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.

Your child benefit claim for your nephew can be back dated but only three months.

I was going to suggest claiming that too.

Can either you (complicated I know) or DH take on extra paid work?

Have you looked into kinship care? There's a charity that might be able to advise and I think there might be a kinship carers allowance?

Get rid of sky.
Doesn’t sound like you can afford to run two cars
Can your partner look at getting a new better paid job?

You've clearly been living beyond your means for some time now. That's a lot of debt and a high level of debt repayments every month. You need to review your budget, all your outgoings and see what you can cut down - Sky is not an essential! And prioritise paying off your debts as quickly as possible. It's not particularly sensible to save or pay council tax in advance if you're paying interest on debts. You say the interest free credit cards "don't count" but they do count because of the monthly payments!

Check out money saving expert for a wealth of tips on budgeting and clearing debts.

Definitely apply for CB for your nephew. Also consider that you might be entitled to the child element of UC for him. If you're not entitled to UC now you might be entitled after the baby is born because your income will go down (SMP instead of full salary) and your entitlement will go up (you'll get the child element for baby). It's worth looking into just in case.

Also I don't understand why you say you "can't afford" to go back to work after maternity leave, if you look into the cost of childcare and the help available with childcare costs (via UC if eligible and tax free childcare if not) it's likely you will be better off working.

@AnotherEmma they won't be entitled to UC judging by their income, even with OP being on SMP

Could you look at whether your mortgage provider allows for a payment holiday? Some companies allow this depending on your mortgage terms.

GiveHer
I had missed the part where OP said they are earning £4K/month between them
Assuming the partner earns at least half of that, no they won't be entitled to UC.

So how much debt is there altogether? I would seriously consider consolidating them all onto one interest free card if you can and keep transferring the balance to another deal until its cleared. If its not doable because of the amount, have you equity in the mortgage to remortgage?

Cut up all your cards.... Get rid of PayPal credit!

Don’t forget your interest free will not be forever. When does the offer run out?

Thanks all.

The 2 cars isn’t really an issue and we can’t afford to get rid of any. We both work, and public transport is expensive and extremely unreliable. My 10 min drive to work would take over an hour and 2 buses, and that’s if they are on time and not cancelled (they always are cancelled).
Bus pass is also £5 a day which is more than my fuel.
Other half starts work at 4am so can’t get rid of his.
None of our cars are financed and we only spend £10-15pw on fuel.

TBH he’s a lorry driver, and doesn’t have earn a bad wage so a higher paid job isn’t really in question either, although he is going to do as much overtime as legally poss to save some £ towards mat leave fund.

We get no help- UC or TC for childcare. We both earn over £30k each.

Mortgage holiday- nationwide Dont do anymore. Our mortgage is only 2 years old, think they use to do it before.

Cards are shredded, not enough equity yet in our home as we only bought 2.5 years ago.

Although anything that isn’t cleared before mat leave, I will transfer to interest free where I can. Obv not the ones already on interest free.

Thanks everyone for your help and suggestions, you’ve been really helpful. Xx

@SciFiScream There’s no financial help available for kinship carers unless they have been formally assessed as foster carers by the local authority. That won’t be an option now that the nephew is 17, unfortunately.

I found doing a couple of KIT days in the months that my Mat pay was lower helped a lot (if you are able to leave baby - I EBF but expressed and she took a bottle). Also, I got a fair amount of tax back in the first couple of months after the 90% dropped off which helped too. I've never really had a properly reduced salary although we budgeted as if I was going to so anything extra was a bonus.

Mine was the full 18 weeks maternity leave in the late 1990's. It was unheard of to take longer.

I understand today that leave is up to a year. Can you opt to return earlier if it's possible?

I think funding a year off on the government maternity allowance would be a challenge for most.

If your nephew is legally residing with you you should claim child benefit. It will be £82 a month for him right now. Apply tomorrow morning as it's not back dated.

You'll get this until he leaves further education. I got this until my eldest was 19.
If all it does is help pay his lunches it will help you.

Once the baby is born you'll get it increased. You have to apply.

It works out to £33 a week for both children. Or £20 a week for one. This isn't means tested as such but you have to pay it back if either you or your husband earn over 50K. Together you get to earn £100K. So from your figures you'll keep it.

This means you'll just about cover your bills.

Your home insurance sounds expensive.
My home and contents insurance for 75K contents and £250 K rebuild came in at £145 a year. Shop around if you can.

The other thing I found cheaper was to add my husband to my car insurance and vice versa. Apparently the more drivers you add to your policy the cheaper it gets providing they have no penalties.

I remember being surprised at how little I actually needed for my first baby. Having spent a fortune. Now a days with Facebook local selling you can pick things up very reasonably.

Huge congratulations by the way. You'll work this out and you got pregnant!

Just wanted to say I'm in the same boat and literally not sleeping for worrying over it.

@Idolovechocolategimmygimmy we seem to have done an ok job with helping OP it. If you want to see if anyone has any helpful suggestions for you I'm sure OP won't mind you hijacking her thread.

Don't lose sleep over money, especially when you're pregnant.

@orchidsarebeautiful thanks soo much! Thanks all really helpful.
I plan on going back after 9 months if I can sort out reasonable cost childcare.
Yes the child benefit I am on now.
I will defo shop around for a better home insurance deal.

Me and DH are already on each others policies. I don’t think the insurance is too high though tbh.

And yes I am going to try not to buy every gadget and device for baby, will get 2nd hand where I can.

@Idolovechocolategimmygimmy Please do not stress, I did until I vented on here and now I feel better. It’s a worrying time anyway being pregnant let alone pregnant and worrying about money.
I think with some careful planning and preparation, we can do it. Hopefully you can too.
@GiveHerHellFromUs is right, everyone here as been so helpful, and I’m sure we’re not the only mammas in debt. Feel free to use this thread too to ask questions and get some advice and help.

Xxx

Pay off your debt and switch remaining to a low/interest free card before baby arrives, speak to your mortgage company about reducing your payments for 6 months. But also you need to try and cut costs, go through everything and see what you can reduce

Have you heard of Turn2us, it’s a really helpful charity that help look at what benefits you may be able to claim, support with debt advice etc.
Stepchange are also really useful.

Due to your mortgage you really don’t want to risk falling behind with credit card payments as you wouldn’t want your credit file affecting any remortgage rates etc.

I am in a similar situation:
I work full time my partner currently doesn’t work due to a long term Illness he gets Personal independence payment for £300 4 weekly which ends in January 2021.
We rent but are hoping to move to a bigger house before baby born.
I have some credit card debt about £1000 which is currently on a 0% until 2021.
I’m lucky that I get 12 weeks full pay then 6 weeks half pay before moving to statutory maternity pay.
My intention is to move the card to another 0% rate that will get me to 2022 so I can maintain minimum payments only.
I’m buying big items second hand and will be relying on friends and family gifts for clothes etc.
We have just applied for Universal credit. I’m not expecting we will be successful in getting anything this early but I want to know what I can do when I do go on to half pay etc.
I have accepted that unless my partner starts working before baby born or in the maternity time that I will be taking a shorter maternity leave. I will likely do the 18 weeks with pay from work then another 10 weeks on SMP before going back and my partner will be a stay at home dad.

I have cut down some spending by cancelling subscriptions, planning my food shop instead of just buying what I fancy that week.
I am taking lunch to work instead of buying it this saves me about £30 a week at moment.
I’ve also started selling things that have been sat around not doing anything useful for a while.

I would speak with a debt charity about income maximisation and how to repay debt quickly.