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.

@Liebig we don’t have a car on finance and have a fairly modest home. House prices are just sky high compared to salaries. We were encouraged to stretch ourselves at the time (I wish we hadn’t listened but we were young and trusted the advice). We don’t have an extravagant life really.
Re: the masters I could step back but work are funding it and I’m nervous that funding wouldn’t materialise again if I stopped now. It’s part time and I do it in the evenings and weekends and it would allow me to jump to the next stage (senior lecturer) so I hope it’s an investment. I could ask to step back for a while though.

You need to hustle!

Get a corporate part time job if you can, or a full time one with flexible hours. Yes, you may like this job but you can also like another one that pays better. Don’t be attached to a job you like if you’re struggling financially. You’re only hurting yourself.

If you like the area move to a flat locally if your parents can help if downsizing is a better option. You could always sell your place and rent if you have to.

If you teach you could look into l&d careers. Needs must and all that. I took a job that was far from ideal during the pandemic 50+hours work (after years of nice corporate jobs) due to desperation, and in the end it gave me new skills. Lost my job again, and was really struggling financially - cut everything & my partner had to buy my toiletries. I kept applying for jobs everyday, and on weekends until I found something new 6 months later.

Have also been looking at other ways to make some money and cutting back even though I’m in a good job now that pays much better.

I will never be a manager, am not the brightest, and have ADHD which is really challenging for work but I manage. I’ve mostly had admin jobs, so my salary will never be amazing. If I were smarter and you, I’d leverage your smarts to be in a better role.

I feel for you, but luckily you have your parents. And you always have options!

To pay for what?! That money would be the child's and if the parents have any sense be put aside for the future. You can't make your kids earn money for you, plus even for children that's a tough judgemental world to throw them into full of rejection.

@Diverseopinions this isn't the point of the thread at all.but just to say that your comment about long holidays in academia doesn't ring true at all anymore. I was a university lecturer for years, just left last year. I had 30 days annual leave for the year. The courses I taught on (nursing and other health sciences) ran throughout the summer. The old notion of academics having long summers is a distant memory.

That will lead to an inflationary spiral. Where will the money come from to pay the wage increase? By increasing the cost of goods and services.

@WhatsHoppening keep going with your Master's if you can. My university slashed any and all professional development budget during the pandemic and never restarted as it needed to recover lost income. It is great you are being funded to progress so keep at it if you can as the university sector is quite shaky at the moment financially.

Can you go full time or 4.5 days compressed into 4?

Could you post your budget and posters might be able to help spot if anything seems unusually high etc. lots of people struggle during the years of nursery fees so that can be very normal. Ours have gone up hugely.

I’d also look at remortgaging. We are choosing to pay a ERC to break our fix and locked in at a low deal as we wanted the certainty. We’ve also extended the term to give us more flexibility.

Yes that is my worry! They also (theoretically…) give me some hours towards studying this- if I were to stop I’d be given other roles/workload and I highly doubt these would be removed in future for me to study.
I wish we hadn’t been so naive I wish we hadn’t stretched ourselves. We bought our house pre kids and stupidly thought we would muddle through and it would be fine. It was until now to be fair!

@Metabigot The answer to your question was in my original text.

And with wages kept low already that is leading us into a recession, so by your logic you’d have to lower wages further 🤷‍♀️

I don't think you understand how it works.

Companies can't just 'cut profits '.

Ever heard of shareholders?

OP I know it's not easy but if things get too tough ask your dp's for help.
I have told both our adult dc to tell me if they get a bill they can't afford.
I would hate to think my dc were struggling and didn't ask.

So what ARE you willing to do to manage the situation?

Your actual lifestyle doesn’t sound extravagant, but working 4 days is a luxury that you can’t afford. The “only £100” a month extra is exactly that-extra, and you need it. I know childcare can be a nightmare but you need to look further into that. The masters is a luxury you can’t afford right now, you need to park it for now to free up time for other potential work.

If you can’t do much about your outgoings you need to look at changing your income, and ‘life admin’ will have to stretch or shrink to take up the time available.

I also lived through the 15% rates of the 90s and we all did what we had to, with extra jobs etc

I’d start looking at fixing a mortgage rate as soon as possible. Get it locked in now.

No she would bring in under £100 a month by working the 5th day every week. She works 4 days currently. Unless you are saying she should work 7 days a week which would still only bring her in between £200-£300 extra a month.

I'm not sure where you get the extra £400-500 a month

Do you have a mortgage broker?

If not - that is 100% the way to go. They get paid to remortgage people on better deals.

If they can't lower the interest rate, they possibly could lengthen the term. If you're current term is 20yrs at 1.5% they might be able to find you a 1.7% but at 30yrs - which will keep your monthly payment around the same. You will pay more interest overall. But at the moment your issue is disposable income. Also these deals are only ever for 2yrs or 5yrs, so you have time to turn it around and go back on a shorter term mortgage.

IcyKaty44

Some grandparents are not working - depending on their age, wealth, etc. All those grandparents I used to see at the school gates picking up little ones, presumably, didn't work full time. Combining households will become more common, I think, as fuel price increases hit.

It sounds like your mortgage is the problem. I think too many people have bought houses at the very top of their budget when mortgage rates were low, not really thinking about the fact that when the rates rose they then couldn't afford it. I know my parents in the 1980s had to downsize when this happened to them so made sure I bought well within what we could afford, borrowing about £100k less than we were offered. I obviously don't know if this applies to you but I think a lot of people are going to struggle now and wonder why, think it's unfair etc, when really they were reckless.
How much is your monthly mortgage and how long is it? You can extend it to when you are likely to retire, probably until age 68. This will reduce the payments. I would always advise people to take out the longest possible mortgage and then overpay, so that if something happens you can just reduce down to the minimum payments. You may also be able to take a couple of payment holidays or go interest free for a while.

Going to be blunt here, OP: it sounds like you’re living a lifestyle you can’t afford, but you don’t want to give it up. Do you really want to stretch yourselves even thinner by taking on more work, leaving even less time for you / your family?

I just see a long road ahead of stress, no time, working to live, sleepless nights etc. etc. but for what? A mythical lifestyle that you can’t actually enjoy, house that you can’t appreciate because you’ve got zero time. Family time that will be squeezed and juggled between all your other commitments.

For a lot of families I get that there is no choice. They cannot ‘downsize’. But you do. You can move to a smaller place, have a manageable mortgage, not worry about all the ‘what ifs’, and enjoy your life with what you HAVE.

I know so many families that are living on the edge. But these are not poor families, they have 2 cars, 4 bedroom houses, kids in private schools, but the stress from needing to keep all the plates spinning in order to afford this life, plus the worry of one of these plates dropping, is bringing these parents to their knees. But they don’t want to give up their lifestyle 🤷‍♀️

I think you need to take a hard look at your future, and realistically consider whether chasing more money via 2nd jobs to maintain a lifestyle that is just within your reach, is going to give you a life you actually want to live.

No real advice except to offer emphathy. It is hard being the squeezed middle in this country. Me and dh have professional jobs too, well educated (doctorate degree). But when both kids were in nirsery, i hardly have any change after the childcare cost and my dh's salary had to pay for evetything else. Strangely if we throw in the towel (or better still if we divorce), we would be much better off financially on benefit.
Can you negotiately one or more days on flexible hours and reduce childcare accordingly? Or look for cheaper childcare(childminder? Shared nanny?) . Can you offer tuition?

Could you extend the term on the mortgage ie to 30 or 35 years? Then when the kids are older you might have some spare cash to overpay it. Lots of people will be in the same situation and the banks will need to be flexible if they want to keep their customers

Op can you share mortgage amount to income? What was the multiply?

I feel for you, there is often a way through but it does depend on the figures.

How many percentage of your income is paying the mortgage? Can you pay interest only while the kids are young and resume to repayment after you finish paying the extortionate nursery fees? Or can you lengthen the term?

Have you looked to see if you can sort your new mortgage rate now? If it expires December your within the 6 months and your current lender wouldn’t redo affordability etc, the downside of course is they may not offer the best rate in the market but if it gave you some certainty and wasn’t too far off what you pay now it would save you the worry of the next few months??

Speak to a financial adviser - we did this recently and fixed with our current lender, wasn’t the best rate but was only £5 different to what our monthly payments had been and locked in for another 5 years - we couldn’t move lender due to the checks they would do either as bad timing for tax returns, even though our income and outgoings have improved

If you are both working then how can you do a "side hustle"! I think maybe see if you can get a fixed rate on your mortgage.Some reduction in CC costs should help . Maybe a cheaper SM or buy own brands which I do in SB.Sometimes you live up to what you have coming in .Look at all bills and fuel .Any savings there?