Accept getting into short term debt?

[Butteryflakycrust83]

Since the start of the year, our disposable income has been utterly wiped out by increased bills - nursery fees, rent, gas and electric mobile phone contract, train fares as well as food and clothing increasing in price.

Our biggest expenditure by far is the nursery fees at £1500 per month.

From next September, our nursery fees will drop to £750, giving us an extra £750 a month. A year later, this will drop to zero as we will not need wraparound care for school.

At the moment, after all of our bills (which we have reduced where we can e.g. cancelling subscriptions, reducing the food budget) we have disposable income of £100 a month to cover clothes, toiletries, anything for DD and special occasions. I am worried this will reduce further with the next energy price hike.

DH says we should accept we may go into debt short term until our nursery fees reduce to maintain SOME kind of enjoyment in life and cover any larger purchases we may need in the next 14 months. We have a 0% credit card to cover this.

I am unsure - if our circumstances change, I am worried we will get saddled with debt we cannot repay. On paper we would be able to clear debt pretty quickly, but what if I lost my job and my salary reduced? Sickness?

I am unsure where to draw the sensible line here.

thing is it still needs to be paid back if you only have £100 a month spare i wouldnt be putting anything on the credit card unless it was absolutely necessary

I would only do this if you can't increase your income short term or sell stuff or cut costs sufficiently and then only for necessities. It is just that even though you have a plan, you don't know what the future holds and if something knocks you off course, the debt is that much harder to deal with.

Hello - just dropping in to say that we’ve got a Q&A live in Money Matters about debt with debt charity Stepchange if that's of interest!

If you know its only likely to be a short time I would take out a low interest loan rather than a credit card, don't spend it all at once and put it in a separate account, it's there if you need it at an affordable and fixed price. Nursery is a large expense so maybe work out how much that is going to cost you in the next 2 years, take that amount of money out and spread it over the maximum term, paying it back sooner if you can.

First Direct offer loans at 3.3% from £7k spread over 7 years will give you a manageable amount.

Do you both work full time? Is there a way to increase earnings instead? A second job? Or work compressed hours so you can earn more /reduce the days in nursery

Thanks so much all!

Good point re: loan as that would be easier to manage rather than trying to stick to a 'This is how much we are allowed to get into debt by.'

We both work full time, I already have started selling clothes/toys to put money away for Christmas.

We aren't in any way frivolous, but I do want to balance being thrifty with not being able to do anything.

Thanks, I will check out the Q and A!