Exhausted with current situation - money issue

Totally agree with you. My salary is massively lower than yours (just over 40K) but I am a single person with no children and don't live in London so our previous lifestyles were probably similar.

I used to buy what I wanted when I wanted, go on big adventure travelling style holidays (I'm a teacher so have long summers), go to the theatre most weeks etc. I always bought everything second hand because I'm just that kind of person and love vintage stuff but that just meant I had way too much stuff, not that I saved loads of money!

But now I seem to spend exactly what I earn every month. I can't go on holiday any more, have cut way back on social activities and cannot save. I have a house deposit but there's no way I can afford a mortgage. I probably wouldn't even be given one (or not for something I'd want to live in anyway).

I'm not poor by any stretch of the imagination. It's just frustrating to have gone from earning way over average to about average without actually changing my job!
In 2014 I earned £40K and the average salary was £27K
In 2024 I earn £41K and the average salary is £37K
But most people I know are in the same boat so I'm not sure whose salaries are skyrocketing tbh!!

Totally sympathise with you. You don't have be objectively poor to feel and bemoan the difference in standard of living.

I don't understand why you need to travel out of London for work. Surely a locum consultant can earn enough doing carefully chosen locum shifts at high rates at more central hospitals? My F2+ relative earned plenty doing locum shifts, waiting until high rates were offered (not suggesiting this is morally right, but showing it is possible).

I feel you. Can you remortgage for a better deal?? Remortgage for part interest only mortgage, fix for a couple of years? Take a mortgage payment holiday, give you a breather for a couple of months (it exists, you need to ask your provider for options!).

We moved up to Midlands out of London early this year, bought a larger, but cheaper house that is properly insulated (also had a freezing victorian before). It's warm, energy bills are a little less. Nursery is 350 cheaper. Downside is that husband now commutes to work (3 hour drive) and stays in an airbnb 3 days a week. I work from home. Life is a little bit easier in some ways and harder in others, he's looking for a job more local, but this will take a while. You can find a job as a doctor anywhere. Your husband will need to find alternatives or commute, it's doable. Also, you're in zone 3, just even moving out within the m25 would be slightly cheaper and completely possible to commute.

You need a live-in Nanny.

Tell me about it, due to the increases I’m now paying £1,300 just in interest alone on my mortgage, and probably surviving on less money a month than you. Thankfully, I no longer have childcare fees otherwise
I would have probably had to leave my job.

It's not the equity; a smaller house, or one outside London, would have a lower mortgage.

go and get an airbnb in an outlying area for a week and trail how it would be commuting for your dh

that way you would have an idea whether it would work or not

This.

You could probably live mortgage free in the north. It's a no brainer.

You need to move to a cheaper house. If the increase was £1200 a month your mortgage must be vast. You don't need to be paying anything like that much. You've over stretched.

The rapid rise in COL feels unprecedented. (I don't know if it actually is but it feels like it!). I go through my day being suprised how expensive things are.

I was about to say exactly what @Parapaderapa and other PPs have said - you need to look at living elsewhere in London. With that mortgage and nursery costs you are clearly in an expensive area - we are in SE london and FT nursery is £1300, and suspect the mortgage on our 3 bed is a lot lower. Yes it’s not as nice - DH and I use to live in Zone 4 with Gail’s etc but once we had kids it was clear we had to move to a less expensive area. There’s no point in living somewhere trendy if you can’t afford to enjoy it.

OP, some great suggestions from other posters are popping up, had you looked into a) a live in aupair, this is usually much cheaper than FT nursery and you should still be able to access the 15 free hours and have the au pair wrap the rest of the days/holidays?
b) same as above but use a childminder to wrap instead (this will be slightly more expensive).

I don’t think you need to move out of London. For £650k you could get a 3 bed in Highams Park or nearby which has a direct link into the city. It’s a few stops from the Victoria Line for anywhere else in London.

I am guessing you or your husband (or both) earn over £100k a year for you to not get any government help. You could easily afford a place like this, have enough room for your family and have a sensible commute. You could even afford zone 3, somewhere like Blackhorse Road, Tottenham, or Seven Sisters (the latter two will be a bit more) and you’re looking at a 10 minute journey into the city.

Your current mortgage seems unsustainable, with your income you could easily afford a decent 3-bed in London (people afford this on a lot less than your salary), you just seem to be overstretching yourself with your current mortgage.

You do have options OP, which is a lot more than other people - if you are on maternity leave you can take your older child out of nursery for the duration. You can move out of zone 3 - there are plenty of areas that would be much cheaper but still commutable.

I know you say you have been stung by the COL crisis, but that has been going on for a couple of years now, and I know people who have put off having a second child for this very reason - but I agree it is not fair that you have two wages coming in, but can't afford to do anything fun. Have you thought about getting a bank loan to be paid over over 5-7 years to cover the nursery fees? We did this and although we paid interest of around 8%, it made life so much more doable at the time and was worth it.

It sounds really tough, the silver lining is that nursery fees are an investment for a few years for you to be able to keep your job. Just make sure you send your children to state school. If you think about it that way, you just have two more years to fund with two kids in nursery. Hopefully, in two years time your eldest can start school and your outgoings will drop (perhaps your salaries will increase at the same time).

I am not advocating getting into debt but if you know it is just 2-4 more tough years in terms of nursery cost, you could get a small personal loan around £10k spread over the next 5 years and just take the pressure off a bit, as long as you commit to sending your children to state school. Make a calculation of what your budget will look like once one and then two children are attending school. You will have some childcare / holiday camp expenses even then but I am sure it won't amount to two sets of nursery fees.

Two things are causing the bulk of your money problems:

1. Childcare. These are the tough years. If you can just get through the nursery years things get so much better. Consider a shared nanny or child minder for when you would otherwise have nursery fees for both.
2. Your house. OP, your house is a disaster and it is making your life miserable. You can't enjoy it because it's so cold. Heating it would cost so much that it's not worth your having an au pair or lodger. Get rid of the house! Sell it and buy one that is energy efficient!! You can then have a lodger now to help with costs, and an au pair later to help you manage school runs when the kids are at school.

For what it's worth, I totally agree with you about the downsides of moving out of London when you are tied there for work - living nearby cuts down commuting costs and time hugely which is essential with young children.

There's your answer then, OP, just reduce your earnings to £65k between the two of you and you'll manage fine as the government will throw money at you. Seems simple!

Also does DH HAVE to stay working in the city? As a doctor surely you can go anywhere and the family could have a whole lifestyle change! How great is that??

Well firstly you are benefiting from two child benefit payments, tax free childcare and the free hours that OP isn’t entitled to. Perhaps consider how much easier government subsidies make your outgoings before being snarky about the OP making bad choices.
Never mind the fact that fixing because your mortgage was due for renewal just before the huge overnight change in interest rates was luck not good planning.

And the excuse of trains being unreliable or too costly is also nonsense. I commuted for 10 years and I can count on one hand the number of times I was properly late or couldn't get in (I got in half hour early so 'being late' was just never an issue) ditto getting home - one day I had to get a taxi when all trains were cancelled but that was 7/7 when all trains were grounds so pretty exceptional circumstances.

Costly, yes but £6/7k a year is NOTHING when you consider the difference in COL/house prices and how much more money you could have in your pocket.

Have you done the figures on moving out of London? Leicester to London is an hour by train and you could probably get the same size house there for £1000-£1300/m.

@80smonster yes we are both educated and yes we earn well in senior public sector roles.

But we accept reality. We are both from working class backgrounds with no family money or hope of an inheritance. It is what it is. If we want a big house we will, like many colleague and friends, have to leave London. We chose differently, mainly cos Mr Monkey was born here and doesn't feel he should have to leave. No point in whining about it and on the plus side our "modest home" doesn't cost a second mortgage to heat.

Now if I were in charge I would actively enact deflationary measures on the housing market. But i'm not.

Yes lots of city workers live round here (45 mins down train line into waterloo). Houses (and nursery probably) far cheaper!

@Beemum2 yes I've taken two maternity leaves (both SMP only) and have had two children in nursery at the same time.

We earn about £65-70k combined. I work part-time and one day is at a weekend to cut down on childcare fees. Our mortgage hasn't increased because we fixed for five years when it was 1.7%. But it's low to start with as we didn't overstretch, so we can manage the increase.

We just don't live in an extremely high COL place 🤷‍♀️

Is there any particular area outside London where you tend to work more? Might it make sense to move out in that direction? It sounds like if you had a consistent area of work you could reduce commuting costs and improve your own quality of life by ensuring you have short commutes, which in turn would make things like nursery drop-offs easier.