scared by current financial situation

(31 Posts)
gininteacupsandleavesonthelawn Thu 11-Jul-13 10:49:50

I've nc'd for this as i'm worried I may be blasted as having a 'first world problem' but I'm genuinedly losing sleep over this so I'd appreciate any advice, or just someone telling me it'll all be ok [hopeful]...

So, 5 years ago my finances were shit, I left uni with lots of debt and juggled to try to manage it, it resulted in an absolutely shocking credit rating. Over the last few years I've managed to pay all the debt off, but I've also had a baby so it's been fairly slow progress. I've started paying in to a pension and an isa for me and the little one. my earnings have increased well, and last year we really splashed out, we treated ourselves to some new clothes, a family holiday (our first in 3 yrs) and a second (much needed) car. Things were great. We planned to strat saving towards buying a house when we got home.

The problem is that i work in sales, I sell in to one customer and the bulk of my earnings over the last 3 years were commission. I found out when I got back from holiday that they had a spending freeze, it will be short term but after only a few months of no commission and a bit of overspend whilst on holiday we have debt again, and i'm panicking, it feels horrible.

Current situ is:

£3500 overdraft (£5000 limit)
£900 credit card (£1000 limit)
£6000 car finance (3yrs to pay)

No other available credit due to shit credit rating mentioned above.

Income:

£1700 take home (after pension and company car)- me (over the last few years its been and average of £4-5k)
£800 ish for DP (self employed, could disappear at any moment)

Outgoings:
rent- 650
council tax- 150
utilities- 100
nursery- 350 (2days a week)
phone/sky/internet- 80
car- 170
fuel- 400 (I have 70mile round trip commute)
food- 300
mobiles (2)- 80 (contract lasts another year)
car insurance- paid annually in advance not due until feb

I cant think of anything else. We seem to just bleed money as we've become so used to having it so quickly. It feels like we are only a month away from being on our arses. definitely no commission coming in July pay and august is looking doubtful too sad The car tax is due next month (£150 for 6months) and we have 4 weddings to attend plus presents etc over the next month.

Is it awful? I could cry... any advice gratefully received...

lizzywig Thu 11-Jul-13 12:38:31

What sort of % interest rates is your debt? I would suggest that cutting back on food shopping would be a good starting point, we spend approx £200/month for me, Dh & 20mo dd. We eat well & with careful meal planning it's totally doable. Some of the posts on here are v helpful with ideas for how to cut back.

gininteacupsandleavesonthelawn Thu 11-Jul-13 13:34:52

The OD is £2 per day, the credit card is 20% ish, Last month is the first time I haven't paid it in full for about a year so I never used to pay any interest...

That 300 includes toiletries, cleaning stuff, nappies & wipes, I'll be amazed if I can get that down to £200 a month- happy to try though!

Charlesroi Thu 11-Jul-13 13:59:49

It'll be OK - you have more money coming in than going out.

Agree you should try to cut dowm on the food bill. Have you tried Aldi or Lidl? Write a basic meal plan and stick to it.
Take a packed lunch to work to save on costs.
Your mobiles and internet/sky sound expensive - have you tried ringing them and asking to drop to a cheaper package/threatening to leave?
If you can't afford a big wedding present, don't buy one. You can always send a gift later when you're back in the black.

The good news is you'll be rolling in it when you start getting commission again. Don't panic.

gininteacupsandleavesonthelawn Thu 11-Jul-13 14:18:35

We do a bit of our shopping at Aldi already (baby stuff/veg/milk/eggs/ wine)

I've set DP on sky but the mobiles are a big fat no until the contract runs out (iPhones so v expensive)

Can't turn up to the weddings without gifts- i'd be mortified. People all think we're quite well off so would think we were being tight. DP also needs a suit sad he's lots a lot of weight since he wore one last about a year ago.

HollaAtMeBaby Thu 11-Jul-13 19:28:21

Balance transfer the credit card to a 0% one.

If you've been flush for a while you must have some nice stuff you can sell e.g. the iPhones - have you considered that?

Can't really see the problem given that your income more than covers your outgoings. Why does your partner earn so little?

lizzywig Thu 11-Jul-13 20:20:53

I can see the problem, she has debt she wants to clear, savings she wants to increase & dh's income is not guaranteed. It's a scary situation when you're not used to it but op there are people much worse off and there's lots you can do.

Our £200/month includes nappies and toiletries etc, literally everything. We do 1 big monthly shop for all non perishables + toiletries + meat + that weeks fresh. The shop usually comes to £110. The remaining money is spent on top up shops for bread, milk and fresh fruit and veg. We do Our big shop at Aldi (when we did it at Tesco it was coming in at 150) for 60. Anything we can't get there we get at Tesco/sainsburys (i check offers before going). These last few bits cost around £50.

We have thinks like pulled pork (1 shoulder Will feed us twice - freeze half), chilli (bulk out with oats to fill you up), 1 meat free day each week (jacket potatoes), tray bakes (chicken thighs, chorizo & potato wedges) etc. I buy a large chicken, get 1 roast from it and strip the remaining meat for other meals. I never buy chicken breasts and always get cheap cuts of meat. Chorizo and herbs are a godsend as are bacon bits for carbonara. I don't profess to know it all but I've spent a long time trying to get costs down and have a spreadsheet full of ideas which I'd be happy to send you if it helps.

3boys3dogshelp Thu 11-Jul-13 20:39:45

While your incomings are still higher than your outgoings it's not a disaster, but I can see why you're stressed. We had a similar situation of being reasonably well off (and seen that way by friends and family) then having 2 babies in quick succession and taking on a bigger mortgage, then dhs salary drastically reduced twice after I went part time. It's rubbish but it is doable. Looking at your outgoings the main ones that stand out are
1) sky/phone/Internet - no way you need to be spending £80/month. Shop around and you'll get it much cheaper. Talk talk and plus net had good deals a couple of months ago when I switched. Sky is a luxury and not one you can afford right now. We bought a freesat box at Christmas and
really haven't missed sky.
2) nursery - are you entitled to any tax credits? No idea of cut off but worth a call to check. If not make sure you get childcare vouchers from your employer - it saves you the tax so is worthwhile.
3) food - aldi is great and will definitely save you money, nappies from there are good too. I used to be a food snob! Rarely shop elsewhere now.
4) clothes- if you splashed out on clothes do you have any you can sell? Or old baby equipment? Might make a dent in your cc bill if you sell some things on eBay.
Sorry for the essay, hope it helps! We have been where you are and are coming out the other side, I'm sure you'll get there too.

gininteacupsandleavesonthelawn Thu 11-Jul-13 23:05:06

Thanks everybody.

To answer a few questions, DP earns so little because he's in the building trade and there's not much work round here anymore, he also took a year out as a SAHD when I had DD and only works 3days a week (he looks after DD the other 2, it's not worth increasing childcare as he's not guaranteed work). He does try to fit in extra shifts when family can babysit.

Re tax credits- no, I am normally a higher rate tax payer so even if they gave me it now, i'd likely have to pay it back in april. Childcare vouchers, I get £124 a month, thats all I can get tax relief on due to normal earnings. I also don't get CB as earned over the threshold last year (probably will this year but I won't see the ££ until dec/jan).

Nothing much to sell, beyond clothes/shoes which I wouldn't get anywhere near what it would cost me to replace them/they are worth. The iPhones are on contract so i'd still need to pay that and get us new phones, doesn't really make sense.

Gave all our baby stuff away or ebayed in the early days to pay debt so there's not much left- will definitely have a look though.

Totally agree re sky, DP is on to it.

Will have a look at the shopping etc again. I've also had a chat with DP and said we'll just have to start being honest with people that at the moment we can't afford the dinners/nights out/hosting that we used to.

Sad that it was all so shortlived, but hoping it's a lesson well learned and if (fingers crossed) my income goes back up i'll be much more careful with it.

Thanks again.

gininteacupsandleavesonthelawn Thu 11-Jul-13 23:09:07

Also, can't balance transfer to 0%, the interest rate is high because my credit rating is poor so no options there. As i said, this month is the first I haven't paid it in full in a year and it's my top priority to pay off.

Preciousbane Thu 11-Jul-13 23:24:45

DH also lost weight and had his trousers altered by a tailor, it was about twenty quid and much better than buying a new suit.

I'm guessing you have to hang on to both cars for work purposes.

When we had dc it was quite hard getting free babysitters so we really didn't go out so much, we did a few babysitting swaps.I missed it at first but got used to it, no more cocktail happy hours after work and eating out every week.

gininteacupsandleavesonthelawn Thu 11-Jul-13 23:27:02

Yes to the cars, one is a company car and the other we'd need to pay off the finance before we could sell it.

Thatsinteresting Fri 12-Jul-13 00:06:49

You could see about paying your council tax over 12 months instead of 10. That wouldn't save you money overall but it would free up £25 a month. For your Phone/internet/sky try cancelling sky and switching to Tesco broadband and sign up to Lovefilm (though Topcashback as that will earn you a few pounds). We have inclusive minutes all day and our bill comes to around £22 every month. Lovefilm costs £8 but we watch tv series and films. If you did the same that would free up another £50. Lastly try ringing your mobile provider. I'm with Orange but kept going over my allowance so my bills were getting quite high. I rang them and they changed my package without extended my term so my basic bill is the same but I don't go over my allowance anymore saving me money. When my contract runs out I'm going with giffgaff. Try ringing your provider they might do something for you. It's worth ago, may save yourself another £20.

cozietoesie Fri 12-Jul-13 01:03:11

I think you'll find it's surprisingly easy telling people you can't afford something gin. I make no bones about it - if we can't afford something, I just straight out say it, but I do so with a smile (not a sour look) and then change the subject. And people mostly just accept it.

Your biggest problem with it might in fact be stopping other people opening the floodgates on their own problems. (It's surprising how many people are covering up difficulties.) Best not to have long discussions on it though.

Good luck.

gininteacupsandleavesonthelawn Fri 12-Jul-13 10:16:32

Right, DP is on the phone to sky now. His shift was cut short today as the supplier delivered the wrong stuff so nothing to be done until it arrives next week sad

He was paid £200 (would have been 270 had today been ok)

I've split it into:
£70 fuel
£50 shopping- will let you know how i get on
£40 I'm travelling to london for work this week so need some cash for taxi's etc, i'll claim it back on expenses though

That leaves £40.

I've also remembered that already paid out £300 in expenses which I can claim back after this trip- it takes about 3 weeks to claim though so the end of the month might be tight.

Friends have asked to come over tomorrow, everyone else lives in flats but we have a garden so normally sunny weekends we put the BBQ on and have a bit of an open house. After writing this thread I've said to DP that I'm happy for people to come over but if they want food I'll need them to contribute, even if it's £5 each sad it normally costs me £50/60 each time... sometimes more! Is it awful to ask that of people?

gininteacupsandleavesonthelawn Fri 12-Jul-13 11:11:40

Got broadband & sky down to £55.

usedtobe Fri 12-Jul-13 11:13:59

I could be x posting with others as didnt have time to read all replies
I'm in very similar position but I don't have an option of any commission coming in

It's so hard but you have to set a budget and stick to it to prevent sinking in further into debt. Can you apply for working tax credits? Can you cut down your expenditure in ANY way? Do you have family that could help with dc so you can stop using nursery? There may be free nursery or surestart is the area for few hours a day, if your DH is self employed can he look after dc more?

Stay strong, it's tough sticking to the budget and not dipping into overdraft but it can be done.

usedtobe Fri 12-Jul-13 11:27:43

Rather than asking your friends for money I'd say everyone is welcome but please bring your own alcohol and food

if you get everyone to bring meat, you can make salad, bread , crisps soft drinks etc grin

cozietoesie Fri 12-Jul-13 14:01:33

I agree with usedtobe/ Ask them to bring some food and booze rather than money.

gininteacupsandleavesonthelawn Fri 12-Jul-13 14:46:39

Agree that asking to bring food would be better but then what if we end up with 6 packs of sausages and nothing else??

Weather isn't supposed to be so good tomorrow so may just say no.

As I said before, no tax credits, and no reliable family help re nursery. It's still financially better for us for DH to work rather than stay at home with DD.

cozietoesie Fri 12-Jul-13 19:05:25

If you feel like no - fair enough. But it's reasonably straightforward. You just phrase it right - 'Bring some food or booze - Hey - how about you bring some XXXXXX?'

People like a little steer so it wouldn't go down badly.

gininteacupsandleavesonthelawn Sat 13-Jul-13 10:11:02

We're all full of hayfever so decided just to say no to BBQ. I went shopping yesterday spent £30, still got meat & veg to get, will probably need more bread later too. Reckon I can manage on another £20 max though. Luckily we didn't need nappies/wipes/cleaning stuff this week.

DontmindifIdo Sat 13-Jul-13 10:25:47

As others have said, in the short term you just need to get used to saying "sorry, we can't afford it right now." you can also add "I'm not getting commission this month so things are a little tight compared to normal." it doesn't have to be a big deal. People know you are in a commission based environment.

However, long term, you might want to look for another job, no rush, but check if competitors are less commission based for wages - if you are used to bringing in £5k a month with only £1.7k being actual base, another company might have a salary structure where you still are normally bringing in around the £4k mark, but a higher percentage being base. It might mean that your overall wage is lower, but if your DH's wage is also not gareenteed, it might be better for your state of mind to have a slightly lower family income but one that you can bank on monthly.

Also worth talking to your employer next week, are there other clients you could be talking too? If all your income has been based on managing the relationship with one client, it's unfair that you have lost so much of your income now they have gone on a spending freeze. Is that the bulk of your work too? Would it be that you don't have as much to do at work now they aren't buying? Can you talk to your boss about helping out with other smaller clients and/or some budget for business development with new clients so you aren't so relient on just one customer. (as you can see, that's not a safe move). Spreading yourself over 3-4 companies who buy less overall at least would give you more security if one has a similar spending freeze in the future. Let's face it, they aren't going to want to be paying you £1.7k a month if you aren't bringing any money in to the firm if your role is sales based, best you go to your boss to ask about ways to improve this than just wait to see what happens. (You do not want to be in the situation where the client goes elsewhere and you are then redundant if there's not enough work to justify your role)

gininteacupsandleavesonthelawn Sat 13-Jul-13 10:59:44

Thanks, dontmindifido, I know exactly what you are saying. I have asked my current employer to review my basic:commission ratio, they are looking into it but it's unlikely to change before the end of the financial year. Looking after one client is full time (and more) they spend about £40m a year so theres LOADS of work to do, if anything i'm working harder at the moment than I've had to before. Everyone knows it's a spend freeze but the sales cycles are long so things we are working on/winning just now won't deliver commission for another 3-4months or longer, it's coming, just not fast enough to relieve my current situ. It's been 3years since I had more than 1month with no commission, it's just a rough patch which I need to work out how to ride out and learn from, the worrying bit is not knowing for sure how long it'll last.

gininteacupsandleavesonthelawn Sat 13-Jul-13 11:00:35

Ps. you are right about looking elsewhere, if my salary request is rejected I will definitely have to look at it.

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