To ask if you can afford to live on one salary?

[coffeeforone]

I'm currently on mat leave and due to go back full time soon. DH found out last week that his job is at risk of redundancy.

We need to do the sums to work out if we would be able to manage on one salary in the short-medium term and if not, what cutbacks we need to make.
I was chatting to a family member earlier who is very shocked that we do not already know with confidence we can live on one salary and should already have been living within the means of the lowest earner in case of this eventuality.

AIBU to this it is ok to need to spend more than one salary if you both work?

Of course it's doable. DH earns about £30,000 a year (self employed) we are a family of 5, I am a SAHM. It's more than doable if you are willing to cut back etc

Surely that depends on where you live?

My rent used to be £950 on a pretty standard flat, bills were £200ish. That's already a big chunk gone, without anything that would be considered easy to cut back like gym memberships or cars or whatever.

We could manage on my salary in terms of mortgage and bills but would have a seriously reduced food budget and definitely none left over. Couldn't survive on DP salary.

When we brought out house (over 4 years ago) we worked out that we would be able to survive on 1 salary if something happened, BUT bills and household stuff has increased so much over the last few years (and we now have another mouth to feed) we now couldn't live on one salary. If the worst happened we would have to seriously cut back and I'm not sure we could do it tbh!

We live on one salary and have two children. Husband earns 40 grand.
Our rent is 700 but we are buying and our mortgage will only be 450.

I think it really depends on how high your rent/mortgage is and what kind of lifestyle you want to live?

We manage to do plenty of activities and we go on holiday abroad every year, sometimes twice.... but I never buy clothing new and we never buy branded foods or anything like that, my shampoo is the 80p supermarket one, most of our furniture and toys for kids come from charity shops and Facebook selling. We have a really cheap car and only one computer for the whole family. We prioritise doing things... for some people that might seem mad because they value something else...

Depends what your priorities are. I have friends who earn much more than my DG and have no dependants yet swear they are living hand to mouth because they have a certain lifestyle that they feel they need. I know some people would be horrified at having to buy second hand clothes for example... but it doesn't bother me at all..... I'd be horrified and miserable at never being able to have days out and travel.

If you are willing to let previous standards drop in one or more areas then you will be absolutely fine.
Look at what is important to you about how you live... is it high quality food, or is it travel and days out, or is it entertainment at home.... you either cut back on all of these a bit or you focus on something at the expense of something else.... just sit down and make a list of everything you spend and look at which expenditure is necessary and which is important to you etc

How long has.your husband been at the company? Will he get a good package?

We could live off 1 salary but wouldnt afford big holidays etc. With 2 salaries we have luxuries. On 1 It would just be getting by.

We could live on mine, but not DHs current salary shit downsizing property, he is however doing his post grad through work which leads to an automatic promotion, once that's finished we would be able to but things would be tight. We live in a high employment area though so if either of us were made redundant we'd get work again quickly even temp work while looking for something better/in our chosen fields. I've DH has his further qualification he'll be in a role in high demand and short supply so could walk from one job straight into another within a day or two, I could do similar if I took a bit of a pay cut. I don't think anyone whose household has two salaries saves the entirety of the higher salary, it's madness

No.
I earn more than twice what DH earns. We could scrape by on my salary but it'd be very, very tight and all luxuries would go. I have a horse (have had her long before met DH) and she costs an arm and a leg but isn't going anywhere as she is old. When she dies I will have to think carefully about whether to have another - it rather depends on if this pregnancy sticks.

We could not live on DH's salary as he cannot be on the mortgage (bankruptcy from failed business) and only earns enough to cover the basic bills. We have a combined income of £83k, but our mortgage is based on my salary only.

Currently pg and I will return to work almost full time (about 32hrs/4 days) - we an afford some drop in income but only a little.

yes we could have always lived on one salary. the reason i have always worked though is that if husband lost his job (and hes would have been the sole earner) we would have gone under quickly. And he didnt want this level of pressure. It would also have affected my pension and career path. And i think it wouldnt have been a great example to set for my children. Plus we have been able to do lots of things we wouldnt have otherwise done - extra tuition, holidays, decent 18th birthday presents

AnchorDownDeepBreath
We live in SW. Our rent, bills and food come to about £2,000 a month. We have no luxuries.

Yes I think needing two salaries is the norm! We could live off one of our salaries - the higher one! But not off the other without serious cut backs!..it would be a case of dipping into savings and getting some more earnings into the house ASAP if thar happened

It would be a major struggle to live just on DHs. We couldn’t on mine. Once we are mortgage free we’ll be able to though - looking at around 10 years time all being well.

we could, but that would mean giving up on holidays and luxuries, counting the pennies and not being able to save for the kids. Not a lifestyle I would like if I have the choice.

No. Not without selling our house and moving out of this area. Not without having to change the education choices we have made for our children.

I am guessing your family member is of a generation where houses and a decent standard of living were affordable on one middle income salary. And hasn’t woken up to the fact that in the 21st century, most couples need both incomes to get a mortgage and not be living hand to mouth.

We could scrape by but would be pretty miserable. Would be manageable very short term though.

DH brings home £1.5k per month - mortgage is £950 & bills £200. So that leaves us with £350 (+ £190 child benefit) for everything else. Petrol is £150 and food is at least 250 for family of 5, but budget will increase as youngest is a baby. Leaves us with £140 for everything else which once you consider things like car insurance, repairs, clothes, Xmas it doesn't really cover it.

Right now I'm on mat leave so we have smp to add to the pot, which makes things much easier. However it's not worth me returning to my current role as after childcare it'll only bring in around £200/month and for the amount of hours worked and the stress off the job and the horrible horrible commute one day a week I've decided to go self employed because essentially anything above £200/month puts us better off than my current role.

I do think that rather than trying to live off one salary, a better plan is to do a budget based on the lowest income so you know where you would stand. Also look at things like company sick pay and possibly income protection. As my part time salary is significantly less than DHs low salary we have income protection which gives us peace of mind.

Who was the relative? Was it someone much older or much younger, who maybe has not worked?
The average salary in the UK in 2019 was £29K, the take home pay approximately £1925 per month.
Why on earth would a couple scrimp and save to struggle to live on one income and save the bigger take home?
Bonkers idea.

we've always aimed to manage on my salary... teacher so secure job. Not sure if reality it would work but we have never stretched ourselves to the max for mortgages etc to keep things manageable

Your DS would be losing out by staying at home rather extra nursery when he’s 2? What utter tripe... I was a SAHM so my DS went to playgroup 2 mornings a week at 2.5yrs and he was just fine, my DD was even more “deprived” as she didn’t go anything until she went to pre-school until she was 3... and she’s doing more than fine academically! We lived off one income when the kids were small but we lived in area where house prices were low and we didn’t do big holidays and our cars still are never what you would call plush!... & we have never... brace yourself... had Sky or other paid for satellite telly😬 The viability of living off one income is mostly linked to your housing costs and secondly your expectations of daily life, so it’s different for everyone. But please don’t worry about wee ones being at home rather than nursery that is truly bollox

YANBU

Only very high earners could afford this/ know with certainty they’d be okay on one.
It’s absolutely okay and cutting nursery is incredibly sensible.

Without changing our lifestyle, no - we're a few hundred pounds a month short but we could trim enough stuff back to do it if we had to. Wouldn't be a lot of fun though!

Yes for us. We also cut out kids nursery hours to bare minimum, there's nothing wrong with that.

Your relative needs to get in the real world, what a dick!
We live on one salary because we are out of the uk at the moment, in the uk I need to work in order to enjoy the luxuries e.g. Holidays, nice clothes, good Christmas and birthday presents.
We could live on one in uk but I enjoy clothes and make up so I work in order to pay for this.

We would probably manage for a bit on one income. The first few months would probably be ok, but once we had been on one income for a bit we would struggle. In the beginning we would be using up food from the cupboards, then there would come a point when everything was used up and we had to buy everything we needed, which would cost. The children wouldn’t need new shoes for a while, but when they did, we would struggle. If the washing machine broke down, we wouldn’t be able to fix/replace it as we wouldn’t be putting in t9 savings to cover expenses like that. Do you know what I mean?

A good friend went through this and in the beginning was extremely upbeat about how well they were managing, but after 6 months, they were really struggling.

No we couldn't.

But, we have enough in savings to pay off debts and could, I think, pay the mortgage long enough for the insurance to kick in and pay part of it. I think we could fairly easily cut our outgoings by £200 a month, anything more than that and it would get painful.

We'd probably need to save about another £200 a month if the lower earner lost their job. And an unachievable £550 a month for the higher earner.

Yes we could.

But only since we have paid our mortgage off.

LOL. Did they by any chance bring their children up pre-1997? Most people could do that quite easily in the 70s/80s.

I had no choice as my second child turned out to be twins and I simply couldn’t earn enough to cover childcare. We get tax credits. It isn’t easy and from their birth until they are 3 in the summer holidays we have had somewhat straitened lives. I am in (paid) training from Aug and will also be buying a house outright from inheritance before then.

It will be so nice to not have to count every penny. For the first time in my life I’ll have spare money.