Please help me unfuck my finances

[JAMNoMore]

Just looking for someone to cast a critical eye over my finances as I'm really struggling to get out of debt and need to make some changes.

Backstory: I'm a single mum by choice; I used my savings to pay for IVF. Took out a loan to cover my mortgage during maternity leave, and to buy some of the bigger necessities. I then made the fatal mistake of getting a credit card. This was supposed to just be for the last Christmas as I'd only just restarted work, but as I'm only working 4 days a week I'm earning less than I used to, and kept adding little things to the card, and a few bigger emergency things, so it's now much higher than I ever intended it to get. I'm repaying over the minimal amount, and am currently still in the interest free purchases time - will be applying for a 0% interest on balance transfers card in the new year so I continue to pay 0% interest on the card debt.

I have namechanged for this, as it's going to be full of private/personal info. Apologies for the massive overshare.

My current monthly income is £2055.41, this is made up of £1972.61 in pay and £82.80 child benefit. I am not eligible for any tax credits because on paper my income is high and my childcare outgoings are low.

Regular monthly outgoings are as follows;
Mortgage; £828.03 (28 years left on this. Paying fixed repayments for another 2 years, then will need to see what my options are.)
Loan repayments; £172.01 (there are another 30 months until this is paid off)
Credit card repayments; £100 (there are 28 months until this is paid off, assuming continuing 0% interest level, and no further emergencies)
Dog insurance for 2 dogs; £21.89
House insurance; £10.39
Car insurance; £50.82
Gas and electricity; £108 (this will go down. I had been paying £70 per month which was too low, so they insisted I go up to this higher amount. I'm expecting to be able to go to £90 in the new year and it should average itself out.)
Council Tax; £94 (this includes 25% single person discount)
Groceries; £200 (including dog and cat food, and cleaning products, nappies, toiletries etc, and to be honest it's not enough - a lot of my recent CC purchases have been to make up for a shortfall on food/wipes)
TV license; £12.12
Internet & Phone; £36.19
Childcare; £50 (this is to a family member and is to cover nappies and wipes and activities, not a payment for services)
Childcare; £104 / £130 (this is for nursery one morning a week; variable amount due to 4 and 5 week months)
Car fuel; £50
Mobile Phone; £48.19 (this will decrease to £19ish in the new year after I've finished paying for the handset)

I make this £1885.64 per 4 week month and £1911.64 on a 5 week month

Irregular monthly outgoings;
Car tax; £126 every 6 months
Car service and MOT; £150ish once a year (assuming no failure)
Dog vaccinations; £40 each per year, two dogs
Next account; currently owe £60, would like to be paid off by the end of the year.

So, if you've got this far then huge thanks for sticking with me. If I average out the irregular payments this all works out to leave me in the vicinity of £90-£130 per month for overspill, emergencies. This doesn't seem to last, going on grocery top up shops, family birthdays, new clothes (kiddo is 18 months, so is just going up to the next size, plus has recently needed new wellies and wet weather gear for nursery), the odd day out. Obviously I'm not averaging these payments out over each month as I should be, so my MOT coming up next month means I'll be making heavy use of my overdraft for a few months, which will incur some fees. Starting January I will be putting money aside each month to cover the irregular payments, so I can at least make them a little less of a shock to the system when they come round.

Where do I start trying to make things easier? I can't go back to working 5 days a week because I couldn't afford the extra days in nursery, and my mum can't have my kid for another day each week. I'm trying to sell stuff on ebay, but that's a very finite resource, and I don't have a lot of fancy stuff worth selling! All advice will be gratefully received.

Disclaimer: This is 100% not a begging thread; I do not want any financial help, I am not at any immediate risk of starving or losing my house, I have local family who would help out if it got that bad. My son is young enough that he won't notice if Christmas is on the frugal side, so no one's festive season is at stake. I just need some hints and tips on how to get back in control of things. Thanks!

[misscph1973]

You have got a really good overview of you finances, very impressive!

(I earn about the same, and I have similar outgoings. But I am married (DH similar income), I rent and I have 2 DC)

You don't really have that much debt in my opinion (I have a student loan, a bank loan, a bank overdraft, tax credit debt and a credit card) And you own your home, which is of course great, but it does mean that you have maintenance and repair outgoings that are usually not expected.

Can I just say that it gets easier, your DC will start school and you will go back to working 5 days, get a promotion or get a higher paid job.

I think it's a good idea to transfer the credit card debt to a 0% balance transfer card. Could you also look into transferring the loan? Possible pay it off over a longer period to free up some cash? Of course it's nice to pay off debt, but not if it makes your every day life miserable and difficult. Debt, if managed, is good for your credit history as well.

[ipsofatto234]

I also think you seem to have a really good grip of your current finances and it looks like you're managing things well. My only suggestions would be a) could you investigate childcare vouchers - they come out of untaxed income so may help with the one day a week of nursery/allow you to consider more days as your child gets to 2 or 3 and becomes eligible for some free hours (make sure your nursery offers these! and b) You may be able to find a better internet/phone offer. Thirdly, we got rid of our TV some time ago (saving £12 pm on licence fees) and didn't miss it (you can watch catch-up but not live TV online with no licence) but did then buy Netflix for £6 p. m so it wasn't a total win. I'm sure you've thought of this already but try to only fuel the car at Tesco/Sainsburys to collect Clubcard/Nectar points, which you can then use at Xmas to buy food/gifts. You could also consider speaking to your mortgage provider to extend the term of your mortgage if that's an option open to you, which does decrease the monthly payments a little but then of course, increases the overall amount of interest you're paying across the lifetime of the mortgage. As others have said, hang in there - it'll get easier as your LO becomes eligible for some free childcare hours, then when LO starts school etc.

[JAMNoMore]

Thanks both for the kind words. I've tried really hard this year to get things straight - have a budget spreadsheet which I've kept since Feb, and which allows me to sort of keep track of things. It's just so demoralising to keep having to remember that I can't treat myself to anything above the budgetted amount because I can't afford it. I guess that needs to be fixed in my attitude rather than my finances.

I'm looking into childcare vouches, ipso, have got an account now which is linked to my work, but nursery haven't given me a code to connect to their end of things. (And, to top it off, ofsted have just revoked their license, pending some security work - another parent complained that they thought the fences were too low and the kids could escape! Means no nursery for a week or two, but I'll save money from next month's nursery fees, so there's a silver lining. The nursery only provide wraparound care after 3, so he'll have to move to a different preschool/nursery setting and I'll definitely be looking for one which does the free hours with the expectation of going back to full time hours)

I've done Netflix before, and occasionally dabbled with NowTV. I think the only live TV I watch at home is Bake Off, and there's no reason I can't watch that an hour later on All4. Unless - I think BBC iPlayer needs a license to watch, even the catch up stuff, and I often pop some CBeebies on to calm a tired toddler.

Supermarket fuel is a good call, but the supermarkets are a bit out of the way, so I'm not sure if I'd end up spending more to get to them (I usually do my grocery shop online so it's easier to go through and remove things before checking out.)

[misscph1973]

When you transfer your CC balance, choose a supermarket one (Sainsburys and Tesco and probably more ) for the extra points.

Online shopping is definitely the way to go, I certainly find it much easier to stick to my budget this way.

I guess you have quidco etc?

My DC are 10 and 12. I was so poor when they were little! And tired. So I do really feel for you, it is hard, but wow, you own your home, you can work a spreadsheet (!) and you have insurance. I still don't own my home, I can't work with spreadsheets (despite taking a course!) and I only have car and travel insurance. But I do have a job that I love, healthy children and enough money to pay my bills - it wasn't always like this!

I do think it's about attitude. It's very important to remember how lucky we are - have you tried writing down 3 things to be grateful for every night before bed for a month? I swear it changed me, I noticed when all of a sudden there weren't so many ugly people on the school run any more ;)

[Spam88]

It sounds like you're pretty on top of things OP.

A couple of things that stood out for me - you're paying quite a lot for your internet, you can get fibre optic for around £25 now from a few providers (certainly sky and Vodafone). That includes line rental.

Your car insurance is high, but I guess you've probably looked at making sure you're getting the best deal?

Unless you particularly need huge amounts of data, you could pay less for SIM only on your phone. I pay £12.50 a month for 1GB, 1000 minutes and unlimited texts on O2.

Regarding TV licences, you do indeed need one to watch iPlayer now 👎 don't know whether you could get kids stuff on YouTube though? There's certainly stuff on Netflix if you decided to get that again.

[HarveySchlumpfenburger]

There's definitely enough children's stuff on Netflix that that shouldn't be an issue.

Unless you are particularly wedded to watching a series on BBC iplayer I'd swap the tv license for Netflix. you can cancel Netflix fairly easily, so I tend to find I pay for it on the months I'm using it and if I go through a period where I don't use it I'll cancel for a few months.

Have you looked at comparison sites to see if you can get a better deal by switching providers for some services?

[ScrubbyGarden]

I think you are doing amazingly! Quite a bit of your outgoings are finite, so it will ease up soon enough- childcare won't be forever, and neither will the loan and credit card repayments.
Your utilities seem high to me, but I live in a small flat so I'm a bit clueless.

I find that when I am economising I do better with allowances than individual budget lines- so x cash each week for food and all incidentals. Then I find myself saving teeny amounts for a small treat and feeling chuffed rather than hard done by. (So, getting to the end of the week with enough for a magazine left over say)

[HarveySchlumpfenburger]

Just looked through your OP again.

I use YNAB for budgeting, I'm not suggesting you pay a subscription but one if the principles might apply.

You've identified that you need to put money aside for irregular bills each month, but do you do the same for things like clothing, days out, birthdays etc? If you don't it may be worth considering.

[LuxuryWoman2017]

You have a good handle on your money which is brilliant, these early years are expensive with childcare fees and will pass.

Do you have a spare room? The single biggest help to my finances was taking lodgers which I did from the moment I got the keys to my 1st house. Is that an option? You can be really picky now and specify you want a female or it is for 3 months or Mon-Thurs only - whatever and is tax free up to about £7.5k. Lodgers have few rights so if it didnt work out you can give a week/month notice. I used to get £100 a week from my last and it was such a help if you could do that even for 6 months and through the rent at your debt.

Otherwise, could you earn a little more in the evenings? Go on MSE and read about Leapforce and Lionbridge which are legit ways of earning at home, not MLM or anything. Web evaluation I think. Anyway MSE will have a wealth of ideas for you.
FB selling may be better for selling your child's outgrown clothes for a few ££ - no selling fees or postage hassle.

[GrasswillbeGreener]

Your groceries spend sounds about right but I guess you could look at whether there are any reasonable savings to be had there as well. I don't have pets currently so don't know if you could get cheap bones or offcuts from a supermarket or butcher to make bought petfood go further. Many of the nicest clothes I found for my children while they were little came from charity shops so look around and see what is available near you; perfectly reasonable to recycle clothes efficiently that way! I used cotton wool and water rather than baby wipes, and a wet flannel for anything else. Consider whether that £50 for nappies/wipes/outings could be rearranged as, I'll bring the nappies and would you mind terribly if we cut the outings budget for a few months? May not be worth it, you'll have an idea of how it gets spent and whether that is reasonable to try or totally unfair!

Keep on keeping on, you sound like you are close to getting it under control.

[Brittbugs80]

Your card and loan don't sound too bad you seem to have a really good grip on your situation and you don't seem to be ignorant about how much you owe!

Would it be cheaper to transfer credit card and loan to one monthly cheaper payment?

I missed how much your car insurance was, who is it with? I used to use Swinton who are a broker's and although they didn't always come back as the cheapest, after my first year they always offered cashback. My last renewal (third year of being with them) their quote was £1 more a month but they gave me £150 cashback (they send it out by cheque 3 months after new policy starts) and I used to use this to pay my road tax.

Online shopping is always cheaper (I find) and your are not tempted by 2 for 1's as you walk round.

As for Christmas, your DS won't know if his presents are brand new or second hand. While I hate this whole disposable era where people Chuck and replace things on a whim, it's great when it comes to buying toys etc for cheap. Keep an eye in charity shops. Plus it comes assembled and without boxes so your good to go Christmas morning! Ask relatives for clothes in bigger sizes too, so you have them in ready for when DS needs them.

Shop around for MOT prices too. My local independent garage is around £30 cheaper for services and mots.

[Silvertap]

You seem to be doing really well already.

Have you tried money saving expert.com? There's a wealth of knowledge on there about stretching the pennies

[Firefries]

You seem to be doing really well as others say. Definitely go Netflix only, if you can. It is cheaper and maybe only for a time you might do that.
I will go out on a limb and say let go of the dog insurance. I know it sounds harsh but animals are animals (and I love mine) if something happens to them we (ourselves) are willing to let them go over getting surgery etc. So no pet insurance. I know that's more unusual and you don't have to do this, its just a suggestion. Also try and cut back on extra foodshopping. I am trying that too. Maybe find ways to make cleaning products last longer - add water to the soap? Just thinking aloud. Food - somehow get more frugal?
Finally, I would try and lose the Next acct. They are too tempting and you would probably be ok without it. I had to do that. It was actually freeing. Again, just my ideas you don't have to follow them. Best of luck.

[OliviaBenson]

Don't lose the pet insurance. It seems quite reasonable for 2 dogs and vet bills can easily add up. Never mind that the insurance will give you 3rd party cover.

[Spam88]

Agree with not getting rid of pet insurance. Would be awful if they had to be put down because you couldn't afford to pay for the treatment they needed.

[HerOtherHalf]

Switch your car tax to monthly payments. It's just a small thing but finding £126 when you're struggling can be difficult and sod's law dictates it always comes up at the wrong time. Also, pay only the minimum to your 0% credit card. Unless you have serious doubts about getting another 0% transfer when this one runs out there is no good reason to overpay. Any money you can allocate to debt repayment should go to where it saves you the most money so clear highest % debts first. Also, and as a dog owner myself I empathise, but if you are struggling you may have to seriously consider if you can afford them. Food, vet bills and insurance all add up to a tidy sum.

[scaredofthecity]

you can do the tax free childcare thing without salary sacrifice now.
I set up an account last week and its really easy. You put money in the account and it automatically gets topped up by 25%.

childcare-support.tax.service.gov.uk/par/app/eligibility

[Lorddenning1]

Like everyone has already said u seem to have a firm grip of your finances :)

A couple of suggestions, I know you said your a single mum by choice but what about child maintenance for your little one.
Are you definitely sure you are not entitled to any other benefits, a good website to check is entitled to, benefits checker/calculator.
Are you tied into a contract with your gas/electric, if not u could go on Uswitch and compare (it's so good, they do all the work for you) I save around £30 a month now with cooperative energy and I'm still in credit with them :)
My little boy got everything second hand neatly when he was little (unless it was off family or friends) he had the same things as everyone else but at a fraction of the price and he never knew, check your local Facebook selling sites x

[JAMNoMore]

So much advice. Thanks everyone - I'm going through your posts and will be sitting down at the weekend with a notepad and pen and making a to do list of the things I can do.

I'm not using quidco at the moment, but as Christmas is coming, that's definitely something I should do. Lionbridge and Leapforce sound really interesting. I've also considered looking into whether there's anything small and crafty I could make and sell on etsy, but am wary of putting money into a hobby and it then not selling, so will have to approach that carefully.

Ditto Swinton insurance, definitely something I'll look into. My car insurance isn't up until June, I think. This year they tried to hike the price up and I complained (on twitter. Good ol' twitter), asking them to justify the 20% increase and they eventually capitulated and kept me on the same amount. I've got my insurance renewal dates recorded on my spreadsheet of budgeting, so need to pick each one up a month ahead of time and check I'm not getting fleeced. I do have a stupidly big car (necessary for fitting in dogs, child, pushchair etc) so insurance and tax are heftier than they would be with something smaller and more affordable.

I'll see if I can take a fortnight off live tv/iplayer, see if dropping the tv license is doable.

I tried YNAB for a while - did the free trial, and while it was an interesting take on budgeting, I didn't want to pay the subscription. My spreadsheet is sort of along those lines - I start each month after I get paid, and have a running list of incomings and outgoings. I go through and put an estimated amount against each known outgoing, then whatever is left is for unbudgeted stuff, so it's not quite in keeping with YNAB, but it works for me in terms of knowing what's already 'spent' that month.

My plan for next year is to work out what I need to put aside to cover the things like car tax, dog vaccinations etc, and to put away a set amount each month to cover them when they arise. Will make sure I include birthdays on this list.

I've never considered a lodger. I'm not the most houseproud, and between work and kiddo I don't have a huge amount of time to keep the place tidy. Add to that the dogs and cats, I don't think anyone would want to live here. Plus it would mean moving the kid into the little box room, which is currently a study for when I'm working from home. I'm not going to rule it out, but it's low on my list of preferred solutions. If the bills start rising next year I'll think harder about it though.

Re: monthly car tax rather than 6-monthly, doesn't that mean you pay more over all? I'm pretty sure the reason I went for 6-monthly was because they increase the price a little for the monthly DDs, so I figured I was saving money by taking the bigger hits.

The dogs are staying. I get what you're saying, Her, and I do appreciate the covering of all bases, but we're a long way from being that desperate. They are on Harringtons, rather than a super expensive food, which makes a lot of difference. Dropping the dog insurance is also a definite no, although I have dropped it down to a lower level of cover. I bring one of my dogs to work with me, and in order to do so I have to supply proof of health and 3rd party insurance.

Cutting back on the overpaying of the CC is something I can do. I had it in my mind I needed to clear the debt asap, but you're right that I don't really gain anything by that, and as long as I can keep moving it to 0% balance transfer cards, there's no benefit in paying it off sooner.

I've checked my benefits eligibility a couple of times, and each time it looks at my annual salary and the fact that I have very little in childcare payments, and doesn't look at my other outgoings - the CC, loan, and mortgage payments which take such a large chunk of my pay. It's frustrating, but i know the pot's not infinite, and they can't help everyone, which is why I'm determined to try and help myself.

So much to do, but a lot of it seems quite achievable. Thanks again to everyone who's commented!

[misscph1973]

May I ask what you do for a living? I am just thinking of the suggestion of looking in to Lionbridge - I know them via my own profession, I'm a translator, and they are a good company, although very large, so it can be hard to get from one end of it to the other for the work, IYSWIM. But back to your profession - if you are going to take on an extra job, you should work from your existing skills, education etc so that you get paid decently. But as you already work, you are single and you have a young DC, it might be too much to take on another job? It's about balance - you should also enjoy your life.

Re car tax, yes, you do pay a little more, I pay monthly, as I prefer to spread the cost rather than look for the money every 6 months. It works for me, might not work for you.

I really think that if you have a spare room, you should get a lodger. It has got to be the easiest way of getting more money in. Maybe you could test it by becoming an airbnb host?

I think overall you should prioritise getting more money in - reducing outgoings is good, but it will not make a huge difference, I wouldn't have thought that you could save more than £50 maybe £100 tops, and that's hardly worth it. But if you had a lodger, you would get maybe another £300?

[Lorddenning1]

Is the child maintenance not an option?

[misscph1973]

@Lorddenning1 T, not for single parent IVF children - otherwise it would be very expensive to be a sperm donor ;)

[reetgood]

The thing that made me wince is the mortgage, both the longer term and amount, but I imagine there's not a lot that can be done with that right now. But also I'm in the north so I won't depress you with what ours is!

I'd explore your tariff for gas and electricity. Have a look at money saving expert to see if you can lower the payments. As a comparison we're two fairly frugal adults in a smaller 3 bed house and dd for both gas and electricity is £48/month. Also energy saving measures around home eg not leaving things in standby, using thermostat wisely, draught excluding and insulating etc

Am also a ynabber and agree re setting aside the clothes, Christmas money etc. I'd do this over overpaying the card. If you need to you can repurpose the money, but you can't take back an overpayment. However if that's to clear the balance I wouldn't cut entirely.

Is groceries realistic? It might be worth keeping an eye on this as it's your most moveable feast so to speak...

[ieatchocolate]

Unless you had to, I wouldn't convert anything (insurance/car tax etc) to monthly payments unless it's cheaper to do so.

I pay £x amount per month into a savings account to cover all that stuff and things like dentists appointments. And then just take out the annual subscriptions when they're due. As long as you don't do it just before a load of big bills come in then you should be able to get it sorted.

[MrsMoastyToasty]

Next time your car tax is due pay it by monthly direct debit. There is a slight surcharge for doing this but it does mean that you don't get a major expense every 6 months.
I also pay for my cats annual boosters on a monthly prepayment scheme (most pet insurers insist that boosters are kept up to date otherwise the insurance is invalid).