Money woes

[wanderingcloud]

We're in a gigantic hole of debts and bills and we can't sort anything out without money.

We both work full time already, as teachers so not really able to take on additional work (although we do some exam marking in the summer)

We don't have anyone who can help. More and more bills arriving and no way to pay them. I budget already, we've been on debt plans for years, no new credit since 2013 but we're no closer to clearing it.

I don't know what to do.

Aibu to think there's no way out of this for us?

A lot of teachers tutor, have second jobs in the holidays etc.

Depends on your expenses, no new credit is good but presumably your added to your outgoings considerably (few children?) given the debt isn't going down.

A small second job isn’t going to help clear debts if they are significant.

You need a debt recovery plan done either by yourselves or through CAB. You might need to take a morning off school to speak with debt counsellor but a days stress related sickness is not unreasonable given your circumstances. Your bank might also be surprisingly helpful and give you a longer term, smaller repayment debt consolidation loan.

You need (and CAB are good at this) to prioritise debts. Council tax must be paid. Utilities must be paid but might accept smaller monthly payments to clear backlog. Cut up credit cards as they are too tempting. Once you have a plan it will, I am sure, feel much better.

Reduce outgoings by whatever means possible. Supermarket value ranges with a clear meal plan. Use your freezer. Don’t eat out except the odd monthly treat of fish and chips or similar low cost boost.
Don’t drink or smoke.
Consider whether you need 1/2 cars. Can you walk/cycle?
Wear thermal underwear, lots of layers and turn the heating down.
Go to visit people for meals - will your parents cook for you once a week? Heating, entertainment and food!
Cut your own hair or grow it long. Stop wearing makeup.
Borrow a tent for your holidays or find a colleague with a holiday home they’ll let you use for free.

Apply for promotion? Move to a cheaper area to live - the joy of teaching is you really can live anywhere. Suffolk Coast is much, much cheaper than south coast. Derbyshire is cheaper than Devon.

What about applying for boarding school jobs at some of the schools that house their staff for a nominal rent?

Personally speaking i would prostitute myself before I worked in an independent school of any description, it isn't what I want at all.

OP may not feel the same but always on threads like this there is an assumption that all teachers are longing to work in private schools and that there are an abundance of jobs in them.

How much debt and have you made a dent in it in the last 6 years?

There are certainly steps you can take but advice depends on whether you need to clear 10k or 100k

Do you own your home, OP?

Could you rent it out an move to a one bed flat, or change your living accommodation in any way?

Friends of mine (both teachers) moved abroard to teach in an English speaking school & rented their house out. Accommodation was included for them in their jobs so they were able to clear their debts pretty quickly.

COuld this be an option?

I have worked as a Money Advisor/Welfare Rights Officer for years, and being in a Debt Plan for years where you are never going to clear it makes me wonder how good the advice you got is.
You need a complete overhaul of your finances. Bankruptcy may be a solution but go to Stepchange or National Debtline.
Seriously have a good look at your Income and Expennditure, cut out stuff you don't need, like expensive TV packages. Meal plan everything. Drop a brand, and there are plenty of fab sites for cooking on a budget.
Seek out Money Saving Experts board, especially Debt Free Wannabe.

Thanks for advice. I went because my phone died and it's so old and crap, it's at the point it takes several hours to charge up enough to use. Also we went out for a walk with the kids.

In terms of debt management - we are with stepchange. All they do though is go through our budget and take the leftover for the debts. The problem is there's nothing leftover every month so we have barely dented our debts in the 4 years we've been on it.

We already budget to within an inch of our lives. Phones are on SIM only contract that's cheaper than PAYG (though to be fair the handset is so crap might as well not bother)

Food/living/fuel expenses budget is £120 for 6 people: we meal plan, shop at Aldi, buy clothes in the charity shop. I haven't bought branded foods in years. We've only eaten takeaways when family have offered to pay for it for us. We don't buy anything superfluous other than a Netflix subscription and stepchange agree that £10 a month for entertainment isn't unreasonable.

Every insurance and bill is as good a deal as we can get - stepchange do the budget with you and they agree it is reasonable. It's the essentials that cripple us every month and they keep going up, the council tax, electric, water... Our wages don't. Childcare is a HUGE chunk - wraparound care for the kids and nursery for the youngest. We had to balance the cheapest option with necessity, we need to be in work by 7.30am and we can't leave until 4.30pm at the earliest - but also need them to be flexible enough to care for them until 8pm when we have parents evenings/options evenings/open evenings.

Tutoring is a good call but (without sounding lazy) we already struggle with fitting in the "day job", keeping the house reasonably tidy, doing laundry, cooking/planning/shopping, homework with our own kids etc in the week. I'm exhausted most nights and I've found most tutees (I've done it for many years pre-kids) don't want to do it at the weekend!

Also, without outing myself too much.

We have one car, it's essential as we can't get everyone to childcare and to work in time without it.

We live in the East Midlands and quite far from where we work as we live in a cheaper town than the expensive on we work in.

We moved here last year, from the south east, looking to take advantage of better cost of living Vs salaries.

It's actually been a completely horrendous experience. Ironically any and all financial gains we made by moving (which actually aren't that great, things like council tax and energy bills aren't that much cheaper and it's stuff we don't buy like takeaways that are cheaper!) have been completed wiped out by the fact that we have no support network here.

Back down south we had friends with young children and had formed close friendships, we had reciprocal arrangements with friends so we would help them with childcare in the school holidays, they'd babysit for us when we had parents evenings etc. All that is gone now and we have to pay for that help.

Granted we now get to live in a small house rather than a flat but it's a very lonely existence without friends.

Hold my hands up. I'm wary now of making another big move to "improve our lot" since the last one has done the total opposite!

When I was younger and only on m3 of the pay scale it actually cost me to work after childcare. I sympathise enormously. With no family or friends around it’s really tough. How near are you to UPS? Can you take on any extra responsibility for a TLR? Is it possible to apply for another job with TLR? How big is the debt?

Have you done the sums on either both being part time or one of you not working until all the kids are at school and then the SAHP doing some evening tuition to boost the finances?

Have to do a LOT of evening tuition to boost finances to match a minimum £24,000 salary!

Do stepchange review your budget annually? Have they considered the option of going through bankruptcy or similar and the consequences?

Would it be cheaper to find a babysitter for parent evenings? Do you work at the same school?

I think a bit like student finance debt you need to not see it as debt... once your childcare costs decrease that will make a huge difference and presumably you are being very careful there isn't a #5!

We're with step change too and it's bloody hard! I found out the back end of last year DH had ran up 42k in debt. Thankfully he is in a job overtime is available and that's not taken into account on DMP we are trying to save all of. That to settle the debts faster. I only found out in October I have no idea how I feel after 4 years of living like this. You've been making it work this long which is amazing give yourself credit where its due. I'm on a thread on here with a very helpful lady in not good at the whole tech thing so I don't know how to find it for you. It starts with drowning in debt so you might be able to find it. She might be able to give you some help I'm far too deep in to sort it out any other way as DH just buried his head and stopped paying everything so the debts got sold on, the bulk of his debt is no payment fees and and interest and ballance transfer fees. If yours is still with the original creditors I'm willing to bet she can help you.

You don’t mention how much the debt is and how it came about . I agree with another poster bankruptcy might be an option and a huge relief. My understanding is that you can build your credit rating after that but of course they needs to be checked as fact. Someone I know who went bankrupt had an American Express card but it was clear it every month no minimum payment.

That's the root cause of the problem then. It doesn't matter how much you cut back on the small bits when you have debt if you then go and have children. It wipes out any of those savings and adds to the costs by large amounts.

Do you rent or own? How much is the debt and who's name is it in? How was it built up - a particular big event like illness or redundancy or just years of overspending, poor budgeting or disorganisation. What percentage of the debt has been paid off since you went with Stepchange and how long do you have to go?

I'm surprised that Stepchange have had you getting nowhere for 6 years like that. Their usual advice is that if a debt management plan wouldn't have you debt free in 6 years or so, an IVA or bankruptcy would be more appropriate.

I think you should look at bankruptcy as long as it won't affect your ability to be a teacher. A couple of years and it will be like it never happened.

Do you own your own home?

Also has the interest been frozen on your debts, because it should have been and if not could be a reason as to why you aren't getting anywhere.

If you’ve got the support from stepchange and have cut back everything as far as you can, then you know your only options are IVA/bankruptcy or increasing your income.

Hugs to you op. We have been in similar situation all our children’s lives. They’re now over 18 and at university (thankfully with enough student loan to live on without needing help from us!). I qualified in a professional role recently and it’s made a huge difference in our debt-paying ability. I know how depressing and hopeless it can feel paying £6 a month off a £3000 debt cause it’s all you can afford right now (plus all the others).
Your light at end of tunnel is when you don’t need to pay for childcare anymore. Work out when you’ll be free of that cost and how much extra you’ll have to pay off debts. MIGHT cheer you a bit?!
I hope all your interest has been frozen?
2 years to go and we’ll be debt free. Then to start paying more than interest only on the mortgage🙄

Glad to hear you are with stepchange.
Try and look at it positively.
the debt is going down.
HAve you done a review?
have you accounted for everything.
I find them really helpful. They accounted for dentist which to a certain extent we dont use very much, but we did take their recommendations, so, fingers crossed, make some savings that way. As soon as water, council tax, whatever, increase, inform step change. Let them know if you cannot manage on the budget and they will readjust

OP debt management plans only tend to work for certain people and certain circumstances. Often they take immediate pressure off but there's no long term improvement to the debt plan.

I think you should consider seeing an Insolvency Practitioner or find a local solicitor specialising in insolvency. Most IPs will do a free initial consultation, some solicitors might but you're likely to get more out of an IP consultation than a solicitor meeting I would think.

If you don't own your own home and your employment is not affected by bankruptcy then it seems to me that bankruptcy might be the way forward. If bankruptcy would cause consequences that you need to avoid, then an IVA might be workable.

An IP would want to see a statement of assets and liabilities as well as income and expenditure.

Use a local firm and not an IVA factory.

Good luck.

What’s your monthly income and fixed outgoings (and what are they?)
What’s your total lever of debt and monthly debt payment? How was the debt run up?
When is your youngest going to be in school? That looks like it’ll make a good difference.

How long til children are in full time school?

1. Cheaper to get an au-pair? £80 a week

1. One of you go part time as child care expensive ? Would you then get tax credits?