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?

It is quite a lot. But we'd lose some child benefit which would reduce it, and an extra days commute as well. I also wouldn't be able to drop my hours when DH does get a new job - part time roles in my sector are like hens teeth and I was very lucky to get this. And it's not even a given they'd allow me to go full time at this point.

But they didn't when he was working.

What are you talking about?

A minimum wage job should give him a take home of about £1800 a month.

With the mortgage company far better if you are on repayment to try to agree short term interest only. Mortgage payment holiday might be available if you have overpaid and built up buffer previously. Speak to credit management department of your mortgage company they are the ones that often have options when people circumstances change.

You can switch to interest only on your mortgage for up to 6 months. Your mortgage company have to agree to this under the mortgage charter and it doesn’t affect your credit rating. Most mortgage providers let you switch on their websites by completing a form

A mortgage condition requiring life insurance is very rare - I work in this field and I haven't seen one in the wild since well before the financial crash.

It is estimated that most people have about 2k worth of items in their attic.

Sell some of it if this is the case, if you can.

Do you mean after the 6 months? Or was he bringing in more than his take home salary monthly somehow and that's where the £1200 gap is from? Sorry, just a bit confused about how urgent this is beyond him trying to secure another role in a similar salary range.

My sibling's been through redundancy a few times in the last decade due to the nature of their sector and they've managed to secure new (and better) roles within 3 months but it's been very stressful.

If I were in his shoes I would make sure my LinkedIn was up to date and in regular use and make sure I'm using my career networks. I'd be open about my situation and that I'm actively looking for work in a certain area. I'm sure his CV is up to date but if not, make sure it's amazing and if you've got any friends who work in recruitment or HR, call in those favours to check it over.

I'd let friends and family know I'm available and what my skills and expertise are.

A work contact has recently been through redundancy following a restructure and I and others in the sector have been sending her freelance opportunities, project work, consultancy things and she's managing to juggle those things which are relevant and interesting to her and her career while also getting a part time job to fill in the gaps. She was working on a project through her organisation and we've managed to bring her on that in a freelance capacity in another role so we don't lose her expertise.

As for ideas for cutting your outgoings, have you got a list of your monthly budget and do you usually go through your statements with a fine tooth comb to track spending? I do because my income's not massive and I need to stay on track. If you haven't, it's a useful exercise as it will give you the real picture, not your assumptions.

I used to think I spent too much on clothes and makeup but when I started looking into my spending more closely, that's not where I was going beyond a reasonable amount, it was more that I felt guilty when I made those purchases.

Mortgage holiday - you can but ask. Contact your mortgage lender to ask. I contacted ours during Covid as I wasn't sure about our income during that period but we were both employed throughout and didn't need to pursue it.

Are there any other repayments that you can pause for 6 months to a year? Car, furniture, loans etc?

It goes without saying but if you were planning a holiday, don't go. I've had to cancel our plans to go abroad in the summer as we've had to do some work to the house and there's no spare money for funsies. We'll go another time and enjoy our local beach (and redecorating our fixed house).

Do you have things you can sell? Get on Vinted.

Do you have more than one car? Can you get by without one? Especially if your husband doesn't need one for a commute maybe? My car is very cheap to run and tax and insure as it's tiny with a small engine and we bought it 4th hand in cash. I'm guessing from your income level that your vehicle(s) will be fancier, more expensive to run, tax and insure etc. Can you sell a car? Might be more complicated if it's a company care or on finance or whatever but it's a potentially large outgoing that can be cut.

Look at all your subscriptions on your bank statements. You will probably have some completely unnecessary ones that are nice-to-have but need to be cut if you're slashing your spending. Some might only be £9.99 a month but they all add up. You don't need Hello Fresh and the Week newspaper and that monthly craft magazine and the NT Online.

Your questions about TV - you don't need Amazon Prime AND Apple TV AND Disney+ AND Netflix AND the TV Licence. Use Freeview via your smart TV. More info on MoneySavingExpert about that.

Do you have gym memberships? Stop them. Go for runs for free and lift weights at home. You can rejoin when he's got a job.

All these things on their own aren't much but add it all together and you'll get closer and closer to closing that shortfall.

Are you on the very best deals for all of your utility bills and insurance? Get on MSE for more guidance or go check out some comparison sites.

Are you paying a lot of interest on e.g. credit card repayments? This might not have been a major issue for you until now as you could afford it but it might be the time to get a 0% interest card to do a balance transfer. Repayments will continue but you'll pay back less over time and depending on when the 0% ends, you could reduce or pause some repayments.

Same with any store credit, if you've got Next or whatever and you'd usually pay it off, reduce that down to the minimum until your husband gets another job.

It's different if someone's never ever going to have that higher income but for you, it sounds like you're looking for some breathing space.

There are things we've always done frugally because we've had to that you can do for the next 6 months or beyond which can also help. Not buying new but from vinted and charity shops, using boot swaps at kids' sports clubs. Not eating out, taking flasks and picnics. I've never had a cleaner or a gardener, always washed our own car - any services that you outsource which your husband or you can do need to stop. We don't turn the heating on, we put on a jumper or a blanket. Doing a Secret Santa instead of buying loads of Christmas presents.

Some of it's incremental but it all feeds the bigger picture.

You can watch ITV, Ch4 and 5 without a licence providing it's not live. There are some other free channels out there, as well.

With some subscriptions you can pause them. Might be worth doing that than setting everything up again from scratch once you are back on your feet.

Good luck

Not sure where you live, but is there any seasonal work available? Farming, tourist attractions, general labouring? As its coming into summer there may be some more outdoors work places after short term contracts, which would help bring some income for now, whilst not committing him longer term as he also continues to try and find a replacement job. Also may be more likely to consider someone that might be clearly looking for a stop gap (rather than some roles that would want to take people on looking to stay long term).

With saving costs, I'm not an expert in the area, but look carefully at the implications of a payment holiday for your mortgage. It can increase costs down the line for some people, particularly if you aren't able to extend your term. Be careful about making your mortgage more unaffordable in the longer term, to save a bit of money now

This is very muddled 'advice' given by someone clearly not qualified in this field.

A mortgage payment holiday is not the same thing as applying previously accrued overpayments. Quite a few lenders will apply overpayments directly to the loan, so they are not available for reducing payments if needed.

Given OP's relatively low salary, temporary switch to IO is unlikely to be approved, but Mortgage Charter may be an option.

You don't know that!

Well you know, everyone has different levels of fear about running out of money when things are going ok.
Some plan some don’t.
What is important going forward for this op is what happens now what could have been done in the past.

Work for Evri. My H finally did this when made redundant - if he works 6 days a week he should make up the shortfall. Yep, that is crap pay and well below minimum wage but its better than burning through savings until you get something else.

The job market is really tough at the moment. Unless he is in a field where he knows there is plenty of work for his talent and experience, I would not rely on getting anything in the near term.

Not that it’s helpful to the OP but this is another example of the importance of saving a rainy day fund of 3-6 months wages.

It can make a msssive difference if something like this happens.

If he can get one. Contrary to popular middle class belief, employers do not think their minimum wage positions are just there to fill in time for middle class people in-between jobs. These are critical and essential jobs to the employer. They want someone who will be in the job for a long period of time. Someone like OP's H is not a good bet for those employers.

Something like Evri is better as their model works on being flexible and knowing their drivers come in and out depending on their circumstances.

Check if mortgage payment holidays affect your credit rating, I think they do. So not worth it.

I agree.

As this is still very new, I assume he is still in contact with HR, is it a reasonable sized company? If so, as part of his redundancy package he should ask for outplacement support which will help him with things like updating his CV for the current market and coaching for interviews/AI recruitment. If he has been in the same company for a while then the world of recruitment may be very different from the last time he did it! He should get his LinkedIn profile as polished as possible (I hate LinkedIn but it does seem like a useful recruitment tool) and start working his network.

Don't panic and cancel everything just yet, but do do a bit of belt tightening in terms of where you shop and what you buy. Is he having to work notice or is he on gardening leave? If he is at home then he can do some things to lessen family spending eg walking the kids to school instead of driving to save petrol cost, changing where you do the food shop, meal planning to be savvy etc. You can stretch 6 months package for quite a bit longer by just shaving the extras a bit.

Good luck.

So sorry OP. This sounds like a huge shock. However, you have not only a 6 month buffer of wages but 6 months notice that your income might change. If your partner gets a job within 6 months there is still a possibility you might be better off. I suspect the unknown nature of the situation might be the most frightening element.

I would hesitate to increase your hours permanently as this might be a temporary situation. You sound like you have made instant savings in childcare and subscriptions. I would advise paying off the credit card with the redundancy money. You want to pay zero interest if possible. I would also ring your mortgage provider and find out what your options are, but don't do anything yet-you have at least 6 months for this to work out.

Selling things you don't need and buying secondhand is worth the effort, especially for kids clothes and equipment. When DD was small we had less ready cash and I got quite into it. I still buy dresses on eBay because for £20 you get a £150 dress.

I think the economies you make now will serve you well in the future. It is amazing what you don't need and don't miss. We had a cash flow crisis when I wasn't working much and the builder of our extension offered to start 6 months earlier. We had already booked holidays etc so tightened our belts to make it work. We had a new empty room for a few weeks whilst we saved for a carpet!

DH and I are both pretty frugal as a general rule but can tighten our belts further if required without minding very much. You sound like you are in a bit of a panic but I feel this will work out and you might be better served with a bit of frugal optimism. DH might get a job despite the terrible job market and this will be temporary. I do hope so. Then you can use your new found frugality to save a bit for future rainy days to make yourselves feel more secure. Good luck, OP.

It might not sound like much but selling used stuff from around the house on Vinted can be a really good money top up!

He could do that while the kids are at school just as an extra little pot of funds. Like you say it's stuff like if the kids need new shoes, little things like that always come up when you're budget is tight!

It's surprising what sells and well worth doing. It takes minutes to list and is very easy. Plus no seller fees.

Old clothes, books, toys, hobby head going unused, kitchen stuff you don't use, home stuff, etc. Get it all listed.

We are in the same boat but four months pay. We’ve stashed it in the redraw and are surviving on my salary while DH searches. It’s been 3 months so far. We:

• only shop at Aldi and never get take out
• DH bakes all the kids snacks himself
• cut out take away coffee
• reviewed all our insurance and changed providers
• threatened to take our home loan elsewhere and got a 0.15% discount. It all counts!
• cut off most but not all streaming services
• dropped a couple of the more expensive kids’ activities.
• say no to expensive social events
• use the heating less (it’s winter here) and rug up
• no snacks while out and about

I would add to this the a caveat: generally if you have fewer people than bedrooms a meter is cheaper, if you have equal or more people to bedrooms then this is less clear but often be cheaper without a meter. But as you have young children then they - generally - will use less water. Personally I would definitely look into this though, my bills are about 1/6 of people I know who are in larger houses without water meters. But good call @MrsMoastyToasty because a lot of people either forget to look at their water bills or aren’t aware of meters etc.
I would also look at your recent and historic water usage and then look online and find an average, this will also help you to decide whether to go water meter or back to billing. Being more conscious of the water used in the house can help massively. Fix all leaks, even a drip, watch for water wastage or anywhere you can cut back your usage. I will also add that although it doesn’t sound like you’d save much by fixing a leak, I have had a leak which pushed my bills suddenly into around 10x my old daily water consumption and as I was on a meter my bills shot up by the same amount - 10x - it was a massive increase!