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.

@essexanon I saved about £2000 because I didn't even think about it til the last 4 months .

To be honest though SMP covered my share of the bills (mainly utilities) DP took over paying for the food shop etc.
I had about £100 spare each month.

Then some months are 5 weeks instead of 4 so always a nice surprise when you get an extra £100

Are you sure on your maternity pay figures? For statutory maternity it is 90% of your wages for 6 weeks and then about £595 a month (£148-odd a week). You could have a better paid one from work, but you may be better paid at the beginning at 90% than you are thinking.

Your bills are huge. Are there any more we might be able to help you cut down?

I managed to save about £3500 while pregnant to use up on mat leave. So far haven't had to dip into it (been off since end of Aug) but that is mostly thanks to a v generous Xmas bonus. The end of Jan pay is the first one at stat pay, not looking forward to it! I made a spreadsheet to work out how much each of us need to contribute to joint costs to be left with equal amounts for personal spending. That seemed fairest.

We had been paying council tax over 10 months so have Feb and March free, the timing worked out well as they are two of the lowest paid months if I remember correctly.

I saved about 5k cash before going on mat leave but I didn’t go back either.
That is very high number for outgoings OP!
I would suggest getting rid of sky altogether!
What are the other outgoings??

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.

This is what I'm planning to do - pay off half my debt before the baby's due and put the rest into savings. I'd love to put everything towards my debt but unfortunately it's unrealistic, as I'll need some money to cover me when I'm off.

@CornishMaid1 yes I get 90% in july and Aug. im more concerned for September onwards, the calculator took july and aug into account.

@nevertwerknaked yes unfortunately they are, the below are the bills remaining after I pay off the £7k debt.

mortgage £968
sky (tv, phone and broadband) Is £77 (this was reduced from £120)
gas and elec £77
water £40
council tax £161
interest free CC £100
house insurance £50
my mobile £10
his mobile £12
bank fee £18 (non nego as it incudes monthly benefits that I use that outweigh the £18pm)
my car insurance £37
DH car insurance £40
paypal credit payments £155
Barclays loan £500
DH credit card £400
DH gym £10
nephew bus fair-college £40
nephew dinner money-college £80
total- £2775

You must have enormous debts!

I would get rid of sky so far as possible for starters.

Could you talk to a debt advice charity? You have over £1000 a month on debts even after paying off £7000? That seems unsustainable.

Also, is there a reason you pay for your nephew?

I suggest Stepchange would be a good place to start.

If I were you I would get rid of sky and gym...sorry
What are PayPal credit payments??
Also I would rethink paying for your nephew when you clearly cannot afford it OP...sorry.

Think this must be the OP from a post the other day where she has custody of her nephew.

Nephew could take packed lunches to college. That covered your £50 shortfall immediately.

@NeverTwerkNaked yes I have legal custody of him however i am not entitled to any help with him financially.

TBH I have never looked at them as we manage ok at the moment, because we are both working FT and it will be a temporary dip in finances until I go back to work. is it still worth doing?

If you can't afford to go back to work due to childcare issues your employer will make you pay back all your maternity pay minus SMP (unless they're a very nice generous company). Check with your HR Department.

At my last Company all the money had to be paid back if I resigned within the first six months of returning too.

If you think you won't be returning to work, don't spend the Maternity pay - stick it in a separate bank account so you have it to give back when they ask.

It's really helpful to share your outgoings like this. You seem to be paying off a lot of debt. I'm a bit confused about the amounts though. On page 1 you said your bills were £3535 exc food and clothing etc. but on page 2 the amounts add up to £2775. What's accounting for the £800 ish difference? Is that what you plan to use to pay off the 7k debt? Which I guess is in addition to the paypal credit and credit cards?

I'm sure you've thoughts about this but do you think you can reduce expenditure on nephew? My kids only have 1 dinner at school a week as it's too pricey to do every day.

Is the minimum payment on your interest free card £100? Or are you overpaying to clear down the balance?

Does your Barclays loan have a very high interest rate? I know you don’t want to do it, but if the loan has a good interest rate it might be worth consolidating all the credit cards and PayPal credit into that.

Whatever you do, do not take out any more credit than you already have. Servicing current debts is eating up so much of your income and it will only get worse if you don’t draw a line in the sand with it.

Re nephews lunches, could he have a bought lunch at college one day a week perhaps? On a Friday? And packed lunch the rest of the time?

Can you consolidate the loans and credit cards?

@Pilot12 I didn't know this, I will look into it.

@73Sunglasslover yes that's what would be used to clear the debt. Nephew is at college so cant take food from home to re-heat etc. its only £4 a day and he struggles to eat lunch on that, he does take snacks and fruits in his bag. but hes 17 and 6ft4, I cant really cut his dinner money down anymore. he cant even afford a mcdonalds meal with £4 a day so somedays uses £2 in the college canteen on lunch and goes mcdonalds once a week. x

@queenofpain the interest free CC is £85 a month, I round it up to £100. the Interest on the Barclays loan is higher than the paypal credit unfortunately.

xx

Does your nephew have a job? I’m assuming he needs more than just food and bus fare.
Look into consolidating all your debts and see how much you can pay off.

@queenofpain he also does take a lunch from home like a sandwich, fruit and a snack but its not enough to tie him over all day. hes a giant 17yr

@charles11 he is looking for a weekend job at the moment, his food at home, clothes and any extras for him like going out with friends, I pay for out of my spare cash atm.

I know nephew will probably feel nose out of joint somewhat, but could you encourage him to take a very part time job - my brother's wife's nephew is enterprising and has a car washing round he created for himself while at school as he was too young to get an employed job, does about a dozen cars a week on a regular basis, and charges £10 a car plus extra for the interiors, and his sister works on a Sunday only doing the lunchtime to early evening shift mostly food serving and collecting and washing glasses, and although min wage she earns a fortune in tips (popular foodie pub), but being just part of one day it doesn't impact on her Uni work.

Sky - Ditch. We were paying £30 for super-fast internet and phoneline. Netflix is £6.

Home insurance - £50 also seems high, that's £600 per year. I would call and see if it can be reduced

£900 if just on two credit cards. Call and see if they can extend the terms slightly to reduce monthly payments for that year.

And yes, if you don't go back to work after, you have to pay back maternity allowence over the basic government allowance.