How to cope on Mat pay? savings vs paying off debts

[essexanon]

hey guys

im having my first baby- due July. Not planned for those that will say "well you should of planned better", I was told getting pregnant naturally was going to be extremely difficult but hey ho, here I am 9+6 after DTD once :-)

im panicking over maternity pay and how we are going to survive.
DH earns a decent wage- but not enough to cover all bills.

I earn a decent wage, but maternity pay will cut my earnings by nearly 75%.

Due to decent wages, we are entitled to no help, but unfortunately our mortgage and bills are high.

My question is, in the upcoming months, do I Pay as much off as possible on my credit cards, around £7000 or do I save as much as possible so that we can survive when im on maternity leave?

if I pay the debt, DH still cant afford all the bills but it will help.

If I pay the Debt, the shortfall on bills is still around £50 a month, this doesn't include food.

Pay the debt off and credit card the £50 shortfall. Try and get an interest free cc. Work out now how you are going to afford to return to work and pay for childcare. You might not be able to take your full entitlement.

If your credit card is interest free then save as much cash as you can.

Can you afford to pay off your credit card before July?

What are your outgoings and incomings each month at the moment?

How much would be left each month after bills are all paid (not including credit card)?

Pay off your debt then you can spend on card again once you're on leave.
You'll find you barely spend anything when you're on leave.

Transfer the debt to a 0% card so a term that will cover you, perhaps do it just before you go off on maternity and still have the salary.

Save as much as you can now, cut all unnecessary expenditure.

When you go on maternity, look at switching providers for everything.

Could you move your mortgage to interest only for 12 months?

You should earn annual leave entitlement whilst on maternity. You can use this to be scheduled out of the office but paid!
Some companies may pay some allowances too during maternity, sometimes a returners “bonus” too.

@OneEpisode you can only do that at the beginning (before baby is born) or at the end though

@GiveHerHellFromUs

Yes I can pay off the £7k debt before july...Just

What are your outgoings and incomings each month at the moment?:
£4000 between me and DH- bills are £3535. This leaves £465 for fuel, food, entertainment, clothes and any other surprises that comes up.

How much would be left each month after bills are all paid (not including credit card)?:
Once on mat leave, we would be left with a shortfall of £50 on bills. fuel, food, entertainment, clothes would still be on top. this is if I clear the £7k debt.

I paid off all my debt, but DH can cover all the bills.

If I were you I’d shuffle CC debt around to interest free and pay the min payments and save to cover living expenses on mat leave. Mat leave seems like it’s going to be forever but realistically it’s only a year.

Review your bills and see if there are any reductions possible. Reductions in mortgages, energy etc. If you think you will need anything for the baby, make a list of what you’d specifically like, and if anyone in your life asks what you’d like, tell them!
I was surprised at the generosity of colleagues and neighbours, they wanted to share the joy of the new person...
Ruthlessly return things you don’t need. Sometimes you can swap for something more suitable but maybe acknowledging the donor in colour or taste..

Also stat mat pay is about £730 pcm. Looking at your sums it sounds like you were expecting less?

@trianglebingobongo according to the calculator, id get
£637.20 Sept & Oct
£658.44 Nov and Dec
£615.96 Jan 2021
£594.72 feb 2021
£700.92 March 2021
£254.88 April 2021

Don't have the full year off if you can't afford it.

We were in a similar situation so we sat down and went through every single penny, in and out, and found out we were being stupid thinking we couldn't afford to pay off credit cards/finance and save money for when maternity pay kicked in. We split the 'spare' money we had after bills and mortgage into our debt and the rest into our baby savings pot, the majority of this was used to buy things for the baby (we managed to save A LOT by buying most things second hand). It didn't make sense to me to pay off all of our debts and then get into more debt with baby buys/getting through the month when on mat leave so luckily we were able to pay debt and save simultaneously. We've also cut down bills where we can, small unnecessary payments like streaming services etc.

Hopefully you can do as we did after looking at every single penny and debt, if not I would pay a chunk of your debt off then move the rest of the debt into a 0% credit card to deal with after you go back to work, then save every single penny you can to cover you while you're on mat leave so you can avoid getting into more debt while on mat pay

@newbingepisodes given they only have £435 to play with now, unless I've read it wrong, I don't think she can afford to go back to work? Unless grandparents are offering unpaid care

@combatbarbie yea childcare is something we need to look at down the line, my mum could do it but at the moment her health isn't great, if its not majorly improved by the time I need to go back to work then I cant afford to go back.
My job is only Full time, cant do Part time either.

Ooh, your bills are really high. Is there any scope for reducing any of them? Are you paying interest on the credit card? if so I'd think that focusing on reducing that will leave you with more money in the longer term.

Yes, as pp said your employer will probably want you to use up your annual leave whilst you are pregnant, “before the expected day of confinement”. You might prefer to have the annual leave at the end of your maternity leave which is the other option. During your maternity leave you can be paid for “keeping in touch days”. Some employers will let you break this into shorter sessions.

Sorry I only saw your breakdown of left over money after I'd replied. I would say your main priority should be cutting bills and other costs, if you have a £50 shortfall with food and other costs on top you are likely to find yourself in a lot of debt at the end of your mat leave - it might be worth giving yourself a monthly limit to put on a CC to cover your bill shortfall, food and 'extras' (giving yourself a really strict budget) to at least control what the debt will be at the end of mat leave and then work out if it's affordable for you to pay that back? I'd be worried that I couldn't control what was going on the cards during mat leave

Oh and not sure if this is helpful but we have a dedicated debit card for food shopping that we send £X to every month, another account that our bills and mortgage go out of and our own debit cards for our personal spending. It makes it super clear what we can and can't spend as we weren't great at anticipating what costs were going to come out of our account 😂🙈

Hi OP, in a slightly similar situation so trying to save / pay off as much debt as possible. I have this month cancelled Netlix, Amazon prime. I have turned to cheaper products in the shop and really reduced my outgoings. As other poster say move debt to interest free and deal with it on your return to work. I have found a spreadsheet of what I am spending / debt repayments / savings has been really helpful and lets me plan. Are you entitled to child benefit, as long as you / partner don't earn over £50k a year I think you are entitled to it.

I'd pay half of whatever you're proposing to pay off the credit card and put half in savings to use when you're off.

At least then your monthly minimum will be much lower while you're off and you'll have some disposable cash x

I agree with going through your outgoings too. We managed to reduce ours by about £300pcm on paying for things we just never got round to cancelling

Thank you all! you've all been so helpful!

I have reduced my sky bill,

overpaid on this years council tax so that 2020-2021 bill is lower, and will change it from 10 months to 12 months so it should reduce the monthly amount again.

I Have another credit card that I haven't mentioned because its interest free for another year or so, which I pay £100 a month on.

we also have a Barclays loan of £500 a month, that we used for the disasters that happened in the house. Again I haven't mentioned those as I cant really do much about those, and im not borrowing more on those etc.

I plan on taking 9 months off instead of a year, as those last 3 months is no pay at all.

If you did save before maternity leave to make maternity leave easier- how much did you save? I know its different for everyone, Im just curious xx

@essexanon I save between £250-£500 a month, depending on other outgoings/credit card usage that month etc. My OH doesn't save quite as much as he's got more CC to pay off and he will be supporting me while on mat leave