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.

Yes; this is exactly what I think my issue is.

I bet you spend far more on your holiday than £1320.

What about fuel to get there. New outfits. Sweets for the journey, snacks while you're out and about. Entry to theme parks. The odd dinner out. Souvenirs. Ice creams. Money for the arcades. New pans for the camping stove. Car parking charges. Etc.

That's just an example. You don't track what you spend, so it's highly likely your rough figures are way off mark.

Personally, I'd go back over 12 months to categorise everything.

Think you've already nailed it- you are loosing money without realising it. Go back the last 3-6 months and find out where it's gone.
It's such a good use of time and if you then need to increase eg your grocery budget as you are spending £35 a week on top ups- at least you know.

For some context I also live in a northern town, there's 3 of us in my household, I earn less and I can afford to save. A massive thing for me is I deffo spend less on groceries but appreciate with your household that's not possible

Yet if you go somewhere like mountain warehouse you can get a good quality winter coat for £40. Shop wiser and outside of your comfort shops.

It is almost exactly average. The government did a big survey. It's about £35 per person per week for a grocery shop. Not including alcohol.

Is this what you actually spend or what you think you should spend?

Do you really only spend £1000 a year or so on your week's holiday for five people? We have just gone away for a week in the UK and the accommodation alone is £800 and that was on the cheaper end for the area. Once we pay for activities, travel, food, etc, we will be well over £1000.

You should be ok on that salary with such a low mortgage. I am a single parent with around 4k month income, but my rent is £1400. I can still save some each month (buying up north when youngest goes to uni). You need to write your budget down to see where you can save money

Don't forget to account for mobile phones - if you and DH and the teens all have one that's probably a decent chunk.

Yes that's so true. I'm not adding all those extra bits in!

Our take home is probably 1k more than yours when adjusting for mortgage, and we are usually able to save 2k on a month when it's not Christmas or holiday or big house expenditure.

But we are a household of 4 which admittedly makes a difference, and are very frugal.

You need to differentiate between day to day expenditure and capital expenditure, washing machine, carpets etc.

Maybe set up a separate capital savings account and put £600-800 a month in there and then use that for capital expenditure.

And then use the core account only for day to day spending to make it easier to track what you are spending

I recommend banking with Monzo or Starling or one of the others where it groups your spend into types automatically. Very eye opening!

I do think teens are expensive. My DS muttered that “the government” pays for him aka child benefit and so I wrote down his costs. I didnt include 1/5 of food despite the fact he he eats loads and constantly empties fridge of all sliced meats.

Just hobbies, clothes (constantly growing feet too) school lunches, transport, music lessons, pocket money, phone contract is getting on for £500 a month. I can easily see his quickly it all goes.

We have a income of £3100 family of 5, our bills/mortgage take half of that and we still live comfortably we have a holiday abroad every year, we don't go out much but could afford to but ours is due to personal reasons, but we pay for takeaways, etc don't know how you seem to be struggling on more

Work out the total of your regular payments and deduct this off the total I have mine all coming out a day or so after I get paid. Deduct this off total income. Then deduct any known one off expense that month. What’s left is what you have to spend. I divide it by the number of Fridays till next pay day as Friday is my food shop day. I put it all in a savings account and draw my weekly share each Friday. If I don’t spend the full amount I don’t draw as much out the week after so it remains as savings. I’ve done this for years and found it works for me. It makes me more thoughtful when doing the food shop as the less I spend there the more I have for other things!

You need to get your statements out and an excel spreadsheet.

Check each subscription, do you need them? Can you change them?
Are you on good utility plans?
What about your teens costing school wise?

How many treat shopping you do? A takeaway for 5 is hugely expensive, do you buy a lot of coffees during the day?

I found that contactless paying is the worst, it really shows how we spend money without realising how much.

That money is supporting 5 people, teens cost as much in fact probably more than adults, growth spurts, ravenous appetites the desire for tech and labels to fit in with friends.
So actually I think it's not a generous income to support 5 people.
Also mortgage will only be part of your essential outgoings, what about utilities, council tax, insurance, running a car, transport etc.
It's a fact of life money never guess as far as you think it does. I also always wonder where the money had gone by end of t h e month and sometimes sooner!

Who are these people claiming £3, 400 a month is comfortable for a family of five! It really isn’t! It’s not you OP. Life is just really expensive now. OP your description of your lifestyle is exactly what I would expect for a family of five on that income. In fact I think you are doing quite well. I’ve worked out if it were me and my two kids ( both younger than teens) we would have a similar lifestyle with 3k income and no mortgage. Except I don’t think we could afford the holiday. So you are doing well with your budget. Especially if you run a car in that.

Do you live in a really big house? Have a cleaner/regular beauty appointments?

not saying you shouldn’t do any of those things (I wish I could)

but we live in a pretty average house in the south. Family of 5 with a dog.

We had a dip in income and now take home £3200 a month with a monthly mortgage of £1200

we also cook from scratch, and have no other debts. We have ok bills, our energy bill is about £50 a month.

we pay for school clubs, childcare, a hobby for me and DH, go on holiday once a year.
but we did have to sacrifice the cleaner and I don’t get my nails done/waxing any more, I have to do it myself. We don’t really do any day trips that aren’t free but are members of national trust and English heritage so that’s opened us up to a lot. We found those were the things that surprisingly added up.

You need to use a bank like Monzo or Starling so you can track spending.

There is no way you’re only spending £1200 on 3 kids uniform, shoes and clothes and school stuff like trips, mouth guards, new swimming costume, CIN donations, book fair, hot chcolate for need school book, halloween tat on the yard, christmas - disco, jumper day, money for elves in need.

With respect, I think you are just guessing these numbers.

Your kids only spend £25 / month each on clubs, sports, kit, training, exams, travel to events etc ? That’s £6 a week - are you sure ?

how many cars do you pul fuel in for £65 /month ( and please tell me where you buy your petrol ) ?

do you really cover all your dental costs for two adults for £360 / year?

and you and your Husband only spend £1.67 a day each on personal spending? So that covers coffee, lunches out, drinks, clothes , hairdressers etc ?

And your kids get £7 a month each ? Really?

and you have no phones ( not even your teens )?

you do no repairs or maintenance on your house ? You don’t get your boiler serviced ?

You never decorate or buy a new mug or duvet cover?

We have about that take home. We are always skint and when I did the finances the thing that took us over most often was the food bill plus having two teenage boys who eat constantly. Not sure what to do about it. I tried Lidl but found we spent more than if I just did a menu plan ( including breskfast, lunch and snacks) and stuck it in Tesco online and got it delivered, meaning I don't set foot into the supermarket!

Great summary! I'll take that on board for my household too!

You're just overspending.

Holidays.
Treats.
Something for the kids.
Carpet.
Washing machine.
Wedding - clothes, travel, gifts, hotel(?)
Christmas.

Add on the discretionaries, such as takeaways, snacks, treats - and the other things you haven't allowed for, such as uniforms, trips and activity related expenditure (coffee whilst waiting for a club to finish, parking), Netflix/etc, new phones and the odd 'that's a bargain' or 'if I get a couple of extra bits, I'll get free postage/a 5% discount' and that's where it's all gone.

Thing is you’re not scrimping, the opposite, you’re blowing money without thought. What you’re really saying is there is a limit to how much you can blow.