Wealth Check: Part-time work could be the right move for full-time mum
Saturday 09 May 2009
Kate Tym, 43, is a freelance poet and full-time mother. She writes poems for weddings and is looking for ways to boost her business and her income.
Before having children, Kate was a commissioning editor earning £30,000 a year. "Ten years on, I've lost most of my contacts in publishing, but with three children and only my husband's salary, it's often hard making ends meet. I want to know how to bring more money in, stop some going out and make sure our mortgage is appropriate."
Salary: Earns approximately £3,000 a year. Her husband, Will, earns £18,000 as a self-employed plasterer
Monthly outgoings: £1,150 on bills, food and essentials, £390 on children's activities, £170 on life insurance and pensions, £530 on mortgage
Savings: Between £500 – £1,000 in a savings account and £1,000 in a current account for mortgage payments and unforeseen outgoings
Debts: The Tyms owe about £900 in bank overdrafts
Advice this week is given by financial advisors Darius McDermott of Chelsea Financial Services, Jason Witcombe of Evolve Financial Planning and David Brunning of Brunning Newman Houghton Ltd...
All three experts agree Kate must boost her income in order to achieve financial security for her family. Jason Witcombe says Kate should look into part-time employed work rather than being completely self-employed. He suggests she offer her editing or proof-reading services, but says even employment not linked to her preferred vocation will "really help out the finances and give Kate the confidence to build up her income from freelance ventures".
David Brunning says Kate must utilise the internet to market her business. "Kate should invest in specialist advice to ensure her website is top of search engine listings. She should check what her competition charges and think about working with a wedding service company," Brunning says.
He adds that Kate should write for funerals and memorials, too, as most have readings. "Weddings peak in the summer, but funerals in the winter, thus spreading work throughout the year," Brunning says.
Darius McDermott says: "The Tyms may want to consider a role change as Kate used to earn a decent salary commissioning – almost twice their current income."
The Tyms have a £100,000 mortgage with Northern Rock on their £150,000 flat. It's arranged on a 60 per cent repayment and 40 per cent interest basis, but Kate would like to change this to 100 per cent repayment. Brunning says Kate should contact Northern Rock to see what their terms would be for this.
He adds that a fixed-rate mortgage could be a good idea: "Looking at the Tyms' expenditure and Kate's variable income, the ability to budget their mortgage payments for the next two to three years may be more important than getting the lowest possible variable rate."
Witcombe says Kate should check what their rate of interest will revert to in September, when due for renewal. "We're in a strange situation at the moment where many standard variable rates are actually lower than initial discounted or fixed rates." He warns that Northern Rock's standard variable rate is "not nearly as generous as some other lenders".
McDermott says in September the Tyms will have the opportunity to look for a better rate on their mortgage, and advises the best rates being offered are Alliance and Leicester two-year fixed (3.19 per cent) and a five-year fixed from Ipswich BS (4.25 per cent).
"For the five-year mortgage, Ipswich is demanding mortgagees have 40 per cent of equity in the property – the Tyms (33 per cent equity) must find the extra equity," McDermott says.
Kate currently hopes to have a pension which will allow her a yearly income of £50,000 and hopes she and husband Will can retire at the age of 60.
McDermott says although the Tyms are putting money towards their pension, this is ambitious considering their income and savings. Witcombe advises they put more towards saving: "As Will is self-employed, the Tyms must make sure that, if all else fails, they keep sufficient cash to pay his tax bills."
Brunning advises the Tyms build up three months' bills in a cash ISA, and look for more cost-effective household utility packages. "It's a fiercely competitive market and they could make savings by packaging their mobile phones, landline phones and the internet with one provider." He adds the Tyms should seek advice on their longer-term savings plans. "Once Kate has brought her income up, she and Will should review their expenditure and long-term savings to see what they can realistically set aside.
"It's a compromise between spending now and enjoying a comfortable retirement... everything's a compromise?"
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
Shareholders can hold a company to account
Derek Pain: Dividends ease the suffering in a moribund stock market
Questions of Cash: Payment woes with Barclays overshadow Cornish holiday
The opera singer, the broadband delay and why customers aren’t divas if they expect a good service
Bank-beating exchange rates on your international payments
- 1 Revolutionary lost Caravaggio painting 'Mary Magdalen in Ecstasy' identified
- 2 McKamey Manor: This 'extreme' haunted house is the stuff of nightmares
- 3 Russell Brand says he will 'probably' give up acting to focus on his revolution
- 4 Watch what happened when food critics were unknowingly served McDonald's
- 5 David Beckham's Haig Club whisky is exactly what’s wrong with the Highlands
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Support for EU membership 'at highest level since 1991' with most Brits wanting to stay 'in'
Thousands with degenerative conditions classified as 'fit to work in future' – despite no possibility of improvement
Tony Blair 'says Ed Miliband will lose 2015 general election'
Putin: The US is to blame for almost all the world's major conflicts
iJobs Money & Business
£60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...
£30000 - £35000 Per Annum plus excellent benefits: Clearwater People Solutions...
£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...
£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...
Day In a Page
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village