Avoiding Debt

CrustyMcMuffin

Not sure if this is the right forum but we're looking for any advice on how to avoid debt!

My wife and I are due to have another baby in March and the plan is for her to give up work completely. We currently have one son and find it quite tough to survive on my FT and her PT wage. We're looking to cut back on all luxuries such as my gym memebership, cheaper sky package, looking to switch electricity suppliers etc.

What else can we do to prepare ourselves for our drop in income?

file_wizzard

Crusty,

See http://forums.moneysavingexpert.com/showthread.html?t=47180

Thefunkygibbons

The other thing is check whether you are getting all the help you are entitled to

Also you could
- Ensure that you get the new baby stuff at sensible prices, either good second hand or slowly over the next few months in the various sales
- check any savings are earning good rates of interest
- clear any old stuff on ebay
- look at the mortgage and insurances to ensure that these are the best rate
- make sure tha family car is economical and the most suitable for the new family
- don't be shy of telling the family what you need, especially for Christmas

skintchick

If you post your outgoings we could offer advice on where you can cut back.

CrustyMcMuffin

Thanks for your replies, here's our current outgoings

AA Roadside Recovery £9.19
Council Tax £151.00
Gym £22.00 - Being cancelled
Car Loan £169.33
Phone £ 25
Car Insurance £32.02 - Due for renewal next month so I'll be hunting for the best deal
Home Insurance £19.76 - As above
Electricity - £67.00 - Need to find a better deal for this
Savings £70.00
Mortgage £373.09 - Tied in until Oct 2007
Mobile Phones £30 - Cancelling when contracts run out
Unemployment Insurance £12.95 - Possibly not worth having?
Life Assurance £28.49
SKY £42 Will get rid of some of the channels soon
SKY REPAIR PLAN £7.50
TV LICENCE £8.51

Petrol is around £25 a week
Groceries is £40-£50 a week

Nappies etc - £40 a month

As I say, we're ok just now as we take in around 2k a month, but when my mrs gives up work it'll be around 1600. We've got a few grand savings and thankfully no debt apart from car loan and mortgage but we want to keep it that way hence our desire to cut back whereever we can.

I'm a web developer and so am looking to start up a company to do some more work in my spare time, but this won't be regular income so we cant rely on it.

grumbler

CrustyMcMuffin wrote:

AA Roadside Recovery £9.19

:eek:
Cheapest Roadside Recovery article

Phone £ 25

You can pay £10.50 and have free evening and weekend calls and pay extra just 3p per daytime call (not per minute!):
Our year with talktalk is almost up.

SKY REPAIR PLAN £7.50

is it really worth £90 p.a.?

jue

Hi There Crusty.
Firstly congratulations on the baby, you must be excited.
I would say definately look around the Old Style Forum, you will find loads of help and support on there.
I second buying some of your baby things second hand.....visit car boots to bag some bargains.
Definately ditch the sky TV package, perhaphs buy a freeview box.
Scrutinise your electricty usage it sounds very high to me, things like line drying clothes will help, and switching off things when not in use.
You don't mention gas useage, is your home all electric? that would explain the high electric bill.
Other things I would say is do you need mobile phones at all? When your contracts run out could these not be ditched?
Clear out the clutter on E bay or have a car boot.
Good Luck for the future, it looks like you will definately will do well.

skintchick

OK, a couple of thoughts:

You can cut your food and nappy bills. Go on the old style boards for advice on this as they have threads on both issues.

You have savings. If the interest rate you get on them is less than you are paying on your car loan, then use your savings to pay it off, although keep some back for emergencies.

Your petrol costs sound high. How many miles do you do to get to work? Is it just the one car or does your wife have one as well? Try walking if the journey is small as cars don;t run efficiently on short journeys.

And don't forget you save £70 a month, which if you need it you can use.

ANd a note: pay for insurances outright as they usually charge you interest if you go for the monthly payment plan. This would cut monthly outgoings down too.

Having said that, I work out your total outgoings as they stand to be £1355.84, which is within your new predicted income - I wish I had that much spare! If you find it actually all disappears, you and the wife need to keep spending diaries for a month so you can see where it all goes.

CrustyMcMuffin

Cheers guys, to answer the queries:

Mileage to and from work is about 150 miles a week, I try to use the car as little as possible but even so £25 is about average of what I pay.

We already have a son, so a lot of the expense has been paid out. If we have another boy then we don't even have to buy new clothes. Saying that I really want a wee lass so I can be an overprotective dad!

Our home is all electric, we just got a notification that the monthly bill was going up to 67 a month, it was 55. I'll hunt around for a better deal and try to stop leaving the lights on, my mrs already gets on at me for this.

Never realised just how much extra I've been paying for roadside assistance! Need to get this changed pronto!

Anyway, thanks again I'll scour this site for the best deals and try and get the best deals.

skintchick

Hmm. I do 125 miles a week to work and back, and spend about £60 a month on petrol (unleaded, Skoda Fabia 1.4 16valve 100bhp, so not a little car). Sounds like your car is guzzling a bit too much fuel.

Maybe get it checked out? Is it quite old? Or a massive engine? Just a thought as petrol is so expensive.

HelenR_3

CrustyMcMuffin wrote:

Cheers guys, to answer the queries:

Mileage to and from work is about 150 miles a week, I try to use the car as little as possible but even so £25 is about average of what I pay.

We already have a son, so a lot of the expense has been paid out. If we have another boy then we don't even have to buy new clothes. Saying that I really want a wee lass so I can be an overprotective dad!

Our home is all electric, we just got a notification that the monthly bill was going up to 67 a month, it was 55. I'll hunt around for a better deal and try to stop leaving the lights on, my mrs already gets on at me for this.

Never realised just how much extra I've been paying for roadside assistance! Need to get this changed pronto!

Anyway, thanks again I'll scour this site for the best deals and try and get the best deals.

hiya

do you mind if i ask why your TV License is so cheap ?
when we`d had ours a year i called them and said can i pay for it a tenner a month because i thought i saw that advertised somewhere and she said no , so i have to pay i think £32 every quarter :mad: