Is this salary okay for a family of 5? Why am I always skint!

[WhatIsWithMe]

I live in a large town in the north. It doesn't really have much going for it but weirdly house prices are pretty high here. Maybe as it's close to a popular city but generally it's not an expensive place to live.

We are a family of 5, 2 are teens and one in primary school. We have a small house with a mortgage of £500/m.

After tax, etc mine and my partners combined income is £3900/m. Its looks like a great figure but every month we always find ourselves scrimping as we don't have enough money.

The thing is, we already budget, we cook from scratch, we don't have any other debt, we don't spend much on clothes, restaurants etc much and buy only what we need. Yes, we do have the odd takeaway, day trip, treat etc but they aren't a regular thing. We don't holiday abroad and can only afford a week away in the UK.

I'm just confused. Where am I going wrong? Is it that the cost of living has crept up on us or is it that, that income is just low.

well it wouldn’t be ok for me because my school attend private school

but i’m sure that many will come on and have a very comfortable life on less than that

I presume you've written down honestly where the money is going each month? I must say I'd be surprised to find myself struggling when there is 3400 left each month after the mortgage is paid. Are you frittering it away on lots of small purchases?

Yes, you need to look honestly at each outgoing so you know exactly where your money is going and can spot any irregularities

With a low mortgage and that net income you shouldn’t be living hand to mouth and should be able to afford holidays. Only you know where your money is going, and if you don’t you need to start by itemising every single thing.

You won't know until you do a budget.

However, we're also a family of 5 - two teens, one primary. Essentially it's like supporting four adults and a child on two salaries. Teens pay adult prices for clothes, meals, entry etc. 'Spare' money isn't spare for long!

You're frittering it on something. You need to go through your bank statements and find out what on.

You need to analyse your spending to see where the money is going.
Then you can make decisions accordingly.
I'd start with 12m of bank & credit card statement downloads.

I take home £3300 a month with a mortgage of £600 which is sufficient for just me but I can’t imagine funding 4 more people and teenagers are expensive!!

You need to write down everything you spend every day for a month. Teenagers can be quite expensive. How much money are you giving them?

Have you gone through your statement and written down everything you’re spending?

The devil is in the detail the "etc" in the post 3900 after tax etc. If etc means national insurance and pension contributions that is one thread. if etc includes mortgage (I don't think it does) then that is a very different discussions.

You need to export your last 3 months bank statements to excel and sum up all the spending into categories. Essential direct debits, food, fuel/public transport, car expenses, school expenses.

Then clothes, eating out, beauty treatments/haircuts, house items.

Group everything then sort high to low.

Then in the next column set an acceptable amount to spend on each. Reduce until the total is less than £3900. That becomes your monthly budget.

Gas
Electric
council tax
water
insurance
car
food

can you put in the figure above?

Agree with it being frittered somewhere. We have less take home than you by 250 and a mortgage of 1200 pcm and are just about managing, albeit with 1 teen rather than 2. It has been a hard exercise in working out where we had been frittering our money, but we definitely were - and now that money is going towards a bigger house, rather than just m&s lunches and forgotten subscriptions!

Need a good budget, it's going somewhere. We work out rent, bills, including petrol and food. Then what's left?
But some months we challenge to a "no spend" month. So no takeaways, meals out, day trips or events" this way we get an idea of what we are really spending on and also pull back some savings.
You should be fine on the income you have.

At first glance, it sounds quite tight to me. But as everyone else has said, you need to prepare a budget that includes absolutely everything, including Christmas, haircuts, MOTs etc.

This, also things like sky, Netflix, Spotify. Then commute costs.

You do have a low mortgage which should help. But we earn similar with two kids and we do have to be somewhat careful (it's all relative, we absolutely are not struggling but neither are we drowning in cash). So I can see how with an extra child in the mix, you feel like you're not struggling exactly but not living the lifestyle you expect perhaps.

Our 'outgoings' are about £3400 a month, but that covers absolutely everything including Christmas, birthdays, modest amount for holidays, spending money for family activities, etc. as well as all the usual bills.

MSE does a good budget template so you can see how much you are really spending a month, as a lot of people don't account for stuff like haircuts, dental treatment, car maintenance, Christmas, birthdays, etc. and then spend money that should have been earmarked for that stuff, then find they are constantly having to find money for 'unexpected' stuff that isn't really unexpected. So I'd recommend doing that with your bank statements beside you and work out what the real picture is.

Need more info about what you spend on. Your mortgage is so low you should be saving

https://www.moneysavingexpert.com/banking/budget-planning/

I would encourage you to fill in the budget spreadsheet on here. It’s really comprehensive and calculates everything as an annual cost so that you can work out where your money is going.

It’s amazing how little things add up- a coffee, magazine, parking etc.

My monthly income is £2300, my rent is the same as your mortgage and I am a single parent of one DC. We are not living the high life but we do absolutely fine with no scrimping and can afford a yearly holiday and treats. I'd have though a £3900 salary with one extra adult and 2 kids would yield similar.

Any childcare? We run out of money at the end of each month on more than that but it's basically childcare costs and mortgage causing it (plus my posh cake habit but we all need a vice)

If you can bring yourself to do it, do a spreadsheet of spending.

DH does one and it can be quite revealing. (Turned out that DD had more spent on clothes one year than the rest of us combined).

Food has gone up a lot, as have utility bills. Kids extra curriculars are all expensive and mount up.

However you do it, have a few months of writing down absolutely everything you spend.

For example, our 'bottom line' expenditure is about £2200. That's just essential bills, food, childcare, etc. but another £1000 or so a month goes into various pots for 'true expenses': car maintenance, home maintenance, Christmas (gifts, food, events), birthdays, holidays, haircuts, boiler service, subscriptions, that sort of thing. If you don't account for that in your original planning then you will keep being 'surprised' by predictable expenses.

Agree you need to write down exactly what you are spending each month. You should be pretty comfortable on that salary with your low mortgage of £500 a month. Were a family of 4, income £6500 with a mortgage of £1500 a month and childcare frees of £1400 living in an expensive south east area so have a comparable income to yours once those are taken into account. We are comfortable, run 2 cars, day trips, usually at least one weeks holiday either UK or abroad plus a couple of long weekends away and we save a reasonable amount each month too. Something must be going wrong for you to be struggling every month.