OP are you saying its costing you £50 a month in OD fees/interest for £4 worth of loans?
So £600 a year interest for a £4k loan? Thats effectively 15% if you even calculate as simple interest, depending exactly how the fees ate are calculated that can go up further as the debt gets smaller.
Can you check the fee structure.
So immediately you should maybe consider a loan to clear them. Eg borrow £4k for a debt consolidation and immediately use it to clear ODs
This sounds like its in effect high cost debt but with no real plan to pay it off.
Although thats going to impact your cashflow as well.
I come back to your biggest issue is short term cashflow and thats hard to really get out of. But the best approach remains to increase income if you can. and specifically use it to clear the highest debts down as quickly as possible.
Of everything you have said my biggest worry is whats the real plan for your wife to return to work. What are you going to do with the child, are grandparents going to help etc
As most people who have been though the early years nursery system will tell you it costs a fortune. Its worse than another mortgage for most people.
You need to look at the Lidl thing again. I shop a little in the discounters, they are not necessarily cheaper. Some things much, some things better quality for the same price, some things cost more. For most people if they move from one of the large supermarkets to a discounter they will see a drop. But there are other ways to still reduce more. Eg when did you last see a buy one get one free in Lidl/Aldi. These are often loss leaders, and can bring decent brands below the cost of own label, they want to get you hooked on theirs, but if you can be strong you just use them and move on.
What do you feel about coupons, there are actually lots of sites to get them and that track them, and depending how busy you are it can be a bit of a laugh to try to beat someone else to find the money off. So what can you buy for literally a few pence.
I get emailed every so often vouchers for one of the tuna brands from years ago, they end up costing less than all the own brand tunas. But occasionally they will send me one, and when I go to tesco I find its also 3 for 2, or BOGOF etc. It can get silly cheap at that point. There are people that do this all the time, its called extreme couponing, you can often get things nigh on free if you can be bothered to do it.
Do you have a garden? Are you green fingered at all. Its actually quiet easy to grow some stuff, its also quite fun as well. Plus you get yourself some really fresh veg/fruit and you can use that as the base for some of the baby food.
some things are really so easy to grow, raddish for example. Potatoes can be grown in bags (its actually easier) just plant a spud in half a bag of peat, it should sprout, once the top grows back tip the bag out. Is there any potential in this area for you?