Could we manage on this budget??

[teenyweenytadpole]

Just doing some thinking about how I could manage on my own. Currently in a rented house, we have some savings, too much for rent but not enough to buy a house. I earn about 7K a year, I have been on entitled to and they reckon I would get another 11K a year in tax credits so that would be around 18K a year, there is me and 2 DD's. DH earns good money at the moment but (and I know this sounds awful) I don't feel secure about being able to rely on maintenance, he is self employed in a volatile field, plus I am half half a fear he might do something stupid like make himself unemployed or go abroad or something to avoid paying maintenence. Maybe not, but anyway I am trying to work out how I could manage without it then if I got any it would be a plus!

So...income around 1500 a month. Rent for a small nothing fancy 3 bed house around here is about 800 a month, I currently spend about 800 a month on food (but could cut that back especially if it was just for the three of us), I also would need to allow about 200 a month on petrol, 90 on electric, about 1500 a year on oil, current council tax about 1200 a year but might be less if we moved. Then there is things like clothing, phone bills, car servicing/repairs, all the usual expenses of life. I guess things like swimming lessons and ballet would have to go unless DH was generous or maybe the GP's might help out. Seems like it would be too tight, I would have my savings but for example desperately need a new car, so would not really be able to live on that money. What do you think?

Also, I am planning to start my own business but this would run alongside my current part time job, at least to begin with. Does anyone know how this would work with tax credits, presumably I'd just declare any profit as income and this would be taken into account in the calculations?

Thanks so much.

You can claim housing and council tax benefit, which will really help. Any maintenance doesn't affect this. Tax credits wise, you should be able to earn up to 20k before it affects it (they may have reduced this now, so you need to check). Any profit you make from being self employed, plus any income from other work, should all be declared. It's easier to register as self employed, you'll get a new tax code. It may be best to go and have a chat with your local tax office, they are very helpful.

You can spend a lot less than £800 on shopping , we spend £250 a month for the 4 of us.
Ditch ballet and swimming for sure, you need to cut your cloth to suit your means.
Cut your electricity and gas by switching appliances (and heating) off when you're not using it.

If there's only you and two children you can rent a two bed flat. A lot cheaper than a 3 be house.
Reduce food bill by miles
And then will prob have enough for some activities

As far as the new business goes, I'd leave it a year at least to see how you adjust to your new situation, as your DCs will need your time and attention, and new businesses take time and money which you can ill afford.
Make a realistic budget of everything you need, then see which "luxuries" you might afford, remembering Christmas is not all that far away (which might eat your savings).
Cut as many car journeys as you can, definitely anything under a mile, eventually anything under 3 or 4, and you'll see the difference in fuel costs (and as a bonus, it's good exercise, and wears the DCs out).
Come September, keep in contact with the school about your circumstances, you probably won't need to pay school trips etc. and they might well give you some long lost uniform for the DCs.

£11k in tax credits? Are you sure that's right??

Try the credit crunch board for money saving tips and budget meal planners.

Hi all and thanks for the replies, the tax credit amount was a mix of child benefit and tax credit, so that was an annual total. I got this off the entitledto site. Yes I could definitely spend less than 800 a month on food, we do eat well and that includes things like toiletries, wine, that could be cut back on. In terms of the rent there aren't really any flats around where I live, it's all houses. Also I do think elder DD really needs her own room as she is starting secondary school and needs to be able to do homework etc. The very cheapest 3 bed I have seen is about 750 a month within a reasonable distance to school for both DD's and they were a bit on the grotty side. I live in a rural area so petrol is a necessity - there really isn't any other way to travel, we have a 5 mile drive to school and back each day. This journey also takes me to work so no option but to do it really. I am pretty sure GP's would chip in to help out with ballet etc. I know that seems like a luxury but it would be such a huge change for the DD's anyway I would want to keep as much as I could stable for them if you see what I mean - moving to a small house and having less money to live on is manageable but I don't want them suddenly plunged into a life where it is all downside and no upside! Anyway thanks for the tips yes I will check out the credit crunch info as well.