Advice needed, please

[NeedMoneyAdvice]

DH and I have just found out we are about to lose £500 a month income.

I had started another thread, but I was advised to come here for some advice. We don't know what we are going to do and I wondered if anyone could help us. Name changed because lots of these details would out us.

We have just taken on an 18 month lease with a letting agent. We have spoken to them this morning, and we cannot break this. We could simply not pay, but we would lose our deposit, and would struggle to find a landlord that would take us on if we did this.

We currently earn about £30k between us, take home about £23k.

Rent is £1000
Council Tax is £200
Gas and Electricity is £190
Phone/Broadband is £50
Childcare is (currently) £350
Car insurance is £60
Car payment is £140
Petrol around £80
Home insurance is £20
Gym membership is £75

Think that is everything. Obviously, this leaves us over budget. I genuinely don't know what we will do without this money?

We aren't entitled to any benefits, including WTC and CTC.

I genuinely don't know what to do.

Do you already have a tax credits claim? Currently if your gross pay is over £26k per year you earn too much to get any CTC for 1 child but the cut off goes up to £32k ish for 2 children. If you don't currently have a claim you can always apply now, then call to add your new baby as soon as it's born to get the extra money ASAP.

If you get to the point where you HAVE to stop paying something, then stop the Gym membership first.

In your position I would also be applying for Social Housing.

I would give up my 'employed' job if it meant we were better off, yes.

Heating is on for 3 hours in the morning, and 3 in the evening. Water is the same.

Sorry- but you need to ditch the car, and come up with a plan B for getting your son to school, and you to work.

Is there a bus? Do any of his school friends live by so that he could get a lift (there may be some lovely mums of 1 that would relish having a bit of extra distraction for their child in their own car)?

As for shopping, go online- it'll save you in the long run too as there is less impulse buying, and it'll save you lugging shopping about with the little one when they arrive.

Hi OP

Re the gym -
Have a look here Sorry there's a lot of info to wade through.
This was an Office of Fair Trading ruling against a company who does the contracts for a lot of small gyms. If you lose your job you are entitled to get out of the contract. Ring them again and insist that they allow you to cancel. OK as the £500 was a gift you won't have a letter from an employer but perhaps something else would do.

Also, have a look at switching your utilities. Ours was £275 pm but switching got us down to £206. Investigate getting gas and electric from different suppliers, that saved us a lot. The utility companies assume people will take for granted that dual fuel is cheaper, but IME it wasn't.

Good luck... as long as you can think creatively about each element of your spending, you will be able to save far more than you first thought.

We can't get anything from CTC or WTC.

We can't apply for social housing. Well, we can, but we would be so far down the list it would never happen. We are extremely low priority. We looked into this a few months ago, before we moved here.

So you are also going to have to find extra money for childcare once you go back to work after mat leave, which is appx 8 weeks away? Do you work FT?

why did you sign up for gym membership when you were 7 months pregnant? and couldn't afford it anyway

contracts are always negotiable. Get CAB or the govt money advice thing to help you.

what is your maternity pay situation? why only 4 weeks? you get 6 weeks at 90% so will you not take that? you might be better off taking longer, ditching childcare and car for that time. plus you might then get some WTC or CTC for that period.

don't panic, get some proper advice

Lots of good advice from other posters here... I have also read your other thread
What about internet shopping, if you switch down to all the value brands, menu plan etc you could save a lot plus you wouldnt need to use your car . Even if the delivery slot was £3 , you could save more than this by choosing cheaper food options etc plus would save you carrying heavy items if heavily pregnant?
I have switched contracts half way through on a mobile before, I had to pay a fee , think it was around £60 but the savings over the 18 month contract were much more than this one off cost...it can be done, you just need to be more persistent

What abour selling things on Ebay ? this can be a great little earner, old baby things etc, or on Gumtree?? Everything adds up
I also think your gas and electric is very high, we are approx £130 a month for a 3 bed home and heating on a lot?

Is your rent very high for the area? Can you move? I think with the letting agencies and Vodaphone, you have to try again. Can you offer something? Same with the gym. Who said they couldn't negotiate? What is the person at the desk? I got out of a gym contract once by getting hold of the manager and blubbing. Embarrassing yes, but better than losing the money. It wasn't fake tears. I was genuinely panic stricken.

rumple We need the car.

DS school is over 5 miles away, and he would have to get 3 buses to get there. I would then need to get another bus plus a 20 minute walk to get to work.

So, we'd leave at 7am to get there for 8:30
I wouldn't get to work until nearly 10am (obviously, too late)

I would need to leave at 3:30 (too early) to be at school for 5
We wouldn't get home until 6:30 (probably later as it is rush hour?)

In the car, it takes 20 minutes total.

None of his school friends live anywhere near - they all live near the school. We can't afford the area.

You're right, you can't.... I mentioned earlier up the thread about finding new tenants and being released from your contract. Sorry to mention it again but it is a good way of leaving your contract and everyone wins. Could you find a smaller 2 bed for around the 5/600 mark?

Sleb childcare was going to be £200 a month for the new baby, but we will have to rethink that, yes.

We took out a new gym membership as we are both very sporty and fit. We've always been gym goers, even when pregnant. Being pregnant doesn't stop you exercising!

We can't afford to take maternity leave for more than 4 weeks (I could take the full 6 but there is a situation at work that's a bit complicated, and basically I need to be there when newborn is 4 weeks old for a few days, so I am going back after 4 weeks).

We aren't entitled to WTC or CTC regardless of our situation.

It sounds as if you've hit the nail on the head. "You can't afford the area." Not even five miles from the school. But it's only a temporary situation. You can get out of it. Isn't this the sort of thing that CAB help with?

I wish Jon!

Even a horrible studio flat in a really dodgy area here is about £650 a month.

We could have gone for something like that, I guess, but we didn't as we didn't know we were to lose this money. And now we have signed the lease.

I have spoken to the letting agents personally. They were actually really annoyed and said we've just signed the lease, there is no cooling off period and we can't end it. Even if we found new tenants, they would keep our deposit and we wouldn't be able to move somewhere new with no deposit available.

Okay- I have no idea where you live, but would school transport be an option? Some places will offer it free dependent on circumstances?

www.somerset.gov.uk/irj/public/services/directory/service?rid=/guid/c07e7e94-e851-2d10-52bd-dd33b6d0c680

Then it would only involve getting yourself to work?

you need to move schools then - are you not entitled to help with his transport if school is 5 miles away?

the whole set up sounds completely unworkable - you need to look at the whole situation and go through each thing and see what can change. I don't know how you coped even with the £500 gift.

Can your son change schools to a local one?

And get on the housing list, you never know, the list might move quicker than you expect and if it doesn't you can always just carry on with your life.

Is there any flexibility in childcare? E.g lose breakfast club but keep after school or lose 1 day? Also can either of you get childcare vouchers through work? That could save you £40 a month.

Gas and electric does seem high, we pay 110 in a 4 bedroom house.

Obviously cancel the gym and mobile contracts as soon as you can, giff gaff is very good value when your contract ends.

Also when your tenancy ends could you maybe rent somewhere a bit cheaper in a less nice area?

Sorry I can't really think of anything short term apart from Aldi for shopping, cutting back on convenience foods and using savings if you have any.

There isn't free transport to the school.

We should really move DS schools but he is in a really good school, that feeds to a fantastic hight school.

The closest one to us now is awful, really bad OFSTED. So we are keeping him where he is. I really wouldn't be happy to compromise on this if there was any chance, as it's very, very important to us.

So you have 3 jobs and banking exams between you?

Can you give us rough breakdown of what the three jobs bring in?

Have you tried WTC/CTC/HB/CTB calculator for all possible permutations of jobs and childcare?

It might be you will qualify for tax credits inc childcare payment once baby is here. So imagine he/she IS here and put those details in the calculator.

My employer doesn't do childcare vouchers. Will ask DH (how do these work?)

We already shop in Aldi and Lidl, I have done internet shopping but it honestly wasn't cheaper in comparison. Have never bought a convenience food, and haven't a penny in savings.

We are overdrawn by just under £2.5k. We always are, except on payday.

What are your thoughts on how to deal with the loss of £500. If you run through the options and graded them, which would you start with?

Your gas and electric is too high. I rarely switch heating on (I can afford to, but years of living frugally have got me used to doing without it). Have boiler on timer for hot water only. Use hot water bottles in bed, wear extra clothes. Be meticulous about switching off appliances/lights. Several years ago I lived for a short while in a rented property with pre-pay gas and electric meters, I used to put £10-15 a week on electric and £10-15 a fortnight on gas. Scrap the heating, have the hot water on an hour in the morning, same in eve.

Cancel phone and broadband. Landline isn't a necessity if you have a mobile. Beg phone co to switch you to a cheaper mobile tariff (a friend pays £10 a month for hers, no fancy phone but still gets free minutes, texts, data allowance etc).

Stop paying the gym. You simply can't afford it.

Cut back on food - you can live incredibly cheaply on pulses and veg.

I'd say ditch the car, but I don't drive so am used to managing without one.

You need to find ways to increase your income - I'm assuming you both work FT? £30k between you is a v low salary in the south east (again I'm assuming that's where you are due to house prices, sorry). Extra jobs? Work weekends? Any work you can do from home (ironing, sewing etc) Cleaning work?