agree with Clapton, you are going to end up with lots of debts if you do not downsize, you cannot live with your current lifestyle with a drop in salary of £16,500.

If your OH wishes to take a drop in salary, and I can fully understand if the stress is too much, you must adjust your lifestyle accordingly. I think you both need a reality check.

I wish you the best.

Merlot

Lindsay-Lou

Hi Toria,

Just wanted to say I understand completely that your husband needs to leave a job that he's so unhappy with. It just isn't worth the stress and risk to health and family happiness!!

Unfortunately something else is going to have to give and i can only wish you the best of luck as you face your lifestyle changes! It'll be worth it in the end.

toria27

Thanks everyone for your suggestions. I know it seems impossible but like I said before this is just for a couple of years, once DD starts nursery next September this will make it easier for me to work more daytime hours as she will get some funded sessions, then obviously when she starts school in 2009 things will improve again. Also we both have the option of overtime but this is not included in budget as it is unknown how much. Cant get another evening job as OH is at college 2 nights a week and spends 2 nights a week doing up an old mini to sell (should get £1500 when finished) but I am looking for day jobs have been since September and no luck yet I will look at the make £10 a day thread have not looked at this thanks.

Staying in his present job is not an option as he already found and trained a replacement.
Luckily we have no debts so if we do end up with some during this time we will just have to deal with that the best we can.

I will look into changing phone and internet providers merlot but moving house is not an option as house prices where we live are terrible so would end up living in a really rough area and we are not prepared to give up where we live.

I dont think £516 a year on Xmas and birthdays is a lot that is only spending £5 on family and a bit more on each other but includes a birthday treat for all of us and christmas food etc. this really really can't be cut down.

The reason we need 2 cars is the hours I work. I have to drive to work with DD and OH meets me there to take her home, I start at 6 and he doesn't finish until 5.45, then I need to drive home at midnight, no buses or anything. depending on new job hours we may be able to get rid of one car.
House & contents is so low as it is through quidco and I got £120 cashback.

We will look into a break in the pension RoxieW and life insurance is per month! due to work OH does etc. I don't have any cover