Debt... incoming

RAS

LBincoming said:

At the moment, the £500 showing as ‘unallocated’ mostly goes into savings; £100 a month into an investment ISA, £200 into premium bonds and the remainder into our regular savings account (although the money in the regular savings account is never left untouched by the end of the month, so definitely need to look where that’s being spent). My husband has just gone to the local butcher for a pie for instance…

Some of what I'm going to may seem a bit harsh but if you are both going to get a handle on your expense you both need to think differently, and to adjust over time.

And you both need to be keeping pending diaries for a while to adjust from being able to just do stuff to knowing the limits on your activities. At one stage, I used to budget for a half pint with mates once a fortnight. It was the first thing to go in a difficult month but knowing I'd got some social activity budgeted helped. 

An honest SOA means you need to include EVERYTHING. 

So the £300 going into the ISA and premium bonds needs to be in your SOA as does your regular savings account. And it might be a good idea to concentrate your effort on working out where the "touched" bits of those regular savings are going each month, as that is probably the stuff that is missing from you main SOA.

And you need to include any amounts that you have already saved into those accounts in your SOA. It may well be they are a bit thin after the wedding but.....

Given your current situation it is not a good idea to be putting money into illiquid "savings" when you will inevitably end up needing to pay more for that money if you have to "borrow" it on a credit card or via a HP loan.

One message going forward seems to be:

NEVER EVER buy anything thing on Hire Purchase again. Apart from the cars, you've also got a whacking great monthly cost paying for the sofa.

You can live with a second hand or even freegle sofa while you save up, rather than buying something new and shiny on tick.

There is no point saving and scrimping. So cancel the DDs or SDs on the ISA and premium bonds and start putting that money aside now into a separate account only to be used for mat leave. 

Work out where the touched savings are going, adjust your SOA to reflect that, even if it is only to save enough to cover a set of tyres which wiped it out one month.

And write a time line. When everything seems to be going to pot, if you know there is some relief a few months down the line, it helps. It may also help your OH if he knows that, for example, he needs to cut back on barber costs for 18 months rather than for ever and ever.

A few thoughts on that.....

Now, baby 10 months? start mat leave savings - project value by the time baby 2 arrives in December? 
December - baby 2 arrives, lost income, additional Child Benefit, reduced petrol cost as not working.
March - return to work,  Higher income, higher child care costs, higher petrol costs
May? - sofa HP ends, £100 relief to stressed finances
Summer - baby 1 is 2 years old. Does that affect nursery cost?

And accept that if baby 2 is not the same sex, they are going to be wearing baby 1's cast-off at least until they are old enough to care. You can't afford to care about it. 

EssexHebridean

Two things I’ve thought of - first, ask yourself why you are so hung up on the specific type of buggy you’re after, you seem very focused on wanting a specific make and model, which is also from what has been said, expensive. Imagine it came without the brand name and the recognisable features attached - is it REALLY hundreds of pounds better than another make? 

Second - for the new baby’s first 18 months or even 2 years, leave other people to buy presents for Christmas and birthdays. At that age they have no concept of who has provided the new shiny, noisy fun thing they have just been given so presents from other family members will mean just as much. Also consider starting a system with family at least where they ask you what is needed by both children, and buy at least in part from that list. (This may be something your family already do). 

peteuk

You’ve probably done this already but mobile phones.

Two phones (if your out of contract) are you happy with the handset then a simple sim only is a lot better.   Contact your provider and find out what they can do.  It will be a new contract but most sim only can be upgraded at any time.  So no need for insurance eg if you break it upgrade.

They may not offer you money off, but they may add data. So I pay £20 for 1GB but get 6GB free.  That was taken out on a 12 month contract and I know you can get better now as my wife got a better deal.

stymied

Have you registered for tax free childcare? Have you looked into a childminder rather than a nursery especially one that can do school pick ups in years to come?

Andyjflet

In all honesty you need to be intense about getting some savings behind you like now, before you stop work, at least £1000 emergency fund. I would also be planning on getting rid of one car and moving to a single use vehicle, thats a lot of money to pay for vehicles you cant afford, you need a Dave Ramsey car sat on the drive. 

cydney65

Just a small mention about your side hustle. Hopefully you are registered with HMRC-are you saving for a potential tax payment?
 My turnover was really small last year but I still need to pay over £600, which I hadn't bargained for (I know!)

lisa1234831

Hiya when checking your benefit entitlement for now and when your new baby arrives are you working out your income correctly? Some of your income is disregarded when on maternity leave so you will be classed as on a lower income. 

https://www.gov.uk/guidance/tax-credits-working-out-income

NeverendingDMP

Just an idea for you to think about, if you stop paying into premium bonds for 3 months you would save 600 a pound. Either to almost cover a lost month whilst on mat leave or to repay the sofa early. If you repay the sofa early this will mean that when the Oct price cap on gas and electricity comes in you have the extra in your budget to cover the increase without having to panic. (Unless you are on a fix)
If you stop premium bonds for longer thats gonna save you more and take pressure of whilst on mat leave.
Wasn't sure if you pay any childcare now but have a play around on benefit calculators on turn to you or similar type sites. Just to give an example our take home pay is 3.5 k ish a month our childcare costs are 550 a month  last month we got 39 in universal credit. It all helps, you might be able to get a bit even if it covers the shoe fund for when your current little one is walking, it's worth a look and might also help you decide what the optimum work/childcare balance is when you return to work after baby two. 
Car, phones etc already mentioned but just out of interest is your mortgage fixed. 
And britax city jogger is a recommendation from.me too. Have you checked the pram you want will fit in your boot. They are huge. And without sounding the voice of doom how much will you use the pram with two small children. Will you always be out together or a lot by yourself. You can get buggy boards or buggy seats that are.a pain to use but help transport two in one. I think your youngest may still be too young but it's worth a though. Some people use baby carriers for youngest and pram for oldest. Not something I ever managed though 😂

LBincoming

RAS said:

LBincoming said:

At the moment, the £500 showing as ‘unallocated’ mostly goes into savings; £100 a month into an investment ISA, £200 into premium bonds and the remainder into our regular savings account (although the money in the regular savings account is never left untouched by the end of the month, so definitely need to look where that’s being spent). My husband has just gone to the local butcher for a pie for instance…

Some of what I'm going to may seem a bit harsh but if you are both going to get a handle on your expense you both need to think differently, and to adjust over time.

And you both need to be keeping pending diaries for a while to adjust from being able to just do stuff to knowing the limits on your activities. At one stage, I used to budget for a half pint with mates once a fortnight. It was the first thing to go in a difficult month but knowing I'd got some social activity budgeted helped. 

An honest SOA means you need to include EVERYTHING. 

So the £300 going into the ISA and premium bonds needs to be in your SOA as does your regular savings account. And it might be a good idea to concentrate your effort on working out where the "touched" bits of those regular savings are going each month, as that is probably the stuff that is missing from you main SOA.

And you need to include any amounts that you have already saved into those accounts in your SOA. It may well be they are a bit thin after the wedding but.....

Given your current situation it is not a good idea to be putting money into illiquid "savings" when you will inevitably end up needing to pay more for that money if you have to "borrow" it on a credit card or via a HP loan.

One message going forward seems to be:

NEVER EVER buy anything thing on Hire Purchase again. Apart from the cars, you've also got a whacking great monthly cost paying for the sofa.

You can live with a second hand or even freegle sofa while you save up, rather than buying something new and shiny on tick.

There is no point saving and scrimping. So cancel the DDs or SDs on the ISA and premium bonds and start putting that money aside now into a separate account only to be used for mat leave. 

Work out where the touched savings are going, adjust your SOA to reflect that, even if it is only to save enough to cover a set of tyres which wiped it out one month.

And write a time line. When everything seems to be going to pot, if you know there is some relief a few months down the line, it helps. It may also help your OH if he knows that, for example, he needs to cut back on barber costs for 18 months rather than for ever and ever.

A few thoughts on that.....

Now, baby 10 months? start mat leave savings - project value by the time baby 2 arrives in December? 
December - baby 2 arrives, lost income, additional Child Benefit, reduced petrol cost as not working.
March - return to work,  Higher income, higher child care costs, higher petrol costs
May? - sofa HP ends, £100 relief to stressed finances
Summer - baby 1 is 2 years old. Does that affect nursery cost?

And accept that if baby 2 is not the same sex, they are going to be wearing baby 1's cast-off at least until they are old enough to care. You can't afford to care about it. 

Thank you for this!

Unfortunately the sofa HP payments were taken out before we thought of having children, while I was working full time. Thankfully that’s over fairly soon. For the cars, HP seemed a much better way than PCP, as we’ll be able to keep them once the payments have ended. I’m required to have a car for work, and even since going part time, I’m still sent to the other side of the country in a fairly regular basis. In hindsight (what a wonderful thing) we should’ve both gone cheaper with the car choices, but again didn’t expect to have another period of maternity leave to cover.

The reasoning behind putting our savings into premium bonds rather than a normal savings account is to stop us touching it on a whim, as it takes a number of days to draw out and land back in our account. The money is still there as a buffer for pre-planned events or emergencies (car insurance, if the washer goes etc) but means we can’t spend it on a takeaway or something else equally as daft.

The timeline is a great idea thank you - something I’ve already started working on writing down with my husband’s input.

LBincoming

EssexHebridean said:

Two things I’ve thought of - first, ask yourself why you are so hung up on the specific type of buggy you’re after, you seem very focused on wanting a specific make and model, which is also from what has been said, expensive. Imagine it came without the brand name and the recognisable features attached - is it REALLY hundreds of pounds better than another make? 

Second - for the new baby’s first 18 months or even 2 years, leave other people to buy presents for Christmas and birthdays. At that age they have no concept of who has provided the new shiny, noisy fun thing they have just been given so presents from other family members will mean just as much. Also consider starting a system with family at least where they ask you what is needed by both children, and buy at least in part from that list. (This may be something your family already do). 

The new pram was because of taking advice from friends who’ve either had babies very close together or twins - they basically all said 
‘buy cheap, buy twice’. Luckily I found it on Facebook marketplace a couple of weeks ago for over £1000 less than the new price, and a family member asked to buy it for us as a present for the new baby, so we feel very appreciative that that’s no longer a worry.

Totally agree on the presents. We bought very minimal presents, just a few books etc, for our little one last year and she had no clue what was going on anyway haha! My family tend to be great at asking what we need (the new pram is part new baby present and part Christmas present for instance) but we both feel uncomfortable having that same discussion with his side.