Back again - 15 years later

ArtyJ931

Hiya

I'm no expert but things I noticed is - low medical amount a month (for 3 people) glasses, dentist, etc?

Nothing for haircuts - do none of you get your hair cut? Might be possible but just thought I'd mention it.

£50 for shoes and clothing for an adult and 2 children isn't much I don't think.

Your gas and electricity costs seem very low to me.

Car maintenance, birthdays and christmases and other 'child related costs' also seem unrealistic so may be worth looking at.

I would suspect that this is where any 'surplus' is going.

HTH

Altior

There's nothing here that a bit of tweaking wouldn't sort, in my view. Yes some of the SoA expenses look a bit unlikely. But if overall in reality if they are a bit up here and a bit down there, it's not material overall.

If you don't mind sharing, what are the terms of the share save? What I might suggest revolves around how compelling it is. Don't forget that you might be liable for CGT upon maturity/disposal, though no doubt your workplace has advised you on that.

For me the problem, if there is one, self evidently, is not an effective use of a an emergency/slush fund budget and using the OD for this. How to get there hinges on how valuable contributions to the share save are, compared to pension contributions.

yesnoyesnoyes

I’m really grateful for the suggestions and critique, hard as it is to read…. Contact lenses were in the soa(£19) my ex h takes care of my eldest for hair cuts and clothes the bulk of the time, I don’t really by clothes for myself and my youngest lives in hand me downs and vinted stuff. Medical stuff I have life long illnesses that give me free prescriptions and work have insurance as a benefit for long term sick for me or my children.

Gas and electricity are right. I submit a reading every month and it’s always in credit. Someone mentioned low food shopping bills but nursery feeds my youngest 4 days a week and half the week the other is with his father. I meal plan and cook everything from scratch, there’s no waste. £400 includes toiletries and washing powders

The fact that huge childcare bills and the loan are nearing the end of the cycle is going to help me massively, and I think I’m trying to get myself in a position where I can embrace that to a better place financially, everyone talks about making an emergency budget and point out where my budget /soa falls short but I’m in a really difficult position, I can’t earn more, I could sell the car but that would be false economy imo, I live in central London, everything costs more. I have cut every corner I can think of. I don’t do my nails or have a beauty routine beyond moisturiser and some mascara.

Everyone talks about an emergency fund but how can I build one if I’m going short every single month? Rightly or wrongly the investments via work are not going to be something I stop because I consider it an investment for my future, and as I say come Sept and October I’ll be finishing paying high childcare bill and the loan will be gone. I’ve carried this debt down from nearly £16k to 6, it’s been a noose around my neck frankly - I think in the same time I’ve only added £900 to the debt and it feels like I’m nearly at a better place - ultimately I want to be in a great place and be able to say yes to more things and feel a sense of day to day security in my financial life.

Emmia

https://forums.moneysavingexpert.com/discussion/comment/81940779#Comment_81940779

If you live in central London (as I do) you arguably do not need a car. I don't have one (I do have a licence), I have a travelcard and walk or get the tube/bus everywhere.

Giving up your car requires a mental shift, but actually I find it really freeing - no unexpected repair bills, no insurance or maintenance costs, no factoring in depreciation, no fuel costs… of course you will need to join the great unwashed on the tube/bus.

Work out how much the lump of metal costs you each month and compare it to the cost of a travelcard.

Altior

Everyone talks about an emergency fund but how can I build one if I’m going short every single month? Rightly or wrongly the investments via work are not going to be something I stop because I consider it an investment for my future, and as I say come Sept and October I’ll be finishing paying high childcare bill and the loan will be gone. I’ve carried this debt down from nearly £16k to 6, it’s been a noose around my neck frankly - I think in the same time I’ve only added £900 to the debt and it feels like I’m nearly at a better place - ultimately I want to be in a great place and be able to say yes to more things and feel a sense of day to day security in my financial life.

I'd call it a slush fund, rather than an emergency fund as such. In fact I'd advocate for both, the emergency fund reserved for a genuine emergency, and a slush fund for those predictably unpredictable but everyday expenses. A cash buffer if you like.

Regarding the investments, I'd call it an opportunity cost. The opportunity is brilliant, but the cost is seemingly giving you a lot of financial distress.

You've not shared any of the details, so it's difficult to be definitive about it. But I'd be advocating for a breather, or reducing the contributions temporarily, not stopping it. Once you have built the buffers/headroom in your normal budget, returning them to where there were originally. But if it was crazily compelling, then it could be worth possibly considering doing this via moderating pension contributions instead. It depends on the detail, which to throttle temporarily (or possibly a bit of both).

loobidoo

https://forums.moneysavingexpert.com/discussion/comment/81940109#Comment_81940109

I think you're right with this one. E.g. you could scrimp on clothes, Christmas saving, and sort some annual bills after October when you're £670 up.

Do you think £110 (i.e. not paying sharesave) would help/resolve the issues/cover (un)expected expenses? I think this is more about covering things in the short term and looking ahead to your budget when it doesn't include nursery fees and you've paid off the loan. That will be a relief.

What things could you sell?

You say you put £200 towards the emergency fund - when did you start this and how much do you have?

Nursery fees, I'm sure you are, but are you paying through tax-free childcare?

Mortgage - would you consider going to interest only for 6 months until the nursery fees stop to help build up a cash buffer?

yesnoyesnoyes

I’m in south London where we don’t have the tube network, I have to do 2 school/pre school drop offs in the morning in opposite direction. When I’ve been without the car it’s added nearly 1.5 hours to my day and to get to work as well for 9 am on my office days would just be impossible - honestly I’d love to go car free, but as I say it would create other stress in my life which wouldn’t serve me long term.

I claim the universal credit element for childcare so I can’t use the childcare tax account as well, I don’t think there’s a lot in it in terms of savings, But even after all and the “free”Hours - it’s still tipping me in the red, more than my debt is really, but I’ve got no choice I have to work.

Im not even sure it’s possible to switch to interest only on the mortgage but with the rate likely to be much higher come the end of my deal I’d be hesitant to reduce paying that.

Only started the emergency fund this month, so it’s a giddy £200 big, but I already know Im going to go into the overdraft, I always “pay it back” when I get paid so I don’t stay in it but it’s the perpetual deficit. If I could have 2 months with no childcare it would be a huge help but alas that’s not possible.

Altior

6 month interest only option is part of the mortgage charter. Should be specified by your lender exactly how it can be applied. It's a one time only joker card though, so best saved for when it would be necessitated, in my view ie an emergency scenario.

loobidoo

OK, so…no changes to the car, sharesave, mortgage.

Energy bills are already low.

Groceries/household products are already low.

I get that surprise expenses always crop up but I guess they're not 100% 'unexpected' since you have a car and kids, but they seem to be the killer each month. I think Altior is right in that the £200 here could be your slush fund/'things I didn't budget for' fund.

But then the SOA says even with £200 as a slush fund you've got £175 left, so maybe work through a few months of transactions to see where this is going.

I didn't notice the overdraft on the SOA - what's the interest rate for that?

What's the holiday? Or is the £100 an allowance for future?

I'm struggling to see where else you could cut but some ideas to build an immediate cash buffer:

• reduce/stop pension contributions temporarily
• up your income via survey sites etc (i.e. not a second job)
• selling stuff you own - I bet you could make a couple of hundred quid without trying too hard
• cutting out all takeaways
• funding the last few nursery payments differently (e.g. paying on interest-free credit card and paying off when the loan clears) - not a good idea
• Ask if you could stop commuting into London temporarily
• use annual leave to save on commuting

ManyWays

I am sorry but stopping paying into the Sharesave is a very simple and practical way to help get through the next few months and then to build an emergency fund faster.

Your energy bills are likely to be going up from July. Your car maintenance is at an unsafe level. The mortgage is going to go up a lot next year.

You need to be in a secure position now before you can afford this investment for the future.