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.

This.

We're north (roughly same distance between Newcastle and york if it helps) and have a similar monthly income. House slightly more expensive at £750 but we manage well for 6 of us.

We did above as were struggling at end of month. It was the small things such as DH going to Costa for a morning coffee and refusing to take lunch to work - easy £15 per day without him realising - used to do regular little shops through week rather than a meal plan and proper shop - would pop in for bread and milk and pick up other bits that we didn't need which all added up.

We set aside an afternoon and went through everything and now have a budget we stick to plus savings. We'll worth the initial leg work!

I think the cost of living has made everyone feel a bit like why isn't this money going further.

I would think 5 people eat an awful lot. Apparently £35 a week is the average shop per person per week, (this is from a government survey, not mumsnetters who eat one chicken all year) so 5 of you must be eating near £700 a month to be average. Without alcohol or takeouts.

Transport costs? Insurances? Pets?

One thought. You say you budget ; does your monthly budget include clothiers, takeaways and other things you ‘don’t spend much on’ ? It needs to. If you budget for every single category and never overspend on any item, you can’t go wrong. It may need to include setting some money aside into a separate account for large items like holidays.

The true expenses is very useful.

Also things like glasses need renewing every couple of years. So you can average those sorts of costs out into a savings pot too, then it's not a surprise.

£1150- essential bills/ mortgage/ school bus/ train/ childcare
£750 - groceries
Fuel £65
Kids clubs £75
£150 Car costs which I split over the year to save
£110 UK hol ( this has gone up considerably in the last 3-4 years!)
£30 Dental ( I have dental issues and need to have check ups regularly and this works out cheaper)
£100 mine and Dh spending
£60 day trip / treat
£20 kids pocket money
£100 stuff for kids ( someone always needs a new coat, clothes, shoes, pjs, etc)

This takes me to £2610 and I have no idea where the £1290 has gone!

I think it's going on random things like we had to buy a new washing machine last month. The month before we spent a small fortune on a family wedding, the month before that we replaced the carpet in the living room / hallway etc. these are all big costs which we really do need.

Its very hard. I was looking at a very average winter jacket in M and S Men's dept. £130. For nothing really.

Absolutely agree with writing it all down. Everything.
Start with the necessities-mortgage, council tax, utilities, car insurance, petrol, food etc-ONLY the necessities
Then look at what you have left after-this is your disposable part. If it’s a small figure then it’s simply cost of living, if it’s a decent figure then go through your last months bank statement to see where it’s all gone. Small things that we don’t notice at the time really do add up.

I think it surprising if you're running out of money but not that's you're finding it generally tight. I think having a third child makes a bigger difference than people might think - another person to feed (presumably eating close to adult portions), clothe and pay for on days out.

You've missed things like birthdays and Christmas. Haircuts.

This takes me to £2610 and I have no idea where the £1290 has gone!

You really really need to go through everything with a fine tooth comb. Even accounting for the extras you've mentioned like a new carpet, wedding and washing machine that's an insane amount of income unaccounted for each month.

To put it in simplistic terms over a year you've got almost £15,500 unaccounted for!

So you have £1290 spare but don’t know where it’s gone. Weird.

£750 a month on groceries seems a lot.

“I think it's going on random things like we had to buy a new washing machine last month. The month before we spent a small fortune on a family wedding, the month before that we replaced the carpet in the living room / hallway etc. these are all big costs which we really do need.”

This all needs budgeting for then.

Do what a previous poster said and go through the last few months bank and credit card statements to see where the money is actually going.

We're on a similar income and we'd save up for something discretionary like a new carpet. Do you have savings OP?

It’s the sort of level where you only need a few meals out and 2-4 people getting Starbucks etc where it gets eaten into
plus mortgage is just one of many bills. 4 /5 phones, internet, hearing, council tax

So you do know where the money is going…white goods, weddings and carpets…@WhatIsWithMe what are you confused about? You don’t have a grip on spending clearly so you need to do that properly. You sound comfortable…but spendy.

Is your first figure complete? It seems low for £500 mortgage, plus council tax, energy, water, insurance, internet, tv, let alone adding train and after school clubs etc (I assume not nursery!).

Otherwise you have your answer in the one-off things for the last few months, each of which are easily more than £500. Then if you add in coffees, haircuts, top-up shops, odd bit of toiletries, kids school requests, the ‘odd takeaway’ etc, it’s easily gone.

£100 for you and DH’s monthly spending will be easily gone, so better to be realistic but then budget.

Writing just that bit down does look very suspicious! I am going to go through the mse budget thing and see what the hell is going on!

I also forgot to add Xmas / savings which would be around £250. There must be other stuff that I'm missing off.

Shopping is so expensive now, it doesn't surprise me at all.

Not these days. I used to budget £500 for ours a month (also a family of five), and now it's more than £750. It is mad how much prices have increased.

You need to get into that "missing" money. I include an amount each month for birthdays, eating out etc. Over the years I've added a savings amount. If I need a new washing machine it comes out of that but in the run up to Christmas, the savings column will change to Christmas funds, or holiday spending money, wedding etc. I adjust it each month depending on what is happening, but ultimately if the balance goes below zero I have to reduce something until it's not.

It takes a bit to get into it but now I probably spend 10 minutes a month on it.

£750 on groceries for a family of 5 who shouldn’t be living on the breadline is not a lot. Someone up thread said £35 per person per week was the U.K. average. That’s £750 a month for 5 people. My own teens eat the same as us adults.

Yes pre COVID we could survive on £500 for all of us but we like to cook and you'd be surprised how fresh ingredients can be quite expensive

You have to track every last bit of spending for a month or two to work it out. Little things add up very quickly - a new pan, bed sheets, replacing hot water bottles, etc, that's easily £100 on just a few things.

Sounds like you are not apportioning budgets correctly so occasional big costs are being mixed up with your regular monthly household running costs.

You have had big one off expenses recently - new carpet, new washing machine etc.. so no wonder money is tight.

With stuff like that I either save a specific pot of money (a new carpet is reasonably forseeable) or if not (I get a new washing machine can be an urgent purchase) I put it on the credit card and work out a repayment plan pretty quickly afterwards (generally I have a slush fund for house related expenses so would take some or all of it from there.)

For occasional additional socialising expenses eg a wedding or special meal we have a separate account we pay £50 a month in to and we dip in to that for those types of expenses.

I'm guessing it's scrappy little bits of spending - the £3 here, £7.99 there. The stuff that's small beans so you don't really think about it or remember it. But it all adds up. If you go into town and pay for parking, grab a coffee and snack, maybe pick up a few wee bits in Boots, then a sarnie and drink meal-deal, or some extra ingredients you realise you need for dinner tonight... Quite easy to burn through 50 quid before you've realised it.

Same goes for recurring bills. It's super easy to think that Netflix is only a tenner, Audible is only 7 quid. All of these smaller subscriptions also add up.

Lots of banking apps have a spending analysis tool. It's not perfect but it will group things like groceries, travel, recurring bills etc. That's a helpful start for you taking a look at where it's going.