If you own your house

[rainbowbaby2]

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

He'd probably get job seekers allowance for 6m if he wound up the business. If it's a Ltd co, he can put it into administration and the debts will be written off if the co can't pay them. Then he gets JSA and then a job.

If he's a sole trader, it's not so easy.

This is crucial.
Is his business a limited company or is he a sole trader?

Ah, I got the impression that the business was failing so he was folding it up and closing things down but they'll still have the rent to pay on his office space for a bit. I think he should cut his losses, look for an alternative Mon-Fri office job with a salary around £35-40k to start with.

There are two main benefits to consider

Contributions-based JSA - based on his NI contributions, not means tested. He probably won't be entitled to this as I believe formerly self-employed people are excluded, but always worth checking your individual circumstances.

Universal Credit (may be non-contributory JSA in your area).
To get this, which will be paid to you as a couple, firstly they look at all the income and savings that both of you have as it is means tested, and secondly he has to be available for full-time work immediately and actively looking every day. He has to give evidence of jobs applied for and steps taken to find work.
So he can't claim this if he is still "working to close his business". You need to declare that the business is already closed, ceased trading, and any minor admin relating to winding it up will be done in his own time.

Edited to add: if it was a limited company and he was employed by the company, that is technically not self-employment, so he may get contribution-based JSA. You need to know if it is a limited company or not.

Take one step at a time.

Assets: House - £400,000, You could sell and move to a smaller place. Buying, selling and moving costs money and is not an instant solution. Nor is it a long term plan because even if you moved to a £200,000 house, it cost you £20,000 to move, the £180,000 you have left might last you 5 years - then what is the next question to ask.. You could put the money into a rental property and that could become your income... but net rental yields are between 2 and 4% so this is not going to guarantee a large income.

Business: I am assuming if this is not doing well, then it is unlikely that it could be sold. This is where your husband and his accountant / business advisor - or you, if he has no one else, need to sit down and work out where the business is, what can be done.

It clearly returned enough money to support your family and to enable you to pay off a house so it is not nothing. Even if it is contributing towards the load at this stage, it is bringing in some money.. however, at some point, it might be necessary to wrap it up - that won't be an easy decision, but if your husband could get a job elsewhere and the premises could be rented out, then this might be what needs to happen.

One of you can work and one of you can look after the children, this does not need to be one person all the time - share the load and see where your efforts are best spent.

Consider allowing the business to stop, defaulting on the loan and on the rent This is a huge decision and would prevent your husband from being a company director, getting future loans, etc.. so I am not saying this is a good idea - but it is one you should consider.

Then see how much money your husband can earn elsewhere. I also know that it is not easy and that the headline unemployment rate is masked by part time and zero hours contracts.

But number one priority is getting a handle on how much money is going out... I am sure you could stem that quickly!

Then work out if your husband is spending more money keeping his business open than he is bringing in.... and run some scenarios, it is hard to step back and work out what to do differently, but this is a very important step. It might also bring the realisation that in fact, there is some merit in the business but some changes need to be made.

You have been successful as a family before, you can do this again.. do it together.. I am sure your husband is suffering under the weight of this, share the load.

If the business is dead in the water your DH needs to extract himself from it with minimal financial impact on his personal finances. His liabilities will depend on whether he's a sole trader or a limited company, but either way, he should seek advice from his accountant and/or Debt advice | Free Debt Advice and Support | Business Debtline.

It could well be that, whether or not he can end the property lease before next year (always worth a try) he stops spending any significant time on it and look for employment. You should also look for employment either just to double your chances of someone in the household having a job (with no mortgage, even full time NMW will go a long way to paying your basic expenses) or with a plan for sharing childcare to maximise the amount you can earn as a couple. Also apply for UC as even without housing costs, with 3 DC, and little/no income, you should be entitled to something. Plus, the way the system works is that you will be significantly better off if you meet earnings thresholds and you'll be able to claim for some of the cost of childcare, so it's not a given that 'you can't afford to work'.

If your DH is a sole trader and he's left with personal debts eg if he's a sole trader, he might need a formal debt solution, but he'd need professional advice from a debt charity (not a commercial provider) after sight of his whole circumstances.

As your outgoings are so low without the business then all it surely needs is once the business is closed, one of you gets a job. This isn't rocket science

If the business is not profitable, he needs to divest himself of the liabilities as cheaply as he can manage. If a
lease is the highest expense, most landlords prefer a replacement tenant to someone who defaults and an empty storefront.

In the meantime he gets a paying job with a reliable paycheck. There is no shame in working for someone else.

I would start by going through all the outgoings closely and seeing if there are any obvious cuts to be made.

Subscriptions, anything repeated - for example you don't need netflix and now tv and disney plus and amazon prime etc every month.

Look at where money is going that seems shocking - such as huge amounts on top up shops, quick snacks whilst out etc. These can be cut without really impacting life.

Then look at how to increase money coming in. Easier said than done, I realise!

Have you looked at The rebel finance school. Its a FREE course and would be amazing if it could help you.

Surely the answer is the husband gets a proper job working for an employer

We took in a lodger and it helped massively.

Look into downsizing, or if the house allowed/was suitable, investigate getting a lodger or Airbnb.

Is your husband’s business a limited company?

If it is, has he personally guaranteed the lease, loan, or anything?

If the answer to the first is yes and the second is no, you have no personal responsibility to pay the business’ debts (nor does he).

.

Hi OP. I'm in a similar position in terms of cash flow at the moment. I have been on Chat GPT this morning asking for ideas on work I can do at home. It's given some great suggestions for things you can do which are totally flexible in terms of how many hours you work and when - as long as you have a computer you can apply for the role. A lot of it is AI stuff.

I wish you all the best.

Get yourself on you tube & start educating yourself about finances - Rebel Finance school is a good one (free) also James Shack, Meaningful money etc. I found them invaluable & opened my eyes on budgeting, saving etc

Get lodger/s. Or do Air b&b.

You need to look at the actual figures to work out what is the best thing to do.

I think your husband needs to run the business evenings and weekends until the tenancy is up and get a full time job. Same for you if you aren't bringing in a stable wage, get something fixed part time hours and use free childcare

If you are having to use income meant for the normal daily living to pay the business then the business is failing. It needs wrapping up or reducing hours on the business and take a full time job running the business in then evenings or weekends. You also need to work as well even if only part time

I know you don’t want to be too outing but could you do the job your husband does- partime/around the kids?
If you have to pay for the rent of the building, you could at least bring in some income to make that work. He could then look at a full time job now to get ahead of things.

Either the business needs to start doing better or one or both of you need a job or another income stream.

We’ve been in this position ignore the rude comments of people on here not helpful.
maybe early termination of lease is the best option. If you go on entitled to website u can see how much in benefits are available to you. There is a limit on the savings part. It’s not forever we ended up downsizing to a different area.

Money saving expert on their forum have a supportive thread to help you get out of debt or go & see CAB this is what they do best, take all your paperwork with you.