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7. CUTTING MY SPENDING

One of the case studies included in Tony Palmer's book is that of a young couple who, deep into difficulty, finally sit down together, face the facts and reach their first positive decision which is to rearrange their lifestyles in order to cut child-minding costs (he, at home, will take on more of the commitment). They reach several more decisions.

• They will look for a cheaper mortgage provider or seek a cheaper mortgage from their existing provider. They will get this, although it will be an interest-only arrangement.
  
  
• They will approach their bank to see if there could be a similar arrangement for their personal loan. There isn't.
  
  
• They will dispose of one of their two cars in spite of the inconvenience.
  
  
• They will have a water meter installed.
  
  
• They will see if changing their gas and electricity suppliers can help them. They will also install better roof insulation themselves and they'll turn off unwanted lights. The TV won't be left on standby.
  
  
• They consider reducing or suspending their life insurance. They don't do this, because of the baby.
  
  
• They'll shop at a cheaper supermarket and cut out prepared meals. What they DON'T do is ask themselves whether the cheaper supermarket prices really are always cheaper than those at small independent shops.
  
  
• They'll cut holiday costs by going self-catering in the UK rather than to hotels abroad. You might wonder whether this is actually true...
  
  
• They'll get rid of one of their two mobile phones and shop around for deals.

Still there's a gap between their income and their expenditure. She can't work any more hours because of the baby, but he has skills which he deploys in a new evening job which brings him income that he can declare without the risk of being taxed. Also they check out adverts about Children's Tax Credit and Working Tax Credit and find they can get tax credits for the baby.

So finally, they find that their situation becomes easier. They haven't allowed themselves to panic and they've talked through things with each other as well as with their lenders. Also she has had secure if unglamorous employment throughout the difficult period. And way back at the start, when they first married and settled down, they deliberately didn't choose the biggest house and mortgage they could afford.

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