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.

Takeaways are bad for your wallet, bad for your waist and bad for your long term health.
I would also recommend you remove the tap and pay from your watch or phone and make an habit to have to take out your wallet before you pay for anything and ALWAYS ask for receipts, put it in the wallet and every night, write down the expenses.
It is so easy to buy a tiny thing here and there.

And yes, please, do report back!

I do this. I fill up an online shopping cart and then go through the basket at checkout removing non essentials. It’s weird but I get a buz putting it in my basket but then remove it 😂. It works for me. I take home 1800 after tax and own my home without a mortgage but am trying to cut back. It’s just me living here

Council tax 175
service charger 40
insurance 25
netflix 12
gas and electric 125
water and sewage 40
sky phone 35
virgin media 25
amazon prime 10
TV licence 14
cc 100
savings 300
food 450
bus 15

total spend 1366

leaving me about 400 over

i never seem to have that 400 pounds either so will evaluate my spending. I reckon it’s birthdays and costas

I always, always wondered this.
DH and I are highly qualified professionals.

We lived for 30 years in a city where house prices were low .
We had a generous 4 bed semi with a big garden.

We raised 4 children and had several pets.
We drove a Skoda and rarely took expensive holidays, preferring holidays in the uk where our dogs could come .
We didn't smoke, drink or eat anything fancy.

We lived a comfortable life but nothing extraordinary.
We are good savers .
However, I have always been utterly amazed and confounded by other families lifestyles.
My only conclusion has always been that many families live on credit and are in debt ( we have none...not even a mortgage now )
We prefer a quiet life that we can afford to pay for up front.

The idea of debt is awful for us.
I guess it depends on how you approach your spending and on your attitude to debt.

I came to believe many people must live beyond their means...or we were very bad at managing our money ( which we weren't..we are very careful)

leaving me about 400 over

Leaving you about 700 over. Money that you choose to save is not spending (at worst, it's deferred spending). If your income dropped by 300, you have a cushion (i.e., not saving that until things picked up again).

This is not a criticism — quite the opposite. It's really important to save! But don't beat yourself up too much about not saving more than you're already saving, which is over 15% of your take-home. Presumably you don't have any debts since you can afford to save; you're doing pretty well already!

That income is probably about average for UK households. I know many people who are on less than that and have more dependents.
£500 for mortgage. Say about £1000 for other bills - this is an estimate etc. that’s £2400 a month? £600 a week ish?
you can’t live on that??

I’m a big fan of ‘separate pot’ budgets: put 500/month each into separate accounts for holidays and big bills? Then you’ve probably got minimum £500/ month on utilities and other unavoidables. Leaves you with less than £1900 / month for food, petrol, kids clubs, clothes, presents etc - it’s okay but sure, won’t be extravagent. But if you’ve got separate pots for holidays, car & boiler repairs etc etc at least when they come, you’ll be ready for them.

Honestly I don’t think it’s enough. We live in a small northern town too, expensive for what it is but close to a big city.
We have 2 children, a mortgage of £650 and still have nothing left at the end of the month on a similar joint salary to you. We cook from scratch, try to budget, we don’t drink a lot or smoke and we manage a holiday abroad yearly plus a couple of Uk trips but it’s not enough to have all that plus savings and money left over. It’s the cost of living, food shopping has doubled, days out can cost upwards of £100. Even things like buying lunch from a sandwich shop isn’t cheap anymore. What was considered a good salary just doesn’t go as far anymore.

Are you sure that's all your essential bills? Looks low to me. How about clubs etc for kids? Hair cuts, school dinners ?

When my ex became super abusive, after leaving my job to have our son, I went from earning £37.5k a year, to having to support us all on £1,100, rising to £1,300 a month. Of that, our mortgage rose as high as £600 and energy bills were up to £400 a month. While I grew up poor and knew a lot of money saving hacks, I learned even more during this time (also lockdown, so it sucked extra hard). Thankfully, me and my son are now free of this human waste, who claimed he'd had a massive pay cut but, thanks to child maintenance, I discovered he'd actually been earning over £43k, after his pension contributions were taken off. Yep, and making me support us all on £1,300 a month.

My key take-outs of what causes financial drain are as follows:
Entertainment subscriptions (sky, Netflix etc, just freeview here)
Other subscriptions (gym, hello fresh)
Car finance (mine's basic, used, bought outright)
Mobile phone contracts (use giffgaff / smarty)
Processed and convenience foods (I cook fresh and freeze some)
Throwing out leftovers, instead of making curries / soups etc
Takeaways / meals out
Costa / Starbucks etc (buy a flask)
Paying trades for simple home maintenance / renovations
Mags / daily papers (Internet & free news channels)

Just a few things that many people seem to think are essential but can totally be binned / scaled back. I don't expect everyone to go to the lengths I do (I make my own curtains / upholstery, cook most meals from scratch, don't have fancy phone / car / tech, can't drink or go out because I'm double parenting a SEND kid and I'm onto my second renovation, almost single-handed, having increased the last house value by 60% and bought a cheap probate wreck, to live mortgage-free), but pick and choose what works because me and my son are living comfortably on universal credit / student finance, while I retrain as a teacher (I was an engineer), to fit around his school hols and care need. We have all we need, he does wonderful activities and we are happy and safe. We might even get a cheap holiday abroad next year.

Our household income is about £2200 and we are a family of four. We live in the North. Two kids. One a newborn. We have the same mortgage as yourself and manage our bills/council tax and expenditure with some difficulty. Take little one to football and swimming lessons too. We just about manage on this income. We also leave aside a small amount for charity every month. Honestly, if we were on your income we'd be very very comfortable. I suggest you write down how much you spend on mobile contracts, broadband, all TV packages/license, all insurances, petrol/road tax, which supermarket, leisure (alcohol/cigs/lottery), investments (stock, crypto), online SHEIN/Temu/Amazon etc etc
Hope you figure it out.

You sound very much like my parents. We had a nice life growing up but nothing out of the ordinary, they are comfortable now but absolutely hate the idea of debt. They would rather go without than put it on a credit card. Because of this I have a much more relaxed attitude to money. It comes and goes, some times you have it sometimes you don’t. I would never miss out on an opportunity because I didn’t have the cash there and then. They’re now in their 70s and still have places they want to visit and things they want to do but their health isn’t what it was. I can’t help but think they should’ve just stuck it on a credit card and done it years ago.

I know lots of people are saying you are frittering away your money , but don’t be too disheartened by that , we have very similar incomes and mortgage payments, two teens , and we too have months where we struggle.
on paper we have enough, but throw in a few hundred pound car bill , a siblings wedding , an expensive school trip, a family day out ( all things we have done over the last few months ) and we have nothing left .

everything is very expensive atm , and having a few hundred pounds Goes nowhere- especially in a supermarket!

go through your expenses as people have suggested and see what you can find , but if you’re paying all your bills and managing a family day out - I think that’s pretty good!

I earn a similar amount and only have myself to keep on it and I would still say I struggle to save or put away much towards holidays or a new car.

If you are left with £3400 per month after the mortgage that's a massive amount and you must be going wrong somewhere massively

instead of paying for apps check out the likes of the budget Mom / sassygirlfinance on Instagram. They teach you how to budget (for free) and set money aside for things throughout the year (called sinking funds) and how to separate in your accounts. I use Monzo pots for all my spending categories to keep in check!

Get the ynab software- it will show you where all the money goes and if there’s obvious places to cut back- subscriptions and trips to the co op and codes are often the killer. We are a family of 4 with a take home of 2200 and mortgage of 900 so 1300 left and manage fine, but only with strict budgets

No it's not enough for a family of 5. Council tax, water, car insurance, house insurance, phones, TV licence, MOT, petrol/diesel, bus fares, maintaining children's needs, Internet. It's no wonder you're struggling.

As a teacher my take home monthly income in £2789. I am single, no children so am in a very fortunate position.

Look through all expenses, cut whatever is unnecessary: takeaways / coffees / buying lunch at work / subscriptions. Use cashback sites for all spending to get a rebate, accrue airmiles/cashback on card spend to redeem for cheaper holidays and transfer any existing debt to 0% finance cards.

Once you're done reducing expenses, you should look at increasing your household income which I find is actually far easier. What skills can you leverage for freelance, push for promotions, jump to another company with a payrise, get an extra job, any side business ideas?

Back 1.5 years ago I was earning £37k/year, and was struggling with bills. I made a lot of changes to my life to reduce monthly costs and also pushed my income to £250k/year at the same time.

Ok....

Yes that is a decent income

Your what attend private school? Your school?

Whaaat?! Tell me more! How on earth did you do that!

From your list it's the takeaways and also family get togethers which are my main issues.

I'm glad you're in a better place now financially. I wish I knew stuff about DIY. My dad wasn't into it so never was taught even the basics.

In April'23, I worked in a £37k job (no bonus). I started looking for a new job and researched using my spare time to earn extra money:

• Freelance Accounting: since it was my full-time job, the most logical start point was to find private clients to work on in the evenings
• Amazon FBA: still working on this one, have not had any results yet
• Options Trading: pretty much gambling, managing to net 10% return per month
• Stock Market Investing: The market keeps going up, the S&P500 YTD is up 25%
• Event Ticket Reselling: returns 100% profit on average per ticket
• Completing Surveys: £80-160 for one hour, usually done during a lunch break. I manage to do one per month on average
• Property Investing: requires large capital investment, have purchased recently giving 5% return in rental

By September'23, I started a new job with £60k salary+10% bonus.
By January'24, I got promoted to £65k salary+20% bonus

Leveraged the promotion and started job hunting, by April'24 I accepted another role for £150k+25% bonus. By now, my freelance accounting is generating £100k recurring fees per year and I think it will keep scaling. My £250k stated in my earlier post does not include all the other sources of income nor my bonus from work.

There are many groups out there with like-minded people making money. The cost-cutting may have saved me £300-400 per month in expenses, but it doesn't compare to the amount you can earn which is theoretically unlimited. You may not be able to repeat my same steps, but I'm confident you will be able to earn more.