Do you think I’m in a poor position?

[Pogodogo18]

Here’s my situation. I’m a 50 yr old single parent with one still young child (10)

I’ve got a reasonable job that earns me £48k pa and I get £6k child maintenance a year.

But my outgoings are high and I can barely afford to save anything. Less than £100 a month usually. I have a mortgage of 200k on a house worth 460k but 18 years to go 😔😔

No pension to speak of. About £5k in cash savings. Old car but okay for now.

I’m very fortunate in some ways (don’t mean that in any boasty way at all, just grateful for what I have). But I wake up at night and I think I’m in a pretty precarious position financially. The lack of pension scares me the most.

I’ve worked bloody hard to reinvent myself career wise after my divorce, and I spent years married to a careless spender, which has taken me a long time to recover from. Despite all the graft, it all feels too late to catch up.

I live in an expensive area and wonder if my view is clouded by seeing lots of people better off than me. But however I cut it, I feel very vulnerable financially. Am I?

What's your provision through work for sick pay etc? If you get a decent package, eg a few months at full pay and the provision to take your pension early if you cannot work due to ill health, your needs are a lot lower than if you don't get these things.

Have your checked your mortgage rate to see if it's as low as possible? You need to always be on a deal or a low margin lifetime tracker. Worth checking every year or so and even considering if its worth paying early repayment charges to move to a better deal.

Do you watch both the Disney and the Netflix enough for it to be worthwhile? I know its only a few quid, but its a few quid down the drain if you never watch it. Likewise the NT membership, do you actually use it?

Are you aware that it usually costs more to pay your car insurance monthly so worth paying annually unless you really can't manage it, which you should be able to as you are saving a small amount each month. On the matter of insurance, you say you have buildings insurance, but does this include contents insurance too? You need this.

As others have said, the £600 for day to day spends is ripe for being frittered on non essentials so you need to check what this is going on and if you need to be more mindful about what this is being spent on.

On the bright side, you have a couple of small debts that will be gone within under a year, so that will be another little boost to your disposable income. Coupled with the imminent decrease in childcare costs, things could look a little more positive in a year or two.

Agree with PP that the area to focus on is the £600 a month day to day spends. The specific pots below seem to duplicate some of these - you have a petrol pot and also mention travel costs, I’d count these together and be clear about how much I was spending on travel (and how much of that is discretionary). I’d be really surprised if you can’t find some savings across those two areas.

I'm a single mum in my 50s and would agree with what others are saying about pensions, breaking down the individual costs in the £600, and that the insurance cover seems very expensive as a proportion of your expenditure.

What really made a difference for me in feeling more secure has been You Need a Budget. Allocating my expenditure each month, seeing where it goes, seeing different pots build up, feeling the difference of knowing I have a small emergency pot, counting up the difference of small savings. I needed to replace 4 tyres last month and rather than it being a panic, could see at the garage that I'd built the reserve for this - such a massive sense of relief. So I'd really recommend that for everyone but particularly when you're on a single income and worried. Peace of mind matters.

Like you I'm focussing more on reducing the mortgage, but the logic of focussing on the pension, alongside the government contribution, is that cash put into it should grow with compound interest. So putting money into the pension later doesn't have the same effect as doing it now.

There are some great threads over in Credit Crunch which I'd really recommend for the fellow feeling and great tips. Good luck.

Thanks everybody. Some massively helpful ideas and advice, it has really made me start thinking about my money in a different way. There is scope to save more, I can see that. And prioritise the pension. I need to stop thinking oh it’s all too late what’s the point as it sounds like a few posters have made a reasonable difference even when starting late.

I don’t know if you are familiar with money saving experts financial challenges on the forum, but they can be really motivational.

There are challenges like no buying toiletries (in a quest to use up existing supplies), no spend days (having so many days where you don’t spend anything) and also changing how you think about spending money, just because you can afford something, it doesn’t mean it’s a good use of money

I know that this has been mentioned before but stop overpaying the mortgage. Interest rates are at an all time low. Pay that money in to your pension instead. It’d be far more beneficial. Plus the money you’re saving for your son. Look at your discretionary spending. Try to have a few months (say Jan, Feb, March) of very tight living (zero unnecessary spending) and you’d be surprised how much you’ll save there. In the future you can take in lodgers, international students or downsize so i wouldn’t be panicking if I were you. I would try to reign in spending a bit though. Best of luck. It’s hard to balance it all

I know that this has been mentioned before but stop overpaying the mortgage. Interest rates are at an all time low. Pay that money in to your pension instead. It’d be far more beneficial

Totally agree.

Also, OP mentioned earlier that her very old car is nearing the end of its life. There should always be a plan in place for servicing, suddenly needed repairs and ultimate replacement. Ideally have a monthly standing order to a separate savings account.