We very soon won’t be able to afford our life

[WhatsHoppening]

We have a high mortgage, high childcare costs which thankfully will reduce but still wraparound. With our mortgage term ending in December and the increase in gas and electric, food costs, petrol and the increase in mortgage when we remortgage on a higher rate we will not be able to afford to live. Our outgoings will outstrip our income. We are both professionals, I work part time (4 days) and there’s no hope of DC getting into after school club on my day off (and realistically after childcare I bring in less than £100 pcm per extra day worked after childcare). I feel sick. I keep getting told by my parents and grandparents we will get through it but how?! My grandparents were post war so it was hard but my gran could be a SAHM for 3 kids on a my grandads teacher salary. This is a pipe dream for us now and DH earns more than a NQ teacher. Just a rant- lots have it much worse. But I’m scared for the future.

No help to you now, OP, but this is the reason why mortgage lenders need to stop lending at 4x or 5x salary. Payments that you think you can manage fine will change over time as will other circumstances and if there’s no slack in the budget it becomes impossible.

With the long holidays in academia, you will have time away from lecturing, I guess - over the summer, especially. I'm imagining that you don't have childcare in August, but do the minding yourself. If you were thinking of using childcare to give you the free time to study on your masters, then I guess that will need to be abandoned as an idea, and it might be best to suspend your masters for a while. I suppose that any tutoring you could do could be in the evening, online, when the children are sleeping or on Saturdays. Tutorfair is a platform tutors use and charge quite high hourly rates.

This sounds a bit crass, but if your parents are comfortably off, could they help you with some expenses now, on the understanding that you won't get as much money left to you, later on? I think it might be worth having a discussion with them about how you really are going to have to think of something from outside the box.

But when the only houses in your area are £400k and you earn £80k between you, what is the alternative? Rent is as expensive as a mortgage.
Its ridiculous that we are in this situation.
Greedy second home owners and landlords snapping up all available cheaper housing to rent (my cousin owns 40 houses) have hugely contributed to this mess.

This sounds exactly like our family, and I was a child in the 1970s. Even down to the computer paper!

My dad got a weekend job in addition to his main job. And my mum went to her cleaning job when my dad got back from work in the evenings. I'm not sure how they did it.

Sounds like a big mortgage is eating your income.

Could you switch it to interest only for a few years?

I have a friend with young children who has been struggling financially. She has started selling all the decent clothes her children have grown out of rather than worn out, as well as some of her own, and she has been gobsmacked at how much she has made. Is this an option for you if you don't do that already?

When we were in our 30s, both professionals paying 2 x childcare (no subsidies in those days), we couldn’t afford life. We rented out a bedroom to trainee teachers for 3 years, and the kids shared a room. We were still skint but it helped us bridge the most difficult years.

It depends though doesn’t it on the type of house OP bought, we don’t know if they stretched themselves and purchased a 4 bed detached when really a 3 bed semi would have been perfectly fine for a couple with 2 small children, we don’t know the full details of why they are in this position.

Agreed. Back in the early 90s DH and I were in exactly the position many young families are now, outgoings exceeding incomings and no obvious way to solve it. We resolved it by DH changing job and us all relocating to a cheaper part of the country (luckily DCs were pre-school age). In the long run it was a very good move for us as a family but it was stressful at the time.
These are hard times for many people but we will all manage just as we did before

How are you paying for the master’s? They’re not cheap! If you’re self funding, then defer for a few years.

Could you get a lodger?

I feel your pain OP. Both me and my DH work FT. I’m sure we will be ok but it will mean cutting things back to just essentials for the next 15 months until DS qualifies for the funded 30 hours. It’s sad when you both work but are serious looking at cutting out all extras such as DCs swimming lessons.

Thank goodness my mortgage fix doesn’t finish until July 2024!

Its scary to think that many people won’t even be able to afford essentials there is nothing to cut from the budget.

I'm a bit fucked. I'm a single income household. My eldest son lives with me, but he's autistic and isn't able to work right now. I'm also autistic with adhd, and I'm thinking I'm going to have to get a second job. This will fucking kill me. I need quiet time for my mental health. I don't know what else to do.

Cut right back on everything. Cheapest brands from Tesco or Lidl. Batch cook.

Do either of you have gym memberships?

Are you paying more than you need to on insurance/broadband/phone contracts etc? I managed to halve mine by threatening to switch. Also found out I was paying way too much for my bank account so am not suing them.

No car journeys unless essential.

Good luck. I have no idea what to do when the next lot of energy increases come in. I put my heating on for about 3 days last winter (I have a log burner) but now have a mouldy house from drying washing etc. (Can't afford a tumble dryer).

@WhatsHoppening So sorry you are feeling this too. It’s utter shite isn’t it. I am a single parent with 3 dc and I earn a pretty decent wage, and until the last 6 months my finances were tickety boo. But a combination of being expected to be in the office more = increase in fuel use as well as cost that I wasn’t expecting as we were told we would only ever need to be in 2 days a week for the rest of eternity, the energy price hike and general cost of living expenses I think I will have to cancel the modest camping holiday I booked for us back in Oct 2021 because I’ve only paid the deposit so far and I literally have to choose between paying the balance this week or us eating. So it’s a no brainier. They will be absolutely devastated.

I know a holiday is a nice to have, so the fact I can cancel it is a good thing because not everyone would have even got to have a holiday- I just don’t understand how I can go from being ok in feb to being utterly, utterly, fucked now. I had a small amount of savings but the car needed a major repair which ate virtually all of that and then just general increase in EVERYTHING has gobbled up the rest. The kids are eating well but I am living on their leftovers/ random stews I have put together from whatever is on the fridge and I have sewn up their school trousers so often in the hope they will make it to the end of term that I think they are probably all thread and no fabric 😂

BUT - I’m selling my car as a fair bit of money is tied up in it and getting something smaller and cheaper to run. That will make a difference. And I know that with careful planning and canny budgeting our food bill will come down further, I can be even thriftier. I have to be. It’s just not healthiest option. I am exhausted with life responsibilities and massively lacking in time so there is only one of me so that every little additional thing feels like a huge weight, and the thought of tightening my belt so much further is like running faster just to stand still.

Sorry for the outpouring of misery. I know I am hardly the worst off either. Just no idea how I’ve got here.

We so, so very nearly bought a flat in London in 1989. Someone was looking out for us, because although we had the finance in place through my job, we decided not to. We would probably still have been paying it off.

People are just going to have to get second jobs/cheaper childcare/move jobs/downsize/cut back on expenses. It's the stuff of nightmares. With three children, two professional jobs, both graduates, both public sector workers, we struggled through the childcare years and that was without a squeeze on the cost of living!

I think everyone’s in similar boats just now. I hate that you still get the nippy Nancys of the day commenting on posts like this when someone is literally laying out their financial situation and saying they’re struggling 😞

I have a ‘side hustle’ plus working part time but it’s got to the stage I’m just working all day every day, even at the weekends there is just no break. It’s kind of something I can make more at if I want to so of course I’m not able to turn down money but I’m burning the candle at both ends and still at the bottom of my overdraft and need to go for food shopping tomorrow to feed us and our baby. I feel like sometimes the harder you’re willing to work the worse deal you actually end up with 🤦🏼‍♀️ It’s shit

General observations follow...

Buying a mortgage on the expectation rates would never go up again, and so that means you can afford to leverage your capital that much more, is a universally dumb thing to do. Why comfortably afford a mortgage for a smaller house, when I can technically get a much bigger one, so long as nothing changes for the worse? Excellent.

I can afford to spend £500/month on a brand new car on PCP. I choose not to, because a) cars are a dumb extravagance I wish we didn't need, b) overleveraging yourself is the height of fiscal irresponsibility.

There are too many people on the threshold of becoming destitute because the market is shit and they get paid a pittance. Then there are the PMC sorts who get a decent wage and decide they have to live above their means because lol, consumerism and image. The Joneses get to have two holidays abroad a year and a new car every other year and eating out weekly, why not us?

Man, so many people got totally befuddled by our rotten economic model.

Your best bet is your DH doing online tutoring a couple evenings a week.

I would approach your lender now. We were always with nationwide and just picked the deal we wanted off the website, no underwriting and you can do it months in advance.

Right, so your DH is a surveyor, not a teacher? How far into his career is he? (I.e. are his earnings likely to rise dramatically in the next few years, or is he already quite established?)

Is your Masters actually likely to result in more earnings potential for you, or are you doing it for your own edification? How much longer do you have? (I.e. is it a part-time degree that takes years and years and years to complete, or do you just have a year left?)

I think you need to start looking at this as 'how I can cope in the short term' vs 'how will I cope in the medium term?'

If you're eating into savings temporarily, but you know your earning potential will increase, it's not a comfortable place to be, but it's not a disaster. Similarly, if you switch to a cheaper mortgage in the short term (but you're adding on extra years etc), it's not ideal, but when things get better, you can remortgage and reduce the length of the mortgage/start making capital repayments again.

I think I'd try to stick out the Masters if financially viable, because it will be hard for you to pick it up again later down the line. However, if needs must... you may need to consider putting it on ice and taking another job in the time you were spending on studying.

In summary... it's all just a bit shit, isn't it?

‘My parents kindly gave us some money a few years ago to help with our deposit so I couldn’t ask for more.’

Yes, you can ask for help - money, childcare, passing stuff on - & they can only say no.

They are v wealthy to be fair but often talk about the high interest rates in the past and say we will get through it (I’m sure they’re right).’

I agree with your parents, you will come through this challenging time. It’s good that they make supportive comments and you can still ask them for some practical help.

You have parents who may be able to lend you some money. You are very fortunate that you can ask them, most people don’t have this security. Get past your pride, look the gift horses in the eyes, smile sweetly & ask.

Yes the same for our family. Dad would work overtime, so 6.5 sometimes 7 days a week. Dreadful home made clothes, no after school activities that were paid for. Holidays were staying with my aunt who lived by the sea in South wales.

When you remortgage can you go for a much longer term? This drops your monthly payments, but most lenders let you overlay up to 10% per year without penalty, so you can, when funds allow, still pay some extra off.