How bad do you think this financial situation is?

[Charcole]

I am very stressed about our financial situation at the moment and wanted some honest outside perspectives on how bad it is or how bad you would find it, as I keep switching from thinking that we are OK to waking up at night in a panic.

I am on maternity leave and get £620 maternity allowance each month. Whilst I was working I saved £9,000 to supplement my maternity pay. DH has been made redundant and is looking for another role. He has about £10k in savings.

Our monthly bills are relatively low as we have quite small rent to pay, so bills come to about £1,200 PCM this is not including food or any unexpected expenses/ living expenses.

What's worrying me is that we obviously don't know how long it's going to be until DH finds another role, his usual salary is about £50k but he may not get offered anything at this level.

How bad do you think this is?

@ghanagirl you are in a fortunate situation, just like my sil. enjoy it, but don’t assume its the samw everywhere. you are very, very lucky.

I understand why you’re both worrying but in contrast to the other posts I think you’re secure enough for him to take December off and enjoy his new baby! As you say, it’s not a great time for hiring (but January is the best month of the year! ) this month off is a once in a lifetime opportunity

This happened to us when we had a toddler and a new baby. DH got a contract job quickly and 3 years later went back to being an employee. Still haven't spent the redundancy.

Completely disagree with those suggesting you leave DH holding the baby. He has to prioritise getting back into the workforce ASAP and if you are freelance it sounds like normally his is the more reliable pay packet.

His confidence will have taken a knock so the last thing he needs is to be sitting at home while his pp DW takes over the breadwinning.

I made DH claim his contributory JSA on principle but at a taxable £73 per week it won't help your finances much. On the other hand, because of the time of year it is likely your DH will be entitled to an income tax rebate.

My advice would be DON'T PANIC, make sure DH's interview suit and haircut are in order despite any penny watching and make the most of having a shared maternity / paternity break.

Actually we relocated countries when DD1 was a baby and neither of us had a job lined up. So we have done this twice. It is lovely to spend the first 2-3 months with both parents around. Make the most of it, because if it takes longer than 3 months for your DH to have a replacement job on the horizon and you are renting in London you will probably have some decisions to make. If, as I suspect, he is easily re-employable then make sure he takes his time to find the right position.

We had similar a couple of times and DH found work very quickly. Before his notice was finished in fact. One job was even interviewed for a couple of weeks before Christmas, and he had a few potential interviews at that time. At that salary I presume his skills are in demand and potentially he could do a short term contract/freelance. Plus our bills were low enough to live on half our income if we had to. You should be fine he just needs to focus on job hunting and you on the baby.

OP, I could have written your post about the emotional rollercoaster of uncertainty from DH being suddenly made redundant even with the a cushion of savings.

I hate financial insecurity and the not knowing whether he will get a new job before burning through our savings made me want to cry. Dh, on the other hand, seem quite chilled. All I could think about when how quickly and hard we will hit the wall.

Your emotions will also be all over the place because you just had a baby.

howabout has a good approach. The key to gaining some calm and control back is to work how your expenses, cut them down as much as possible and try not to spend into your savings at all. Claim everything you are entitled to.

Your dh will need the time and headspace to job hunt. He is going to need to be able to attend interviews at the drop of a hat and having a baby to look after will seriously impede that. Your dh might even want to consider whether he could go self-employed. He can do his research whilst waiting to hear back from the agencies.

Your being stressed won't help him at all (I know I wasn't great for him then). Therefore, give yourself a few months of time to bond with the little one and to support your dh whilst you both adjust to the new circumstances. Working out your finances exactly even if it means living seriously reduced (or at least knowing you can) is key to mental equilibrium.

You are in a good financial position. Not time to hit the panic button yet.

Shop for more basic food but still good quality food at cheaper supermarkets, (Lidl, Aldi and Tesco rather than Waitrose and M&S. Less dining out etc- dining out becomes a weekly or monthly treat, and at less expensive places.

@Yura
Where do you live?
There’s about 2 within 15 mins walk and another 3 about 30 mins walk.
I walked everywhere when DC were in pushchairs A’s bus was more hassle

Thank you everyone for your advice and views I appreciate them all, and the disparity of them reflects my state of mind actually, sometimes thinking we are OK and at other times panicking!

So there's been a slight development, SH can do some day to day contracting for a contact he knows but it's very sporadic. However it will probably bring in between £700 and £800 a month, at £100 a day. This now means we should be able to have an income of £1,300 ish a month which will cover bills like rent, water, electricity, and we will need to find extra money for food bills and day to day living including travel.

DH not SH!

Ghanagirl I’ve just checked and our nearest children’s centre is 14 miles away. We did have 3 closer ones (one less than a mile) but all have closed due to budget cuts.

That's a good start.

You clearly don't need to be rushing back straight away but I think it might be wise to keep an open mind to going back earlier than planned in case it's necessary. And certainly as soon as your Maternity Allowance runs out, so before the 10 months you had initially planned. Basically I would appraise again at probably 6 months. And yeah be frugal and just don't spend anything you don't have to.

Also have you claimed child benefit yet? If not then do it. You would be eligible now and it's £20.30 a week. Not riches, but enough to cover nappies, wipes and formula/extra food for you if you're breastfeeding.

Just be careful the sporadic contract doesn't take over and take the place of proper job hunting. £700 a month is only £8.5k annually, so nothing like your DP's true employment value. My DH always earned a lot more in weekly contracting roles than he did as employee (normal to compensate for loss of employment benefits and sporadic nature of work). He turned down things which took lots of time for not much money. Friends doing you a favour by putting odd jobs your way can be pretty unscrupulous when it comes to paying up.

@ghanagirl I think you must live in a dream world if you think everyone lives within 30 minutes walk from half a dozen free children’s centres and everybody gets all the maternity leave they are entitled.

It’s not cruel suggesting the op could go back to work. She could. If she didn’t have savings and her husband didn’t have this contract work she might have had to. She might have decided to do she doesn’t deplete her savings if they’d already earmarked it for something else like a deposit or extension. Luckily she has the luxury of choosing to take longer maternity leave.

I think it's not awful. You were both responsible in saving so much. Like PP have said you'll need at most £2000pm to cover everything. So that's about £1400 above your income from maternity pay, you can live for at least 9 months off your savings and beyond that you'll manage even if DH has a much lower salary than before. Look here to calculate how much he'll take home on a different salary - it can also tell you the annual salary he needs for a given take home pay. For example if you needed £2k per month he'd need a £30k salary. From what you've said this would be enough to get by even if you weren't working.

I am freelance so don't have a job to go back to as such, but am planning to go back to work in about 10 months

Perhaps you May have to return to work earlier?

I would plan to go back at six months latest if this doesn't resolve itself by then, your husband can take care of your child. I wouldn't eat all your savings up.

I agree that 10 months maternity leave is a luxury in your circumstances, unless your dh finds another job quickly. You'd also want to build your savings back up.

Even if childcare eats up your spare income, it is still an investment for the future to keep your hand in. If you take too long a maternity as a freelancer, won't your clients forget about you and get esconced with a replacement? I thought self-employed people tend to take short maternity leaves or at least go back part time soonish for this reason. If that happens, it would be a doubleblow to your household income stream.

So you've basically got f all to worry about now and have plenty of savings also... Very fortunate

I think we will need to use approx £1,000 of savings each month to cover our expenses in addition to this income, if it works out. It's going to be a big lifestyle change as with both of our wages we have been used to something very different. I'm trying to keep a lid on my stress but I know DH is feeling it.

Having children is a big lifestyle change anyway and you’ll probably find that you’re going out less and doing less of your hobbies to start with anyway which will cost less.
We lost £30k a year when I went part time after having DD. You get used to having to think twice before you spend any money pretty quickly. It’s not the end of the world.

How about a temporary temp job to just tie your dh over for the next couple of months whilst he searches for a proper job. That way he could easily make £1200 per month