Going into debt every month just to make ends meet - I don’t know what to do

[SilverliningHunter]

I’m a single parent to two DC and I only qualify for child benefit.

Their DF is abusive and it cost me thousands in legal costs in family court so I’m paying them off every month and a car loan for four more years and I’ve just been told it needs a new engine. I work full time and I have a side job, I’m exhausted. And as the thread title says, I am going into debt every month just paying all the bills that need to be paid, never mind the extras like broken car/school trips etc.

I have a massive mortgage that I didn’t fix so that has increased by £500 a month and I am at my wit’s end. I’ve been applying for new jobs but there’s very few in my area that pay more than I’m already on and that I’d be qualified for.

The only thing I can think to do is to sell the house, clear the debt with the equity and rent. Rent is the same price if not more than my mortgage but the benefit would be char I’d clear the debts so wouldn’t feel like I’m drowning all the time.

Has anyone done similar? I can’t sleep for worry.

@NamingConundrum The car loan is a bank loan for a private sale, the car doesn’t have a warranty.

@PlutarchHeavensbee I don't agree I mean it's not the answer to all of OPs problems but I sell on etsy and make extra money enough to put towards my car payments and take some pressure off every month. And as it's passive it requires very little time to maintain once it's up and running .

I think finding out about the car issues and being in a position of potentially continuing to pay off a car that may conk out soon is making me revaluate.

I would rather take in a lodger / airbnb a room than sell and rent.
A friend of mine does that, single parent as well, he rents a room on airbnb and tells me it brings in a fair amount of money. You don’t have to offer it all the time, you could do when your DC at visiting their dad or when they are on holiday.
Not ideal but better than loosing your equity IMO.0

Try consolidate debts. Extend mortgage to 35/40 years or interest free period

AWFUL advice. Never turn unsecured debt into secured debt.

Op, hang onto your house with both hands. It's your most valuable asset, it's your security.

The £30k debt...if all of that was gone would you be able to live/save? I'd look at a DMP or self-managed DMP. It will screw your credit rating for 6 years but your mortgage is fixed for another 4 years anyway and the impact of defaults will be greatly lessened by the time you come to renew.

How much equity do you have lovely ? If it's a fair bit I would look at whether you could do shared ownership either on a new build or with Heylo- (shared ownership on open market) with heylo you need 25% deposit though- they buy the house and you pay rent on remaining 75% - you do benefit from property uplifts - the big advantage is if anything goes wrong income wise you can get benefit on rent- but not on mortgages. It will give you security but also possibly cash to pay off debts and gradually rebuild to higher ownership- it can't be flats. Obviously on new builds it's different .

There’s no space for Air BnB permanently and the DC visit their dad so sporadically and he’s unreliable about contact that I couldn’t use their rooms unfortunately.

I feel like I’m going all the right things re budgeting etc buf the bottom line is that I’m not earning enough to cover my costs.

I would recommend heading over to Martin's Money Saving Expert forums. The users there will ask you to complete a SOA (statement of affairs) they will be able to offer great advice but no one can offer much if we can't see your income and outgoings.

*Edit for typo!

I probably only have around £60,000 equity so if I sold and paid off my debts I’d have £30,000 left so I could breathe more easily. I doubt I’d ever be able to get back on the ladder in future though as there’s no inheritance on the horizon or anything like that.

I would also see if you can get interest only mortgage for a while to catch up a bit. Do you have a driveway you can rent out? Is the car strictly necessary or can you get around on a bike/public transport? Cars are very expensive when they run as they should, but super expensive when they don't obviously.

I really would not recommend giving up your home especially if you can’t see yourself being able to buy again as renting ends up being very costly long term and you could end up in a worse position down the line. I know 8 years of paying off debt feels like a long time right now but at least once that is done you’ll be 8 years further into mortgage payments and will then have more spare money, renting you’ll never get that and you’ll always have the worry of having to find the cash to move if landlord sells up which is becoming more and more common now, even if they don’t sell your rent could increase and you end up priced out and having to move anyway (so extra costs). Do you absolutely need a car for daily use? It may be worth looking at selling that and repaying the bank loan with the money from sale if it’s feasible to not have one. See what your monthly costs would be if using public transport and balance that against what the car payment & petrol costs, like one of our cars is £175 a month finance but if we needed to cut costs we could get a bus pass for a week for £14 so for a month £56 and no petrol costs, that would save us around £200 a month. Yes it would be less convenient but it would be an easy way for us to save a huge chunk each month, could that be an option for you?

Interest only period on mortgage would also be a good idea, or you can even apply for a mortgage break for financial reasons with some lenders to give you some initial breathing space to build up some savings to allow for unexpected expenses. Realistically if you go to interest only even for a little while once your debt is cleared you will have the money spare to make overpayments so won’t necessarily be much worse off across the whole term.

You'd also save on insurance and tax if you could get rid of the car.

I really appreciate all of the ideas, even if they aren’t a goer as this is making me feel less alone.

I live in a village on an estate with plenty of free parking around so no demand to rent out my space unfortunately. I do need a car as we are already in a village with infrequent buses. I feel like I can’t catch a break as my dishwasher has already conked out but at least I can work around that by just hand washing things but now the car issue.

What size mortgage could you afford if you assume 30k is the deposit - is a significant downsize or area change a possibility

I think it would be very difficult where I live to get a mortgage with a £30k deposit. I was only allowed to keep this mortgage on I’d shown I could pay it (before interest rates went wild)

When children are grown I would be happy to move areas, possibly up north where it is cheaper and I have friends, but my eldest DS is about to start his GCSE year so I won’t be moving now.

@SilverliningHunter but do you need the car to get to school and work or is it for other stuff that is nice to be able to do but not necessary? If it's for other stuff it might be worth going 6 months or so without. I would think you'd save a few hundred a month by not having a car and if you can also get a mortgage holiday then you'd be absolutely fine for a while and you might even have some savings.

This . . . I’ve been applying for new jobs but there’s very few in my area that pay more than I’m already on and that I’d be qualified for.

Have you heard the probably dodgy stats about women applying for jobs they are 100% qualified for and men applying when they are 50%. Don't underestimate how far you might get if you looked at things you've got some but not all qualifications for.

Get yourself over to the moneysavingexpert.com forums, they are brilliant there and will help you squeeze every penny.

I don’t need the car for school as the DC get a school bus. I do need it for work and for my second job as public transport doesn’t even exist for the routes I need to take.

Have a look at money saving expert forum they have debt free thread from people who have been where you are, & support you. Don’t sell your house I struggled to pay for a house on my own, overpaid because I felt unwell.got rid of my debt good job too had to retire early as unwell, my neighbours are both in their 60’s still paying rent & they will for the rest of their lives, scared to ask their landlady for anything for fear of getting kicked out.

I will check out the other forums too, thank you.

I think my best bet is a new job but that’ll take time to sort. It’s a shame as I love my current job which counts for a lot but we all need to pay the bills.

Would you be happy to list all outgoings to see if there’s anything you can cut /we can help with @SilverliningHunter i am in a similar situation and posted not long ago. I’m already working towards freeing up 170 per month.

Could your children ask around for babysitting or dog-walking work? Summer holidays might be good time for that. That could help them pay for some of their clothes and extras, as well as teaching them good work ethic.

Ah, such a shame about needing the car. They can be such money pits. It's a good thing that your kids are older though, at least the end of supporting them is near-ish. Also, your oldest could maybe find a part-time job? Not to pay bills with of course but at least it would take some burden off you if they can buy their own clothes etc.

could you ask for a pay rise in your current job?