money - where does it all go?

[denimdouble]

Hi,

So before I start, I know that we are fortunate and that so many people have it harder. I am just fed up of everything being so expensive and that so much of our money is tied up with bills and essential spends.

We both work hard in decent jobs and our joint take home pay is £7400. Today I have calculated that after every last thing that we have to pay we are left with about £1800 each month. This is essentially the money that we can use for holidays, days out, fun stuff etc.

We do have some debt that we are paying off, however this will end in about 18 months so this will make things easier. Our mortgage ends in 47 months which will make a huge difference to our lives.

I don't want to sound ungrateful or tone deaf as I am not, however it's awful to see that so much of our income is needed just to stay afloat.

Anyone else feel that same?

I knew as soon as I saw the OP thar the writer would get a pasting on here.
Unless you are surviving on pennies, you are not worthy.
have no idea why posters on MN are completely incapable to posting sensibly to a thread like this one.
Is it envy, pearl-clutching or the current phenomena of everyone wanting to ge the world's biggest victim?

1,800 a month to blow on fun makes no sense when you have debt.

Seriously! I have to agree with this post. I'm a higher earner too with a single take home of around your combined and I cannot see what the issue is here??? £1.8k discretionary spending per month is really REALLY good. What more do you expect?

But what is a sensible response to this thread? Unless I've missed some critical updates I cannot see the problem of £1.8k left from a £7.4K salary.

I know, we'll do a swap. Admittedly I'm on my own but I live on the state pension, although I do have a very, very few extra hours per month in a part time job now.

I manage to live on about £1200 max (varies each month) which includes rent and running a car, and I feel perfectly happy with that.

I'll show you what budgeting really means, and I can guarantee that by the time you return to your rather comfortable financial situation, you'll view it very differently.

Hi OP I understand your question.

Even with our combined income being a fraction of yours I also get fed up with the large percentage of it just gone in a blink of an eye.

But it’s one of those things that there simply is no point in getting upset and frustrated with because it is what it is.
Bills, mortgage, food, car costs, it’s adult life isn’t it.

I think that’s a bit unfair. The average is based on the entire country, and it is well known that SE England is a lot more expensive than the rest so you don’t really have a ‘choice’ in essential spending (mortgage is what it is, council tax which tends to be one of the highest in the whole country is what it is, utilities are what they are etc, childcare is what it is - you can’t exactly send your kid in to wraparound care in the north when you live in SE). The only ‘choice’ is moving to a less expensive part of the country and I really don’t like that outlook (if you find it expensive just pack up and leave). Many people choose an area because of their ties to family and friends or jobs. And speaking of jobs, your salary in SE (especially if commuting in to London) would be a lot higher than elsewhere in the country. So even though a 7k paycheck looks like a lot on paper compared to the ‘average’, it really isn’t a lot this neck of the woods.

In any case of people wondering where their wage goes, I'd advise going onto Money Saving Expert forum and doing a SOA or statement of affairs to look forensically at where your money is going. If you post it people will offer advise...it may be your debt is accruing high % interest or you've overly expensive insurance etc

Our income is much less then yours, we live in the South East, DH manages to save £600 a month and our mortgage isn't due to end until we are 67. Thanks to housing costs here, we actually think we are very lucky compared to most and what you have spare at the end of the month is more then I earn, which I think is loads.

Are you kids still young? There are loads of low cost stuff to do with young kids (gets harder as they get older). We now have teenagers and the cost of driving lessons and expensive activities and are still doing OK.

I will admit we are quite frugal and DH does most house repairs as he's very handy type. So we probably save a lot that way as labourers can be very expensive.

I’m assuming your mortgage is in to the thousands and you also mention childcare costs so kids must be no where near uni.
so I’d just push on op because in a few years you will have all that money extra per month.
i think many people feel squeezed when they’re in the thick of kids and full time work if you’re trying to pay off a house, but you’ll come out smiling in a very short time.

Car costs nowadays are absolutely insane. The amount of brand new 60 grand SUVs being driven around locally amazes me. When I was younger we bought a second car every five years and updated it when it clapped out. What happened to make leading really expensive cars so normal? Every three years a new one appears and I’m sure it’s costing households an absolute packet but it’s just a core expense now. Bizarre.

But why wouldn’t it disappear? Wages are there to pay for people to live, not to accumulate large amounts of savings/assets. I’m constantly surprised how people on MN expect to be swimming in spare cash, especially when they have young children. I just assumed we would be totally skint when we had young children and we cut our cloth accordingly (no foreign holidays, stayed livid in a small flat etc). I am currently reading the Call The Midwife books by Jennifer Worth and it is absolutely shocking how quickly our expectations around quality of life have changed. Just in the 1950s, the majority of homes in London did not have indoor toilets, hot running water or cars. We all have so, so much now and constantly want more. I think some people need a reality check. Read the Jennifer Worth book and you’ll never moan again.

Hah, stayed living in a small flat. Although I’m sure I was livid at times.

DH got offered they option of a reduced rate new car from work. He always does his sums first and even that turned out more expensive to run then our 10 year old car, even when taking into consideration all the repairs you have to do on an older car, which often isn't more then wear and tear parts. It's always way cheaper to buy a 2-3 year old car and run it until its time to scrap it.

So I never see the logic in buying new cars. I'd have to have a multimillionaire before I'd buy a new car. My friend would change theirs regularly saying she needed a reliable car, but an old car is just as reliable as long as its serviced regularly and well maintained. In fact I go far as to say more reliable than a car you only own for a few years.

I think people are trapped into these finance agreements due to balloon payments. They have no lump sum cash ability to buy a second hand car so are stuck renewing these very expensive monthly fees. I think a lot of the spare cash in the squeezed middle is going out on car payments.

Where is the problem here? £1.8K disposable income every month is fine, or is it you feel that because of your huge combine income you both should have more, instead of spending £5.4K on food and bills? You both made choices to get to the position you’re in now. You say you don’t want to come across as tone death but that’s exactly what you’re seem like.

When i read the pp I wasn't sure if it was a typo or not as both worked 🤣🤣

I agree, I recently passed my test and we wanted a ‘run around’ car that I could ‘scratch and bump’ but even looking at cars no specific brand or spec, only criteria being ULEZ, it was just too much when you then also have to think about insurance, tax and petrol on top. Our existing car is a rental and the monthly payments on that are affordable, we wouldn’t have had the money to buy it cash.

We live in the South- East so our mortgage is high for a very 'normal' house.

but you are going to be mortgage free in a few years?

Just posted about the debt. We will be 50 and 51 when the mortgage is paid so not that young :)

But that is young is this day & age with expensive London house prices.
I'm the first to say wages are crap & 100k doesn't go far these days etc but your income is going on clearing debt & paying off your mortgage early which is your question...

I'd noticed similar and find it really bizarre.

I have a cousin who moans that they will never be able to afford a mortgage (currently early 30's) with a similar salary to us. They are currently renting a house off a friend below average market rate. Yet have a brand new SUV every three years and an expensive abroad holiday every year. Moans at me to how I can work part time and have a large house in the countryside. I point to our ten year old car on the drive that's finance free and the fact that my passport ran out last year which I have no desire to renew in the next 3-4 years minimum. My aunt then pointed out that he money they had spent on the cars and holidays in the last three years if they'd gone without they could have a mortgage by now. It blows my mind sometimes on what the cost of a car lease is nowadays.

You have more fun money than my take home full time wage.

Your lifestyle is outstripping our salary basically.

When you have a mortgage, kids, and child care, it always feels like a financial drain as these costs are high. It's not until your mortgage is paid off and the kids have left home that you feel well off. We all know what we've signed up for so best just get on with it.

If you are struggling, but earning, and will soon pay off the mortgage, and still have childcare costs, why on earth wouldn't you extend your mortgage? This makes no sense.

I understand that to many you have a lot of money, and can appreciate the exasperated comments from those who are not so fortunate, but I hear you OP.

Growing up my household had a joint income of £80k and we lived in a lovely house with a big garden, had multiple pretty nice cars (like a soft top BMW for example, not like a Bentley!), went on exotic holidays, ate out or had takeaways a few times a month, thought nothing of going shopping. My parents had enough left over at the end of the month to fill pension pots, put something aside for my future and help me with rent when I was at uni etc. My father worked for the local council and my mother for the NHS.

Now my households joint income is slightly more than theirs was and we live extremely differently. The house is considerably smaller, we have one low end car, we don't go abroad other than to visit family where there's no accommodation costs, we don't eat out or do many things which cost money, any shopping is charity shops or vinted. We are privileged compared to many and I'm grateful for that, but the way we live feels disproportionate to the income we have. It just doesn't go as far these days. We're actually in the process of moving to a cheaper part of the country to try and reduce the monthly outgoings. We both work remotely so the income won't change, but perhaps we'll have some breathing space and be able to reduce the mortgage term from the 25 years it is currently.

I'm no expert on economics (quit that a level before the end of the first term!) but if you use the Bank of England inflation calculator you can see it. What cost £1800 now would have cost £900 in 1998. An £80k salary equivalent would be £153k today. So households earning the same amount are paying double in living costs. Doesn't feel like salaries have grown in proportion to the cost of living at all.

You can have more than a lot of people and still wonder how you can not have more left at the end of the month. Both can be true.