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.

That’s the whole point though isn’t it,
they want us to have less disposable cash to bring down inflation?

I agree with a number of comments here. Extend the term of your mortgage and overpay when you can. As your children require less childcare you’ll be able to focus more on the mortgage but for now focus on keeping a roof over your head and food on the table.

So sorry you are going through this, but it will get better so hang in there! Don't give up your Masters, your career is important and so is your happiness.

I think it might help you to talk to someone in real life about your concerns. Your parents sound lovely and I'm sure they'd be mortified to hear you are thinking you're worth more dead than alive and you're considering stalling your career. They may offer to help out financially or with childcare once they know how much you are struggling.

There are lots of other options open to you. Personally I would consider getting a lodger - you can get £550 a month for a double room and under the Rent a Room Scheme you can earn up to £7,500 a year tax free. Most likely your lodger will just be at work all day and in their room on their computer at night, so it's really not a very drastic change to your lifestyle but it could be enough to tide you over until things improve. If you go on websites like Spare Room you could have that extra income coming in by next week.

www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme

If you’re public sector any chance of going for higher grade roles?

As other posters have said, and not a race to bottom but many of us have been in this situation in 1990s or even 2000s. In my case my ex was diagnosed with serious illness and could no longer work and we were managing on my wage
my advice is to first look at your budget ruthlessly. Then both of you need to look at your jobs and drive really hard for promotions, role changes etc to increase income.

focus on outgoings: You are going to have to say no to a lot of things you may right now consider essentials. Things you’ve taken for granted previously. It’s shit because you are both professionals and working and in an ideal world that really shouldn’t happen, but it does. It means the kids will have to go without which is difficult, it means you’ll probably be eating a more limited menu and you’ll have to cook every day, no holidays, only days out that are free and don’t replace anything unless it has actually stopped working
I remember seeing my younger sons shoes splitting and saying to myself it’s early June , can I glue them and make them work until end of summer term so he can have cheap shoes over summer. It is that dire and shitty.

also when you remortgage ensure you go for a flexible mortgage. We learnt our lesson on that from late 1990s on. This allowed us to take a payment holiday to ease outgoings when it got tough, and in later years , once kids were independent we over paid like mad and ended up paying it off early in the end. I think everyone should have flex mortgages as you never know what’s around the corner.

do think carefully about your Masters. Can you guarantee it will increase your salary. And quickly. If so yes then worth ploughing on just now. If not you may need to bite a bullet and ask to defer a year or 2 and stop just now. Think then about if there is anything you can work at on that 5th day that could bring in more than that £90 balance after childcare. If not then you’ve done your best but it may be worth looking

do remember though- having children is expensive especially with childcare costs. But these times do pass and when they do become independent your financial situation will improve dramatically. It may feel miserable and difficult to live within your means just now (If you can cut back dramatically) but this time will pass. Don’t compare yourself to others just now, just focus on what you can do to have small things to look forward to even though you are living hand to mouth

Op I'm sure it's been said by now but you can save a mortgage rate 6 months in advance.

Over stretching to afford a bigger house has bitten so many of my friends over the years. My mate was like you but even better paid. She bought a huge house on a small exclusive development and could afford nothing but the basics for years. Her children have now left home so her DH and her are in this enormous house and it’s hard to leave the house that you raised your children in. It’s increased in value so she could leave and release a lot of equity but it’s her home.

Just how much bigger is the house you are in compared to what you actually need.

I feel for you OP, we are also two professionals, both working and DDs in school and wraparound or nursery. We are finding it tough all of a sudden and we didn't even stretch to the max when we bought our house (thank goodness, or we'd really be in the shit.)

Things we have looked into that might help:

• Look at your mortgage rate now, including extending the term. Find a mortgage broker that you don't pay a fee to and ask their advice. Ours was amazing and really helpful, and took his fee from the bank we arranged our mortgage through.

• Are there cheaper childcare options? We've had to cut out one day of DD1's after school club as DH can just about manage to pick her up from school and put her in front of the TV while he continues working from home. Childminders are cheaper than nurseries usually so we're investigating that for DD2.

• Eating WAY cheaper. We've gone almost completely vegetarian, don't eat out and make most of our meals really cheap. Jacket potatoes with beans, egg on toast, pasta with some frozen veg and garlic butter etc. It's a bit shit but I keep reminding myself that we're all fed and if we have porridge for dinner one night, DDs will be fine. I've managed to get our food shop to between £40 and £50 a week this way.

• Last winter we turned the heating onto the bare minimum and got used to wearing extra layers in the house, sleeping with extra blankets on the beds, wearing our (fake) Oodies which keep us really warm. Again, I have to remind myself that children have been brought up in colder homes before.

It is shit. I'm shocked that DH and I as two working professionals on decent salaries are having to live like this but needs must. I dread to think how people on lower incomes must be feeling but we WILL get through it.

Yy we took and indeed take in students from abroad through language school.

Sometimes 3 weeks sometimes 2
Some places let you take 2 ,some insist only 1.

That's about 500/600.

We all cram into one room to sleep but it's absolutely fine! The DC love it and it's like camping.
When the students go you have the added bonus of suddenly feeling the house is absolutely huge!!

I think it’s fairly common stage of life, we switched some of our mortgage to interest only when it was apparent outgoings we’re higher or exactly the same as incomings. Could you do that or extend your mortgage term?

I feel this! We remortgaged with the same lender to avoid further checks and did it over a longer period of time. My dh works mon-fri 10-12 hours a day and I work the weekends and bank holidays. I’ve also resorted in to delivering for local takeaway some nights when dh gets back from work as it’s cash in hand. We don’t have anyone to look after ds so We never spend time together as a family but needs must right now 😣

Is there

Is there anything related to your husband's job he could do as a second job?
My DP has taken on a third job (his second one hasn't given him any work since our baby was born 😑) related to a qualification he has and it pays pretty well. He does long shifts in his main job but spends evenings and any breaks at work doing this new job after the kids have gone to bed.

I agree with @Bridgeth29 . With interest rates being so incredibly low for over a decade, a lot of people seem to have been naive when buying. They just don't seem to get their heads round the fact that for the 50 years or so leading up to the 2008 crash, interest rates averaged out at around 8% with many many hikes into double figures.

My adult children bemoan the fact that house prices are so high now (and I totally see their point- house prices are ridiculous) but I do remind them that my generation didn't actually have it any easier because although we could get a 100% mortgage and buy (and were persuaded to do as 'a good thing') we were all then in the position of seeing our mortgage payments shoot up while the value of our homes shot down! Ironically, we had the opposite problem to the one our kids have now... we bitterly regretted buying and wished we were renting instead. It was incredibly depressing to be both working full time, over half our income going on the mortgage on a tiny house which was going down in value, paying sky high childcare and still not covering all our bills. The only thing we could do was generate more income temporarily to see us through the worst parts. So yes, that meant taking on evening work which was very frustrating and felt wrong when we were both working full time in professional roles anyway, bur needs must, and many other people were in the same boat.

However difficult it seems OP I feel you have to accept we're heading into that territory again and that many people will be feeling as you are. At least you have the option to move to a cheaper area because your house will at least have held its value or more likely increased. I'm not saying 'move' lightly, I know it's a major thing with changing jobs and schools, but honestly, what's the point in remaining in a more expensive area if you're worrying about money all the time. Either that, or downsize, which again might be a struggle with children but you could see it as a time limited thing to get you through the next few years. And of course listen to all the very good suggestions on here about extending your mortgage term if possible, cutting down on any extras, looking at your internet, phone packages etc

Can you post all of your outgoings and your income? People will be better able to help.

I remember a guy I worked with in the 70s. He had kids so to avoid childcare costs his wife worked nights (she was a nurse) I think she finished her shift at 6 am and when she walked through the door he left to do 2 hrs on the petrol pumps (back then you didn't serve yourself in most petrol stations) and then he came to work and did his 8 hr stint. Saw his wife for 2 or 3 hrs in the evening and then it started again. It wasn't living it was existing and we are going back to that.

I empathise. We are in a similar boat - I have a toddler and am expecting another baby in January. Childcare costs for two so little will be massive. I can sort family childcare to do a couple of days a week but won't be able to work other than on these two days, cost of living is killing us. I keep reminding myself it's just for a few years until the children are at school. We are going to just get in debt, for example with the utility companies. They can't cut you off with young children. We'll have to pay them back in a few years, which is a situation I never thought I'd be in. My OH is looking for a new job, even those he currently loves the one he has and it's flexible round our family. We've started having egg and chips, or rice and dahl a lot for dinner. We've got onsies for thdxwinter when we won't be able to afford to put the heating on. Cutting costs where we can, and just accepting debt as an inevitability.

My Dad had three hours when we were young. A full time job in the week, a petrol pump attendant on a Friday night and on a Saturday he had an insurance premium collection round. My mum worked as a dinner lady, so they had 4 jobs between them but needed no childcare.

Its so sad that we are going back to the 1970s.

*jobs not hours!

We bought our place in 2018 and I remember at the time saying to DH that I wanted a bigger house. (We have a 3 bed I wanted a 4 bed which we’d seen). The bigger house would have maxed us out. I’m so so glad we made the decision not to go for it.

where we are property prices have risen so that our house is now worth around £300k more than we paid for it (if we sold today). It’s insanity. We wouldn’t even be able to afford it today.

I was panicking the other day re rising interest costs but DH reminded me that we are “only” on 1.80% and will have an extra almost £2k when the kids finish nursery in September. So will have more income to pay out when we refix (next feb is the start of the 6m countdown to renewal data).

I agree with PP - look at extending your mortgage term to lower the repayments. You can always overpay in future to cut the term back.

Otherwise it may mean moving to a smaller house, but even that isn't the end of the world. I would continue with Masters if you possibly can.

Good luck OP.

out of interest, do you have a summer holiday booked?

It's bloody awful isn't it. I'm so angry about the state of things. I know it's bad everywhere, but we have high costs here in all areas compared to a lot of other countries.

We might be ok, but we are living in cramped conditions and rent, so risk being kicked out if the housing market crashes (which despite what those BBC articles quoting estate agents say about prices going up), I think is on the cards. I'm glad I haven't been able to buy a house in a way and haven't moved into a more expensive rented family home (my OH saw this coming for the last four years). It's still shit not progressing though and even shitter for those who feel their lives are going backwards.

The thing is we just carry on paying the bills and not saying anything. I think that is the issue. If we accept that the economy has been badly managed but carry on as usual then these energy companies will just keep taking. I'm not sure what the answer is, but I think it starts with us not accepting this shit. There are a lot of people making money out of this misery (we are looking like our new, unelected PM is going to be one of these people, which is great for society!). Im glad people are going on strike. The disruption is shit, but it is necessary.

You really shouldn't be in this position, OP, two people working hard for their family and careers. We must be getting to the time when this is going to become unsustainable for so many.

I don't know how much you'll be short by, but look at ways you could cut back. Our car is only being used for work now, and I've done one 5 mile journey to visit elderly DM and homebase in last few months - ie no trips out, shopping on foot. We're actually spending less on petrol despite increases. We have a set weekly budget for food and stick to it, always on look out for best prices between two local supermarkets, offers, reductions - our food bills are very low. I think many of us will be cutting back on heating, length of showers etc, so will end up paying less than is forecast. Best insurance prices. Day trips out - walk to a local park and take a picnic lunch.

I doubt you'll be able to cope with much more yourself right now, working, masters, running family home. Could DH get a few extra hours, say in a pub? DH did this for a while and actually enjoyed doing something totally different.

First you need to do a really, really detailed spreadsheet with absolutely everything you spend on it. Every single penny.

Next, you need to take out all expenditure which isn't absolutely essential to enabling you to work and keep the roof over your head.

So remove children activities, window cleaner, birthday parties, discretionary clothes, haircuts, gym, subscriptions, magazines, coffee out, holidays, cinema trips, flowers for the garden. Everything.

Then see if your income covers your core basic costs. House (all bills)., childcare, food, travel to work.

If you can't cover core costs then see if your mortgage provider will allow you to extend the mortgage term to reduce monthly payments.

If they won't then you are going to have to move to a cheaper place.