Need help clearing debt accrued on Mat Leave

[MatLeaveDebt]

Can I please start off by saying I'm a very anxious person and having been in debt before (15k+) and having to be on a debt management plan, this new debt may seem small to you, but to me it's causing me stress, anxiety and sleepless nights.

I haven't told my DH and I don't plan to.

I have £1000 debt which I have accrued during maternity leave. I'm laying out my finances here so please can I have only helpful comments.

My DH earns double my salary so allows me to have more money to spend each month. We both have £700 after bills have been paid. We're paying off a holiday for next year just now so extra money is paying that off.

Out of the £700, that is used for food shops and petrol for our one car (which we split, E.g if food shop was £50, we both pay £25 from our own money, same with petrol).

My debt is broken down as follows:

Overdraft £200
Credit card £600
Next £200

I'm really not sure what is best to target first. I want to get rid of it all asap but we have Christmas coming up so will need to keep some money aside for that, and also DDs first birthday at the end of December too.

I am due back at work next week which in a way is good as I can't be shopping for baby clothes and stuff lol, but I need a focus on getting rid of this asap. And I don't want to tell my DH.

I don't want to take a loan to consolidate as rates are increasing just now even with an excellent credit score.

Any finance savvy Mumsnetters out there willing to offer helpful advice?

Thank you x

It sounds like your budget hasn't been updated since you had dd, so whilst you have a process for managing shared costs like food and petrol, you don't have a way of splitting costs for dd fairly down the middle. If you've been paying for her non-food stuff out of your share of the 700, that at least in part explains why you've been accruing debt.

I can sympathise with your DH up to a certain point, as when I first read your post I assumed it was going to be the usual story of a DH who thought it was your job to entirely fund your mat leave, as if your pregnancy and child had nothing to do with him. It sounds like he has tried to be fair (if not particularly sympathetic) and it hasn't completely worked out.

However, the budget does need a reset. Your DD is a shared expense. She needs her own pot in the shared budget / arrangements to share costs as you do with food.

And at the same time, you do need to scale back on what you're buying for her. Certainly so you can afford to have your hair done, even if you have to leave it a bit longer between cuts or go for something lower maintenance if you're having colours and whatnot.

I agree with others that food and petrol should be treated the same as general bills, and come out of the joint account. As should stuff for DD. Then what is left is genuinely money for yourselves.

I understand food and petrol costs can fluctuate but over a month they should be reasonably similar.
You also need to agree what are reasonable purchases for DD. She's 1 - you can buy immaculate 2nd hand clothes and toys for next to nothing (or get them for free on Freegle/from friends. A 1 year old does not need presents for Christmas and birthdays and you can just have her grandparents round for a tea party on her birthday.

All bills from one account. You're clearly not coping because you're in debt. That's one admin thing out the way.
You sound like you're tip toeing around dh for one reason or another. Might be worth getting to the bottom of that too. You don't sound like you've both got an open and honest relationship around money being that you're married that's not overly healthy.
Bills should include dc clothes and food bills from joint account. Someone's hiding something anyway. Whether that's you hiding you spending too much or him hiding his earnings. It won't end well if you don't sort it out soon.

Do Next first. My children had their first few years with second hand clothes, bedding and toys. They never noticed and were very happy children. They loved all their second hand Christmas presents.

I also buy clothes in charity shops and ebay for myself. You really need to stop at every purchase, think do I really need it, can I get it cheaper elsewhere. Also meal plan, and opt for cheap days out. Postpone any home improvements.

Anyway by being careful I've cleared up to 2k of debt before. I have done it without telling anyone including DH, as I didn't want to panic him. It's doable, don't panic.

If you have around £300 genuinely disposable income and around £1000 worth of debt, I'd just recommend not spending anything unless absolutely necessary for the next 4 months. Then that's the debt cleared without any fuss. And you can probably even afford to have your hair cut once in that time :)

Well done for telling your DH.

if you have £300/month left over it shouldn’t take long to sort this out.

Month 1:
Pay off Next with your Credit card.
Pay £100 off credit card and leave £200 to cover your overdraft.

This leaves £700 on credit card which is interest free.

if you want to knuckle down you could pay this off in 3 months (£300 month 2, £300 month 3, £100 month 4). If you wanted to ease up a bit you could devote £150/month to it and still have it cleared in 6 months.

More importantly, you need to sit down and make a proper budget, and stick to it. It sounds like you’re spending frivolously with the excuse that it’s for your DC, but do they actually need all the stuff you’re getting for them?

If you have £300 left each month, apportion it accordingly - so for example £100 for haircut, £200 for frivolous spending. Once you’ve spend it, no more buying crap for that month.

I’d recommend starting a separate savings pot jointly with your DH for Christmas/birthdays; you could each put £50/month in and that’d be plenty!