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Budgeting and saving tips

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  • Your soa has some gaps in it but it looks to me like you will need some sort of debt solution. I am assuming all of that credit card debt is not just on one card and that you are being charged interest? You really need to break that down into the individual debts but on that income with that shortfall I don't see how you can continue to service the debt.

    Ring stepchange and in the meantime open a bank account with a bank you have no debt with. The haircuts can be reduced and you need to put something in presents and emergency savings. I think you might need to look at either a DMP or IVA. I would not sell the house or consolidate on to your mortgage. Will you not get tax credits towards childcare costs?
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.

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  • So the first hard step of writing it all down on paper is done. Well done. I agree with all the advice given on where to trim, and I think you’d benefit from taking a years bank statements and working out a true reflection of where all your money has gone and what the credit card debt had been spent. But it’s not a bad start in terms of a budget. Zero based budgeting has worked for me when you start to implement all this.

    That aside, it definitely looks like you should look into a debt management solution. Someone more educated than me will advise you on here soon I’m sure. But don’t panic. You’ll gain absolutely nothing from selling your house, it’ll end up costing you more in wasted rent etc. You just have to take the next step into debt clearing.
    Debt Free: 06/03/2020 Highest Debt: £37,514
  • Also, sit down and do the maths on if you truly are saving by cutting down hours to save on nursery fees. Often the outlay of more childcare fees is well overtaken by income, if your wage is decent. Have you checked your entitlement to tax credits, made sure you’re getting your free hours/childcare top up?
    Debt Free: 06/03/2020 Highest Debt: £37,514
  • Cat4321
    Cat4321 Posts: 33 Forumite
    Third Anniversary
    Thank you all, my husband and I will sit down over the weekend and do a more realistic budget looking at bank statements etc. Truly grateful for your advice thank you.
  • We had to go through the same process last year when I went back to work after mat leave! I ended up taking on a second job, that I could do from home and that income went solely to paying off debt.



    Make sure you're registered for tax free childcare - it saves us around £180 a month in childcare! Also make sure you're getting child benefit; not sure if that's included in your benefits income. Good luck!
  • Great idea to have a sit down with your partner. Maybe make an evening of it, bowl of crisps and a drink so it’s less full on.

    Another thing that catches my eye - could you manage with one car? There doesn’t seem to be a lot of miles done judging by the petrol costs. Could one of you travel into work via public transport while the other uses a single car to run the kids around etc? Share the car on weekends? Would free up some cash and your figures for insurance, maintenance etc seem low - are these right? If you’re underestimating, you’d stand to save even more.
    Debt Free: 06/03/2020 Highest Debt: £37,514
  • Niv
    Niv Posts: 2,562 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Don't forget that until 30 free hours kicks in there is tax free childcare!


    So many people we know have no idea about this!
    YNWA

    Target: Mortgage free by 58.
  • Cat - above all don't panic, and treat selling the house as being an utter last ditch solution - if you tackle the situation now I really don't believe that's where you're at right now.
    🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
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  • I can't add to others' excellent suggestions, just to say you're in the right place, and also, in quite a good situation if you can talk to your partner about this, as many people are trying to do this unsupported.

    The childcare thing is difficult - on a reasonable wage it can be a fine line between working less, costing less in care - and working more - earning more but paying more care. One thing about working more - you'll be more likely to get promotions/improved work opportunites whcih could earn even more. BUT one other thing (which scuppered me) you have less time with your baby. It's not only money that affects these decisions! Whatever you choose, make sure it is right for your family. I lost out on earnings, boo, but I did spend every Friday for 4 years with my little one, and those were the most precious days. Good luck!
    PEAK Dec 2019: £24,273 -- NOW Virgin £2377 Markses £681 Halifax £6143 Loan £6696 Family loan £5819 TOTAL: £21,706 -- Paid off: £2308. Target: Jan 2023 LBM: monthly pay but weekly spend doh :o December 2020 target = £18212 and nothing added to CCs AND by paying an extra 20 a month on something I just knocked 8 months off my target date :-)
  • Cat4321
    Cat4321 Posts: 33 Forumite
    Third Anniversary
    Household Information[/b]
    Number of adults in household........... 2
    Number of children in household......... 2
    Number of cars owned.................... 2

    Monthly Income Details

    Monthly income after tax................ 1700
    Partners monthly income after tax....... 803
    Benefits................................ 137.6
    Other income............................ 300
    Total monthly income.................... 2940.6


    Monthly Expense Details

    Mortgage................................ 808
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 193
    Electricity............................. 45.92
    Gas..................................... 5
    Oil..................................... 45.83
    Water rates............................. 45.5
    Telephone (land line)................... 47
    Mobile phone............................ 58
    TV Licence.............................. 12.83
    Satellite/Cable TV...................... 0
    Internet Services....................... 0
    Groceries etc. ......................... 320
    Clothing................................ 10
    Petrol/diesel........................... 180
    Road tax................................ 41.2
    Car Insurance........................... 62.69
    Car maintenance (including MOT)......... 50
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 54
    Other child related expenses............ 40
    Medical (prescriptions, dentist etc).... 18
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 14.48
    Contents insurance...................... 0
    Life assurance ......................... 73
    Other insurance......................... 51.09
    Presents (birthday, christmas etc)...... 52.92
    Haircuts................................ 60
    Entertainment........................... 50.79
    Holiday................................. 30
    Emergency fund.......................... 40
    Children savings ....................... 20
    Total monthly expenses.................. 2429.25



    Assets

    Cash.................................... 0
    House value (Gross)..................... 179000
    Shares and bonds........................ 0
    Car(s).................................. 3000
    Other assets............................ 2000
    Total Assets............................ 184000



    Secured & HP Debts

    Description....................Debt......Monthly...APR
    Mortgage...................... 179000...(808)......3.49
    Total secured & HP debts...... 179000....-.........-


    Unsecured Debts
    Description....................Debt......Monthly...APR
    Credit xards...................32356.8...337.5.....0
    Total unsecured debts..........32356.8...337.5.....-



    Monthly Budget Summary

    Total monthly income.................... 2,940.6
    Expenses (including HP & secured debts). 2,429.25
    Available for debt repayments........... 511.35
    Monthly UNsecured debt repayments....... 337.5
    Amount left after debt repayments....... 173.85


    Personal Balance Sheet Summary
    Total assets (things you own)........... 184,000
    Total HP & Secured debt................. -179,000
    Total Unsecured debt.................... -32,356.8
    Net Assets.............................. -27,356.8
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