Pregnant but have debts - need advice on saving vs repaying please!

redlighthouse

I've just found out that I'm pregnant with my first child. However, I currently have a £10.5k debt on a 0% credit card, as well as a £9k loan from a family member. I've been aggressively paying down the credit card (usually about £600-800 per month), plus paying £220 p/mth to the family loan. I currently have a Help to Buy ISA which has just over £1k in it, which I had initially planned to build up for a house deposit, but have dipped into recently to pay off a bit more of my card debt. (My job and housing situations are both secure, and I pay a nominal rent, which I appreciate is extremely fortunate. This is why I've been able to attack my debt but also why I feel a fool for having it at all.)

I'm intending to take 9 months of maternity leave, three months at full pay and six months on statutory maternity pay. I'd ideally like to have some savings to make up the monthly shortfall between my old wage and SMP, but I'm also aware that I should take as much more off my credit card as I can before baby arrives.

So my question boils down to this - should I be saving anything (and if so, roughly how much?) over the next 8 months, or should I throw everything I have at the credit card? I
don't foresee managing to completely clear the card by my due date, but I'd like to keep going with the positive steps I've been making. The debt isn't causing me any stress, I'm just annoyed that I've been so irresponsible, and I don't want to be in the situation of racking up debts again when baby arrives. 

Thanks for your thoughts.

HampshireH

You need you consider your total outgoings compared to your income when on statutory mat leave because mat leave isnt a lot. You are fortunate to have low accommodation costs, will that remain?

Perhaps a SOA and we can see where you could divert funds from?

Don't forget the stuff you will need to buy for the baby.

Congratulations btw

redlighthouse

Thanks! 
Yes, my accommodation costs will stay pretty much the same (though when I go back to work they will definitely increase a little to account for another body in the house), and my travel expenses will go down a bit. Currently travel is about £60 per month, plus £20 extra that goes into a fund for repairs etc.
I've been using a budget spreadsheet for a while now, so I have projected forward to what I'll have coming in and going out when I'm off, and although it's tight, it's manageable. That's also how I know I can't afford to stay off for a whole year. 
I did try doing an SOA but the one I used won't let me copy over to here. However, I've pretty much cut everything right to the bone already, so it isn't really a question of diverting more money but making the best use of what's already available i.e. the £600-£1000 that goes to my card and family loan plus the £100-£200 I save each month for things like birthday presents, unexpected bills and Christmas. Otherwise, my outgoings are pretty minimal. The only area that I feel like I'm overspending is my mobile - my old SIM-only phone finally died and I did choose to replace with a contract. However, I'll be changing that as soon as I can. There is possibly also an option to reduce my payments on the family loan while I'm off work. Although I obviously want to repay it, the person I owe is extremely relaxed about it and will almost certainly suggest that as a way forward.
That's why I'm unsure of whether to just carry on as projected, which will give me a pot of about £4k in savings by due date and credit card of about £5k, or repay more to my card and have less in savings...

middleclassbutpoor

I am a big advocate of Dave Ramsey and he would advocate paying your minimums and save like crazy.  
Live frugally still and continue this through your maternity period 
Repay your debt with anything that is left when you return to work and continue hitting your debt. 
You mustn't go crazy with your money if you build up a sum to cover the shortfall, you shouldn't go into debt further either -  thats the important bit - hit pause on your journey to being debt free and give yourself some savings.  A good budget and cashflow plan is what is needed. 

DD265

I've not seen the end date for the 0% deal on your credit card - that might affect what you choose to do. I'm not sure what impact maternity leave would have, but how do you fancy your chances of getting a 0% balance transfer card when that term ends?

Personally to keep my options open I would pay slightly more than minimum to the credit card (fix it at say £160 a month, if the minimum for March is £150), pay the family member as you have been doing, then save the rest. This gives you the option to pay the credit card down at a later date or use the savings during maternity leave if required. I saw a comment somewhere else recently about being prepared if things don't go to plan in case you needed more time off work, or had to go back part time etc, which is what would push me towards savings.

redlighthouse

middleclassbutpoor said:

I am a big advocate of Dave Ramsey and he would advocate paying your minimums and save like crazy.  
Live frugally still and continue this through your maternity period 
Repay your debt with anything that is left when you return to work and continue hitting your debt. 
You mustn't go crazy with your money if you build up a sum to cover the shortfall, you shouldn't go into debt further either -  thats the important bit - hit pause on your journey to being debt free and give yourself some savings.  A good budget and cashflow plan is what is needed. 

Thanks for your input - I have only a passing knowledge of Dave Ramsey's work but you've explained a really clear approach. I'll play around with the options on this on my budget spreadsheet and see what it looks like. Thanks again.

clairebeth

See if you can get a 0% transfer with an end date after your mat leave,  then pay slightly more than minimum on the cards each month from now until the end of your mat leave (and perhaps your family member might allow you a payment holiday while on mat leave). 

Meanwhile, save as much as you can, cut back and live within your means.  This will give you a good emergency pot to have as backup on maternity leave.  Hopefully you won't need it, because you will be living on less.  Once you go back to work, you could use the remaining savings to put towards the debt and continue to pay it off.  

You will find you spend less on mat leave as you will go out less, travel less,  buy fewer clothes etc. Babies don't need a thing,  and you will be given a lot of things, so don't buy anything ahead of time except a few baby grows for after birth etc. EVERYTHING can be bought second hand and in good condition,  as babies outgrow things so quickly. I got an uppababy vista pram with the carrycot and cosytoes and everything for £50 on gumtree! 

clairebeth

Oh yes,  and a second recommendation for Dave Ramsey.  He calls this 'stork mode'.

redlighthouse

clairebeth said:

You will find you spend less on mat leave as you will go out less, travel less,  buy fewer clothes etc. Babies don't need a thing,  and you will be given a lot of things, so don't buy anything ahead of time except a few baby grows for after birth etc. EVERYTHING can be bought second hand and in good condition,  as babies outgrow things so quickly. I got an uppababy vista pram with the carrycot and cosytoes and everything for £50 on gumtree! 

That's awesome advice, thank you. Did you bother stocking up beforehand on things like wipes and nappies? I've seen people recommending throwing one or two things like this into each week's groceries, but I've also seen people advise against it because you never know what sizes you'll need or if baby might be allergic to certain brands...

redlighthouse

Thank you SO much everyone! I'm off to look more into the stork mode, but you've all explained it in a way that makes great sense - for the first time recently, I feel like there's a sensible and achievable way forward. Thanks!

clairebeth

So,  I actually used cloth nappies mixed with disposable but I know that's not for everyone! I think you could buy a few packs, like, maybe 100 nappies or so,  of newborn size, that would last you a couple of weeks.  Lidl are very good and they are cheap,  I think about £2.60 a pack, more than half the price of Pampers. For wipes, they don't recommend you use chemical baby wipes when they are first born anyway.  Instead you can get those cotton makeup remover pads and use with water, so you could stock up on a few packs of those.