Planning for the future

Budgeting and debt

Stretching your joint finances to cover the cost of two homes is going to be tricky. Both of you are likely to end up (at first) poorer than you were. If you are still at the stage where you are considering your options it will be helpful to think through the money side of things.

Do you know how much you spend, and on what?

Most people only have a hazy idea. Use our family Budget form to help you work out where it all goes. You may need to keep all your receipts for a week or so to check what you are spending.

• Council tax will be reduced by 25% if you are the sole adult in the household. You will need to contact your council tax office for the reduction.
• Check what benefits you are entitled to. Use the benefit adviser on Directgov. If you have children, you may be able to claim working tax credit and/or child tax credit. (See 'Links to other websites' for the 'Benefit adviser' service from Directgov and HMRC's 'Do I qualify for tax credits?').
• Work out how much child maintenance you might be paid or be expected to pay using the calculator on the Child Support Agency website (See 'Links to other websites').
• Work out where you could cut your costs. You might:-
  Rearrange some of your debts.
  Spend less on some things.
  Find extra ways of earning money.
• If your debts are a problem, ask at your local advice agency about debt advice. They can suggest ways of managing your finances.

Where are you going to live?

Have you thought about where you are going to live? You might want to stay put, but it may not be feasible? Finding out about something doesn’t commit you to it, but it does enable you to make a proper, informed decision. If you live in a home you own, you need to find out the following things:

• You can ask an estate agent to tell you how much your home might sell for if you put it on the market. Remember that you will need to take off the costs of the sale and the costs of moving to work out what you would be left with.
• Check how much is outstanding on your mortgage.
• If you have an endowment policy, find out what it is worth, both if you cash it in now, and what it will pay when it matures. Sometimes you will get more money if you sell an endowment policy, rather than cash it in.
• Check out your local property market to work out how much another home would cost.
• Consider what is available to rent as well.
• Investigate the possibility of getting a new mortgage. How much would you be able to borrow by yourself and what would it cost you?
  Until you have all this information you can’t really say what your options are, and what is going to be best for you.

If you rent your home, your options may be a bit more limited. You may need to find out about the cost of renting somewhere else, and to find out what council housing or housing association accommodation is available in your area.

Your future career

If you have only been working part-time or not working up till now you may need to think about getting back into the job market. Now is a good time to think about what you want to do in your career.

• Think what you will want to do in five years time. Do you need some new skills?
• Do you want to change your career path?
• What training or qualifications will you need?
  If you need to plan for this, or budget for it, now is the time to do it. There is plenty of advice available. See links to other websites. You could also ask at your local college, or university. There are courses for people who are returning to education, even if you left school with hardly any qualifications.

June 2011