Wwyd???

[Signet2012]

Current situation is:

Have plenty of debt, not completely unmanageable but something we will be in for ever for sometime unless we can make big payments as well as our regular monthly payments.

Partner has his own business which isn't doing so good but brings regular but low income.

I've just returned to work after mat leave but to a lesser role and lesser pay.

We can not do without either one of our wages and are -62 pounds to pay the bills (including 150 shopping budget and 75 petrol)

Dp is getting 4k in the next month and a half for some work he did outside of his usual job.

My plan was pay it straight off debt.
He wants to save it incase his business starts failing so we can still pay our monthly commitments until he can find work (this would be just short of 3 months worth of bill money)

A compromise would be to pay 1k of the debt, use 1k to get bits what we will need over coming months (stock up cupboards, next stage car seat for dd, car tax, mot and repairs as car is crucial to dp work) then keep 2k in savings.

What would you do?

Your compromise sounds perfect to me

Your compromise sounds good. I'd have thought that paying 4k of a lot of debt isn't going to reduce the monthly payments that much. I thought the "advice" was always to have three months wages saved somewhere just incase the shit hits the fan.

If it were me I would go for the compromise.

On another note, you need to sort out the -62 situation. You will never clear debts if you are going backwards all of the time.

Do you work off a monthly spreadsheet?

Yes
The food budget is 150 a month for dp, dd and I which includes all food/cleaning and toiletries.
We budget 75 for petrol and dp only uses the car for work and if I need to take dd somewhere and the weather is horrific (bus fare is extortionate for some reason)

We have sky tv and contract mobiles which we are still in contract time for but these will be going in August and October . Must have Internet for dp business. But the has and electric has just gone up by 40 pounds a month but heating was on a lot over Winter as was dd first winter, next year she will be getting a dressing gown

I just can't see where else to cut things out. Our household income is 20k so we are seeing if we can get tax credits.

We were ok until dp didn't get paid one month and its all been catch up ever since.

This will tell you what you are entitled to. Call Sky and the mobile people and tell them you are struggling and ask them how you can reduce your bills. How much are you paying for your internet? Ours is with Sky and it is £7.50 for unlimited. What other bills do you have?

Already tried they said we couldn't and if we didn't it would go against our credit rating which surprisingly should be ok!

Other bills are mortgage, ctax, gas and electric, life insurance (36 pounds a month for both of us cheapest I can get due to complex health issues) house insurance (have shipped about and on the cheapest for the correct cover) water, tv liscence, car insurance, mobile me, mobile dp, both needed for work but very good contracts I'm losing mine in October and going payg.
The rest is debt. Stupid stupid stupid.

It's money I've put in the house not expecting to conceive as ttc for 3 years. So got the house done up ready to sell and move when I got my bfp.

The plan was to return to work full time but we do not have any childcare except nursery which would not have worked around my job commitments and rota hence the level drop and wage cut.

I'm sure we will be fine now we have this 4k coming because even if we take the 62 out of that until tax credits are sorted.

Entitled to reckons we are able to claim 23 pounds a week

Well at least the 23 a week will cover the shortfall you have at the moment. Is there any equity in the property? Would you be able to release it to at least clear the debts and get back on an even keel?

Only slight amount and as its only me on there they won't allow me to increase it any further. Dp isn't on as I've had the house longer than we have been together (I got it when I was 21) and with him having his own business we kept it that way. Now my wage has decreased I doubt they would let me anyway.

There is plenty in the pipeline and with some careful living we could probably sort it out in time but its so hard!! Bloody stupid of us to get into debt in the first place.

As I pay bits off the cc I'm reducing the limit too so there isn't the temptation to increase it again

Because of the interest on debt , surely the most cost effective thing is always to get rid of as much debt as possible.

I understand the desire to save but you may not need the money you save and, if the worst comes to the worst you could always borrow again.