Always on the back foot

Tawnyowl92

Hello!

I feel as though I'm in a never ending rutt and could do with some advice! My relationship with money has never been great and I am so desperate to make money work for me, rather than feeling as tho I am constantly chasing it!

A bit of background: I live in a rented, 2 bed house in Kent (which I mention only because it's comparatively more expensive down here!) with my partner (not married) and our 3 boys (one toddler, one in primary school and one in secondary school). There have been a lot of changes over the past year with our employment and we made the choice for me to come out of work because what I was earning was just going on childcare (even tho some was paid for by UC) and because my partners new hours can leave him out the house for 12+ hours a day we struggled to find a balance. We don't have any support at all with childcare from family (which was causing issues as my partner needed to take time off for me to attend interviews). We also have about £7k of debts which we have a DMP for but won't be cleared for a few years.

We would like to be able to move into a 3 bed house (preferably owned), get married and be able to take the family on holidays, however I continually feel as though they are very selfish and unattainable thoughts! Where do we even begin? I feel as though we very much live to our means and the only advice we get from family is "save money" which would be great... If we weren't already on the back foot 😅 

Can anyone help?

stu12345_2

imo in life to have money is either work more hours, or earn a higher rate or both.
and  cut back on expenses   and or invest and or inherit money  

now practice wise it depends on your current circumstances,  you are limited by hours, is your partner limited by his skills or  education to get a higher paid job.

the faster the dmp is over the better, that's when things will improve.
that's when you can really make plans,  then perhaps when the kids can be at school all day then you can find a job around those hours.

I feel you have been through a guide with a debt charity that has worked out the max you can pay in your dmp, and still leave you not living on beans and toast 
do you feel the dmp payment is too much.
maybe the area where you live may always be unaffordable to allow you two to have lots left over to enjoy money especially with house prices in the south east.

my parents brought myself and brother up where dad did long factory hours, mum did part time job in eve when dad came home 
but it was a council house we grew up in, I think that was the saviour that stopped them being behind on debts, or have debts at all, eg low rent 

what is your skills education, what do you reckon the max hourly you could likely achieve if you went back to work when the kids are a little bit older and spend the full day at school.


also when you envy the Jones with their holidays and bought big houses,  a lot of these folk are in heavy debt, maybe a lot worse than you, things aren't clear as things appear, 

I'm in debt,yes, I rent council, but it has been the love of newish cars that did my damage, where as mum and dad ran an old car, they paid cash for 

holidays don't need to be abroad or such a cheap caravan along the south coast near where you live can be just as good.
my hols where guest houses as a child to Blackpool 

elsien

So now that you have the DMP, how well are you managing it? Potentially, you could aim to save some money and make full and final offers if the debts have defaulted?
You say “we” have a DMP - Is that a joint one, individual names, how is that working?

You could consider putting a full statement of affairs up on here to see if people have any suggestions? 

PS – absolutely nothing  selfish in wanting to have a holiday. 

RAS

Ok, can we start with a few basics, please?

Do you have a shared DMP or one each? With whom, as some have fees and others encourage people to start before the debts default.

Ideally, when you start a DMP you stop paying all unsecured debt and wait for the debts to default before you start paying. That means that 6 years later your credit record is clear and mortgages a possibility.

Whilst you wait you stash the money you are not paying your creditors into a separate emergency fund. That means that you have a little safety net when things go pear-shaped. You can get your credit records for free, just hunt out the details here on MSE. Which of your debts is defaulted, and which are not?

The other factor is that life has got noticeably more expensive in the last two years. Is your DMP budget really reflective of your living costs? It should include allowances for holidays, entertainment and an emergency fund, does it?

An SOA would be a good thing but maybe spend a bit of time with the last few moths statements to see where money is going before posting, and compare with your DMP.

Obviously it's going to be easier on a practical front to work once your youngest is in school, so you may need a current SOA and to think about working to clear the debt in a few years.

Bear in mind that every £ you earn will be £1 increase in your income whilst a £ increase in OH's salary will only add about 50-60p to your income. So any small bits of money you can make are going to be more valuable.

Check out the Boost your Income section of the MoneySaving forum. And look at the Comps and Old Style subforums. When you are constantly frazzled by finances, it can be hard to spot small things that can offer gains, or even to have the "capital" to invest in future savings. These won't make you a fortune but you may be able to save and acquire something to make life more interesting.

Tawnyowl92

Hello, wow, thank you so much for commenting! I think I was just venting at the time of posting because things just feel so overwhelming and it's hard to think of anything else!

I have a few questions, but please bear with me, you comments have definitely highlighted how little I know.

Stu - Firstly, thank you. Yes, it is a joint DMP. My partner has GCSEs and I have an NVQ Level 3 in business. Experience wise we have (before April this year) worked since we left school (so 18/19 years) with me taking time out for maternity leave. 18months ago I also started a university degree through Open University. And you're right, I shouldn't compare myself to others and I believe that's the trap I had fallen into before posting.

Elsien - thank you saying a holiday isn't selfish :') I hope you don't mind but I'm going to respond to RAS cos I think what you two are saying could be along the same lines?

RAS - unfortunately I have the most questions for you... I have never defaulted on a debt, nor missed a payment. Our DMP is with Payplan, I don't feel as tho I'm paying too much as it is less than we were paying when we paid the companies individually. I don't know what an SOA is but based on what Elsien said, is it a statement of affairs? If so I also have no idea what that is that's a really good idea about putting the money we were spending on debts into a slush fund and will help start to build something. I haven't done it because I thought if you had debts you couldn't save, I'm just always worried that if I start saving someone will ask for a bank statement, see that we started saving and say we have to hand it over. Why would anything I make be more valuable? Omg I really need to do my research >.< You have been so helpful! Thank you!

pogg000

Have a read of this, I think it helps.
https://forums.moneysavingexpert.com/discussion/6496941/in-debt-and-wannabe-debt-free-first-steps/p1

RAS

Glad it is Payplan rather than a fee charging debt management provider.

Look at www.lemonfool.co.uk and fill in their SOA, format for MSE if you are prepared to post here. But try and based it on what you have been spending, rather than what you think you should have been spending. So check out your statements and sit down with OH.

If you read through other threads here, you'll see a common thread. DMP charities and providers encourage debtors to enter DMPs quickly. Part of this is because their clients are often panicked and want an instant solution, and part because they are funded by creditors who would like debtors to enter a managed debt solution ASAP.

A quirk of the credit record system means that people who enter DMPs and pay less than their contracted repayment get AP markers and are protected from legal action. If people pay nothing, they will get default warnings and then defaults. This allows the creditor to take legal action, but that costs money and if the debtors starts payments once the debt is defaulted, there is little incentive for creditors to take any further action.

Fine, except that a default clears from your credit record 6 years after it was issued, even if you don't repay another penny.

An AP marker remain on your credit record for 6 years after the debt is repaid, so damages your credit record for much longer. People who were once encouraged to pay a £1 a month took a long time to redeem their credit record when others who let the the debt default and then paid a similar amount recovered in 6 years. 

By the way, no one other than a court can insist you share your full financial details, although banks might not want to lend to you without information. So you can have savings and debts. 

In fact if you are on any sort of debt management, you can't get further credit and you need to accumulate savings before you get into a further mess.

I'm going to edit that slightly.

If you are trying to run a household to a budget, you need a main account through with monthly direct debits are set up for essential providers. Some things like insurance maybe cheaper paid annually, you also need money for car stuff, Christmas and birthdays, medical and dental and holidays. Basically anything you don't pay each month is best funded by working out the annual cost, dividing by 12 and accounting for it each month. 

Then you need emergency fund for when s*** and fan get too close.

stu12345_2

an old  biscuit tin for savings has been. my saviour at times, no one knows what's in it.
as forget the bank, it shows up when folk want proof

I'm ruthless at times and so are others, too many nosey parkers out there 

fatbelly

The soa calculator is here

https://www.lemonfool.co.uk/financecalculators/soa.php

You should already have the defaults and so be on the way to a clean credit file. Check

https://www.experian.co.uk/consumer/statutory-report.html

Tawnyowl92

Thank you for all the links and info everyone! I have a lot to go through and a positive start, thank you so much for your advice and support! I'll get cracking on making some mindful adjustments!