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!

I feel I am in this place now.

Single mum at age of 25 with earning only NMW. Had no savings and was struggling.

Started education and am now a qualified social worker.

I now have savings which I believe has put me in a good financial position. I also now have a partner so combined income is 55k. We are comfortable and are saving for a house deposit in the next year.

We also have no debt.

I always had a tiny income due to health problems and I just became extremely frugal. I am now in a much better position due to meeting DP and yet I’m still really frugal. So we are in a good position financially now.

I do think we lose sight of the everyday frittering that goes on with cups of coffee and sandwiches. Completely agree about running a budgeting app and seeing where everything goes.

@lifecouldbeadream What's the app called?

when the DC started school. The childcare of the early years war horrendous. Once both were in school, things started to look up a bit again. But DC1 is severely disabled. We will be always financially disadvantaged and never be comfy but the baby years were the worse really.

@user1472709746

It’s YNAB. We had it when it was a one off fee, where now it charges monthly. There are other free apps around. Essentially, at the start of the month you ‘assign every dollar a job’ and then as your bills come out and you spend money you put it into a category. It works however often you get paid, so monthly, two weekly, weekly, or even if you have annual dividends for example. Each time you spend something and allocate the spend it shows you how much you have left in the budget, and before you spend you can check.

I can tell you how much we’ve spent on which parts of our lifestyle in the last 3 months, last year, or since we started using it. It really helps decision making and our money decisions are made together now, so we look at what we have to budget at the beginning of the month and decide jointly how to spend our money. It’s easy to see if we’re overspending and for the first time in our lives we are spending less than we earn.

We are in control of our money, Christmas, birthdays and holidays are budgeted for over the year so there is never no money in the pot for it. As I say, there are lots of apps that do similar. If you want to save, you have to give priority to it over other things, so treat it more like mortgage/rent council tax and cut back on other things to service that. Sometimes, you can’t afford the nice coffee if you want to go on a holiday that year, it’s reality for most people, but harder to say no to yourself when it’s only a few pounds. When you realise how much that fee pounds each day adds up, it becomes easier to say no.

Sorry..... that was longer than I meant it to be!

I’m 42 and paid the mortgage off last year. I’m stable now.

Genuine question OP.

40k isn't exactly poor, how come you're renting instead of paying a mortgage?

40k is surely about 3k pm take home, I don't understand how you can be skint.

T0, you dont know where the OP lives and what house prices are like. in many areas esp in the South, you don't get anyhing beyond a shoe box on that income and you need a deposit too. given that the OP is struggling, how do you imagine they can save up an substantial amount.

if you think nursery and renting,, they may have well below £1k left. add in utilities, council tax, train/bus/keeping car in the road etc for 2 people... there isn't much left.

My top tip is to download the budgeting spreadsheet from Money Saving Expert. Go through and put all your expenses in, then put your non-monthly expenses (eg MOT, birthdays, firewood, Xmas, holidays etc) in the final column. Balance your budget using the spreadsheet, then when you get to the 'forecast' page there will be a column there which is effectively all your annual cost, per month. Put that amount into a savings account every month so you don't have to worry about big bills again.

@T0 we have two preschoolers and live in an expensive city in the southeast. 3k per month doesn't go as far as you think

Less than £40k to support two adults and a child doesn’t go that far, sure it’s a better picture than a family where one partner is earning NMW and the other isn’t working (though not sure if benefits would make up the shortfall there, I was never eligible for them even when I desperately needed them). It sounds like OP is breaking even but it would be very difficult to save a house deposit on it and difficult possibly to obtain a mortgage on it depending on house prices in their area.

For us the key things have been playing the long game:

1. Deciding early on to move away from the south east to a more affordable area. Wasn’t an easy decision because my family were there, but I knew it was the only way to get on the housing ladder. And it was easier to do it when younger, because once you have kids, they get settled in school etc it’s harder

2. Always working even when the nursery fees equalled my take home pay, to keep myself on the career ladder and my pension contributions going. I dropped to 3 days when the babies were small but stepped back to full time as soon as i could

3. alongside these two big long term things, we did a lot of the suggestions pp make: walks in the hills rather than expensive days out, movie nights in, camping for holidays when kids were young, pretty much all kids’ clothing and baby equipment bought second hand. We’ve never bought new cars and never smoked.

We’re now very comfortable financially so I think it’s about short term pain for long term gain over the things that really matter (ie housing, career) and being able to recognise the things that really are quite insignificant (ie your baby won’t know whether it’s in a second hand pram)

We quit smoking, cut way back on drinking and got better paid jobs really.
Joint income now £90k
I drive a banger old car
Our mortgage is £180k
We don’t spend a lot of money at the moment.

Read ‘the art of frugal hedonism’ for more inspiration

@T0getherindreams we're renting because we're only 22 and hadnt had the chance to save up for a deposit. I was pregnant and we needed to move out from our parents.

35k isn't that much compared to what some posters earn on here

In out 20s we partied. But bought a flat as it was cheaper than renting - then the 'crash' happened. We rode that out as we had very little outgoings and managed to keep pur NMW style jobs

In our 30s I had a better job, DH was unhappy, so he went to university. O started savning, £10 / month to start off with, more as I got a pound ro so more. As he finished I was made redundant. He got a good job and I went to University. He earned more than I had, so we carried on increasing our savings as we could - maybe £50 / month maybe £200, it depended..

In our 40s we sold that flat, put the money aside and rented a house and lifestyle we couldn't afford. And saved like crazy. Every penny. We live The Good Life and enjoyed growing our own veg, keeping chickens and being as frugal and green as we could. It was quite an antidote to our jobs at that time.

In our 50s we bought a house, I went self employed and DH decided to hang on until 60 in his current, much hated job. We are comfortable in that my business went well and I try to put all my profits into pensions. We left it late but WILL be ready to make changes as we each hit 60 - not to retire but to work less.

So we are comfortable, not rich, but we won't be caught out too much by retirement. That's the aim!

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!

We just delayed things and saved up. Once you're in debt or renting, it's always going to be twice as hard to get ahead. We both started out on ridiculously low wages, but still saved what we could, even if it was just a few pounds per week. We continued living at home rather than renting a flat/house in order to save more money. Even though we didn't live together, we shared a car (very old!). We didn't waste money on going out too often - meals out were literally twice a year on eachother's birthdays. When everyone else was getting mobile phones (90s), we didn't until we really had to and then, again, we got one and shared it. Same with gadgets etc - everyone else was buying video cameras (90s!) but we just stuck with our simple point and click cameras. Our only vice was foreign holidays, but even then, we'd do it on the cheap, mostly on last minute (allocate on arrival) holidays.

By being careful with money, we saved up around £60k between us which we used to get married and buy our first house (25% deposit), which is where we still still 23 years on. We're now mortgage free because we continued to save and make early payments on the mortgage. As we don't pay rent nor a mortgage, we feel "rich" despite still not earning as much as the national average wage, and we're still saving to buy nice things rather than getting stuff on credit.

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! To answer that directly, yes. We spent most of our 20s and 30s utterly skint. But we chose not to have kids, mainly because of our skintness, but also natural inclination.

We seriously dug in and set our sights on one debt at a time and whittled it down every month. We spent cash only, had a week's worth of cash in our pockets at a time. When it was gone it was gone until Sunday. Once we got rid of the debts we started saving, again as much as we could. Some in reguar savings straight out of the bank, some in to ups at the end of the month.

When got more money we did much the same, but with more spending cash, more 'things'. But saving still had to be done, credit cards used and paid off at the end of every month - we were working on credit ratings by then.

You have to look at a small step, a year at a time. Celebrate the death of a debt, the size f a savings pot - no matter how small. Don't think about whole life... just work towards imrpoving your Debt : Savings ratio to whatever level you can. It doesn't matter how small the amounts, in or out, every penny adds up, eventually!

We became financially stable in our mid 30s when our oldest started school.

In our 20s DH and I relocated to the south east and I then retrained which meant an additional year at university. We lived pretty much hand-to-mouth although we were paying a mortgage and not renting.

As soon as we became ‘financially stable’ I had DS (aged 31) and a large part of my salary was eaten up by nursery fees. I couldn’t afford to be a SAHM. Our combined salary was about £46k a year but our mortgage was £950 a month and childcare was about £650 a month. We were skint.

Then the financial crash happened and interest rates plummeted. Our mortgage payments went down massively. DH got a promotion and DS started school about the same time as DD started nursery.

I suppose the big difference is that we were always paying a mortgage rather than rent and didn’t have kids until our careers were much more established. That gave us the flexibility to move around.

Slightly different as we delayed having a child until we were financially stable, but the early years were a struggle for me.

Essentially, I managed to accumulate debts of 7k following a wedding/weight loss and ended up taking on two part time jobs to fit around my full time job and saved every penny of those extra jobs to pay against the debt. Ended up paying it off within six months because of that.

I appreciate this will be difficult to do with a child, but is there anyway one of you could do a second job in the evenings/weekends while the other looks after the child? I only ever earned an extra £80 a week from one of my part time jobs, but it adds up quickly. You also benefit from paying no NI if you stick to earning less than £145(?) a week.

Main boost to financial stability was retraining. Realised I was in a dead end career (promoted only if person above you leaves etc) so decided early on to leave. Moved into tax, achieved my chartered qualification and doubled by starting salary (20k) in three years.

Unfortunately the main way to financial stability is finding a career you can progress and is relatively high paying. With a child it will be harder to do the qualifications, however I know many young parents that have managed it between them as a couple. It's a short term sacrifice for long term gain.

You've had some good advice on here OP particularly Dungeon's post.

Only spend in cash - it's easier to not think about it when it's just a swipe of a card.

Get anything you need second hand as the first option. Many second hand things are in great condition (possibly because of the "keep buying new stuff" mentality many seem to have!) - particularly baby/kid stuff which is expensive in the first place and usually not used for long.

Have a direct debit going out at the start of the month for savings, don't leave it till the end of the month as more than likely you won't have much left. Put some savings into a stocks and shares ISA for long term savings.

Pay in the maximum allowed in your workplace pension scheme so you get the maximum employers contribution. Open a SIPP and put a little bit in there each month - even just 10 or 20 quid will add up over the long term.

Go back to work when possible even if PT after baby is born, to keep on the career ladder if nothing else.

Don't buy stuff. A simple one! If you think you need something, wait a bit and see if you still need it in a week/month.

Get rid of any expensive subscriptions like Sky etc - if you still want access to tv get a cheaper one like Netflix etc.

Plan ahead. Do a weekly/fortnightly meal plan before you go shopping and stick to what you need for the plan. Also plan ahead for things like lunches at work, coffee etc - make and take your own.

Prioritise free/cheap activities - e.g. visit to local community farm rather than lunch out.

We lived on one £14k salary for a bit at one point (no benefits or the like), and just didn't spend loads on going out/buying stuff, but still had a good life - i don't remember it being all that different to how we live now to be honest.

We're in our 50s so we were able to buy our flat in London at a time when they were affordable. We don't have kids, not through choice, but it did mean we didn't have to worry about childcare. We work in nursing (husband was a HCA, now retired, I'm qualified) so always in steady employment. We've got the benefit of NHS pensions (me in the future )

When my parents died I used my inheritance to clear the mortgage and there was some left over for a small holiday let property.

I was in my 30s when I'd cleared old credit cards and loans off and 40s when i cleared my mortgage and now have some savings and owning property is also a form of saving.

I do realise that being the age I am meant I was able to get on the property ladder and I don't envy those younger who aren't in that situation.

@MitchellR sorry you're feeling so stressed - your wife sounds like a bit of a nightmare. Have you told her how stressed you are and how her behaviour is making you feel?

If you back down every time you have an argument about it you're not going to get anywhere and she knows it.
I couldn't fathom living like this off my DH - that's not love in my view! You will end up working until you're dead to fund her having a wardrobe full of junk.

She needs to get a job (and learn the value of money?!) - it'd also give her less time for spending.

You could start your own thread for some advice on this. You'll get many people telling you to leave her (which wouldn't be unreasonable, given your post) but you'd get some solid advice on how to approach it to help you make a plan.

@MitchellR I expect to be roundly lambasted for this. but split your bank accounts. Put your wife's share/allowance/whatever you want to call it, in into her account monthly and then that's it. Don't be swayed. If necessary for the first few months you may end up picking up groceries if she runs out of money, but if you do pick ones YOU like. She will soon start to budget. This is your family's future at risk.

I know this sounds dreadfully old fashioned (waiting for the 'abusive' posts) but my DH did this 20 years ago after trying to educate me the nice way (I was dreadful with money and burned my way through his salary without thinking not through malice) and it's the best thing he ever did. It was painful for about 6 months but now we're both on the same path financially and never make large investments without talking first.

I don't know why people are questioning you being skint on 40k, we certainly would be too.