I am financially screwed. I really need advice

[tiredandunoriginal]

I have never been bad with money. I’m not well off at all but I moved out at 18 after saving hard for a deposit. I’ve lived in various places and I have never been late on rent or bills. For a few years I constantly had above £5,000 in savings.

I was in a relationship during this time but in the last couple of years my ex lost his job and just didn’t bother looking for a new one. I had to pay everything alone and used up all my savings to support ourselves and him. He then cheated on me, and left. I couldn’t afford the rent any longer so moved to a cheaper place. I ended up having to take a loan out to support myself. Since then I’ve constantly been in debt. I’ve always been self-employed but for a long time was PAYE, I have a chronic illness and so when I had to go of sick/have operations I didn’t get any sick pay. I then ended up taking out a large overdraft and am constantly stuck in it. I feel like such a failure now and I hate how I’ve borrowed so much money.

After getting pregnant I decided to move closer to my family with my partner because my mental health was suffering and I needed support. I couldn’t move in with them because they don’t have the space. For a while I was doing okay, I even managed to get out of my overdraft and save £4,000 for rent stability after having my baby.

When I had my baby I went on maternity for a few weeks and my partner wasn’t working for a few weeks to support me because I had quite bad mental health. I didn’t qualify for a self-employment grant due to having been PAYE. I couldn’t afford to stay on maternity so decided to start working again. I’m a writer and do many good money when I get commissioned and have a few long-term relationships with editors so get frequent work. However I’m constantly having to wait for invoices to be paid so I’m always in my overdraft until I get paid and then it goes on bills.

My partner is working part time so that we don’t have to pay for childcare. I am the higher earner so he has DS when I work and vice versa.

I am working as much as I physically can while dealing with my mental health and having a new baby (he’s 17 weeks now).

But I just can’t get out of this debt, and my anxiety is horrendous right now because I’m constantly worrying about rent. I can’t move to a cheaper place because I can’t afford another deposit!

I’m just wondering if anyone has any advice on this? I’m going to include a breakdown of my bills in case that helps.

Rent: £950
Council tax: £180
Car insurance: £140
Loan repayment: £150
Car finance (I took this out when I was financially stable and could afford it): £130
Electric/gas: £62
TV licence: £11
Water: Not sure as they got our water bill wrong
Internet: £22
Phone bill: £50

I got declined CBT on the NHS so I’m having to pay £70 a week for that too, and £30 a week therapy. These are absolutely vital to me as I am struggling so much that I honestly don’t think I’d be able to work without it.

I’ve stopped paying for things like Netflix and amazon. Phone/finance was taken out when I could afford it.

Bar these things I rarely spend money on myself and any money I do have leftover goes on things for my baby.

If anyone has any advice I would be so grateful, anything I can check prices on, debt advice, things I could cancel, anything like that?

Thank you

Thank you @LonginesPrime I really appreciate it. I have tried frequently to work while caring for DS but it is near on impossible. Plus I try to give him as much attention as possible so it's just not fair on him. Some assignments take me up to three hours each to write. I'm very focused on health and mental health (ironically) so there's a lot of research in certain pieces which can take even longer. Really appreciate you acknowledging this.

I had an in-house role remotely for five years before DS, for a national paper (NOT the Sun, haha!) but it's 9am-6pm every day and I wouldn't be able to keep up with the workload while caring for DS because you're meant to hit over 1 million UVs a month. Plus I actually make more money now than I did with the in-house role, surprisingly!

And thank you, I really don't want to stop therapy @Sistery

You have had loads of brilliant advice on here and I am sure you have a few avenues to pursue now to help your current situation.

I just wanted to say that I totally get how difficult things are for you right now. I have never been so tight for money than the last 5 years since I had my two children. Having been in a manageable place before kids I found debt escalating out of control. I also struggled when I went back to work and had to pay more for childcare than my mortgage and ended up paying out more than I earned for a few years. I felt trapped and stuck on a treadmill that was set too fast. Last year I had a breakdown and was signed off work for several months. It was rock bottom. In this time I reviewed my finances to work out why I had gone from savings to over 10k in debts in the four years since I had children. I hadn’t realised until that point that I earned less than I paid out and it was completely unsustainable. I made several changes similar to the advice you have been given. I also sought out a higher paid job to tide us over. It’s not the dream but it reduces the anxiety of it being able to pay bills so I feel a lot happier now. I consolidated all my debts into one manageable loan, so I have a date when I will be debt free not too far in the future.

What has helped me a lot is speaking to people of different ages, who are further down the line that we are right now. A lot of people struggle financially at this point in life but as they get older and get more stable careers, get on the housing ladder and have less childcare costs once the kids start school (I know you don’t have any right now and I am not trying to scare you, sorry if I have), it does start to get a lot easier. It’s not a straightforward trajectory for everyone, I get that, but I just wanted to share my story in the hope it will reassure you that things can get easier, even if there is a big wave to get through right now.

I now own a house, and my mortgage is so much lower than my rent ever was. And it’s not a palace but it something. Every payment goes towards something...And I feel positive that in a couple of years once the debt is gone I will be able to take the children on foreign holidays and enjoy finer things in life. I also spend £50 a week on therapy. I get that it’s a lot, but it’s keeping me focussed and healthy, I don’t think it is worth ditching that for me right now, even if it delays the debt free life for a little while.

I hope you get sorted, give yourself some peace and enjoy your time with your child. It’s such a difficult time, so no wonder you have so much going on up there. Don’t beat yourself up for it, you are doing a great job.

@FreshEggs That means the world, thank you. I have family nearby and my mum has had him a couple of times for a few hours but she also has her own business and works from home as a webdesigner and she gets very overwhelmed so I only really take her up on it when she offers or when I have a CBT appointment. All my other family live up north.

I do have a very good friend who I talk to, but she lives in Wales :( (met her on an IBD support group, she is wonderful)

So sorry to hear you've experienced a breakdown. I've been under the crisis team four times because I couldn't cope - but determined not to let it get that bad again.

Hope you're doing okay now xx

Are there any other ways you can boost your income?

Can you get some regular babysitting / child care gigs that you could take DS to, or do when your DP was not working? That would give you a bit more guaranteed income each week.

I know it's very tempting not to set up a proper budget when your income is erratic, but IMO, that's even more reason to budget! I highly recommend YNAB (You Need a Budget) for budgeting - it has changed my life!

Plus 1 to this advice. We use it, and it is REALLY useful. Free trial and a bit of a learning curve to get used to, but transformative if you have erratic income as a freelancer and yet still deal with fixed outgoings.

You are doing brilliantly, btw.

You have a small baby, a partner on a low income, it's a pandemic and your mental health AND your physical health are compromised.

Much advice you will get will be the "standard" advice for people in regular situations. Don't be overwhelmed, but just apply your common sense and gut instinct as to what is helpful for your situation. You can do it.

My only 'new' advice to that you've been given is that an overdraft is the most soul-destroying sort of debt to be in. Give YNAB a whirl and then consider if your credit record is good enough for a 0% balance transfer. Properly managed - by which I mean that you have both a budget for regular spending and a definite plan to pay off the transfer within the 0% timeframe - then not all debt is bad. Sometimes it is necessary to make the picture clearer, or to keep a roof over our heads, or to treat our health.

As long as you have a good plan and a budget you can manage your situation until it improves. Sometimes it's about not making it worse, before you have the capacity to make it better. Hopefully your anxiety would ease with a proper plan.

Would you not qualify for PIP because of bipolar- I know assessments difficult for mental health. DH got it for a while in crisis for schizophrenia- I helped list a very thing he needed help with...that might help to pay cost of therapy...
Hang in there op...sounds like your doing everything right to try to solve the problem by asking for advice/help....do you have mental health support charities in your area- they can help with PIP advice too
Take care of yourself💐

Go on the ‘debt free wannabe’ forum on Money Saving Expert website

If MSE didn't save my life it probably turned it around. Honestly - no judgement and so helpful. The support and advice is tremendous.

And I agree - prioritise the therapy. You can't afford to ditch it.

Sounds about what we had to live on until last year. It's a pain in the arse to be in the red so much, but if you're careful, I don't see why you can't gradually get back out of the overdraft, especially if you get paid a fair old bit in the end.

If your partner got full time shifts, that takes some of the pressure off because, although it would be nice to sit and work uninterrupted for three hours' straight, in reality, there's interruptions, lapses in attention, drinks and toilet breaks and the like that all reduce your effectiveness, along with tiredness. He doesn't need to stay at home for hours that way - he could come back (or start a shift later) and you do an hour or even twenty minutes whenever there's a chance.

It sounds like you may be earning too much for universal credit, but once you're in receipt of child benefit, you might qualify for something. Or not, but you don't know if you don't try.

Other than that, I agree with others that two cars aren't necessary for a part time worker and somebody at home.

You can also try and see where you can cut down food expenses - your partner is in the right job for that.

But when it comes down to it, £400-500 a month on private treatment is something you simply can't afford. There's no way around that. You cannot afford it. People on your (our) income level don't have private medical or psychological treatment. Because rent and bills are more important.

You can sell a car to a dealer and then they pay off the balloon payment or give you the money to pay it off. I think most of your financial issues centre around the car. What is the engine size, this makes a difference to the insurance category. Nearly everyone experiencing money issues has a car on finance, this is the absolute worst thing you can do when income is not consistent. Sell the car and if you need a car, buy a smaller and cheaper to run car.
Do you have interest on your loan repayment, again get a 0% credit card and pay this off and then pay your card off with no interest.
Do you have unlimited data as part of your mobile phone bill, if so, you can stream your Internet off that and reduce those costs. When you go to sim only vodaphone do unlimited everything £20 a month, which saves you £30 on your phone and £22 on the Internet if you stream your data via your phone.
Shop around for the best energy prices on comparison websites. I would also look at reducing cbt from weekly to bi monthly, which will help your anxiety and stress about finances but still give you the support you need. I'm surprised you were declined, I've never heard of this happening before.

Get therapy online for significantly cheaper.

I mean that's crazy money.

PIP is split by daily living and mobility. You may not qualify for the mobility aspect but still qualify for the daily living component. And it’s not means tested.

Have you requested the free overdraft up to £500 that the banks are offering as help with Covid? It only lasts till the end of October and might not apply to your whole overdraft but it will save you some charges for the next few months. Go onto your online banking and you should be able to apply - they just ask a few questions about whether your income is affected, and then mine texted me later the same day to OK it.

I also really admire how resilient you are being. You may not think it but you are. Things will get better for you because of this.

Have you looked to see if you’re entitled to Universal Credit? www.gov.uk/universal-credit/what-youll-get

@tiredandunoriginal OP I don’t think I’ve got much else to add on top of the other suggestions but just wanted to say I really hope things get better for you! It sounds like you’ve been really responsible with money and the fact you’re looking for help and advice is a really good thing so don’t beat yourself up too much. Things always get better.

I’d definitely look into getting rid of your car, not sure how you bought it but you can sometimes sell on the car even if it’s leased/hire purchase etc. I’d speak to wherever you got it from and see what your options are. I got rid of my leased car once (sold the car privately and paid off the lease with the money). It seems like the best option for you short term.

I really hope everything works out for you.

It will probably be a long wait, but get yourself on the waiting list for social housing. Rent should be more reasonable and you wouldn't need a deposit. It's not a quick fix but worth doing all the same.

I would talk to CAB or a welfare rights adviser to get advice on whether you might be entitled to universal credit/PIP (it sounds like you might be entitled to the care element of PIP but I am no expert).

I agree with PPs who have said try and sell one car. We've only got one car between the two of us and it's fine. Especially if your work is from home.

Good luck.

@tiredandunoriginal I am so sorry you are going through this. Just wanted to ask if you ever looked at online therapy? It might be a little more economical.

It may have already been suggested but could you get a lodger?

I second what a lot of others have said. You need to claim child benefit and check whether you're entitled to anything else. It does not make sense to have 2 cars when one of you works from home and although I can see why you want to finish this course of CBT it's not really something you can afford (so hopefully your MH team can help you think about sustainable support long term?). Your rent is quite high. I wonder whether you need to move somewhere smaller or elsewhere in the county? At the moment a one bedroom flat would be enough if that's all you can afford right now. Can you renegotiate loan repayment too to reduce that slightly? Your OH is not bringing a lot in. Even if he were on minimum wage, if he were working full time he would be bringing more in. I know you can't work at the same time at the moment but might he be able to secure another job, maybe at the weekends? You might need to consider that until your little one starts getting some nursery funding. Good luck.

OP, the one thing that stands out to me as 'unnecessary' is the phone expenditure. My phone costs £6 per month because I can't afford anything other than a basic calls-and-texts contract for my Nokia which cost me £9.99. Of course, I could afford a fancy phone if I wanted to, but I'd have to cut back elsewhere, and a fancy phone is absolutely not a necessity.

Thank you everyone for the help and really kind comments, I really appreciate it.

No @inthethickofit19 - and I wouldn’t want to!

@asdfjid I got the phone before I was financially unstable, it’s a contract so I can’t really reduce it except for the data

PIP isn't means tested, so you can still work. You need to prove that your needs and expenses are over and above what a non disabled person would have.
Certain benefits will also get you an allowance on your water bill.

Is moving in with your MIL still an option?

Added up, your bills alone come to £2100. That’s without groceries or travel costs or clothing or entertainment.

I know you said in your OP you don’t spend anything on yourself but that’s not really true - £400 a month even if deemed necessary is a lot.

@tiredandunoriginal
Someone I am close to had a very few sessions of CBT and it helped enormously.
It was £50 ph, {not London} BUT the therapist {massively experienced} knew how cuts had been made to mental health services, so gave the person the barest minimum needed..I think it was about 5 sessions.

If you find a therapist that you trust and feel is helping you to help yourself, maybe cut down on the sessions, but still do them.