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?

We couldn't atm. I mean, obviously it is possible to live on one wage, but our outgoings have been predicated on more money coming in, so we're tied into things that we can afford on two salaries but not on one.

Combined net income (childcare vouchers already deducted) approx £4000, outgoings £2400 not counting food/clothes. We could cut some of that figure by taking DC out of nursery and after school club, and by cancelling all clubs/gym etc, but it would still be down to one person's salary for mortgage and other bills only, no slack for food.

Some of that is debt eg to replace boiler. Which we wouldn't have done immediately if we were on one salary, but it was v old and would have needed replacing at some point.

We are also only 1 year into home ownership, and 8 months away from both DC being at school and childcare costs dropping. So right now no, but maybe in a year or two. Assuming interest rates don't change dramatically.

Yes we could (& did for many years when I was a SAHM) but as others have said it depends on so many factors. We paid off our mortgage, never had child care costs, made a conscious decision to only have one child and have had a couple of small inheritances. So in many ways we have been very fortunate. Also made a conscious choice to live in a rural area where property is relatively cheap (do choose to run two cars though ). Not everyone has the same options.

Yes we could, it would be fairy easy but not necessarily an exciting living. We’re both completely average earners.

We often have to go several months on just my salary since DP is self employed and always promising me large contributions "once I've sat down and sent the bills out", that seldom materialise. Any issues like cars needing repairs or vet bills will take us over it, so I make it my daily mission to put him in the path of as many direct expenses like food shopping, kid's clothes shopping, vet trips and garage visits as possible. We also have a steadily accumulating future repair burden from not doing work on the house in good time, but since the mortgage has less than five years to go, I'm hoping that I'll be able to put some money towards that then.

No we couldn't do this. We have experienced redundancy but my husband's income was covered by the statutory redundancy payment which was relatively high due to his age and length of service, so it was fine then. However, now it wouldn't be. We would have to sell our house which wouldn't be ideal as it would mess up our credit records. Trying to save now to get more money put by as redundancy has to be a risk for both of us.

However, I suspect we are older and for most couples with young kids I would expect it to be very hard to have savings that they can fall back on.

How are people managing this?! DH and I both earn £40k each in full time professional roles. Our mortgage, bills and nursery fees are all comfortably paid for, but we only have around £750 a month after everything is taken into account, including savings.

We certainly couldnt live on just one of our salaries. I am genuinely curious as to what people earn that mean they could live on one? And where in the country are they? We are in the South East.

The South East is well known for being exceptionally expensive . My DH & I earn nothing like £80k between us but live in a much cheaper part of the country (West Midlands) and have paid off our mortgage.

We actually did used to live in the South East but chose to move away for a better quality of life - and could afford a much nicer house as well.

Never heard of it. Dh earns a lot more so we'd have never bought a house let alone a car.

No, we can't, is the short answer!

But we didn't anticipate DC2. Prior to this, I think e'd have scraped by on DHs salary, but not mine.

FilthyforFirth

If I'm right, your outgoings are £3750 a month if you're left with £750.

I guess you must have quite a high mortgage and maybe 2 kids in childcare? Running 2 cars?

I suspect my mortgage is considerably less, I don't need much childcare (primary school after school care for one child) and run one car. I do have a son at uni as well.

It's fine.

My mortgage is sky high as we got a 4 bed detached. We only have 1 car and 1 child. However, we are both expecting to increase our earnings in the next 5 years, DH more so than me. So see it as short term pain. We do have some debt that an inheritance should clear later this year.

But yeah, we definitely couldnt do it on one salary, I think we would struggle with one of us part time even.

Well, I have a 2 bed terrace.
You would be able to downsize if you had to, so I think you can quite easily see how people manage!

We did, for 10 yrs while I was a SAHM. DH is not a big earner either - he’s a teacher. We cut our cloth and lived within our means so that I could be available for our children and we didn’t have to put them in everyday childcare (living far from family). It was hard going at times, even though we are not big spenders anyway.

Now that I’m working we are trying to live mostly on DHs salary while saving most of mine and having a few treats. So yes, it’s doable.

Our basic outgoings are around £3750. We have one child in childcare, one car and no debt at all to service (apart from the mortgage). But unlike Filthy we only bought a 2-bed house, so downsizing wouldn't be an option.

I think there must be a huge amount of people in the same situation where short of moving areas completely, they'd be screwed on only one wage.

DS would be losing out because of our lack of 'financial planning'
What a strange thing to say. Surely DS will be gaining by spending time being cared for 1 to 1 by his father. Swings and roundabouts.

How are people managing this?! DH and I both earn £40k each in full time professional roles.

How do you think people survive on benefits,/minimum wage jobs?

It's about expectations and living within your means.

You downsize, turn the heating down and wear an extra jumper, drop the gym, less takeaways/eating out, cheaper holidays, move to a cheaper area, stop getting your nails done, whatever it is that you spend your income on, you cutback.

nope i have two jobs

We could manage our essentials on DH salary if we cut back from our current outgoings. However that would mean there was very little left for anything else. No clubs or activities for the children, no trips out, very few new clothes or shoes and they'd have to be the cheapest available. We are not frivolous now but we do do stuff.
We wouldn't do that just for the sake of saving one salary for a rainy day. Possibly we'd do it for a short, fixed period of time to pay for an essential thing that we couldn't pay for through any other means.

If we were doing it because I'd lost my job and couldn't get another at all it wouldn't be quite so bad as we'd not be paying for childcare.

We could not manage on my salary alone, even cutting back. I'd have to find a new job or we'd have to move (which would be quite tricky as DH two eldest need to live reasonably near to their mother to maintain access). We live in the SE currently and neither of us earn huge amounts.

We've always based every outgoing on one wage from the outset. Whenever I've worked my wage has overpaid on the mortgage and funded holidays etc.
I was going to go back to work to put DD through university but financial circumstances have changed and it's no longer necessary.

we could - it would be tough,b ut we could.

We manage on one and my Dh isn't a high earner. Tax credits help and we rent so no big mortgage or any debts to pay

We live comfortably on one £1700 wage and £200 child benefit/tax credits. Own two houses and have two kids.

DH and I both earn £40k each in full time professional roles.
We certainly couldnt live on just one of our salaries.

I think what you mean is that you couldn't suddenly live off one of your salaries. Which is normal. If for some reason you had to live off one salary you'd have made different decisions with regards to housing and nursery and be living a different lifestyle.

Yes, we have raised 3 dc on one min wage and of course top up tc.
It's not difficult if you enjoy living frugally and love buying bargains.
I just got a lovely dress from Debenhams for £9 I need it for an occasion.
We always managed dancing lessons, music lessons, cheaper activities and free sports clubs.