If you own your house

[rainbowbaby2]

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

The answer is people often dont survive with small businesses nowadays. Small or large businesses bills are the same pro rata. You both need to give up the SE dream and get jobs. For a time I worked nights whilst my husband worked days. The money was good on nights plus it stops you spending unnecessarily. You have no time to do much except shop for necessities. Could he negotiate with his landlords for early release on the business premises?

I should think not if you own your own home!
First of all, how have you managed to buy your own home at such young ages? Equity release is off the cards because of your ages - you’d need to be much older to qualify. At some point you must have had a good income to be able to do that. It’s time for you both to start looking for employment now. You could both work part time and cover childcare between you or do what most people do and pay for childcare - have you checked how many free hours you’d be entitled to? At least if you were both employed you’d be contributing to pensions, otherwise you’re going to be screwed in retirement.

This exactly.

I am self employed and have some times of the year when I'm busier and some when I'm quieter, by nature of what I do.

I put all my income into one account and pay myself the same set amount every month which enables me to budget. I work this out as 1/12 of my previous years annual income although as I've increased my hourly rate/earnings I haven't increased my 'salary' by quite as much to help me build a buffer. I keep that buffer in my income account and aim never to touch it - so it's there in case a client pays late for example.

Once the buffer gets over a certain amount I pay myself a 'bonus' and either invest it or use it for something I need for the house or put it towards a holiday or other savings.

I'm going to be honest though - it sounds as if at least one of you needs a full time job.

My husband had a really successful business at the time but then Covid happened.
We bought it for a really decent price as it needed a lot of work.

You should be eligible for benefits once your partner business no longer trades and he starts looking for work.

@Soontobe60 equity release as such is usually 55+ but OP could look at getting a mortgage, impossible to pay back with no income though! Am interested that you think no-one who owns a home outright should get benefits - obviously pensioners get state pension if they own a home, and the home could've been paid off by life insurance from losing a partner / co-parent of kids in your 20s or whatever. I don't think it's as simple as that, but a £500k home is obviously a significant asset!

He may be able to negotiate an early end to the tenancy agreement?

But make sure you get some advice on the lease and whether he has any repairing responsibilities - there could be an extra cost there

Surely at least some of the children would get free hours?
Can you move into an employed job to give you certainty?

There is some confusion here. As you say our outgoings are x but include the business expenses, you need to seperate the business expenses from personal expenses, as the business eexpenses need to be allocated to his business ie the rent etc,

Once the business is wrapped up our outgoings will probably be about £1000.

That post knows there is no mortgage - it explicitly says "at least you don't have to worry about a mlrtgage".

I'm not sure why OP won't get benefits though. No income, no savings usually means benefit eligibility.

Obviously, they’re allocated to the business — I’m just referring to the overall amount we’re paying each month, including those business expenses

If you are worried about the self employment aspect making you ineligible for benefits then you need to make sure you get a "not painfully self employed" decision. I'm assuming that will be easy if DH is wrapping up the business.

It should neither of you has a business which is making any money, enough money or more than min wage (you’re vague on this) then the obvious solution is for one or both of you to get a job.

So, do you suggest we close the business and husband gets employment to then pay the business loan/rent etc?
it’s just such a shame it’s gone this way with it as we thought it would do well.

On top of the suggestions to get more money coming in, you also need to get a hold on what’s going out.

This can be a very simple spreadsheet or I would recommend investing time in the YNAB app. There are hundreds of short videos online that explain how to use it. You link it to bank accounts and credit cards and it pulls every transaction in so that you can see what’s going out.

Then, you are encouraged to put what’s coming IN and then assign every penny to a pot - so start with fixed bills, amounts for annual bills, amounts for one off expenses (eg daughter is starting secondary so I’ve been allocating into a ‘pot’ for those extra uniform and equipment costs for a year)

Then, every week, you review the transactions and take them out of the relevant pot. And if you’ve spent too much, you have to decide which pot you’re going to reduce to cover the shortfall - ideally having conversations like “let’s not get that xzy we were talking about as I’ve had to take money out of that pot to cover the extra school trip”

Great advice, thank you.

But he’s not getting any or much money from the business so the money has to come from somewhere. Or am I missing something?

If I was you I would get a job

Do not risk your home when you are crap with money.

What great advice 😂 why didn’t I think of that?

Bit rude for this early in the morning. Of course I read it. I’m referring to the fact that you get nothing towards your mortgage when claiming benefits. You have to wait for a full three months before even being eligible for a mortgage interest loan (repayable).

Do you mean in terms of paying everything each month? We’ve been scraping by, by selling things etc. had a couple of breaks on the rent.
Can only sell so much though.

The obvious solution is that one of you needs a stable income. Equity release is an absolutely terrible idea.

You also both need to be paying into pensions because having a house paid off won't help you when you need to retire. You can't eat it. The cost of childcare in the here and now is only one side to this. Your long term earning potential and retirement income is just as important.

Whichever one of you has the greatest earning potential in the job market needs to be aggressively looking for work.

The ages of your children are relevant. It might make sense for you to get a job then employ an au pair to do school runs while you work 9 to 5, for example.

Has he taken advice on how to wind up the business in the most efficient way? If possible he needs to move fast, stop spending time on it and refocus to a job search.

What about your business? What does that make?

Ultimately you need to set aside fixed ideas about the immediate cost of childcare and look again. It doesn't sound like you can afford to be a SAHM any more but the devil is in the detail, and there's not enough info here to give detailed advice.

If his business isn’t making money and sounds like it isn’t and costing you £3k a month rent etc - then yes time to close it and get a job. Any job