To ask when and how you became financially stable?

[GabbyChalice400]

Me and DP are young. We have a baby and have been renting our first house for the past year.

But we're always skint, living hand to mouth 24/7. I'd love to not have to worry about money, but it seems like we're never going to get there. We earn less than 40k between us.

Has anyone else been skint and eventually ended up getting on track? Please give me your stories so I can feel somewhat hopeful for our future!

No one?

No kids and good well paid jobs so we’re ok and have been for a few years, I was mid 20s when I started to stabilise financially. It’ll happen, just be very careful how you spend what you have now. Learn how to make it go further and never over spend, these lessons will stand you in good stead for when you are a bit better off. Good luck!

DH and I have combined income of 36k and we really struggle. Like you we live hand to mouth 24/7. I’m retraining because I’m sick of my low pay and constantly missing out on simple things because I’m broke. I can’t give you a happy ending story but I can tell you that a lot of people are in the same boat. We’re in our late 30’s with two kids.

Start treating saving as a very serious business.

I think most people have been skint op. Stabilisation for us came with promotions and pay rises.

We bought a house in the south east in our mid twenties, had two kids in less than 2 years, mortgage rates went crazy and basically we had more going out than coming in however much we juggled it. There were always bills we couldn’t pay. We were in a very bad way financially.

We bit the bullet, sold our house at a loss and moved up north to DH’s home town (DH transferred with his company). Bought a little house, and scraped along okay. Learned good budgeting skills and how to have fun cheaply. A couple of years later DH was headhunted for a much better paid job. Once we got our heads above water things improved very rapidly. A few years later we set up on our own and did really really well.

It’s very hard when you are young and things are tough; I never imagined we’d do as well as we have, but the hard times have been very bonding for us and we appreciate all we have now.

Mostly Attitude... Never earned high incomes or been given help from family BUT been fairly smart:

1 - pushing money towards stuff that holds or grows in value. E.g. drive banger cars, nothing fancy, reliability over extras.. drove a car without working automatic windows for years because it was discounted due to known issues, etc. No sky TV, visit the library for DVD rentals, walking in hills rather than only cinema trips.. to compare 2 examples Vs peers.

2 - job risk taking, within limits. Career change and employment hopping as long as it didn't harm the long game (not too often that it might be a problem in future job applications) but came with worthy benefits (extra flex or big salary bump).

3 - no debt, ever, unless unavoidable to build an asset e.g. mortgage. No hire purchase. No car loans. If we can't buy it outright or smartly then we can't afford it. We use cashback and points credit cards, paid off auto each month.

4- don't spend on anything that isn't truly beautiful or highly functional. I'd spend £200 on a jumper I plan to last 25 years but not spend£20 on one that won't last a year. I'd spend£150 on winter boots but I expect them to last 20 years for that price, and I take care of stuff (hand washing if needed, treating leather to regular polishing). Extra lazy stuff like going to scar wash.. no. Buy a bucket. It burns off calories anyway. No gym membership needed lol.

5- understand how money can work for us, or against.. e.g. I've probably paid about£50 in bank charges in my life.. I won't pay late charges or fees for taking cash out at an ATM.. I refuse to ever use cash on a credit card.. I refuse to pay money for something that doesn't give me some tangible utility. I switch bank accounts, do energy price comparisons, research big buys before purchasing.. I always try and separate out what I want Vs need.. the next time you spend anything, put time between the decision & the buy.. you'll find you probably don't want the item you're thinking of buying if you put even a 5 minute time out before buying it...

That's it. We're in a very very stable position with these approaches now while peers in similar income jobs literally have no assets to call their own, and their income is spent every month.

It's quite stark between some friends and us because DH and I have discretion to spend extra on treats if we want.. and sometimes we do.. but without worrying. Friends will be in a restaurant ordering champagne but then in the same night fret about their credit card bill... Ok, so DH and I go out to a restaurant probably once every six months, they're out every month.. but I could not enjoy eating out while worrying about debts! I'd rather not go out.

What Dungeon said above.

We use an app form of envelope style budgeting. It has, absolutely revolutionised our lives.

God I dunno I'll let you know if it ever happens!

Dungeon

Excellent post.

DH and I earned less than £40k combined 5 years ago, now we earn double that amount. We are early thirties. We have both invested in our careers, so whilst we weren’t earning high salaries in our 20s, we were studying/training and working towards promotions to increase our future earning potential. We were also very frugal and saved and managed to buy a house 5 years ago on those salaries. I think investing in your long term future is more important than having lots of money in your 20s. It means short term sacrifices but worth it in the long run.

#oldandfinanciallyunstable

What Dungeon says.
And there is NOTHING wrong with secondhand. I have only just (and that was because I got given money from my Dad) replaced our secondhand 3 piece suite we bought for £250 in 1996. Obviously it needed replacing but has been great value, in that time my friend has had FIVE new ones - and yet mine was such good quality (came from the 3rd lounge of a posh house so had hardly been used), but I did allow the kids to play shark in the water and climb on mine.

Me!

Until I was 26 I only earned £8k-12k per year. Partly due to poor career choices and crappy jobs, for example studying a music degree then walking into a NMW job in retail afterwards as I wasn’t sure what else to do and my mum was dying. And partly due to ill health, have a chronic pain disability that needed a lot of time off work sick for odd days here and there which meant I wasn’t able to get any other job due to my sick record. Due to the time off and running out of sick pay in crappy jobs I got into debt and went bankrupt at 24 with £6k of debt as I couldn’t see myself ever paying it off and I was sinking deeper into debt with the repayments.

However, I had a strong idea I wanted a job somehow helping people. And I volunteered in those kind of roles from nineteen onwards so had a lot of voluntary part time experience under my belt. Applied to do a social work masters at 24 which took two years full time. It was hard, incredibly hard, I was grieving my mum and in a lot of physical pain and I had to work full time alongside full time placement and academic work. I’m not exaggerating sadly when I say I worked eighty hours per week for a solid year of that two year period, placement during the day and my fast food job at night until 1am most weeknights and all day on a weekend, then writing essays until 3am before being back up at 6am to do it all over again. Sixteen hour workdays.

I got through it and qualified and ended up working for the NHS who are a fab employer, worked hard and my health stabilised a little, work funded some training for me for a role in my team and I ended up going from:

£8k per year straight from undergrad
£12k during my masters
£18k in my first post qualifying job
£22k the next job up
£26k during training
And finally, now, £37k. Which rises to £44k within the next three years due to nhs banding.

A few years ago after several long term relationships with guys who weren’t ambitious or career driven I met my OH who was training to be a doctor and then qualified. We got together and started saving and amassed enough for a house deposit while renting, without any help financially from anyone. Bought our first house this year, household income is £80k and will rise with his career progression.

I’ve gone from living in grotty house shares, struggling to find £2 change to put in my car to get home from work at 2am to having a house, savings, a good income, and a successful career. Along the way dealing with depression, a severe chronic pain disability, and grief (lost my mother when I was 22), bankruptcy and family estrangement. And I’m so glad it was hard won, and wasn’t something I expected to happen or took for granted. I always assumed I’d only end up doing NMW jobs forever, I volunteered purely cos I knew I wanted and needed to and it was only by chance and someone mentioning the social work masters that I looked into it and applied. Which really was the key to a good career and income and one of the best things I’ve ever done. Those two years of absolute hell paid off big time!

Having said all that, I don’t know how useful it is to you as there’s absolutely no way I’d have been able to have put the hours into that course and qualified with a child, simple wouldn’t have been doable without a rich partner as I couldn’t afford not to work full time on top of the full time course (and I don’t mean ‘full time’ academics, it was 50% full time work in very demanding draining roles). I couldn’t have been out the house from 8am-2am every day with a child. I’m so glad I waited to have kids until I was stable financially and professionally, we’re expecting our first now.

Not in a nasty way, but the odd friend has said unprompted that they can’t believe I’m where I am now given where I started off and asked me what my secret is or expressed surprise. I think it’s a combination of luck and hard work. Luck that certain opportunities were available to me when they were (I was in the last cohort of the masters programme where everyone got a bursary and fees paid, only £500 per month bursary but better than nothing, a year later I’d have been screwed as I couldn’t have self funded), hard work that I decided no matter what I was gonna throw myself into them and however hard things got (and you have no idea how hard they got) I wouldn’t quit because I needed to make the most of every opportunity that came my way. I just didn’t see failure as an option.

I think qualifying in a profession is a good thing to explore if you’re able to and willing to put in the work. You can do nursing as an undergrad with an access course for example.

I spent all of my 20's heavily in debt. Paid it off now and feel financially comfortable. Now save what I used to spend on debt repayments in the hope that I will never need debt again.

I'd say about 23, we moved in together (rent) and started to save to buy, we set up a standing order on pay day for x amount to go into savings, because it leaves as it arrives it isn't missed. We agreed to put the same sum in, so if we split it could be halved no problem.

Got rid of the man who financially abused me

DungeonDweller is absolutely spot on.

All I can add is - spend your money on things that appreciate in value. That's

1. property
2. shares/investments
3. pensions
4. business

the first three are pretty much guaranteed to appreciate in the 20 year longterm. Spending your money on these things WILL make you richer (longterm). the fourth one requires specialist knowledge.

Don't spend money on things that de-preciate in value, like new cars and fancy sparkly pretty things. It simply isn't good financial sense.

Sorry forgot to add, we’re late twenties/early thirties now. Our household income will drop for a bit when I go part time after the baby arrives, unless he locums and brings it back up to compensate for my lost earnings dropping two days work per week. But when we get past the early years and the child/children are in school I’ll go back to full time and he’ll be on a lot more once he’s qualified in his specialty.

Also treating yourself can be done really cheaply. Don’t waste money on going out for dinner, treat yourselves to the M&S £12 dine in once a month if you can, it’s great value for money if you go for the higher priced items in the deal and if you put a movie on after then you can have a great night in.

Learn to have fun for free, art galleries, walks in the park, window shopping trip etc.

Get your Xmas shopping started now, get in Home Bargains and Poundland to get friends and family presents sorted and set a budget.

Hopefully you don’t smoke, if either of you do, quit as soon as possible.

Get rid of Sky TV if you have it.

Buy your household items when on offer

It’s surprising what effect a bit of frugal living has on your sense of being financially stable.

When childcare stopped. When I remortgaged my house and bought three but to let’s.

We managed to buy a house in 2008 at 23 when you could get a 95% mortgage at 7%. We paid a lot of money per month for 5 years for a very small house. However, it was better than renting and we sold for what we paid, using the equity to buy our current home in 2013. I think that's the point at which I felt stable as the mortgage rates had dropped and we had both added another 10k onto our salaries, but we weren't far off 30 by then.
As a PP said, it isn't helpful but we both had to work full time to get our current mortgage and amass some savings. So, I had my first baby last year at 34. It also massively depends where you live. We are in the South West which, while you aren't talking terraced places for £70k like in some towns in Yorkshire where I am from, isn't exactly London either.

I had ds when I was just 22, completely unplanned. I was earning £14k a year and ds's dad didn't have a job. I had £12k in debt. Those first few years were horrendous, counting every penny. My mum used to come once a fortnight and bring me meat as we couldn't afford it.

I got a new and better paid job when ds was 18 months but it still wasn't enough for two adults and a child, plus I was paying for a house big enough to fit ds's dad's other two kids in and paying for them too. It was ds's dad that was holding me back. Once I stopped carrying him things improved to the point where I still managed every penny, but there was a bit left over for treats. That was despite me paying through the nose for childcare. I met my now dp although we didn't move in together for a long while.

Then I had an accident and couldn't walk and ended up on long term sick. I was bored being stuck in a bed all the time and I started a business, although more of a hobby to keep my mind busy. That was eight years ago. I did return to my job part time while running my business but I took the plunge and went completely self employed four years ago. I now own a five bedroomed house, holiday 2-3 times a year including abroad, nice car, don't have to worry about money too much. I'm not rich by any stretch of the imagination, but comfortable. Things do change, just take any opportunity. I was in the worst situation, but out of it came something great.

We're not quite there yet but on our way, after having kids very young.

We both finished our degrees which I 100% recommend. I know quite few people who've gone to do a degree or qualifications once their kids are at school. Usually in something quite directed towards the job they want, eg social work, pgce, retaking maths gcse to get a c, etc.

Definitely think career! Take every extra responsibility, training option, don't be afraid to change career if the one you're in isn't working well or seem like it's going anywhere.

Find the money for some luxuries but think really carefully about what kind they are and what you get the most benefit from as a family.

We've gone from not enough food to eat to being able to use credit to pay for an emergency and pay it off in a few months.

Next goal, have savings for emergencies!

DH and I are older, with one child in uni and one starting uni in 2020. Uni is insanely expensive in the US. We're okay financially despite that. You've gotten some great tips on frugality, but having some saving and investment on automatic pilot and invest in long term assets like shares. You have to beat inflation in the long run. Putting money in the bank for 2% interest isn't going to get you where you want to be. Every sodding paycheck has to have a cut going to savings/investing, even if you start very small. It has to be habit. Pay yourself first.

Good luck.