Is my dh right?

[Fragglefizz]

Hi guys.

Just need some reassurance I think. I recently moved jobs. I was struggling with my mental health and a large part of it was work related. I decided to make the change and now work in a different role that is less pressured, but almost £400 take home less each month.

I am a real worrier ( medicated for anxiety/CBT etc) and I have become fixated on our budget, and the impact of my decrease in salary. My dh is amazing and supportive and is constantly reassuring me that we are all good, however I am constantly doubting this.

I have spent some time this morning putting together a budget based on our new income. Please can you look at this and tell me if....

I am right to be worried
My dh is right and I need to chill out!

The debt was built up a long time ago and we have about 24 more payment until it is gone. It's well managed and we haven't accrued any further debt for years.

Is my dh right?

total income 4400
Mortgage 683
Gas/elec 197
Council tax 128
Water 43
home ins 27
Car insurance X2 56
Car lease ( salary sacrifice) 371
Food 360
prescriptions/meds 40
Phone/internet/Sky TV 47
Gym membership 27
Christmas saver scheme 50
Diesel/Petrol 250
school lunches 50
home emergencies 100
MOT's/Services 60
Haircuts 20
clothes 50
Birthday/birthday parties 15
mobile phones X2 58
CC payments 450
Loan payment 318
Argos 65
Netflix 10.99
klarna 98
entertainment/odd meal out/takeaway etc 100

3673.99

'Spare' disposable - £761 per month

If the new budget is based on your lower salary then it looks fine
But I would spend the next 2 months so up until the end of the year putting your £700 odd surplus into a pot for emergencies
I'd then spend every penny of this surplus in paying down the debt faster especially the credit cards.
If you are genuinely starting to put money away for birthdays, car costs etc and are sticking to the budget then first get a but of moneh together and then throw everything at the debts get them cleared ASAP
Once the debt is gone you'll be in a great position

What's the Klarna £98?

It looks fine. Have you looked at getting a prescription prepayment certificate. I think it works out that you would save money if you need more that three prescriptions every two months?

What’s the debt? The loan, credit cards, or both?
The budget looks fine if you’ve really got that much spare, especially as you’ve not including Xmas & home emergencies saving in the spare.
Where I raise an eyebrow is your claiming not to have taken on more debt, but you’ve got Klarna and Argos on there. Plus possibly credit card.

As a PP said a prepaid prescription certificate is only £108.10 per year, or you can pay 10 direct debit payments of 10.81. That will buy any meds you need via prescription throughout the year.

He’s right.

From your list, sounds like you have everything you need, plus loads of nice luxuries too.

That said, paying over £930 a month towards debt is high. It’s higher than your mortgage.

How long more will you have loans/CC payments/store cards/Klarna? Can you use some of your disposable income to clear these faster?

You don’t mention savings, so you have some?

He's right. You have enough for now and your mental health is priceless. Get that debt paid down and you will feel better.

Hi,

I think that you will be ok. It looks as though you have covered everything in your budget. I am sure that you are better off than a lot of people, with a decent amount leftover each month

Hi, the Klarna thing…. I hold my hands up. Last month Our boiler broke, the washing machine packed up and then we broke the bed (nothing kinky). We paid for the boiler and washing machine outright. We bought a new bed frame for just under £300 and used Klarna take 3. Not ideal but it’s 3 payments and no interest. We haven’t used credit cards etc for over 2 years

OP have the replies reassured you
at all?

Is your mortgage fixed? If not I’d allow a bit extra in case of rate increase. Also, how hold are your kids as food looks lower than mine, if they are primary age I’d add a bit more for when they eat more than an adult. Other than that, looks reasonable.

Hi OP. I have to say that looks fine and the budget you have put together seems pretty comprehensive. Maybe live with it for a few months and you may find you need to tweak it e.g more food budget at Christmas etc but if you can stick to it then once you have paid down your debt you are in a really good position to build up some emergency savings so try not to worry.

Your DH sounds like he is sensible so try to trust the figures / budget you've worked out and enjoy your new job.

Looks fine. Your phones could be cheaper and you presumably don’t need that much every month on MOTs etc. What’s your mortgage term? I’d start factoring in a bit extra for when your payments go up.

I can sympathise with you completly. I did the same thing in March (and then watched the world turn to shit during my notice period) and took a 400 quid pay cut myself to work closer to home/better environment etc. It’s meant my partner has had to go back to work full time just in case hours aren’t available for her next year in her work and we are paying an extra day in nursery.

we earn roughly 3600 and have a slightly bigger mortgage and some of the same outgoings but less of the luxuries and are managing. We could afford more meals out etc but I’m ferreting away most of my cash for a what if scenario mortgage rates/boiler and what not.

it’s not easy my mind still hasn’t adjusted to the pay and probably won’t until I promote in a couple years. I think the big thing to remember is you are still probably earning above average earnings and that once the debt is paid it will free up a lot of money and that’s how I’ve dealt with it. I paid my car and most credit card debt still paying one off (although can pay it off completely with savings) and haven’t used credit card since. Just take time to enjoy the role I struggle with OCD anxiety and it’s became a new obsession but if you let it take over it will make you doubt the decision to leave etc

What is the Christmas saver scheme? Why not just put it in the bank?

I think you missed road tax, but budget looks fine. Seriously, don't worry. You've got 700 quid of disposable income left, you can put some to emergency fund etc.

So you can cover all your bills, have money for all your debts, can cover phones and fancy TV, put money in oXmas savings and emergency savings and still have £700+ to basically do nothing with and you're worried you're skint?

Pay off your smaller debts (Klarna, Argos) at twice the rate you currently are Nd see if you can overpay the 24 month debt. Even if it doesn't save you money on interest, at least it'll be gone sooner.

Well first of all I would love to have almost £800 disposable income and if I did I would be using most of it to pay off the debt. I don’t understand why you’re worried to be honest.

And just to add that I have a service plan for my car which costs less than £20 and it offers a discounted MOT which costs about £40 a year.

Yes, he’s right. You are covering all your outgoings very comfortably with a substantial surplus. You’re very lucky.