If you own your house

[rainbowbaby2]

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

A YEAR?????

Woman! Get on to Entitled To immediately and sort that out and your childcare allowances etc. In less than an hour you could be feeling immensely better!

Honestly what I’d do depends on entire financial situation…it’s difficult to make an informed decision based on a singular piece of information.

Is the daily cash flow challenge permanent?

Have you done a full budget (accounting for every single penny coming in and going out)?

Can you increase income/reduce outgoings?

Any debt?

At what rate could you release some equity?

You can find information on free childcare hours here.

Government guidelines for funded childcare hours

These guidelines are for England as the provision is different in Scotland and Wales. If you're working and earning a minimum amount, your child is eligible for funded hours from 9 months. If you’re not working, you get the 15 funded hours at age three. Had you not looked into using childcare before?

Sorry to hear your husband's business isn't doing well. A lot of businesses have been decimated by covid.

Where is the money coming in from? The failing business?

He should look into local business grants but he definitely need to get a job and put all his energy into that.

Meanwhile you should look at benefits and claim universal credit.

Budgeting properly changed my life for the better, no exaggeration.

If its temporary then I'd not move as moving costs money.
I'd probably consider taking out a small mortgage, especially if you have other debts, credit cards etc as the interest rate is lower and you could considate them.
However if you feel your financial skills could do with a brush up, the best advice is to tackle that. Organisations like Step Change and Citizens Advice can advise on financial management, income maximisation and debt. The money advice Trust website us also useful.

OP I do understand how you're feeling - mentally paralysed so you can't really think clearly.

Re-read this thread and write a list of all the suggestions you think MAY be helpful, and don't dismiss anything until you've stepped back and had a good think about it. Try to think about timelines of what to work on e.g. look into benefits first as that's a comparatively quick thing to do and if you're e0ligible then something that can help a bit quickly. Look at possible child care benefits before making irrevocable decisions regarding work. Try to prioritise getting a spreadsheet up and running, as that way you can look into cutting back on things like subscriptions first thing.

Bear in mind that there isn't just one big solution to your current problems but more likely a combination of lots of little adjustments. Break your actions list down into small things then you can tick each one off as you complete it - seeing any progress will improve your mind frame and help you gain more clarity as each one is completed.

Set aside time every week or two to review the list together with your husband so progress doesn't slip, and remember to celebrate some of the wins, even if it's just allowing yourself a nice cake rather than cheap biscuits; it's amazing how much an incentive stuff like that can be.

It is very sad that neither business is profitable, but there is no shame in that. Many small businesses fail or barely break even. You need to be objective and keep emotions out of it when deciding what to do about your businesses. Equity release would be a bad idea at your stage of life, but realistically you need at least one full-time paid job between you and maybe a part-time evening job as well.

It is sad when things don't work out but you are young enough to make another dream and hopefully things will get better and things will work for you. Things are tough for a lot of people right now and many people will be in the same boat as you with a rougher sea. Having a paid off house will help. You just need to grab at any work opportunity right now until you have a clearer path forward.

My friend always says ‘no one can have it all’ and it sounds like you have with having 3 children, being a SAHM, owning your own house, having your own businesses. But something has to give, whether that’s you getting a job in the evening or even overnight. Definitely start budgeting now with the tips from other posters.

Also don't be afraid to talk to any creditors. Most would rather be happy to make payment plans with you rather than risking getting nothing at all.
Your husband should also only be paying rent until the landlord can release the building.

When I had both DDs in nursery the fees ate my entire wage. We were literally £50 a month better off with me working which probably does sound like madness but in hindsight it wasn't. My pension was getting a boost, I got a couple of promotions at work and now DDs are both in primary school and I'm in a far better position earnings wise than if I were just re-entering the job market now.

If you are struggling with daily cash flow now then DH needs a full time job and you need to look for what you can bring in...... anything extra will help. My friend works evening shifts in a local supermarket so she can work when her DH is at home with the kids. Another of my friends works on Sundays in a pub to bring in extra money without having childcare costs. Even part time minimum wage work can make a big difference to family expenses so your options really seem to be pay for some childcare or alternatively work when your DH can be at home looking after your children. Most families nowadays cannot afford the luxury of having a stay at home parent.

In terms of learning about money there are lots of free courses on YouTube that I've found really useful. Take a look at Rebel Finance School or even start watching the Martin Lewis Money Show. Anything you can do to learn about finances can help. I didn't get taught about it either and it's only in my 30s I've really got to grips with our money but it's made a massive difference.

If your DH is working 7 days a week but not making sufficient money for your basic living costs should he not ditch the business asap and get a full-time job? If he was working 5 days, he'd also be able to pick up caring for the children more making it more likely you could get a part-time job.

I mean this kindly, OP, but if you need money to live on, you may not really have a choice about staying at home with your younger children. That's practically a luxury for most people these days.

Your UC will be in the region of £1,600 a month if neither of you are earning. It's unlikely to cover all your outgoings. If you have earnings, the first £700-ish of income will be disregarded, and 55% of the rest of your joint net income will be deducted from that £1,600.

If you're working, you'll get up to 30 hours free childcare for all 3 once your youngest is 9 months, either added to your UC or via a separate scheme.

No bank will give them a mortgage while their only income is variable from a failing business.

I know someone who’s done equity release, but she has no children to leave anything to.

I’m a stuck record on this but the one thing that made a massive difference to my finances and finally motivated me to take control was the free (no catches, no upselling) YouTube videos by the Donegans. Google them. Down to earth couple who talk you through everything in a fun way. I’m
literally better off by at least six figures by following their very simple advice.

You can get government funded childcare for babies now, so I would get a job, cut all unnecessary expenses, cheaper food etc. you lose so much money in stamp duty and fees moving, it's not worth it unless you completely cannot afford your mortgage any more.

It is worth considering UC claim. It is likely just your husbands earnings will have minimum income floor applied.

Yours may do too. Depends on how long you have been going and also what claimant commitment is expected of you.

https://www.gov.uk/government/publications/universal-credit-for-the-self-employed/universal-credit-and-self-employment-quick-guide

However as you don’t have any Housing costs you will have the top level of work allowance apply to your claim. £710 each assessment period is disregarded in full. And the rest of the total is taken into account at 55%.

Consider Kings trust for self employment advice as you are under 30.

Most importantly you need to do a good budget.

MSE one here https://www.moneysavingexpert.com/banking/budget-planning/

And stop saying you are rubbish with money because that’s what you’ll believe. You are learning to budget. You are trying. You are considering your spending. That’s a starting point!

If you own your house outright then that’s a massive advantage, and selling up would be the last thing I’d do. Housing security puts you in a better position than most.

If your husband’s business does not cover its expenses then it isn’t a viable business. He needs to speak with an account about insolvency, and how debts/ committed outgoings can be managed depending on the type of business. Is there a business loan secured against the house?

Either you or your husband needs to get a full time job. He doesn’t have the option to be too proud to work for someone else. Depending on what he does, there may be scope for you to work weekends/ evenings around his working hours ( or vice versa, if you get a job and he does daytime childcare).

I get not seeing the point of working when childcare costs would use up all your earnings ( I’ve been in the same boat), but you need to look longer term as well. The children won’t be little forever, and it’s easier to pick up a career later on if you’ve kept it going, even a day a week.

Are you in the UK? What makes you think you are not entitled to any benefits?

I get that it’s hard, and people seem blunt. There isn’t a magic wand anyone can wave, and it’s hard to give specific advice when your details are vague. Only you and your husband can make decisions.

We’ve taken out top up mortgages (equity release) in the past, but looking to renegotiate your mortgage is really worthwhile. For eg if it has 17 years left, look to change to a 25 year mortgage; or explore an interest only mortgage for a couple of years, as they are still available - we have one and have always reviewed/renegotiated our mortgages every 2-3 years.

And then there is the moving utility providers - money supermarket can help you find cheaper gas, water, electricity, broadband etc. I’ve seen people argue that planning meals/budgeting the weekly shop and moving to cheaper supermarkets helps. And there is actually no reason you need to do your shop at the same place - in the past I’ve split it between sainsburys and tescos by sitting and comparing prices so that half the shop comes from each store and I buy the items from the cheaper provider for the selected items. Lactose free milk for example can be £1.95 in one and only £1.35 in the other, but the cheaper shop charges more for tinned mackerel or bread (or whatever) so I get two smaller shops.

If you both struggle with managing money then I’m going to gently suggest that self-employment isn’t for you. It’s hard enough during the good times with VAT, MTD and fluctuating income to think about. During the hard times, it’s phenomenally difficult, emotionally as well as logistically. Cash flow is a common killer of small businesses and it’s hard to get right.

And don’t put your family home on the line for a failing business.

Yes full budget audit first and foremost. Use all the tips and tricks for optimizing energy, broadband, shopping bills. Check all entitlements re child care/credits. Look at making extra cash from Vinted etc.
tighten belt around superfluous spending - holidays/days out/clubs and hobbies.

If DH business is really throwing good money after bad re the rent on the building is declaring bankruptcy an option? Is the business a separate concern? I’m not a lawyer but getting some proper advice around that might help? alternatively if he finds other ways to monetize it - sublet as storage facility? Flexible working office or workshop space to take away or share the cost?

I wouldn’t touch the house as an asset, unless it’s part of a big plan eg you could downsize from £500k to £350k as employment prospects don’t stack up (doesn’t sound like you’re there yet - once the dc are in school you’ll have more flexibility to take part time hours etc). On that though, are there jobs you could do - child minding? That fits around that?

Wind up the business. Look at declaring bankruptcy accountants will advise. That way he won't have to pay rent.

If the business is making no money and costing you, then the business needs to be liquidated.

Is it a limited company or is he a sole trader?