Husband made redundant and facing £1200 monthly shortfall, any advice?

[Tappings]

I'm probably going to get flamed in this thread judging by how others have gone.

DH has been made redundant, he was the main earner.

We're lucky that he'll get a decent payout, equivalent to 6 months take home salary.

I work 30 hours per week. I got a promotion in February and have a decent take home, above national average.

DH will be entitled to contributions based JSA and we'll get child benefit back, but even with those and cutting back our bills we'll be £1200 short per month. And that doesn't account for any personal spends, kids clothes/ uniform, adult clothes, birthdays etc.

Due to my recent promotion, me getting a better paying job is extremely unlikely, even if I went full time. I'm close to the ceiling of my profession. There's no option to go full time where I am either.

DH is (was) a well paid professional in a competitive field and was quite senior in that field. He's already looking for jobs, has sorted his CV, spoken with several recruiters and has an interview lined up for next week.

Any suggestions on what we can do? Advice/ support?

Thing is prior to redundancy we had basically £1700 "spare" per month. If DH gets a job at a similar salary we should be fine.

Getting a house where we can pay all bills on my salary would mean a significant move to another part of the country - something we may need to consider if DH doesn't get another job but it would be a huge upheaval of my job, schools etc.

We don't have a big house. It's a Victorian terrace, there's tonnes of them round here, nothing special and not expensive for the local area or the wider area.

Yes, we have overdrafts on all our accounts, close to £5k in total, though we've never used them. But they are there if we did ever need it.

There's 18months left on the interest free credit card so we are fine for now. We deliberately used a credit card rather than a loan or car finance as we knew we'd have options to change the payment or transfer again if anything else came up. I still maintain it was the right decision, especially as it meant we didn't wipe out all savings buying the new car.

When DD was a student she had a temporary job at a big flower warehouse, packing bunches of flowers to be sent to florists. Not making arrangements, just selecting and wrapping. It was cold and tiring but well paid.

I guess it depends on how comfortable you are with debt @Tappings
Im not and would just get it paid off while you have the money and its one less thing to worry about

Yours is likely a case of where it isn’t cheaper to have a water meter, or at least it hasn’t been in the past. I guess you’ll use more as your children grow, but if there’s way you think you could be pulling back water usage it’s a handy thing to do anyway. I am not sure about switching back, tbh. I never had any need to. I found that the average 3 bed house, without a meter, was paying more per month than I did in a year (before my leak), but my usage was very low. I assume that if I did find out if I could just go back to not having a meter that they’d take my average yearly use and use that to estimate a monthly dd. You can compare your yearly usage going back a few years on your online account and it’ll show you whether you are using more or less than the average house/family. Years ago, when I swapped to a meter, it was because I moved and my bills went up. Same number of people, same number of bedrooms accept it was a house instead of a flat, so it had nothing at all to do with how much water I used and I was being charged too much, a lot more than the previous property, so that was why I decided to switch to a meter and it really paid off.
you can take your own meter readings and compare them to their estimated readings and see where you stand then.

It doesnt make sense to pay off a 0% card because you can put the money in a basic building society account and get around 4% on it - so you lose money paying off the debt. With 18 months free credit they'd get £200 "free" cash by keeping a £5k debt ( 4% assuming you are paying tax on the interest)

just had a look at what Nationwide charges in fees on arranged overdrafts and they are so steep it's only likely to be worthwhile if it's very short term use - so if you'd lose 90 days interest, say, and having an overdraft for a week could avoid that. https://www.nationwide.co.uk/current-accounts/overdrafts/

Do you have a spare room OP or could your children occasionally share? If so, you could put it on Air BnB- you can earn up to £7500pa without paying extra tax. Also check with your energy provider if you have any extra credit built up- I did this last month on a MSE recommendation and got £150 back. Small amount but all adds up. Also check your council tax band on-line to make sure you’re in the right category- you might be out of synch with similar properties on your street and on MSE some people have had big rebates from the council if incorrect (£000s). Do you have a driveway? Could you move your car to the street and rent out your drive?

We have similar expenses to you and life is tough and expensive! Of your listings I would stop the pet insurance but pay the money into an account instead so if you need it you can access it and little harsh but your cats may have to be put down if ill 😓

Kids clothes- def switch to Vinted/local forums. Adult discretionary spend to £200pp, cleaning & childcare gone atm. Do your kids have bikes/scooters- might be faster than walking to school and hopefully we’ll have sunny weather soon… Only another half term to go anyway. Tutoring cancel in summer. Do your kids actually need pocket money at their age? I love coffee too so that’s a hard one! I’d keep the CC like you’ve said esp with 0% card switches. Some of the activities could def be slimmed down. Can your kids swim now- could switch that for just family swims- do you have a pool at the sports club? Maybe switch to municipal facilities? Horse riding & rock climbing may have to become less regular too. I wouldn’t go FT unless you really had to. I’d love to be PT- it’s impossible to go back and hopefully this will just be a passing phase. Maybe switch your lottery spend to premium bonds esp if you have more cash to invest- same upside without losing your cash. Good luck- you’re approaching it well 🤞

Channel subscriptions: they are a cancel to zero on my emergency plan. What I’ll do instead is rotate channels instead of having multiple and also find any deals that allow me to make the cost cheaper. At the moment Paramount + (AKA Star Trek Channel!) is a non negotiable for me. BUT I managed to get it half price. So equivalent of £3.99 per month. (All the Trek, drool)

I know you said nothing for kids to watch but my emergency plan involves borrowing DVDs and box sets from the library and buying cheap from shops like CEX. I found the DVD box set of the cartoon Dungeons and Dragons there. £6! I’m sure Vinted and charity shops would be a ripe source of cheap media.

Keeping hard copies of media is important to me and allows me to immediately stop paying for any subscription service. I’d stop that now if I could convince the family but I can’t so 🤷🏼‍♀️

So consider using hard copies of media as part of your money saving plan and remember libraries lend so much more than books.

Try and get footfall into your library to help preserve its future too.

I notice a real move to decluttering and not owning stuff. Eg CDs, DVDs, even cars and to keep paying subscription type payments for many of these things. (Music, TV services, car payments) if we never own anything but always pay to rent we’ll always be part of the transfer of wealth from those who pay to those who own.

Don’t declutter and stream yourself into paying for life on subscription!

We don't have anything to play DVDs or CDs on. I'm not sure I ever owned DVDs either, used to rent them from blockbuster back in the day!

Any of your family have an unused device you could borrow? You could treat a visit to a shop like CEX as almost like a trip to blockbuster. The DVDs there are so cheap.

Very true. You can buy box sets on eBay for very little money, and bundles of movies too. Dvd/Cd players are very cheap and still sold. I always get region-free then you can play anything.

Marginal tax rate (which I think kicks in at 100k) works out at 60%, because you lose your personal allowance and some other benefits.

As I understand it, it basically means that 4 days at 100k can work out about the same as 5 days at 125k, if you have to pay for childcare.

I took a 3 months mortgage holiday a few years ago to get me through a similar thing, it was a simple online application - I then extended it by another 3 months but had to speak to someone and go through my finances in detail - I would definitely consider it in your situation if a job doesn’t come up within a month or two.

The interest is added to your overall balance and you will pay a bit more when you do start making payments but having the pressure lifted of having to meet the monthly mortgage was huge for me so well worth it.

I was out of work for around 8 months and wish I had planned a bit better in the early stages as I assumed I would find a job relatively quick - sounds like you are taking a sensible approach.

Hope something comes up before too long.

Yeah this and also I’ve heard too many horror stories of kids pissing the money away at age 18 on FiNdInG ThEmSeLvEs ie a gap yah, or a motorbike or whatever. Unless you’re saving more than 40k a year then stick it in your own ISA and keep it until they’re older.

My DH has been made redundant three times, he's in that sort of industry. He's always been able to get a job within six months through networking and the fact that his speciality is relatively small. The last redundancy came around the time he'd intended to retire anyway.
It sounds simplistic, but try not to worry about it, this won't help, and don't let him get depressed about it as this won't help him with confidence in interviews.

Your pension contributions are taken into account in terms of taxable earnings - so you can earn more than £50k before becoming a higher rate tax payer.

Each tax year, you can usually get tax relief on your pension contributions up to 100% of your earnings or £60,000 – whichever is lower.

It’s important to include this in any tax calculators, as if you are marginal between tax bands it can make a difference.

In addition while your Husband isn’t working, you should use the Marriage Allowance which lets you transfer £1,260 of your tax-free Personal Allowance to your husband, wife, or civil partner.

To qualify, you must earn less than your £12,570 Personal Allowance, and your partner must pay the basic 20% tax rate. This reduces your couple’s tax bill by up to £252 a year.

Every little helps!

It seems inconceivable to me to be short of £1200 a month, with 1 wage, redundancy and the prospect of him getting another job.
I guess everyone's finances are vastly different!

Unfortunately he's already earned over that threshold this tax year.

What do you mean? Most households need 2 incomes to function these days.

I did a quick survey of friends and family and none could manage their basic household bills on the lower earners salary and 20% could on the higher earner.

If I'd been made redundant (the lower earner) we'd be ok. Not brilliant but no deficit.

Normal family budgeting includes a 6 month emergency fund you should have established.

That's on top of the normal savings you should be doing monthly.

You could like into transferring your husbands personal allowance to you - can’t remember if it’s relevant for unemployment or just low employed. Not a huge amount but might help.
www.gov.uk/marriage-allowance/how-to-apply

Councils?

I may be corrected by others but most of us aren’t in a financial position for such an emergency fund. I don’t think you could consider this ‘normal’.

But do most people have at least £1.7k spare every month, like OP and her husband did prior to this redundancy?