Help with budgeting and debt repayments

[Havanawinter]

This might be a long one so bear with and thank you for reading!

I feel like we’re just drowning in debt. Between us we owe £11,000 on credit cards and £3,300 left on a loan that ends in January 2025. We never miss a payment but I feel like we’re just about managing and robbing Peter to pay Paul. I’ve given a full breakdown of our income/outcome below and would welcome any areas where we could cut back or make some additional income. A couple of comments: the phones are on contracts until September next year when we will go onto SIM only. We pay for sky sports and it’s really my husband’s only luxury so I’d feel bad taking it away. I work 3 days a week at the moment and will do so until DS2 starts school in 2 years time. I get no help with childcare so rely totally on paid childcare. The car is on finance until November 2024 when it will be paid off.

Income
DH take home - £2179.68
My take home - £1370.53
Child benefit - £159.60
Total - £3709.81

Fixed outgoings
Nursery £500
Mortgage £575.46
Help to buy loan: £80
Kids savings £30
Loan £248.88
Car £280
Council tax £220
Phones £100
Insurances £64.52
Sky £93
Gas & electric £167
Water £35
Subscriptions £13
CC payments £400
Milk £20
Wraparound care & swimming lessons £120
Total: £2946.40

That leaves us with just over £750 for everything else for the month, including food, petrol, clothes, birthdays/Christmas, basically anything else on the list. It never feels like enough even though I don’t feel we live extravagantly. I just feel like I’m drowning but I don’t know if that’s me being ridiculous. We always end up putting the last food shop of the month on a credit card, along with things like birthday presents. We have no savings.

What is kid's savings, subscriptions and milk? They all sound like they can go until you're out of debt.

Does your child/children have to have swimming lessons? Again, it's a nice to have, but you can teach them to swim.

What is the insurance for and is it essential?

Can you get rid of the car? Sell it, pay off the amount that's owed and buy something way cheaper?

£93 Sky? Are the cc paid off each month or attracting interest on the balance?

Based on your information, there's light in the sense that from September you can go onto a £10 per phone per month sim only, then the car payment and loan payments finish - use that extra money to pay off the highest interest remaining dept asap. My only real suggestion is negotiating with sky to get it down a bit, cheaper milk eg buy from supermarket, then possibly could you get extra temporary work on a weekend, perhaps leading up to Christmas do a few shifts? I work occasional shifts at a bar and it's £75 a time, helpful

Just realised Sky is actually £79 and that’s for tv and broadband; we need high speed broadband as we both WFH. Kids savings is money we pay into their junior ISAa every month, subscriptions is Netflix and Disney plus and milk is my eldest’s school milk and the milk we get delivered. They drink a lot of milk! Swimming lessons are necessary right now as my son almost drowned on holiday earlier in the year and I’ve not got over it.

This time next year things will be easier; phones will be less, car will be paid off, loan will nearly be over, plus my youngest will get his 30 ‘free’ hours which will massively reduce our childcare bill.

Good idea RE Christmas work, there’s a local sorting office always looking for Christmas night shift workers so I will look into that.

I think I would just hang tight for another year
Then you'll pretty much have both loans paid off.
Keep meeting payments on everything then once the loans are paid off start paying more to the cards
Then by no time your child will be at school and you can work more hours and it sounds like things will be far more comfortable

Sometimes all you can do is buckle down and look to the future.

The only positive thing you can do now (other than increasing your income if you can) is to STOP spending on the cards. Cut them up and come up with an iron clad budget and stick to it. Then hunker down and keep going as you are.

I would be forward planning to debt snowball and hanging onto that thought as the light at the end of the tunnel.

Write a list of your end dates and how much income you'll have spare - but plough that extra amount straight onto the cards. So coming up you have...

Sept 24 - Phones ending £80pm (£10 pm sim only)
Nov 24 - Car payment ending £280pm
Jan 25 - Loan ending £248pm
Nursery savings £xpm

From Jan 2025 you'll have around £600 a month extra you can plough straight onto the cards, on top of your existing £400pm. Even with interest you can be debt free in not much more than a year.

THEN you'll have over £1k a month, plus nursery savings as spare cash.

It's just a temporary situation, look to the future and stay positive x

That leaves us with just over £750 for everything else for the month, including food, petrol, clothes, birthdays/Christmas, basically anything else on the list

That's not a lot for those things. Well over half of it could go on food and petrol, then you have car MOT repairs etc and the other things. You could see if you could cut back on these things.

Then you've got the things you haven't mentioned. Do you ever buy food or drink out of the house, lunch, coffee, takeaways, meals out etc? That can add up to loads if you do it more than very occasionally.

There is light at the end of the tunnel though. You've said you can reduce some costs as things like your mobile contracts expire. Will you be able to continue running your current car after the finance is paid off? That will help.

You say that Sky Sports is your DHs only luxury, but £93 pm is a lot for pay TV when you're in debt. You can get Now TV sports without a contract for £35 pm and you might even be able to get it for less - we don't have sport but we have other Now TV products and never paid anywhere near full price. If you tell them you want to cancel, they offer you a deal, so it might be the same for sports.

To cut costs, you need to be always on a deal for broadband then take one or two TV streaming service at a time. Saves loads compared with paying for a full Sky/Virgin contract.

Your mortgage is quite low, will this increase at some point?

But you could go through the Moneysaving Expert budget planner to see if you can increase your income, shave down some costs and also see if it is possible to make any of your debt cheaper.

Do a money makeover and potentially save £1,000s - Money Saving Expert