Digging myself out of debt

ManekiNeko

Hi everyone,

This will be a bit long, please don't feel obliged to read - SOA will be posted below when I can make the time. It just helps me to think 'out loud' in writing, and hopefully to get some moral support as I go along.

Introduction

Well, it's been a long time since I was in debt. Maybe 15 years. My first ex got me into debt through financial abuse, and I cleared this after breaking up with him. I've stayed out of debt ever since, including through a second abusive relationship. Free of debt, that is, until about a year and three quarters ago.

I've been free of both of my exes for many years now and am in a healthy, happy relationship with my partner. We also have a toddler together. This is not to say as we don't have problems - we have definitely argued quite a bit since starting a family, which I put down to the stress of raising a toddler - but overall, I'm happy in my relationship and my partner is a great Dad. In fact, I'd like to add a second child to our family, but whether I'll be able to financially is still an open question.

I'm making a diary for two reasons, partly because I could really use some moral support in my debt-free journey, and partly so that I stay focused on creating financial security to protect my son and myself in the long run, regardless of my partner's finances. That might sound a bit callous and I don't mean it to be, it's just that once bitten twice shy and I'd like to always feel I have an independent safety net.

What changed?

TLDR: Three main factors created my debt:

1. Parenting is expensive and involves surprise expenses
2. My partner's bad money situation, plus making money decisions when you have caring responsibilities towards your partner is tough, and I don't know if I'm getting this right - I permanently feel guilty over my decisions
3. Bad luck (getting sick and a problem neighbour)

Parenting is expensive (in unexpected ways)

We did a budget before starting a family, and we were absolutely A-OK as a couple to do this. We live in separate homes and run our finances separately, so our agreement was that I would buy my home (my big prerequisite before starting a family) and pay the mortgage, while he would buy and run a car for the family. There was even some slack, which we both wanted, and altogether it seemed very reasonable to start our family. I was forced into a 5-year career break by the domestic abuse, which worsened my health, so I fully expected my income to improve greatly when I returned to work after 'maternity leave.'

While I was sick last year, I fell behind on my usual approach of ordering things 'little and often' to spread the cost of parenting out. When I recovered, there was a backlog of items that had to be urgently purchased. LO also needed to start nursery part-time, so there were some additional upfront costs.

For context here, I'm in a one-bedroom apartment, which I bought four years ago. I bought the flat as a fixer-upper and while we've done so much with it, there's always another project that could or should be done, so I'm always putting a little money on one side for the latest project. This was absolutely not helped by having to start from scratch after leaving a domestically abusive relationship and buy almost every possession again, from a hammer to a cutlery drawer.

Then I hit crunch point last July - it felt like everything came at once. Our son learnt to walk, and I'd always planned to gradually purchase some wall-based furniture to create extra room for him to play - but I thought I'd do it gradually, over the course of a year or two. Instead, it had to be done immediately, as I had made the foolish mistake of not anticipating that a baby learning to walk might try to grab the heated airer for balance. Apparently, it was just the right height for him. Thankfully he wasn't injured as he grabbed the upright unheated bar but, of course, this created a need to re-arrange my entire place overnight, and bring the heated airer into my bedroom to remove the danger zone. I bought some wall furniture that folds away when not in use to solve my space issues, including a wall desk so I could take a temporary job and finish my degree by next year. I had to put all the furniture on a 0 per cent card.

Partner's money situation

So, this is complicated because while we budget separately, our finances are going to affect each other for the rest of lives because we have a child together. I'm also a carer to my partner. We are actually each other's carers, just in different ways and contexts.

As we don't live together (although he visits daily and sometime stays), my partner and I run our budget separately, so we run a 'tab' of expenses and used to just settle up the balance every month or three. I was pretty relaxed about it because he'd always paid me as soon as I requested he settle up (and we've been doing this successfully for many years), so I didn't always ask right away, especially after we started our family because life was so busy.

We also hadn't bothered with a formal monthly 'child support' amount to start with; we just split whatever expenses came up. But then his money got into trouble last year and he didn't tell me - he didn't even realise for a long time. I don't think it helped that I was sick, as I couldn't support him at all and I'm sure he didn't have any time to look at his budget.

As I didn't know how bad things were initially, I continued to pay upfront for all child-related costs and additionally lend him money when needed. For example, I lent him a lot of money for his car insurance. I stressed I needed a certain amount back by a certain date, and he blew right through it - most unlike him. I gave him one further chance, lending a token £20 or so that I could ill afford, but said if he didn't repay it by a set date then I'd stop lending him money altogether. He missed that date too, and didn't even warn me, so I stuck to the boundary I had set. However, I continued to pay for food for all three of us, because I knew he couldn't afford to buy his own food due to his money problems - and because he was eating at my place all the time (and cooking all the meals and doing the vast majority of the parenting) while I job searched.

I helped him with benefits appeals and this is very slowly ticking through the system. I sorted his bus pass. He gets a small amount of money each month, enough to cover his rent plus a bit. I'm not sure if it's enough to cover his food - perhaps not. I don't know if he knows. He is searching for work after a long (health-related) break, but this takes time to sort as I know only too well. It probably took me 6-9 months to find good work again after my break.

Bad luck

I was very sick for 3 months last year, and was bedbound and in and out of hospital. I spent more money than usual because other people were buying my groceries, and because I couldn't buy things for my son little and often.

In addition, we had a problem neighbour turn their attentions to our family, and I felt the need to urgently install CCTV to protect my family. It's draining and they are one of 'those neighbours' who always have a problem with everyone. I report it to the police and/or Council, especially when things escalate, but I'd never get anything done if I reported every tiny incident. We ignore them and have no contact, but it doesn't stop them yelling at us or making vexatious complaints about my family.

ManekiNeko

Life now

I'll try to break this down a bit …

Work situation

I started a fixed-term contract earlier this year at a lower wage than I used to earn, just a dab above minimum wage really. However, it was at least (thankfully!) a higher wage than the temp role I had last summer. Money was still extremely tight during the first 3 months in the job, and I got into further debt to purchase a working wardrobe etc.

In April, I was given a small payrise along with the rest of the team, which finally put me in a position where I could budget for all annual expenses across the year (rather than panicking at the time). It's also meant that I could reduce my debt by 1-2k ish (not quite sure, haven't kept track) since then. However, due to some staffing changes, a few weeks later I was informed that my contract wouldn't be renewed. To be honest though, I wasn't really enjoying the role that much, so I strangely felt a bit relieved by that, as well as very stressed about money. I'm just about to finish this role.

Thankfully, I've managed to find a better-paid (but part-time) fixed-term contract role at 30 hours a week until March 2027. I know going in that this contract won't be renewed, but it's good experience and a nice mix of familiar work that I'm good at while also adding some new strings to my bow, hopefully improving my CV to help me find a better permanent role. Honestly, although my new job sounds like a role I'll enjoy and find meaningful, and the team seem lovely, I didn't really want another contract role, as I need the security of a permanent contract to consider having a second child - especially with my finances in the state they're in. But FTC was what I was offered, and some job is certainly better than no job, as I will certainly be unable to pay my debts if I wasn't in work. I therefore intend to keep job hunting for permanent roles after work in the evenings.

Overall, taking this role will drop my income by about £70 a month (lower salary, but UC goes up to partially compensate for the loss), but it's worth the trade-off to have extra time in my weeknight evenings as I've been doing compressed hours. I'll work 4 days and then use Fridays for finishing my degree, as well as attending my healthcare appointments etc. Weekends are a mix of (seemingly endless!) family admin, and trying to get some family time in where I can - though I think this will be limited until I finish my degree. I'm making the most of the summer weather to spend more time with my son, but think in the autumn/winter when there's less on locally I'll do more studying.

Specific money worries right now

The big worry right now is that I'm likely to have a gap between finishing this contract and starting my next role due to Access to Work delays. I need to get Access to Work in place to be able to start my new role, so I'm expecting a gap in employment. I'm not sure how long this will be, and it's stressful. I'm staying with the same employer, so if it's a week or so I could take annual leave, but I haven't a lot left to use as I've had to use a lot up for interviews. I have always kept roughly a month of money in advance, so it's not panic stations yet by any means, but I do need to start that role fairly soon or the wheels will start coming off. On the one hand having some free time between jobs would be amazing for my studies, as I need to be cracking on with them and haven't had the time lately, but also financially I can't really afford to have a gap. I may have to find some temp work to tide me over, but it'll be a nightmare with UC as my income will likely vary a lot.

Because of the gap, and because I can't go on desperately struggling under a mountain of debt, I've said to my partner that once this contract ends, I won't be able to pay his food any more and he needs to plan accordingly. I let him know this a month or so ago, to try to give him some runway to find work - or at least a temp job. I feel like an !!!!!!, and incredibly guilty, but this is not financially sustainable for me. I have helped for as long as I could, and honestly longer, getting into more debt to carry the costs for all of us. I cannot risk things getting worse and one day ending up not being able to pay my bills because my debts got too big and/or my job contract ended, nor not being able to buy a bigger home for my son in the next few years (and let's face it, I can't get a mortgage while I'm in significant debt). He will need the space to play and grow. I cannot progress my dream of having a second child while I'm in this much debt, it feels too risky. I have got to get free of this debt, it's a millstone round my neck.

I'm trying to get caught up and automate everything possible I can in my budget. I opened a new bank account and use 'pots' to stay organised, which has been amazing for my budget over the past 2-3 months and has made sure I haven't been caught short often. In combination with my pay rise, this has stopped my descent into debt, and today I've set up a standing order across to my savings account for everything I'm meant to save each month. Really, my only day-to-day money worry is trying to create a system to make sure I pay off any daily spends on my cashback credit card. It gives 1 per cent off everything and I can't afford not to use it, as I use this money to overpay my debt, and to be fair to myself I'm generally pretty organised - it's just that life is so busy with a toddler. I keep telling myself I have to transfer the money while I'm in the shop, but this can feel overwhelming in the moment or I have my hands full with my son. I therefore occasionally have a little panic where I've forgotten to transfer the money over straight away when I got home and then later found myself short. Having said that out loud, I'm thinking I'll start logging in and checking my balance manually either daily after my toddler goes to sleep, or failing that at least once a week, just to be safe (I have also tried to turn on notifications but it's pretty unclear from the app what they'll actually alert me to, so I'm not holding my breath).

I'll also get a little bit of (term-time only) nursery funding come September, so things will ease up for me then and I'll end up with more money overall despite my slight income drop with the new role. I'll then get more nursery funding in September 2027, and that will be a big relief but of course, if we do manage to have a second child, this may not make too much difference for long.

Practical worries right now

Money is the big worry, but it's not the only factor here.

If/when my partner finds work, we'll need to rejig the balance as he's doing almost all the parenting, cooking and cleaning, while I'm doing all the admin work. The admin work has gotten behind as I've been sick - again! - from March to mid-June this year, although thankfully this time around it appears a simple medication change is going to solve the issue. But my point is, I'll have more household and parenting work and less time for admin (difficult, as a lot of it I can't really delegate). If he loses his car, which could happen depending on how tight his money gets, I'll be without a vehicle but also it'll heavily impact his ability to visit us and be an active parent. Not sure what impact this will have on my ability to handle everything required of me - at the moment it only works because I get laptop stuff done while he cooks dinner, but this is impractical if he's buying separate food. I'm still struggling with my health and energy levels, so will need to find low-energy but healthy meals to cook.

At the moment, we argue quite a lot, and I'm expecting our increased stress levels to cause more arguments in the short term until he finds work/gets his benefits sorted, and until I start my new role. I'd love to afford couples counselling but it's not even remotely on the table due to the cost. I know realistically we need more time to talk, but it's impossible to finish my todo list for the week anyway. It's hard to make time when you feel permanently behind. I lost access to my support worker when I returned to work, and I've got to try and organise this again. Now that I've said that out loud, I realise I need to call CAB about this. That could lift some of the load for me and make things feel calmer, so that I could create at least a little more space for our relationship and trying to improve things between us.

Decision points now

I've recently been given some cash by a family member to help me out, which is super thoughtful of them. They didn't set any expectation on what it gets spent on. I've also finally won a battle with UC over childcare costs from December, which they've finally agreed they did owe me. Taken together, it's almost 1k. I could either pay this off my debt, leave it as an emergency between-jobs slush fund, or purchase some much-needed furniture for my home. Thoughts welcome - there are pros and cons to each.

Conclusions

It's been an expensive couple of years, but I feel positive about finding a better-paid role and finally being able to make meaningful inroads into my debt. I do feel proud of myself for supporting my whole family for as long as I could, but I just … can't do it anymore, the debt is absolutely crushing me (and the childcare bill is no picnic either), and if I'm not careful, it could trap us in a small flat instead of being able to move someplace bigger as my son grows up and needs more space. If I ignored it, it could even come to threaten our home. I can't risk that.

I also feel very guilty that I am essentially cutting my partner off in terms of food. I would like to think he could get work quickly, especially temp work, but all told, I'm expecting to feel pretty awful for the next month or three while this gets sorted out. For the sake of my stress levels, I'm trying to take it one step at a time and just keep focused on this week's problems.

ManekiNeko

Quick SOA with comments in bold. It doesn't feel quite accurate somehow but I can't put my finger on it. I'm tired.

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]
Number of adults in household........... 1
Number of children in household......... 1
Number of cars owned.................... 0[b]

Monthly Income Details[/b]
Monthly income after tax................ 1698.96
Partners monthly income after tax....... 0
Benefits................................ 2646.37
Other income............................ 0[b]
Total monthly income.................... 4345.33[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 219.4 Fixed until February 2029
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 100
Council tax............................. 142 Including repaying a small amount of arrears; should reduce next year
Electricity............................. 141
Gas..................................... 29
Oil..................................... 0
Water rates............................. 48.64
Telephone (land line)................... 0
Mobile phone............................ 11.5 In contract for about the next 10 months; I've raised a complaint about this as I didn't agree to a contract and the signal has gotten worse lately
TV Licence.............................. 0 I don't watch TV
Satellite/Cable TV...................... 0
Internet Services....................... 22 This includes a landline and is a social tariff
Groceries etc. ......................... 550 It's been £750 a month with my partner's food included, so I'm hoping I can drop it further than this, but wanted to leave a safety margin just in case
Clothing................................ 0 This needs to be budgeted for regularly, but until I have a permanent job don't feel I can afford to do this
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 21.50
Childcare/nursery....................... 1840 Most months it's below this, but this is the maximum cost per month. I haven't asked nursery if we can smooth it over the year; their bill goes up and down each month
Other child related expenses............ 117.22 Ballpark; in practice, I just keep all his Child Benefit to one side and use it for clothes, toys, etc
Medical (prescriptions, dentist etc).... 52.59
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 13.75 I pay annually, so this is an estimate. It might be more expensive next time as last time, I got multicover discount as my partner's with the same company (they kindly did this even though we don't live together)
Life assurance ......................... 0 Really should get this. Want a permanent job first
Other insurance......................... 0
Presents (birthday, christmas etc)...... 161.79
Haircuts................................ 16.5
Entertainment........................... 0
Holiday................................. 50
Emergency fund.......................... 5
Coffees/eating out...................... 100
Union fees.............................. 17.25
Investments for my son.................. 25
Window cleaner.......................... 2 He comes a few times a year on his own schedule, it's £10 a time so this is just to make sure I'm not caught short
Buying household items.................. 100[b] Batteries, Sellotape, generally household stuff
Total monthly expenses.................. 3786.14[/b]
[b]

Assets[/b]
Cash.................................... 3653.65
House value (Gross)..................... 120000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0[b]
Total Assets............................ 123653.65[/b]
[b]

Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 60213....(219.4)....1.65[b] Fixed until February 2029; I can expect the costs to increase sharply
Total secured & HP debts...... 60213.....-.........- [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Repaying family................2967......30........0
HSBC CC........................9734......243.......0 Expires Apr 2029
Barclaycard CC.................4187......24.73.....0 Expires January 2027
M&S CC.........................629.3.....15.73.....0 Expires May 2027
Capital One CC.................1102.45...33.07.....0[b] Expires May 2027

Blackcats

hello and welcome! I'm sure you will get lots of support and tips on these boards.

I think doing your SOA has been a good place to start even if you don't get it 100% accurate straight away.

I wonder if you could cut back on your presents pot for a few months while you stabilise things? Those that matter will understand. We ask our adult kids to give us token gifts like a photo of the grandkids or a nice box of fruit tea. It takes the pressure off them and they can divert their money where it's needed.

Over on the old style board the monthly grocery challenge might help you eek out some savings on your food budget. Every little helps as they say 😉

My best tip is to keep posting and keep absorbing the info from other posters.

Smudgeismydog

Welcome, and well done for posting, as you’ve noted, it would be great to get on top of these debts before the fixed rate on your mortgage ends.

Couple of observations on your SOA;

• you have said that your partner is a great Dad, could he help with your toddler more while he is not working and looking for a job so you can reduce your childcare costs?
• you noted your flat is small, so your electricity cost seems relatively high
• I’m intrigued by the extra household costs at £100pm (how much sellotape and batteries do you get through?)
• I agree with @Blackcats in terms of rethinking your present budget, you just can’t afford this right now. Time with people is worth so much more; a picnic in the park, homemade birthday cake, a card decorated by your toddler etc
• coffees/eating out is also a luxury you probably can’t justify right now, could you take a flask and something from home?
  

You didn’t mention how much your relative is gifting you, but as you already some emergency fund, then perhaps it would make sense to focus on your Barclaycard CC first as this 0% ends first. Are you able to do any balance transfers if you can’t clear the credit cards before the interest free period ends?

Best of luck on your journey, sounds like you've worked hard to get to get to this point

ManekiNeko

Thanks both, lots of useful things to think over ☺️

Childcare is a tough one, if I pull him out of X day/morning I'll lose the place and would need to wait maybe 9-12 months to get it back, so I'm reluctant to.

I agree about the electricity, this is caused by a heated airer plus two dehumidifiers. They are energy efficient and the dehumidifiers only run when they sense the humidity has risen.

Haha not £100 worth! This covers literally everything for the house plus me though, so for example I need to order a wall holder for my iron to keep it safe when it's hot. So it's more of a general sinking fund for the house I suppose. Maybe I should keep a little log of what I buy, you have a fair point.

Yes, I've done a few balance transfers already and have a good credit history, so should be no issue provided I'm in work. The combo of childcare refund + relative gift is about £1k. Quite tempted to pay off the M&S card altogether with it to drop my bills by £16 a month, one less thing to worry about. Trying to reflect on it but free time is a laugh and a half with a toddler 😅

Wishing you all a lovely evening and hope you're staying cool in this heat 🙏😎

ManekiNeko

Not sure if it changes anything, but these are the current repayment percentages (calculated off my current min. payments):

• HSBC CC, 2.5 per cent
• Barclaycard CC, claims to be 1 per cent but they're taking 0.5 per cent
• M&S CC, 2.5 per cent
• Capital One CC, 3 per cent

So, although Barclaycard expires first, it's Capital One that would make the biggest difference to monthly cash flow if I overpaid it, while M&S is the closest to being paid off. All clear as mud, then 😉

vampirotoothus

Hi according to you SOA you have £212 left each month, so the £15 saving on M&S won't have a big impact, but I do agree that you may feel better having one less card to juggle, so maybe get it gone. Good luck V x