What should I do... no debt, small inheritance, low income and caring responsibilities - please help

simple-living-ma · 6 June 2021 at 8:01PM

Hi
I couldn't really find the right place in the forum to put this. I've post twice - once in budgeting and bank accounts and once in moneysaving mums for different perspectives/audience.

Single parent, 2 children - 1 additional needs/limitations with ASD. No support, poor financial past. Need future security and better life for my children. Received a small inheritance lately which I spent a bit on an (old, sensible!) car, new white goods and carpets, all of which were on their last legs and below is what I have left. I need a sensible plan for the future:

Current Account: £7,450
Everyday ISA: 15000.09 (sure the interest rate is like a ridicouls 0.05)
Shares (via Wombat ISA, just a small amount out of curiosity so I could learn without risk) - £50.65
Cryptocurrency: (Earned via suveys etc., didn't gamble any money here) £21.96
Approx value of my car: 3000 (2014, Dacia Logan with higher mileage - extremely sensible, practical, useful and economical for us)
HelpToSave Account: £150.00 (50% return after 2 and 4 years, but max contribution of £50pm)
Cash: 455

I think if I could tuck the money away somewhere and forget about it, until an emergency, or I'm in a position to buy a house or something (which will be a long time, limited work hours due to young children, 1 with disability and currently in 1st year of Uni to better myself), then it would be safer. I worry about inflation reducing it's value.

Current monthly income = £2167
Outgoings =
Rent - 490
Council Tax (currently free due to student status however expect to pay £85 in July, Aug and Sept as due to being an OU student I only get exemption when actually studying modules)
Electricity and Gas: 93 per month (just compared and switched)
Life Insurance: 9.03 (To leave in a trust for my children, as they have no-one else to provide for them and help them start in life if something happens to me)
Home Insurance: 12.35
BT: 32.00 (this is more expensive than previous suppliers but due to needing extensive safety and controls for child's needs it is well worth it)
Mobile phone: 17 (in future I will get a sim-only plan when contract runs out)
Car insurance and breakdown: 37 (tax is free)
Kindle Unlimited: 7.99
Amazon Music 3.99

Groceries/Food: 400 (have previously been spending more on this, but this is my new goal, with juggling kids, mental health, studying, work and family problems I don't feel like batch cooking,
Clothes: 100 (I buy mine on eBay now, have bought way too much in the past and thrown out stuff and regretted it due to fluctuating style and confidence)
Birthdays/Xmas: 100 (1200 per year, 200-300 each per child birthday and Xmas plus grandparents, nephews etc.)
Holiday: 100 (1200 per year = one caravan weekend at April this year, and a week in Summer, to be near my very best friend who moved 7 hours away, when things settle down I would love to use some of my Dad's money for a memorable holiday but first I want to make sure it's some security for us!)
Diesel: 110
Alternative health: 30
Entertainment/activities: 50 (probably low but everything I like doing is outdoors and low-cost)
School trips: 25 (300 for daughter's first major school trip)
Car MOT/Maintenance/repairs: 50 (approx, just paid this when needed before, is it realistic?!)
Takeaways: 50, not required and brings me no joy or fulfilment, but self-control always gets the better of me.
DLA related expenses (300ish, I've put this aside as I spend this on things that directly benefit my son, family passes to safe outdoor farm park etc. that make life better as well as sensory clothing and toys, replacing things

I need to find a system of "pots" for the yearly expenses?!

Extra info (don't need to read this if you have any financial advice but useful for context if anyone is interested):

Things have been very hard and I am just trying to secure a good life for us.

Overspending has been an issue - e.g. before my inheritance I paid off debt and saved £3k during a long, good spell of mental health and then when isolation from lockdown hit my mental health condition spiralled and I managed to spend the lot with nothing to show.

I think that I have learned to live frugally, compare and am good at reducing expenses but being able to maintain the self control long-term is hard. I have posted separately . I should not need to overspend but I do. This is why I think it would be best to tuck my money away where it cant be spent on impusle, as well as use specific pots for yearly/infrequent expenses.

Working part-time, 16 hours per week (I was working longer hours than this, but gave it up to concentrate on studies and caring responsibilities) Plus tax credits and child benefit and child's DLA. I've been studying full-time with Open University (BSc Psychology) to improve future prospects, just finished my first year. I don't want to be rich, I just don't want to have to worry constantly about money or go back to living week to week.

I expect my son's DLA to end next May at renewal, as it is difficult to claim, and due to NHS cutbacks on the support services and assessments we get because of Covid, I have no further evidence, our local NHS is over 2 years plus waiting for each stage!

Job prospects in future - not sure, I have a passion for writing and would love to release a self help book - not sure if this is an impossible dream! Son needs strict routine and simple life, at the moment he wouldn't cope being put in extra childcare to allow me to work more although me studying from home is fine, I might need to think about future work I can do from home but at least with covid changes this isn't too unrealistic. Psychology degree should open up lots of avenues for me and is fully funded for me - does not qualify me for an specialist positions but I would love to go into mindfulness teaching, counselling, psychotherapist - all of these will need self-funded training.

I want to completely get off dependence on aid in the future - one massive worry for me is that if I am changed to Universal Credit I will lose all Tax Credits, childcare funding + son's DLA premium through tax credits due to capital rules. So I want to be self-sufficient before this happens otherwise our security pot to make a better life will be decimated.

Still some things I need to buy - blackout curtains for daughters room, new bedroom furnishings as the storage and organisation we have isn't practical or easy to manage for additional needs kids and exhausted Mum, but I haven't worked out what would be best yet.

Other - considered business ideas but with my focus on caring for my children, recovering my mental health, and studies this just isn't feasible. The best I can do is not to waste anything and sit tight and wait until I can make better lie opportunities. Considered passive incomes but could not find anything realistic.

Pocket money: currently suspended this as I have accidentally given my kids the idea that that spending is required for happiness as well as them having no impulse control with money and allowing them to constantly waste money on online game content, plastic tat in shops etc.

Thank you so much for reading this!

slopemaster · 7 June 2021 at 8:11AM

Hello

I'm sure others will have a advice on other parts of this, but just a couple of points here

As savings intrest rates are so pathetic, you could consider putting a lump into premium bonds. It's reasonably accessible for emergencies - 3 to 4 days to get it into your current account - but not so accessible you can spend on impulse. I have won £25 three times in last 4 months, which is definitely better than a poke in the eye with a blunt stick! Only thing is, when you get that mail saying you've won, it's hard not to get excited - and then you find its only £25. So, it depends how you would feel about that.

About the crypto - be careful if thinking of transferring to cash. Banks are increasingly flagging this as suspicious, and you could get your account frozen.

You could maybe consider putting one third in premium bonds for access in emergencies, and two thirds into shares in your ISA. Over the med - long term this should do quite well for you. But you would need to be willing to do quite a bit of research on this option, and that might not be practical for you, with your other responsibilities.

Good luck whatever you decide

jimjames · 7 June 2021 at 2:55PM

In terms of the ISA and current account you would be better off with a Lloyds or BOS current account that pays equivalent to 0.7% on £5000 which will be far higher rate than you get now. You can get 0.5% instant access on the rest which again is probably much higher than the ISA.