help - bit skinto!

[nvj]

hello... worrying about what to do re money as i'm sure a lot of us are at this time of year/current economic climate..

we are in debt by the tune of about £7k (mainly credit cards at 0% at the moment) and we have a mortgage but we have equity of about 70-80k but probably couldn't sell the house now if we wanted to...

i'm a student and will be graduating next year so should have a job come Sept and be earning a decent (ish) wage (prob about 20k). my husband earns a good wage (around 40k) but we rely heavily on his overtime which has been drastically reduced recently and now i don't know what to do.
we can't really survive on his basic wage as all our bills come to more than his basic salary (we got our mortgage on a joint salary as i was earning 35k but took 4 yrs off to stay at home with the kids) so do we go further into debt or do we cash in our endowment of about 8k (which has another 17 years to run but we are using as a saving scheme - will not pay the mortgage off as we've changed to repayment mortgage) or ask parents if they can help out (not sure if they can/will??)
just really worried about all we pay out for, all my student bursary goes on childcare and petrol.

any advice or opinions really appreciated!

When you say graduating next year, do you mean in June or next academic year? If it is a question of a few months, I would tighten belt as much as possibly can and tough it out having a very few lean months and binning any luxuries (and by luxuries, anything that isn't completely essential). Rather than pay for childcare, could family members take over a day or so a week? Do you have to drive into college every time or can some lectures be downloaded on an intranet? If your husband is no longer working overtime, can he take over some childcare? Does your degree give you qualifications that anyone might want tutoring in (languages? maths?)?

If it is likely to be longer than six months, I would consider endowment but, be aware, surrender value will be worth a lot less than your fund value.

thanks for your reply lalalonglegs...

no family helping out with childcare is not an option unfortunately and we have an au pair which is probably the cheapest option anyway.
I am graduating in July 2009 so will be ready for job in Sept (teaching).

thanks for your advice, i think we wil have to majorly tighten belts and i might approach my mum or my nan and ask them for some help. I'm so annoyed cos we were debt free and even had savings before i stopped working but i wouldn't change my time at home with my kids for anything...

Does your college offer childcare vouchers or advice on claiming extra benefits such as tax credits? At least teaching is pretty recession-proof so you have a good chance of earning immediately. Good luck.

There's some great advice on cutting back on household costs here:

Money Saving Expert forums

People there can prob advise on the mortgage situation.

Ask if you change the term of your mortgage, Nationwide will do up to 40years but it depends on age. That will reduce the monthly payments and you can reduce the term once you are earning again - this isn't remortgaging and should be free to do. you could also ask about going interest only for a while or even taking a payment holiday. Many lenders will let you take up to 12 months off from paying your mortgage, when we did we were still able to pay into the mortgage without penalty but it was classed as going to the overpayment reserve.

The fact that you have equity & it is for a limited period should all go in your favour.

you wont get any tax credits because of your husbands earnings, we only get £40 a month and my husband only earns £17k! pathetic really.
I am also a full time student on a bursary, your mortgage must be huge if you cannot manage on a £40k income plus bursary? The credit card thing is a nightmare, is tere anyway you can add the credit cards to your mortgage? may reduce monthy repayments and you can always pay more off your mortgage when you arr working full time?