Cost of living - why does it not stop going up!

[Flopsy145]

I earn a good salary, £32k, my partner is self employed and on a similar wage, we live in a 3 bed house that we bought with shared ownership in a village in Oxfordshire. Our household bills alone are £1600. We then have £550 nursery payments, he has £250 child support, we both have £250 loan payments from a few years ago (car, debt consolidation etc).
So for a household monthly income of about £4k, already our outgoings are £2900. That's before our own bills of phone, insurance etc, basically leaves us £500 combined to spend for the month on food and life. I just don't know what to do, our daughter only just started nursery and I'm already using my credit card. Our bills just keep going up and our monthly left over is just not enough and I'm getting so stressed. I do my shopping in Lidl, I only buy clothes for me (barely ever) and daughter on eBay. I'm really trying and I just am on the verge of tears constantly.
I don't really know what Mumsnet can do I just needed somewhere to vent, but any advice greatly appreciated!!

I can't easily get another higher paid job as my daughter's nursery is subsidised by my organisation so I could only move within my organisation which isn't easy. My boyfriend works as much as he can, weekends, late days!

Surely things have to come down soon!!

I think there’s a huge amount of profiteering and commercial opportunism at every level personally. We’ll need to wait a little while before profits are reported to see where most of our money has gone but it’s been going on too long. At the same time companies have stripped back services as far as they can, eg… when was the last time you phone a call centre that wasn’t “experiencing very high call volumes”???

It's not coming down for a good long while. It'll keep going up for a bit.

I think personally, if you have enough to get through the month without getting into debt you're in a fortunate position. It's grim

Don’t forget also that inflation brings in more money for the government through taxes too so they’re not going to stop it anytime soon.

I’m sorry you’re going through this though, the only suggestion I have is that whenever my budget doesn’t stretch to something then I try to take eg 10% off all my costs, rather than cutting out one big thing. It soon adds up.

Also, consider asking for a pay rise, we aren’t good enough at doing that but employers want their employees to survive this. Likewise could your partner start to increase his rates in line with cost of living too?

Your main problem is that almost 20% of your income is going on loans and child maintenance. £750 per month is a huge amount of outgoings for £4000 income before you even get to the usual outgoings. Obviously you need to keep paying the child maintenance but is there anything you can do about the loans? those long have you got left on them?

@Overthebow about 2/3 years left but what I'll need to do is probably refinance and extend the term for lower monthly cost. I currently work 5 days in 4 but dropping to 4 with a 20% increase in salary so my monthly income doesn't change, when my daughter is 3 (2 years) I'll then go full time and put her in that extra day as she'll have the 30 hours free childcare. So in 2 years my income will go up quite substantially which is why I'm wary of increasing my loan term as that will end about the time all this happens and I'll be £700 a month better off.

@SonicBroom I am moving to a role where I'll get a 20% increase for 4 days a week which will then go to to full time in 2 years so I'll be on about £38k hopefully. My partner essentially works for someone else as a subcontractor and over the next few months will be getting an increase in day rate which will help

Cut down massively on gas and electric consumption.
Go vegetarian wherever possible for food bill. Helps enormously but take b12 and iron alongside.

It’s scary isn’t it.

A lot of people will have taken loans in the past for stuff like cars, home improvements. I know people who have taken loans for very expensive holidays and are paying them off. They’ll have made the calculations about repayments not expecting bills and food, etc to rocket like this.

My car loan finishes in 5 months which thankfully will mean an extra £150 a month I can put towards energy bills.

But I agree a lot of this is about profiteering and I think it’s time gas and electricity we’re renationalised. It feels so wrong that a small number people are making a lot of profit when people can’t heat their homes.

Just a thought, are you using tax free childcare to pay for nursery? You probably are, but wanted to mention because it'd turn £550 into £440.

This might help mentally: when your 30 hour funding kicks in (term after DC is 3) your childcare costs will go down a lot. So you just eed to balance the books and stay debt free just until then, and then things should be easier.

Your loans are a huge problem. If you didn’t have those you’d have another £500/month disposable income and would presumably be fine. Not trying to be mean and you can’t change the past but I’m always a bit shocked by how many people flippantly include hundreds of pounds of debt repayments in their list of standard monthly outgoings. When did that become so normal? We need to do better with financial education so young people stop growing up and seeing significant debt as normal and ok. It ruins peoples lives for years and years after the spending stops.

It’s become slowly more normal over the last 15 years I’d say @TiddleyWink, with such low interest rates - we are in our 30s so have never known any different either, we bought a cheap house with more than affordable repayments on a low rate - but it needed work, so a 25k loan over 7 years was a fab idea at the time for us, there’s 3 years left on that loan and now we are feeling a massive pinch. We’ve both had payrises but they’ve been swallowed by energy and fuel and food increases, nmw has just jumped and so our nursery bill has also followed suit, these rises at such a level were not factored into our budgeting 4 years ago.

Low interest rates have encouraged borrowing, it was not like this when I was young and getting credit was quite frowned on. Plus you are in a situation where your partner has children already so this will be something you can’t leave out of calculations until they are an adult, is that many more years?

The cheapest way to live is without loans ( I’m so mean I won’t pay interest for anything) Can you pay off the loans quicker by paying an extra 10-15% a month? ( yes, I know this might sound mad but you need a long term plan here, not short time)
Don’t waste food, ever. Chop left over veg and freeze for soup.
Go veggie as much as possible.
EBay clothing — brilliant, you’re helping the environment too. Sell anything you don’t use.
You sound good at knowing your outgoings and can budget accordingly.
If you have any groceries budget left over, convert it into larder food —- tins, dried food, coffee, tea bags — stuff that will go up in price.
Make sure you’re claiming everything you can towards child care costs.
And don’t beat yourself up, you’re working hard and doing the best you can.

Put your credit card away, only use it in absolute emergencies.
Live within your means. Make it a goal to live in that £500, and see if you can save a bit of it too.
Make soups, go out for walks - not days out that cost. Make a coffee at home, don’t buy one.

@CharSiu

Low interest rates have encouraged borrowing, it was not like this when I was young and getting credit was quite frowned on. Plus you are in a situation where your partner has children already so this will be something you can’t leave out of calculations until they are an adult, is that many more years?

My family used credit in the 90s to buy lots of household items they needed. It’s not that a recent thing tbh. They remortgaged too to access extra money. If it was ground upon they didn’t care tbh.

Op look at all your outgoings, can you reduce bills like gas and electric, council tax over twelve months, though it sounds like you are already doing what you can to budget. The pay rise will come in handy I’m sure. Like previous posters have said its the kind and child maintenance which is the biggest chunk and can’t really be cut. Life’s tough atm

You are doing the right thing with your career plans , you just need to hang on in there over these expensive few years.

Don’t listen to anyone who suggests you cut down on your working hours to save on childcare - that’s a disastrous idea. If anyone has to cut down on work it needs to be your BF. But ideally neither of you.

Have you been onto Money Saving Expert to see where you can cut down on outgoings ? £20 here and there on bills soon adds up. Are you getting the best deal for house / car insurance , phones, broadband, SKy etc ?

However if you are actaully on the verge of tears all the time then I that’s NOT normal and you need to see your GP in case it’s something else.

And I’m sorry to mention this , but do be careful with your contraception. Very VERY careful. Because if you are struggling with the two ( or three?) kids you both have now , another will push you over the edge.

Sorry to be so blunt.

Thanks everyone!
@BocolateChiscuits I am on the tax free childcare scheme, I got confused at first though and paid £550 in and now I'm all out of balance so need to pay slightly less this month to even out.
@Xpologog

@TiddleyWink
I agree the loans are a huge problem, in my early 20s I was not sensible, I had a £1500 overdraft that I was at the bottom of (I don't have that now thankfully), I spent a lot of money at uni on shit, I flippantly got a car on finance and then got a loan with better interest to pay that and some credit card debt off and didn't even consider what my outgoings would go up to over the next 5 years. And now I'm much more sensible but still paying the price with that loan. I'll speak to the bank and see what they can offer me!
@Xpologog great advice thank you, I sell a lot on eBay and now that I only shop on there often buying things with tags or hardly worn for a minimal price I cannot face shopping on the high street as it's just expensive in comparison! I need to get better at food waste though and rather than let things go off chop and freeze, and meal plan. We have a veggie meal a couple of nights a week, have cut down hugely on takeways (now only once or twice a month as we never go out to eat so that's our date night) and I shop at the local butcher's who do meat packs which is £20 for a week's worth of meet.

Just got to get through the next few years and hope the government doesn't fuck the country even more!!

Sympathy to everyone who is struggling.

Sadly the financial pain will likely continue for many years, the result of the government basically shutting down the economy in 2020. The cost of furlough alone was enormous, and our children not yet born will be paying for that into their adult lives.

The fact that the cost of the covid response was going to beggar people should have been discussed more. Some commentators did talk about it but not enough.

If you cut down the meat even more and stop take aways completely then that’ll make a big difference. So make the pack of meat last a month. That might save you £50/month with the take aways. You could then stop using credit card or pay off your loan more quickly. There is no way I’d be getting take aways if I was struggling and having to use a credit card.

I second Martin Lewis, I saved so much through his tips and it really is just reading an email!
Switch banks to get £100+
Yellow sticker shopping, I get 10p fruit and veg nightly from my local convenience store and seem to be the only one which is strange as I live in a council estate.
Charge devices at work (you earn it)
Private work? I type up court reports for example
Cut down on anything you can. We only use the oven twice a week. In summer it's easy.
Wash clothes less. This was a big one, working out what was really dirty. Especially kids clothes and jeans.
Charity shops for clothes, find the ones in the less hipster areas which are cheaper.
Childcare swaps? I have my friends kids on some Saturday nights so she has mine in the school holidays.
Cut the credit cards up or hide them.
You will survive this! Your income will change massively after the loans are paid off and the nursery bills are gone.
This too shall pass

Is your credit card a 0% one? If not you should switch to one and transfer any balances

As both you and your partner have loans/debt I would look at a strategy - either paying off the highest interest loan first so that you are not 'wasting' money on interest or 'snowball' your loans by paying off the smallest value one as quick as you can and then immediately putting the money towards the next biggest etc.

From what you've said you are already cutting down on your spending (I'd still reduce the takeaways to be honest) but I think you need to look at your debt again. Depending on how much debt you are in you can get loan rates of less than 3% just now on loan amounts of £7-£15k which maybe better than your existing? Do NOT take on more debt though, I'm not suggesting getting more debt just consolidating if that might work. And your own bank doesn't always have the best rate so shop around.

But I definitely think you need to write all your debt down, along with interest rate, outstanding amount and how long to be paid off and focus on a strategy of how to tackle them. There's some great ideas on Money Saving Expert and lots of personal stories of how people have done it. It's hard when you feel you are sinking but you are aware of your finances now so that's a great start.

Switch your meals and have veggie meals as default and meat a couple of times a week. Cut out the takeaways until you have paid off the loans and pay off extra using the saved money. The cost of living is going to continue to rise for a while so you need to get the loans down as fast as you can.

£20 a week on meat alone is a lot.
Reduce your meat and bulk out with kidney beans, chickpeas, tinned lentils.

And no take aways. If you’re struggling you do without treats.

I agree about cutting out the takeaways and making the meat last longer (or perhaps supermarket meat would be cheaper?). The cost of living situation is probably going to get worse in the short term so you may need to be prepared for an even tighter budget. Don’t buy clothes for yourself, just for your child.