Working Families - Flexible Working Guide
Working Families - Flexible Working Guide
This is obviously one of the most important factors for many people when it comes to making decisions about flexible working. It can help to think creatively about money to see whether and where there might be room to make changes to your working arrangements. Look at the case studies to see how clever planning has allowed parents to spend more time with their children without losing money.
The two ways of improving your financial situation (short of winning the lottery) are by reducing your outgoings and/or increasing the money coming in. Go through our money checklist below.
Reducing your outgoings
The best way to start is to write a money diary for a month writing down every single penny you spend at the time you spend it (if you have a partner - get them to do it too). Include direct debits and standing orders on the day they go out. This might sound rather boring but the results will probably surprise and enlighten you! The diary will help you understand where your money is going and be a starting point for you to cut back where you can.
Essentials
Look at what you spend on essential things like rent, mortgage, electricity, phone, insurance etc. Look at it again - is everything in there really essential? For example - do you really need a car? or two cars? A mobile phone and a landline? Satellite TV? Consider whether you could remove any items from this list altogether or whether they should be moved into non- essentials. Next, look at how you could reduce the other essential items. Useful sources of ideas are, other parents, the internet (websites like moneysavingexpert.com) or books such as "Your Money or your Life " by Alvin Hall (borrow it from the library to save money!) Here are a few:
Reduce travel costs e.g. by cycling or walking to work/car - sharing/asking to work from home
Check out cheaper gas, electricity, telephone, internet etc. (commercial websites like www.uswitch.com and www.saveonyourbills.co.uk can help you to compare prices)
Reduce your childcare bill by compressing your days and/or looking into swaps with other parents or getting your employer to introduce childcare vouchers so you can save some tax and National Insurance on your payments (see our childcare factsheet for further information on vouchers). You may be entitled to help with child care costs through working tax credit – you can’t claim this for the same childcare as vouchers, so get advice if you are not sure which to claim.
Remortgage if you are a homeowner - look at websites such as www.moneyfacts.co.uk or www.moneysupermarket.com to compare rates
If you pay rent, check whether you can get any housing benefit – see below
If you are liable for council tax (whether you rent or own your home), check whether you can get any council tax benefit – see below
Check your insurance policies are appropriate for your needs and ring around or search on the web for other quotes
Non-essentials
This is very personal and can be a big source of arguments for couples, so tread carefully when discussing this. A monthly manicure may be a total extravagance to one person but feel very essential to another. An item of expenditure may also mean more than meets the eye. Staying with the manicure - for a mother at home with young children it may be a vital bit of "me " time and the only time in the month she does something just for herself. For this reason she may be very reluctant to give it up. The emotional importance of what you spend should be considered - however there are bound to be things in your diary that you could cut back on or find cheaper ways of doing. Here is a selection from various websites (just type money saving tips into a search engine to get more - many libraries offer free or cheap internet access).
Read the newspapers and gossip pages online e.g. at www.mirror.co.uk instead of buying papers and magazines
Buy reduced food on its last day on sale and freeze it
Avoid impulse purchases - if you really want something, wait a week before you buy it to check if you still really want it
Do a car boot sale to get rid of all your unwanted stuff or sell it on e-bay
Join the library, and a toy library if you have one, for free books and cheap hire of toys
Consider modelling at the hairdressers to get reduced rate cuts and colouring
Cut back on take aways and buying lunches at work
Use real nappies instead of disposables
Make your own baby food and freeze it
Measure all your non-essential spending against the time it could buy you and decide which you want the most. For example - you may find that you are spending £5 a day on sandwiches and coffee at work. That's about £100 a month - £1200 a year. You also get a take out every Friday which costs £20. That's over £1000 a year. You may like doing both of these things but would you prefer to reduce your working days by one day a week? If you earn around £15,000 for a five day week your could drop down to four days for the money saved by taking sandwiches and giving up your weekly take out! Worth thinking about and will give you more of a feeling of choice about your situation than you may have at the moment.
Increasing money coming in
Investigate which benefits you could claim - for example, child benefit, tax credits (you can still get some money even with a joint income of up to £58, 000), Sure Start maternity grant, housing benefit and council tax benefit. Click here for our benefits factsheet. Bear in mind that if you or your partner change your hours it can affect how much working tax credit you get – one of you must be working at least 16 hours to be entitled to working tax credit – and it could affect whether your tax credit includes any help with childcare costs. Also, any change in income could affect your tax credits, housing benefit and council tax benefit (plus your tax credits count as income for housing benefit and council tax benefit, so an increase in tax credits reduces these benefits). If you work under 16 hours and your partner works under 24 hours (or the other way around if your partner is claiming) you could be entitled to income-based jobseeker’s allowance or income support instead of working tax credit
Consider changing your hours so your partner can also work if they don't at the moment
Seek better paid work - either where you are already or elsewhere
Look into training to improve your options at work
Maximise your tax position - e.g. if you have a partner, make sure you use both your tax free allowances on income by both working part time instead of one full time
Go to your local Children’s Information Service or ring Working Families and ask them to work out different scenarios and the tax credit consequences. e.g. if I earn this much and pay out this much in childcare, how much will I get? If you are a single parent, you might also be able to get this kind of advice from a New Deal for Lone Parents adviser at the Jobcentre.
Click here for examples of money saving and stress reducing flexible working arrangements
ACTION POINTS
Buy a notepad and start your money diary!
Work through the money checklist and list the ways you could increase the money coming in and reduce your outgoings
e.g. - ring HMRC Tax Credit Helpline to check my tax credits 0845 300 3900
Ring Uswitch - 0845 601 2856 to see if I could be getting my utility bills any cheaper
Look at mortgage comparison website to check if I should remortgage
Ring round for insurance quotes for car and house.
Using the case studies to give you ideas - think about different ways of organising time and money to see how much each will cost you.
Remember - when thinking about this area that you may work for many reasons other than simply money. Make a note of other reasons to work or not work/ work less e.g. you value the stimulation of work, getting out of the house improves your self esteem, taking time out would damage your long term career prospects, you enjoy the social contact etc. OR you value the stimulation of being at home with your children, you don't feel happy leaving your children with people you don't know, you feel the children are better off being looked after by you - all of the time/most of the time/ the majority of the time etc. Whatever your feelings are, it is important to factor these points in to your decision as well as just the financial ones.
Make a note of any longer term costs of taking a break from work or reducing your hours such as the effect on your pension, the effect on your career prospects etc