If you own your house

[rainbowbaby2]

If you owned your house outright but struggled with daily cash flow, what would you do?

Work? Move to a smaller home or downsize? Yuu could do an equity release, but that is expensive. How old are you? Dependants ? Equity release can work for some, but not usually a good idea.

I look after our 3 young children. My husband has his own business but is having to close it soon due to it not doing as well as he’d liked. Such a shame for him. We’re 30 and 37. I guess the post goes deeper than just wondering what to do with daily cash flow and wondering where to go from here! I’m self employed but it just doesn’t make sense to pay for childcare as I wouldn’t end up making any money I’d just be affording to pay nursery/childminder.

Take in a lodger. Work more. Extend the term if the mortgage. Let it out and live somewhere cheaper.

Your husband can look after the kids while you focus on and develop your business?

Depends how much you want to keep your house.
You could work evenings/ weekends to bring in extra money. I did this for years when I had 3 young children.

Are you eligible for benefits? At least you wouldn’t have to worry about not being able to pay the mortgage / mortgage interest loan etc.

This does sound more like a temporary situation while your husband looks for stable employment so I wouldn’t do anything rash. Are you frugal already?

Definitely not frugal. We both struggle with managing money. We’ve been extremely lucky to not have to worry about it until Covid hit. Since then it’s been a bit more tricky. I wish I got taught more about money when I was younger.
it’s definitely a temporary situation I think. I can’t really focus on my business as I’d earn nowhere near enough to work solo. We have no mortgage so ok in that sense but I guess it’s just working out what my husband does next and where to go from here. I wonder about equity release but agree that I’m not sure that’s a great idea.

Not eligible for any benefit’s unfortunately

I would suggest using free childcare hours for you to work.

One of you depending on skills and earning potential should be in normal payed employment so there is a steady income to buffer this issues of unpredictable self employment.

You also need a large buffer account to aid in this. I am risk adverse so would be aiming at 6 months outgoings.

She has no mortgage. Do people even read before commenting? I'm sorry but it's so annoying.

Was just going to mention free childcare.

30 hours a week now? If tumour self employment doesn’t pay then a 20-30 hour weekly job can bring in a good amount of money and give you some independence

Definitely no to equity release. Draw up a detailed budget. Look at your bank statements, cut all unnecessary expenses, including subscriptions, it all adds up. Increase your income, sell something, one of you takes an extra job. There's only one way out of this and that's to manage your finances, otherwise they will manage you.

Sorry, have I missed why your husband can’t get a job?

Completely agree. I really want to get on top of it. I’m feeling really stuck at the moment. My husbands tenancy agreement doesn’t end until next year so we’re stuck having to pay rent at his building until then, which makes things a bit complicated. Our income is completely different every week/month so it’s really hard to budget. Some days we’re taking no money at all. I’m not sure how people survive with small businesses.

He owns his own business and works 7 days a week. Our takings are completely dependant on how busy it is.

I think you need to give us more context, then we can give more focused advice.

What kind of house is it? Million pound mansion with high running costs or more modest property.

How much do you need per month to make things work?

What skills do you have?

Are there going to be debts from winding down the business?

Good news is you're probably in a much stronger position that you think you are, it just needs a plan.

You need a budget basically. As a PP has said go through your budget with a fine tooth comb. Get rid of anything you can like the subscription, go sim only for you phone, shop around for utilities etc. Food will be a big expense so look at making a meal plan and shopping around for deals. If you can’t increase your income the only you can do is decrease your outgoings. There are lots of free online resources to help with budgeting so have a look for them.

What about a budget of outgoings?

At your ages you both absolutely need some skills that you can sell either as employees or self-employed.

How old are your children?

I don’t want to be too outing.
We haven’t had it valued yet as it needs work but I’d say our house is probably worth about £500,000.

Our outgoings are £4000 a month with business loan, rent, bills etc.

With self employment, you need to put the income into a separate account and then draw a monthly consistent bank transfer over into your household account which is your yearly takings dividend by 12. You don't splurge your spending in your peak season or eat beans when the work dries up.
That allows you to budget. If you can't live on that, then you need to make a change to your employment.

Could you mind another child whilst at home? Do pickup and drop Offs for other working parents? Are your children school going age?

Is there an FE college nearby looking for student Accomodation?

Can one if you get an evening or weekend job to help bills, and the other work during the day?

can you contact the utility companies? They have schemes in place for people with cash flow problems?

Ditch the hobby business

One of you get a full time job

Cut down your spending

Why would you not be eligible for benefits for a time while both out of work? Owning one house which you live in outright shouldn't affect your entitlement, unless you've got savings over £16,000. In which case, use the savings for cash flow!

We were mortgage free in a modest 3-bed house and lived well (within reason - one second hand car, UK caravan holidays, no childcare costs, shopping at Lidl/Aldi) on around £1.5k a month - would probably need £2k a month now, which is both of you working just 20 hours a week in minimum wage jobs, or one person working full time on about £29k.

Edit: you mention rent - for the business, I am guessing? What will your actual costs be once the business is wrapped up?