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.

We were 'ahead of the curve' and started to sink into poverty two years ago when I became a ft carer for my disabled son.

We downsized (new area, cheaper house) and cut ever outgoing we could buy it wasn't enough.

We are now downsizing to a flat, paying off all our debt and starting again.

It has been so hard and our kids now have a fear of loosing our home and having no money.

I am so sorry for them but know they will be ok because they have a safe, loving home with parents who adore them.

I'm sorry I don't have better advice op but I do know why you feel so scared.

As the worst of your situation is temporary (until DC2 starts school) I would seriously start a side hustle. Sit down and make a list of all your skills and go from there. I lost the major part of my income during Covid and decided to start an online side hustle, which is now earning me a few hundred pounds a month and growing. In your situation, I would probably really go for online tutoring. You should be able to do that at the weekend and in the evenings when the children are in bed. Turn yourself into an excellent tutor, and you'll get more and more students and be able to raise your prices.

@Diverseopinions universities do not close when students lessons stop. I do get frustrated that people think this. When students out of lessons there is still lesson planning, curriculum design, marking (exams happen from May to august), dealing with individual student enquiries, general academic admin plus, If a research intensive univ this is the time when overworked academics desperately try to squash in as much research as possible aswell. If lucky they'll aqueeze in an actual break. Admin in universities are still working too supporting all of the above plus a gazillion other things.

Thank you these posts may be true but it’s so disheartening. No one intended to get in this position.

I agree with the other posters, crack on with getting that fixed rate on your mortgage with a free broker asap and consider extending your mortgage term. Maybe have a chat with your broker about other options too. Would this help short/medium term?
Can you make some small lifestyle changes too? I’ve started wearing second hand as do my children. All old clothing with life in/no longer fits gets resold. I religiously meal plan and use cheaper cuts of meat/ go veggie. Our lunches tend to be leftovers or “snack plates” of random things. Minimal childrens activities, minimal holidays (in the UK once every two to three years), no gym, no coffees, a takeaway a month compared to one a week. These things all make a difference to the point that some months we’ve been £400/£500 better off.
We are currently managing on one professional wage (I’ve never really progressed career wise sadly) and I’m about to go maternity leave with child number 3 so the panic regards finances is really setting in for me. The worst of it is we will be even worse off when I go back to work in Sept 23 thanks to childcare costs, we are in discussion as to whether the short term it’s worth accepting this loss to continue working in the public sector and I’m really beginning to think it isn’t!

At 32 years old you’ve seen nothing but low interest rates and low inflation, and you’re now at peak cost (childcare), I think there will be many in your age group who will be in the same position for the same reasons. And not surprising given the current housing market only functions because first time buyers over-extend themselves.

As you are 32, when you remortgage go for 30 years again, or even 35. As long as you absolutely definitely overpay once the childcare goes down and you are full time, and bring the term down again at a future date.

In your position I’d swallow my pride and if it does end up that you can’t manage increased costs (after doing everything possible to reduce them), ask your parents to lend you money towards childcare for a set period of time, with a clear plan as to how/when you pay it back. And don’t let them gift it to you. There are many people who’d love to have this as an option, no matter how humiliating it is.

But if you've worked this out, then economists already know this. I don't think this is by accident, I don't think they're sat there thinking 'oh whatever can we do to stop people plunging into poverty?'

I think this is a controlled demolition of the fiat economy, or perhaps a prop up of an inevitable crash. They need people to take out more debt because that's how money is created, and/or, but I think and, they want the houses back. So if you have a mortgage, a 20-30 year liability to a bank, they know you can't stop paying bills because your home security is tied to you paying things or your home can be repossessed. They're making it impossible to keep your home. Once they get it back they can rent them out again.

The system could be replaced with something other than fiat currency, or it could be being propped up with a lot of collateral damage along the way.

Some will starve, some will go mad, but it will all help to inject more cash because there will be thousands who can and will take out more debt to make ends meet, great, more money created, fewer people to deal with, and lots of capital back in the hands of the state.

We've been growing food in the garden. We don't eat meat or dairy so we are aiming to cut out our food bill entirely. We are in debt to utilities and won't be bending over backwards to pay them, and don't have to as we don't own this house and it can't be use to pay off our debts.

This crash has been on the cards for a long time. It was never going to be able to be sustained forever. After what happened in 2008 it was obvious the mortgage model was a trap and the homes could be removed as soon as they decided to squeeze people out, that's why I never wanted one.

@Touchmybum what 2nd jobs? Downsizing costs money too so if you don't it you can't do it, cheaper childcare hahaha ha

The point to be made is those managing ok ate going to punished whilst those who have a lot won't feel it and that's what's terrible - the ever widening gap of inequality

The other thing you might be able to consider is a childcare swap with someone else so you have theirs on your nwd and vice versa.

I am shocked by the smug posts saying how lucky we are today with all the free hours. The free hours are absolutely not free in many cases for anyone labouring under that misunderstanding.

I am eligible for the universal 15 hours offer. In august there will be no free hours as holidays so my bill for 4 days a week will be £1400. We are in a high earning household so can suck it up temporarily but it is a really dangerous situation for working women at the moment. I fear the costs of childcare will start to push women out of the workplace. This is not a good position to be in and I firmly believe there needs to be more government subsidy (and not rubbish suggestions like cutting ratios).

@Minimalme so sorry to hear that I hope you and your family are ok 💔

60% equity with 29 years left? Something is not adding up here.

You are worried about affordability check's but you are already paying your mortgage.

We remortgage recently and even with supposed rising rates got 5 year fixed lower than what we were on before.

We looked at rates the moment it became apparent that rate would rise and booked it.

@Bunnycat101 I'm certainly not being smug when talking about free hours of childcare... imo even more could be done to support working parents because ultimately working is the way out of the situation.

But it's a simple fact that getting any subsidised hours is a significant improvement on the situation 30 years ago. I paid full childcare costs from when ds was 12 weeks old until 2 weeks before his 5th birthday (sept baby) whereas nowadays I could have up to 12 months ML (so no childcare costs) and at least most of the year is get some subsidised hours from age 3.
Life was really shit bringing up young children in the early 90s . It's not a race to the bottom but sometimes it helps to know that it wasn't all a bed of roses in the past

@Bunnycat101 you do realise that for my generation who had dc in the early/mid 90s there were NO free hours at any time don't you.

I am sorry if my post above came across as smug, it was meant to be entirely factual. Our DS is 27 and soon to be married. We have been talking to both our children about the economy, the 90s, the economic cycles, the national debt, etc. Your parents are presumably lying our sort of age. Do they not share their experiences with you and provide advice?

I'm still interested to know how you landed a permanent contract as a university lecturer without a Masters. That is truly exceptional in the Arts. DS has just submitted his PhD and has abandoned his hopes of an academic career so I'm genuinely interested.

And “not been abroad for years”

but forgets the thread the op started last month whereby the op asks about hand luggage limits on planes in advance of her august summer holidays staying at a friends villa

My maths are only ok now so apologies if this isn’t correct:
you own a £500,000 home and have £300,000 equity.
Your mortgage is £200,000 over 29 years. I think you are in a good position and if you get a mortgage broker, you could get a good deal for yourself for the next few years until the children are both in school.
Good luck.

Hi OP. Next time your parents say they had to contend with high interest rates in the 70s point out that wages were also going up and therefore the interest rates actually helped them by eating into the value of their mortgage.

At 2.5% that’s £790 a month

Arrange your mortgage now through a broker - we did this even though our fixed term doesn’t end until 1 October. You can do it 6 months in advance and get a fixed offer now so at least you have some certainty.

@missdemeanors @RosesAndHellebores sorry if I was a bit spikey but I see it on here so much that there is free childcare. I saw an upsetting post on here recently where a poster had assumed she was going back to work getting free hours when her child turned 3. I can well imagine you both had many battles to fight in the 90s. Where it feels bad now though is wage stagnation. When I started my grad scheme 15 years ago, the starting salary was actually more than the current new grads are getting. My quality of life for the same salary was far greater than theirs. I’ve got employees in their late 20s who have no chance of getting on the property ladder, who are questioning how they can afford to have children. It feels a very different proposition for them than it did for me.

@RosesAndHellebores I don’t know I just applied for the role at our local university and got it (I only just met the criteria) seems I was very lucky!
Oh god @Bertieboo82 i have posted loads before on behalf of friends who don’t have mn- trust me I am not going abroad! I wish…

I hear you op. We are in a worse situation as we rely entirely on benefits. I'm scared, we are going to be sitting in the dark and cold and there isnt a thing we can do about it.

Bull shit you’re “posting on behalf of a friend”
Is it completely mad to attempt to holiday with 2 kids (3 and 5) with just a handbag/rucksack each? It’s a hot holiday- staying at a friends place so there will be shampoo/sun cream etc there (no need for liquid on flight). Supermarket round the corner for things like arm bands. We only need clothes. Wear a pair of sandals each and pack flip flops/beach shoes each. 5 x pairs of knickers, 5 x light summer dresses and 2 x swimsuits per child (there is a washing machine too).
Am I mad?! I think I’ll give it a go!
😂

I accept the wage stagnation point but it has been hand in hand with very low interest rates and very low inflation. Wages will increase but so will inflation and interest rates. However, and this is not good for the op or many others, even if there is no wholesale fall in property values, and I personally think we will see falls of up to 20%, there will be a lengthy period of house price stagnation so the income multiples required fall back to achievable

OP you sound rather half empty, you are young, you have a family, a family sized house, a job, lots of equity and have received parental financial help. You have a lot to be thankful for. You’ve been given lots of useful advice here, focusing on your parents situation when they were younger is not useful.