Debt... incoming

LBincoming

Hi everyone - I'm new here, so please go easy on me!

Myself and my husband aren't in significant debt (yet) - £1100 we owe to my parents - but we can see some future finance issues that I wouldn't mind a bit of advice on how to deal with before they become a major problem.

Background, I live with my husband and young baby. We have our own house with a mortgage, which we bought before having a child. Since having our baby, I went part-time at work for three days per week after taking three month's statutory maternity leave (my employer offers no enhancement), because of childcare issues/cost. We each have a car; mine is required for my job, my husband's he only really uses to drive to and from work as there's no public transport available and it's not close enough to walk/cycle. We're now expecting the happy surprise of a second child, however is where I can see the future financial issues stemming from.

Significant upcoming outgoings:
- we need a double pram (even second-hand, the cheapest I can find in a useable condition is £900)
- we are desperate for the guttering and facias on our house to be replaced (we have multiple birds nesting and we're very concerned about leaving it too long to get fixed and creating a bigger problem), approx £2000, if not more.
- another period of statutory maternity leave (a loss of £890 per month from my wage)
- once I'm back at work, we'll need to cover 1 day per week at nursery for two children (£110 per day)

We have hardly any savings, as it was recently used for our wedding.

Brief overview of our spending each month:
House (inc mortgage, bills etc): £1350
Insurances: £73
Food & drink (inc. any eating out): £330
Cars (inc. car insurance): £1080
Loan repayments: £0 - however we do need to pay my parents back, even though there isn't a fixed amount per month
Baby/pet extras: £80 (nappies, milk, pet food for one dog)
Hair/beauty: £70
Clothes: £0 - we rarely spend on clothes, and when we do it's only when we feel financially well-off.
One-offs: £80 per month saved for Christmas and birthdays.
Savings: £400

Joint income: £3515 (inc child benefit)

We don't have any subscriptions, no gym membership, no Netflix etc. We have older paid-for mobiles with cheap contracts, we shop primarily at Lidl and always with a meal plan and shopping list. We also have a sunny garden where I do grow some fruit, but without a full-size allotment (and the time to manage it) growing our own won't make much of a dent in our food bill.

According to the MSE Budget Planner, we should have £60 left per month to do what we want with. This sounds great that we're technically in the green, but usually we end up having to transfer our savings back out to use as additional spending money, so can't actually get anything set aside. Looking at our bank account, this tends to be for things like drinks with friends, window cleaner, impromptu takeaways (when we could quite easily have something at home), coffees out etc. These aren't adding up to a massive amount on the grand scale of things, but peer pressure also is a huge part of it.

Once my wage drops for maternity leave, it'll leave us with MINUS £430 a month leftover (even if we don't save anything and don't spend on a single thing additional, even the double pram), which is horrifying to me!

And once I'm back to work, we'll barely break even with the nursery fees we'll then need to pay.

I feel like we're only getting by because I also have a side-hustle that brings in a little bit of money, but it hasn't been going long enough to work out what the average income per month is or anything. It's hopefully going to work out fairly significant this year, however I'm due this new baby just as the Christmas period starts, which means I definitely won't be recovered enough to be able to do a number of markets I signed up for, which brought in the equivalent of two months' wages last year.

I feel like we're in that strange trap where we seem to feel wealthy - both employed with above-average wages, bought our own home etc - but we're actually cash poor and one payday away from not making ends meet.

Can anyone offer any tips, advice or suggestions on how to reduce our spending please before we end up needing to borrow money? We want to avoid getting any formal credit and borrowing more off parents isn't an option either. 

Thank you!

sourcrates

£1080 per month on cars ?

What does this figure consist of ?

LBincoming

sourcrates said:

£1080 per month on cars ?

What does this figure consist of ?

Its 2 x finance payments (£385 for one car, £287 for the other), £300 of petrol/diesel and £110 for tax and insurance between them. I've rounded the figures.

BlueJ94

"we need a double pram (even second-hand, the cheapest I can find in a useable condition is £900)"

Have you checked ebay as i just had a quick look and can see that m starting from £300 second hand? 

LBincoming

BlueJ94 said:

"we need a double pram (even second-hand, the cheapest I can find in a useable condition is £900)"

Have you checked ebay as i just had a quick look and can see that m starting from £300 second hand? 

I hadn't! I'd just been looking on Facebook marketplace. We're not in a position to buy one just yet, but I'll definitely look in September/October time. Thanks!

Grumpelstiltskin

You need to do a truthful SOA.

Giving a full breakdown of your situation.

SOA Calculator (lemonfool.co.uk)

Format for MSE and put it on here.

fatbelly

Are either of the finance agreements near the halfway point?


https://nationaldebtline.org/fact-sheet-library/hire-purchase-debt-ew/

LBincoming

Grumpelstiltskin said:

You need to do a truthful SOA.

Giving a full breakdown of your situation.



Format for MSE and put it on here.

I'm not entirely sure what that is, but I'll have a look - thanks.

LBincoming

fatbelly said:

Are either of the finance agreements near the halfway point?

Unfortunately not, both have only been around a year. 

ratrace

Hi, i agree with others in that you need to do a proper soa listing our income and expenses

i mean this in a nice way but you think you have £1,100 but i would would say you are in thousends of pounds in the debt, just from the cars alone yes they on pcp etc.. but you still own that money to the finance company

this is why its important to do a proper soa becasue it give you a true reflection of your finances and things we may think are assets may be liabilitys

AnnieB2018

Don’t rush with the pushchair (and when you do, get one off Facebook for no more than £200!), your second baby may be clingy and only want to be carried in a sling while your older one may already refuse a pushchair even tho they can’t walk far yet. One pushchair that reclines flat may then be used for either child as needed x