I have £0 and I cannot be in this position again.

[PlainJane74]

Hey. I am a working lone parent to2 children. I am the walking definition of on the breadline right now.
I officially have no money to my name as I type and because nursery needs to be paid out of my next tax credits payment due on Saturday, I have no money until the following Saturday.
I’m going to be okay (just) as I went food shopping on Monday. I have dinnersand just enough for a lunchbox for oldest DC tomorrow. I can do tinned and frozen food for the kids over the weekend.
I’m writing this post because I need help and guidance to not be in this position again. I get what I think is a decent amount of money to live on but here I am for the 5th month scraping by, credit cards maxed out and scavenging for change.
Please help if you can, I am completely ready to overhaul my finances. Thank u

She knows it's enough money. She said she needs help to manage it.
Honestly try stepwise, you don't have to take their advice but listen to it. Interest on credit cards is killing you. Getting it stopped and paying those off will improve credit rating.
Never fritter money away. If you haven't budgeted for it don't spend it. It gets easier.

You have to have a tv liscence if you watch tv, even catch up, even if not bbc. Look it up

"OP are you sure tax credits are not overpaying you? "

Don't think so:

£6105 for 2 children CTC
£4780 for single parent working full time WTC

MINUS
(£8400 (income) - £6420 (threshold)) * 41% = £811

Gives £10,074

Child care costs are paid base on a a max child care cost of £175/week 1 child, £300/week 2 children, i.e. £9100/year for one child, or £15,600/year for two

OP is paying £900/month child care (£700 nursery and £200 childminder), which is £10,800

WTC for childcare is 70% of the cost, i.e. £10800 * 70% = £7560

£7560 + £10074 = £17,634

Tax credits of £300/week = 300 * 52 = £15,600

So the tax credits number seems a bit low. I suspect OP is not claiming for the child minder?

So her actual income should be:

tax credits: £10,074 (excluding child care)
income: £8400 minus £3240 (30% of £10800 child care cost) = £5,160
housing benefit: £2400
child maintenance: £8400

= £26,034 net

Outgoings:

Rent £12,000
Council tax: £1,320
Phone/utility: ~£2400
Car: £1500?

= £17,220

which leaves £8814 left over for food and so on.

Seems to be plenty of money even now, but:

• debt
• council tax support should be being claimed, I don't see it mentioned
• council tax single person's discount?
• WTC for child minder probably not being claimed?
• child benefits haven't been mentioned - another £1800 here
• the housing benefit of £200/month is not plausible at all. It should be much higher than that - child maintenance isn't taken into account, and broadly speaking on those income figures you are going to get most of the LHA rate paid (i.e. most of the cost of the 30th percentile 2-bed house in the OP's area. The HB is likely to be £500/month or more.

So basically plenty of money and you either aren't counting it properly or you can claim much more than you are saying here.

Christian's against poverty? They are like stepchange but better

"You have to have a tv liscence if you watch tv, even catch up, even if not bbc. Look it up"

This is not true, why don't you look it up. A license is required for Iplayer and for live broadcasts. Nothing else.

@Fazackerley yes, look at the amounts again.

Child maintenance of £700/month is the applicable rate on an income of ~£56k/year. Is that right for his income?

I know it goes on food or petrol or clothes for children

You mention clothes for the children in the same sentence as food and petrol. This is an area where you can cut back enormously. Think about shopping in op shops - take the kids with you and let them pick clothes out. Kids often grow out of new clothes before they get any wear , and you can get great bargains .I bought all my kid's clothing from op shops - it was fun and I loved saving the money. Good luck OP.

Look at the Moneysavingexpert money makeover and try every step that could be relevant to you.

If you can trim a few expenses by a bit, it can add up to quite a bit extra disposable income. Also make sure you know where all your money goes and that you're not paying out for subscriptions etc that you're not using.

£2900 pm sounds like a lot, but £1900 of it is going on rent and childcare, so you do have to be careful with the rest to manage everything. Shopping in Aldi is good, because it's cheap adn good quality - do you get all your toiletries, lunches and cleaning products within the £70? It's not too bad if you do.

Have you tried applying for a cheaper credit card to transfer the balances? Even if you think you have a low credit rating, you have nothing to lose by trying. I've found a lot of the online credit rating tools to be wildy inaccurate. Have you tried your own bank - if you have a good relationship with them, they might accept you anyway.

Have you had any PPI in the past that you can reclaim? If you could pay off your debt, you would feel a lot more financially comfortable. Also, is your childcare costs likely to drop in the foreseeable future? When DC have the free hours or go to full time school - that would also be a light at the end of the tunnel that would help a lot.

I’m overwhelmed with the advice, support and guidance I have received from every single one of you.
I am going to go through this thread with a fine toothed comb and list individual points. Then act on them.
I hope to come back to this thread in the near future in a better financial position.
Thank you all so much

I feel your pain - I was in horrific debt for years and my credit score is still impacted though the time is coming when it won't be thank god.
Looking at your list above here are some questions and suggestions...

1. Who is Tracey? £200 for what?
2. Your EE bill seems very high - can you change to a sim only deal (£16 pm)
3. TV licence - cheaper to pay 1/4ly than monthly - ours is £37.6 every quarter?

Also your list above adds up to £2500 outgoings every month not £2400?

Credit cards - you can do the same job as a debt management company would do here. Ring them and tell them you may have to consider going bankrupt if you cannot come to an arrangement with them (I know they will do that as I did it 10 years ago) - they can freeze your interest and arrange a more manageable fee monthly - say £50 to each of them? Might also be worth calculating the interest you have paid them since you had the cards?
Final advice - if you bear to do it then email each of your creditors asking about taking out an (un)affordability claim with them. You are concerned they did not consider your ability to pay back when they gave you high credit limits etc. Its not guaranteed to work but worth a shot.
Lastly - good luck!

TV licence is cheaper monthly, it's not £20, it's more like £12.40.

For the people saying 1k a month rent is high, the OP is in the S.E, so that actually seems pretty low tbh!
A two bed flat in London is around £1800 a month!

Write down everything ideally in a spreadsheet. Every penny is best (keep receipts). Yes it a lot of work but it's hard to work out savings unless you have an accurate picture. Once you have this you hopefully can identify savings.

The only other thing is to identify ways of boosting income - for instance I've earned money doing mystery shopping, I have sold Avon, i have baby sat, i have cooked dinner parties... think about what unique skills you have, can they be turned into an income? Also if you are short, the food bank will help, they really are there for situations like this.

Food wise have a look at the stuff you’re buying. Cut out anything that had a shred of ‘convenience’ to it (prepared fruit and veg, grated cheese, ready meals etc) as these are always way overpriced. Meal plan and cook from scratch and freeze the portions - you will end up eating healthier by default if you do this too. Food such as rice and pulses go a heck of a long way and you can make some really yummy dishes. The sweetshop trips actually sound like a lovely treat for your kids but maybe try to keep the items low priced like a mini bag of haribo or something small. You can always use “the dentist said we have to” as an excuse for why the portions are small. Good luck OP.

Rtt and great advice.

I would get the debts out and find out the interest you are paying on each debt

Then with the debt with the highest interest pay as much as you can to clear debt. Whilst just paying the interest on the other two accounts. This way you make a real dent in the debt with the highest interest and start to see it diminish. This will give you a good feeling and propel you on to then tackle the 2nd highest interest debt and do the same. Look up snowballing debt

With the debts tackled you will be then able to enjoy a higher disposable income

For goodness sake cut the cards up especially the store card. At least cut some of them up

Use money advice service budget planner

It will include things like Tracey” along with MOT, which many people forget.

Good luck

www.zoopla.co.uk/to-rent/houses/south-east-england/ Renting isn’t cheap

www.stoozing.com/calculator/soa.php

This is a good option to help make sure you include everything you spend.

Good luck!

I have met the mighty Stooz after whom stoozing and the Stooz calculator are named. He also runs The Lemon Fool. Great guy!

Nacreous there is also a link to his snowballing debts www.stoozing.com/calculator/snowball-calculator.php

Op it explains far better how to reduce debts by the snowball method than I can 🙃

I like the fudget app for budgeting. I've found it really helpful. I paid for the full version. Can't remember how much it was but I think it was under £2

@SonataDentata

People who work hard in apprenticeships to get a better job while bringing up their kids? Yes, I too am happy for my taxes to go to 'people like this'.

I'm sure the OP would rather be earning more than £700 a month for working full time.

@SonataDentata you'd probably be sickened to hear what i received when my ex husband left me with four children then