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.

I'd be interested to know how much your parents had to fork out for childcare back in the day. It seems to me their confidence is misplaced and based on some serious misunderstanding of your circumstances.

As for advice - start looking at tutoring. You and DH need to start cramming all the cleaning and other stuff into Saturdays and get used to shorter weekends.

Could your H do weekend bartending?

The current situation is international.I spend half the year in Spain and my DH is from another northern EU country. It is the same everywhere thanks to Putin and his hideous war

Tory mp on tv on Thursday, saying Switzerlands inflation rate is 2% and the incoming mp needs to look very hard at this.

And those suggesting tutoring, everyone is struggling. We had a tutor briefly for Dd. The tutor was one of the first things we cut back on. People can’t afford tutors.

There isn't anything to fix this is there? It's a bit catch 22. We've had low interest rates and so much QE over the last 15 years it has really come back to bite us now. I hope the right people learn from this.

if your DH is a teacher, can he do a couple of evenings a week tutoring?

this is a good option for teachers, I have built a £thousands savings pot from £0 in this way over a 5 year period. It is, however, hit and miss and isn’t something you can really rely on.

Move house & downsize?

really? You can’t see the flaw in this plan? Your assumption is that the OP lives in something big enough to downsize from in the first place and that there is considerable equity to help manage the price increases that make down sizing all the harder. Then there’s the cost of moving, stamp duty and conveyancing, all of which comes in at thousands. Moving to a cheaper area is no longer an option from a fuel perspective if your job isn’t portable I worked out it would take me around 9 years to just break even after a downsize and I am a) mortgage-free and b) live in a deprived area which although affected by house price rises, is not experiencing it in the same way as some parts of the country.

In the circumstances you describe you can earn a reasonable amount more if you increase your hours. I can see why you don't want to but your situation is not a desperate one if this option is available.

No we don’t have a summer holiday booked for whoever asked we are staying with my parents for a week.
I have done a detailed spreadsheet and cut down on any areas we could about 6 months ago. We are being frugal with gas and electric and don’t have subscriptions etc. We have committed to reducing car use, never buying lunch at work (used to be a once or twice a month treat not often anyway).
The biggest thing would be moving but it’s such a huge thing to move house isn’t it. I was browsing interest only mortgages but not sure if we would be eligible as it says you need proof you could pay the actual mortgage amount in some way at the end? I think extending the term would work we have 29 years left now (age 32) so could maybe add a bit.
My parents are lovely but I feel ashamed for needing. Financial help still as an adult with kids. I know those saying people are over stretching and it’s stupid but everyone encourages you too! Our mortgage is based on when I worked full time and had no DC so affordability was fine then.

*to not too

Yes but your flying out there OP

no judgement from me

point is - there are savings you could make

Yes but according to your other thread you have a 60% LTV in your property, approaching £300k in equity. That will help with your mortgage rate

Why do some posters just pick up on the point about the Masters from other posters saying to drop it/defer it? Read the OP's posts. Her Masters is being funded by her employer and they also give her some work time for this.

OP, don't drop your Masters, don't defer it either. Getting work to fund/support this was a brilliant opportunity.

Find other ways. When we've really needed to cut back, it's been Christmas and holidays that weren't at home. If we'd had the space (we didn't) then our next option would have been 'rent a room' as pp suggested.

I agree with posters suggesting ways to get control back because it sounds as if your lifestyle - with some tweaking - would be realistic if you understand your financial situation and route/options through.

This thread though, makes me feel humbled (by some) and incensed (by others). For the latter group, 'poverty tourism' fits. I saw that term here this week and yep, that's what some people cleave to because it makes them feel superior.

'I'd be interested to know how much your parents had to fork out for childcare back in the day. It seems to me their confidence is misplaced and based on some serious misunderstanding of your circumstances.'

I don't know when the OPs parents were bringing up small children, but childcare costs for proper regulated childminders and nurseries has been very expensive for years!
Certainly in relation to incomes, our nursery fees in the 1990s was just as expensive as now.

Actually when you factor in the long maternity leave and then the subsidised hours at age 3 which you get now, childcare was probably more expensive back then. Many of us were back at work after 3 months so paying full childcare costs for a child from 12 weeks until they started school! If I was having a baby now, I could have a year ML and then 30 free hours from age 3 which massively reduces the time when full fees are paid.

(Don't want to derail, just worth pointing out. Some things were actually a hell of a lot worse 30 years ago!)

I wouldn’t blame yourself for overstretching - a lot of people have been advised to do this. What is done is done. You are young, I would stretch your mortgage term to the maximum and overpay in the future when you have no childcare to pay for and better wages. Keep going with your master’s- it’s an investment in the future. I’m 15 years older than you and having to pay for mine myself. I would have loved to be funded through mine.

Right so if you have absolutely cut out everything discretionary. Look again is there something you can cut, football club etc

You already have a long mortgage term.

If you can't cover the mortgage then you need to move.

Or will working an extra day allow you to just cover the mortgage and ride it out for a while longer. Could your partner do compressed hours so he does pick up one day a week and then no childcare costs?

Also, if you bought a while ago then your property price might have gone up so the LTV is a different band which means might not go up as much as feared.

I would look at (1) extending the term of the mortgage and / or (2) changing to interest only

Overall, this will cost more as you'll be paying the mortgage for longer, but it will give you some breathing space

And make sure you have flexibility to make overpayments when possible. That way, you can chip away at the mortgage bit by bit, and when your circumstances improve, you may not need to remortgage as you can make higher payments voluntarily

So you are mortgaged up to the eyeballs and have zero slack in your budget and decided to have another child. Did it not occur to you that inflation and interest rates were low for a very, very long time, utilities and fuel were low for a very very long time and work out that there was only one way for prices to go and that was up. You are very lucky to get 15 hours of funded childcare. In the early 90s there was NO funded childcare and we had interest rates of 15%. I had a friend with two children at a day nursery and once all their bills, including day nursery fees were paid, they had £50 a week for everything and she worked full-time. In 1995 for two days at a day nursery in the baby room, I paid £500 pcm.

Your answer is to ask your institution if you can work full-time. That is how you will earn more money. Or you or your DH will have to work a day at the weekends.

How did you land a permanent fractional role in the arts without yet having even a Masters? If you can bottle that ability and sell it, you will make a fortune. Lecturing jobs in the Arts and Humanities are like unicorn dust at present.

Or downsize?

Nursery fees were hideous in the 90’s. No free childcare from 3, no employer schemes, no tax credits, nothing at all. Just nothing except eye wateringly high fees.

I empathise with you, as I've seen my daughter and son-in-law struggle over the past few years, let alone now. You say your parents helped you with your house deposit and so you're reluctant to ask them for help. You also say that they're very comfortably off. Please, please ask them for help (are you close to your Mum and therefore able to talk to her about it? - I always find with my daughter that it all comes flooding out when we're out for coffee!!!). They won't want to think of you worrying and struggling.

We helped our daughter with their house deposit, we paid off their car loans, do two days a week childcare for them (pick up our grandchild from their house, so no petrol or time costs for them). They do have the costs of the other three days in nursery. The private sector jobs market is very buoyant and she's just got a much better paid job after many months of trying. So although we help them, they help themselves too. It's what families do. The childcare years are relentless.

I can see you're absolutely fully committed time-wise with your lecturing, Masters and the children. What about your husband, as he's a qualified surveyor are there any better paid jobs out there? I can see from your comments that you lead a pretty pared down life anyway and the main issue seems to be your big mortgage. Good advice from people about renegotiating that, so nothing to add on that one. I hope you find a solution - no comfort but so many people are going to be in your situation - regardless of who is to blame it's going to be awful for a good few years I think.

You are worth so much more alive than dead.
Not meaning to minimise your financial situation, it sounds very difficult at the moment, but masters will be done soon and then you will be better placed to increase your earnings.
Even if the worst happened and you lost your house, although very stressful that would be nothing compared to your kids losing their mum.
I don’t blame you for feeling stressed and it’s really hard to see when you are in the thick of it, but financially things are likely to get easier for you.

No-one is perfect, but it would be good to see just a bit more recognition that times really are tough, and the risk profile on decisions around housing have changed too.

Fed up of heating 'oh well, we bought our clothes second hand' when that it all my friends do, and 'we only had one tv'. Again, mostly same but that one television in 1989 cost you the equivalent of a small car.

Lastly 'move house'. Ok... and give up two adult jobs, pay stamp duty and to do up a new house when costs have risen so fast you get less for your money anyway? It has taken me five years to get our current house in shape and periodically we do the maths on this. Moving house is the very worst thing we could do for our financial circumstances at this time, and we can't be alone.

I think there's an easy answer here, extend the term of the mortgage. You can overpay in years to come when childcare costs reduce, incomes increase etc. Don't sell, don't defer masters, take the relief now of the longer mortgage and overpay when things improve. If I understand, your current mortgage would be paid off at 51. Push that out a few years and your repayments will reduce by quite a bit. Good luck.

Not really I suppose I was told they were unlikely to change significantly in the near future. I was a child during that time period so it all went over my head and no one I knew who lived through it told me any of that. We were so excited to get a house and pass affordability we assumed we could afford it which we could easily until recently.
And yes we did have a second child which was fine for our budget at the time. I won’t apologise for having her as she’s gorgeous and plenty of people have children in far ‘worse’ situations than us.

Both of you are planning to increase your earning power in the longer term and childcare costs will reduce. So this financial situation should hopefully be a short term problem rather than a long term one.

Therefore it makes sense to reduce your mortgage payments in the short term by either extending the term or switching to interest only payments.

Alternatively as you say that your parents are "very wealthy" why not ask them to lend or give you money to pay off some or all of your mortgage?
It's unlikely that your parents would want to stand by and see you forced to sell your home if they are very wealthy themselves, surely? It's very common for parents to help their adult children.

Overall this obviously sucks, as for you (and for so many of us) two working adults doesn't seem to guarantee the standard of living that our parents enjoyed and the housing crisis is really taking its toll.

The problem is that it's a supply issue, if there aren't enough houses to satisfy demand the price will always be high. Government will not release land for new housing because when the supply goes up the price goes down, and all the people who already own property and have investments in property will lose money. And those are the people who make the decisions.

@RosesAndHellebores not everyone was gifted with your perfect interpretation of the economy. Thousands of people are in this situation, your post is spiteful and smug.

I think you’re right- currently will be paid off at 61 not 51 but could push to 67.