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

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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?

We are in a similar situation to you. Actions so far..

Claimed JSA
I'm looking to see if I can get higher paid job (I'm already main earner)
Checked all bills and subscriptions.
Reduced food and grocery budget
Reduced clothing, Christmas, birthday (adult) and entertainment budgets
Switched energy tariff

I've calculated we can make the payout last double the time by doing the above but I know it's easier when it's the lower earner that is out of work.

If he doesn't get something this year then it becomes very tough so we will rebudget if no joy in next 3months.

The jobs market is very very tough at the moment. Could he do any consultancy or freelance to tide you over?

Does your tv have free view? Our smart tv does. Yes you can access channel 4 (not sure about 5 but assume so) just with ads.

Netflix subscriptions can be downgraded to an ad version too.

I don't understamd why you're so determined to be prudent now, when you've had good salaries and not built up a safety net (debt?). Presumably even at £3000 pm the six months' take home still lasts more than 6m?

The settlement is there precisiely to suppprt you in the gap until he finds new work and/or until you restructure things to live within your new means.

He'll have an idea about what the market is like for his sector. Is there any sign of hope? Contracting is well paid but then you will feel like this every three months or whatever the length of the contracts is.

It's hard to give advice without knowing your outgoings TBH.

I'd get him signed up with specialist agencies in his field and put himself as 'open to work' on Linkedin - agencies will often swoop on senior people when this happens. BUT be prepared to take a lower paying job. The market is shit.

I'm on £50k.

Due to my student loan, and full time being 36hours in my company, my extra take home will be cira £450 a month. According to the online calculator.

I should say we went for the walk because I was losing my mind, so I do get it, but it's not helpful.

Which is quite a lot and a useful fall back or DH doesn't find work or has to acccept something lower paid.

But it if that did happen you'd move and restructure your lifestyle to live on your salary plus whatever he can earn.

Honestly, it feels like the end of the world now, but it's not.

I really hope your H gets another job soon. The advice you have had is good. You will need to be ruthlessly strict with your spending in the meantime. I mean absolutely ruthless.

It also sounds like you are both relatively high earners, yet you have debt, no savings and essential outgoings that rely on both salaries. This is a very risky strategy. Childcare is a pretty unavoidable expense but other choices like houses, cars, etc. are more controllable. As soon as your H is back in work I would focus on building a bigger buffer for any future shocks.

I was going to reduce the payment to the minimum, and then when DH gets a new job increase the payment to whatever is needed to clear it before the term ends, so we don't accrue any interest.

We don't live beyond our means (or didn't when DH was earning!) but disasters happen.

A flask of soup ?

anyway, I know you are in a state but it’s his problem really. You can’t fix this for him. of course support him, but he will have to gather himself up over the next few weeks and get a job for himself. If you are a ‘fixer’ this part can be quite stressful. Does he have any friends / colleagues he can talk to?

Does he have access to employee assistance program? Or they providing him with training etc before his job finishes up?

Try to stay calm as you have a redundancy payout and this is what it’s for.

If you were taking debt and not saving for disasters you were living beyond your means. Not helpful now, but a useful lesson for when he gets sorted.

Maybe they had medical bills or just replaced their boiler last month and that was an actual disaster. We don’t know that info.

Be careful you don’t incur paying unnecessary interest.

I believe job seekers is universal credit now and he won't get the full amount if he has 6 months wages as savings. I was made redundant earlier this year and when they took around 12k redundancy payment into account I ended ip with about 250 a month. That will go up as his savings go down.

It is only income related JSA that has become part of UC. It is still perfectly possible for op's dh to claim contributions based JSA ( called new style JSA ) based on NI contributions he will have paid. Contributions based JSA is non means tested and their savings won't matter.

In every situation like this there are only ever 2 ways forward, increasing income or reducing outgoings. Go to bare bones essentials until financial situation improves…minimum repayments on everything, preserve what funds you have - Dave Ramsey calls it storm mode.

I think given the job market the fact that you're planning ahead is sensible. DH needs to take whatever job he can find to make up the shortfall while also looking for a new permanent job. I'd look into supermarket delivery work, or ubering if you live somewhere sufficiently urban. Also I'm a SAHM but I do occasional bits of VA work. If you've got experience in most areas of running a business so can do a bit of marketing, admin, scheduling, onboarding, client management etc it's fairly easy and I charge £30 an hour for it. I get most of it through existing relationships but started off by reaching out on LinkedIn, it's uncomfortable but worth a shot!

Is that £1200 shortfall after using some of his redundancy payment each month? Or are you trying to not touch the redundancy payment?

I think you need to look to go full time. Surely that makes the most sense. If DH does get some work you (and he) could try and negotiate compressed hours so you use less childcare

Plan for the worst, hope for the best.

Everything I've read, all the conversations DH has had is that the job market at the moment is dire. And even with the interview next week, it could be 4 months before he starts that job.

We don't want to burn through the settlement and in 6 months be looking at having to take even more drastic action.

Our good salaries are fairly recent (2years) and a mortgage hike, council tax hike (7% two years running) and the cost of utilities going up have reduced our ability to save. Then last year we were hit by an uninsured driver - our car was written off but as it was an old banger we didn't get much from our insurance so used a lot of the savings we had plus the credit card to buy a new (to us, still 5yo) car.

Bus companies are always looking for staff and the bigger firms will often pay you to train. The wages aren’t great but above minimum wage and generally always overtime available.

Do not panic
You have 6 months not including savings where all bills can be covered.
Do some small bits of economising
He will likely find another job in less than 6 months
£1,200/mo is not a lot, he can always take any job and not list it on his CV or accept a part time or contract position while looking for a job commensurate with his qualifications and experience.

Exactly.

Tinkering around with your mortgage is literally the last resort option.

Taking a payment holiday, even if approved by your lender, will have a significant impact on your credit ratings. This means you will struggle to get credit on reasonable terms for a very long time.

Likewise, rules introduced after the financial crash severly limit access to interest only mortgages. To make this switch, you will need to meet very exacting criteria.

For most lenders, that means a minimum income threshold (often £70k), low loan to value, typically you will need enough equity at the time of application to be able to afford suitable alternative accommodation outright.

You will also need a credible repayment vehicle - investments maturing etc...a planned switch back to capital and interest repayment basis is not generally accepted.

Some lenders will allow you to take 50% LTV on interest only, without a credible repayment vehicke in place. These are few and far between though, and you will pay a fortune in terms of the rate and fees.

You may be eligible for the Mortgage Charter, but that depends on whether your lender has signed up to it - this allows a payment holiday (officially) without the damage to your credit rating. I'm less than convinced on this one though, I strongly suspect lenders take it into account in their own internal credit scoring process.

Can you do a nice declutter and sell some stuff?
When I was in a difficult place financially I would sell nice condition things second hand and use that money to buy the children new (to them!) clothes. It does all make a difference and it's quite satisfying