Struggling to afford everything

[pandabear13]

Hi I am hoping someone may be able to give me some practical advice. I am feeling very stressed and worried about the situation so please don't be too hard on me.

I am finding it really difficult to meet payments on debts I have. l am working part time 3 days a week making on average £850 per month. I have a 2 year old in nursery for 2 of these days which costs £58 per day. £150 out of my wages goes directly to pay for childcare vouchers so I get around £700 pay each month after the vouchers have been taken out. The remaining childcare fees come out of my wages.

I have debts from when I was working full time which at the time seemed affordable but since being part time after maternity leave it is much more difficult to afford the minimum payments.

My husband is working full time and pays the majority of the bills. I pay childcare and my debt payments, my car finance and insurance, phone contract and activities and bits needed for my DD.

I would ideally like to go back to work more hours but at the moment I am earning under the threshold for tax and if I went up even one day I would be paying tax and more national insurance, when I have tried to work this out taking additional childcare costs into account it doesn't seem to work out with me being better off, as at the moment I am making under £20 per day after nursery fees are taken off (except for the one day a week I work and my DD isn't in nursery).

I get £70 per week in tax credits at the moment but I am also thinking if I work more hours this would be reduced?

I have considered changing jobs and working nights but my DD would still need to be in nursery in the day so I could sleep.

I just cant think of a solution to this situation and I am getting more and more stressed about it.

Thanks for any help.

Sorry I did write this in paragraphs but it hasn't worked!

Could you sell the car or look for a cheaper phone contract?

Ring step change or Christians against poverty, they will contact your creditors to arrange repayment that is affordable.

Whats chocolatebuttons said. & google National Debtline, they have loads of Factsheets and sample letter examples. As well as budget sheets.

Thanks for your replies. I will look into those. I'm stuck in a contract with my phone and the car finance I owe is more than my car is worth. It could be an option in the near future as once I have paid 50% of the finance I can opt for a voluntary termination.

I work for a financial institution at the moment so I could lose my job if I am in financial difficulty. Do you know how it would affect my credit rating if I were to inform my creditors that I'm struggling?

Why on Earth are you alone paying childcare? Is she your DH's child? Do you charge him £58 for the days you have her?

He is paying the mortgage, utilities, council tax, food shopping etc. So his wages can only stretch so far. We really see stretched as far as we can be at the moment its not that he's not helping.

Once she turns 3 you will get 30 hours free so even with the holidays to pay for you can work more hours and be better off, though you will loose your tax credits

Does he feel the strain too? Is he concerned? Or is it your problem? I think it's very unhealthy to see the childcare costs as yours, whatever else he is paying. I'm not a fan of separate finances generally but particularly in households with disproportionate salaries.

OP pop over to the Money Saving Expert Forum, on the Debt Free Wannabe forum there are some marvellous folk to advise you that know absolutely everything there is to know x

If you get wtc you probably qualify for 15 hours two year funding. Have you checked this? X

Yes the 30 hours finding will be a massive help it's just getting through the next year.

Yes my DH is feeling the strain, he is picking any extra work he can and is working 6 days a week at the moment. I think maybe a joint account may be a good idea. I will discuss it with him, maybe that would help things a bit.

• Does your husband use childcare vouchers too? Is there any reason you are only getting £150/month in vouchers and not £243 (which is the maximum and will help you save more in tax and NI)?

• have you checked any online benefits calculators to see whether you would be better off claiming Universal Credit instead of tax credits? You might find that you are. If the results don't make sense, contact or visit Citizens Advice and ask them to do the calculations for you.

• What is your total debt? You should definitely get advice from a debt charity / helpline. The first step of debt advice is to do a household budget. Include everything, all income (salaries, child benefit, tax credits) and all outgoings (not including debt repayments) then see how much is left over, this will be how much you afford to pay towards your debts. You can also see if you can increase your income (ie increase hours, check you're getting all benefits you can, etc) and reduce your outgoings (MoneySavingExpert is great for that). If all that seems too difficult or overwhelming, go to Citizens Advice as most can offer help with debts and budgeting.

Can you pick up any evening pub work to bridge the gap. Might take you over the threshold again. Can you work offer any advice as a financial institution? What's the status of your debts? Could you make them cheaper?

MyDcAreMarvel I've looked into the 15 hours finding but i don't think we would be eligible. I will check again though. Thanks.

Another Emma I have tried to apply for the full childcare voucher amount but I was told by my employer that the maximum I could do was £150 as anymore would take me below the minimum wage. My husband cant get childcare vouchers as he is self employed. Thanks for the help i will contact one of those. I think having it all broken down may help it seem more manageable.

Does your husband know you are struggling so much or are you trying to deal with this on your own?
I think the first thing to do is look at Step Change, they have excellent advice available.
Second of all can you speak to any of the companies you owe money to, to explain you’re in financial difficulty and can you work out a payment plan with them and/or would they consider freezing interest? This will show on your credit file but not in the same way as a default or bankruptcy for example, so work wise you should be ok. I assume you mean you can’t be declared bankrupt or have an IVA? Unless I’m missing something?
Why don’t you look into doing tax free xholfevsee through HMRC rather than childcare vouchers? This will probably work our cheaper for you as you pay 80% and the government tops up the remaining 20%. There are calculators online to work out which would be better.
I feel for you. I’ve been in this situation myself and can honestly say I was beyond stressed and worried sick. Talking to someone will help, although it feels embarrassing, I promise you’ll feel better to get it into the open with your husband and speak to step change.

The debts are credit cards totalling £4000 and a very account at £1800.

I meant tax free childcare, not sure where that word came from

Is there anyway you could get a loan from your bank to consolidate the debt? Or look into a balance transfer card?

Heymummee thanks I am going to try and contact my creditors and ask about the interest. I think with work its CCJs, iva, bankruptcy. So this is why I have been so scared to contact anyone.

I did look into tax free childcare last week but i have read that if you get tax free childcare then your tax credits will stop.

If I can just get through the next year then once the 30 hours kick in I can up my hours and would be able to afford everything. I don't want to ruin my credit file, but I might not have a choice.

"Why don’t you look into doing tax free xholfevsee through HMRC rather than childcare vouchers? This will probably work our cheaper for you as you pay 80% and the government tops up the remaining 20%."

Actually universal credit is a better option for people who are eligible, because it covers 85% of childcare costs.

OP do you mind telling us how much your partner earns? Do you know his gross/net earnings from his most recent tax return (presumably 2018-19)?

Ahh ok that makes sense, sorry I didn’t realise tax credits would be affected. You learn something new every day.
If you’re affected by CCJs, bankruptcy or an IVA then a short term agreement for paying off debts at a level you can afford for the next year should be ok. Have you anyone in HR at work you could speak to in confidence?
On the subject of agreeing payment amounts there’s a template letter on the StepChange website you can use by the way.

Op eligibility for two year is £16,190 gross household income or less.

Income from earnings, not including income from tax credits.

@AnotherEmma Universal credit is terrible advice, five week wait, lower earning threshold and minimum income floor for the self employed. Plus all childcare paid a month in advance!