To be permanently skint, despite being on a good salary?

[cherriesandapplesandberries]

On paper, we have a good combined income of around £85,000, although it varies slightly and can even go up to around 90 on a good year.

But we seem to be permanently skint, and I don’t mean not much money, I mean absolutely nothing in the bank accounts, scrabbling round for loose change, stressing about how we will get to work, skint. This isn’t a begging thread by the way, I know sometimes people post on MN wanting others to offer them money and I don’t, I’m just trying to explain how it is.

We do have debts, loans and credit cards plus obviously the mortgage, childcare fees, cars which cost then obviously the needs of a growing family.

I know back when I was a young ‘un I’d have fallen about laughing at the idea my current salary isn’t enough to live on, but I just seem to be struggling all of the time!

I think we would need more specific figures to judge - for example, if you are spending £800 on food for 4 people then YABU.

But a basic question would be are you using Tax Free Childcare?

If you post up your outgoings people might be able to make suggestions where you could cut costs. Without figuresmits hard to say anything.

You have a good combined income and should be able to pay your bills and have a decent standard of living on that.

I would suggest you start with a copy of the last 2 or 3 months bank statements. Go through and list all essential outgoings (mortgage, council tax etc).

Then look at what you spend on each and work out if you can cut back anywhere - food is often a big one, are you buying lunch from sandwich shops rather than taking your own, bottled water instead of having a water bottle, takeaway coffee etc? All branded foods -can you shift down. Maybe too many convenience foods?

Clothes/shoes -are you buying more than you need? Could you cut back here?

Are you with the cheapest suppliers for bills- including things like mobile phones? Switch if you are not. For example, I used to have a phone contract with Vodafone which was around £40 a month. We combined mobiles with our landline and internet and now it's about £9 per month.

There are lots of ways to reduce your outgoings but you need to start with a brutally honest look at your expenditure.

Hi OP
I think people could probably help you more if you know what you wanted to get out of this thread. Are you looking for a moan or for actionable advice?

We earn a little over double that but still need to budget, still need to review deals and not let service providers go over initial deals. That’s life with kids.

Do you budget?

It can be really hard being above level where you get any financial support but with lots of outgoings. It gets better.
You either need to spend less or earn more, if you want to make life better.
Clearing debts apart from mortgage is the first step; loans and credit cards are literally throwing money away in interest. It might be worth a trip to the bank to discuss consolidation into one lower but achievable repayment and then commit to not using other loans or credit cards. Cut them up.
If pushed, creditors might freeze the interest for you. Go to CAB debt advisor and see what they suggest.
Then a really good hard look at spending. Not the mortgage but the ‘little things’. Little things add up. Think about Christmas and how much you spent on presents and treats. Do away with excess for next birthdays/Christmas. Reduce expectations that everyone has everything. No need for Christmas Eve boxes, elves on shelves, £100s of pounds of presents etc. Reduce everyday costs for activities and leisure. Go for a walk on the beach to skim stones rather than cinema.
Don’t eat out. Or book one meal a month just for the two adults.Choose cheaper options like a simple supper party once a month with asall group of friends rather than an expensive restaurant. That way you get 3/4 nice meals out in return.
Avoid fashion. Be classic. Reduce clothes buying.
Do a three week menu plan, ordered online so there’s no spontaneous buying, stick to it. Use more vegetarian options. Macaroni cheese is much cheaper than prawn fajitas.
Walk more. Use the car less.

Don’t buy coffee!

What is your food budget for the month? And do you stick to it?

It might be s temporary thing if it’s childcare, that should get better but you need to plan more in the short term, giving up work could harm your earning in the long term, but dropping to four days a week short term could help.

Cut on non essential spending....

"hundred and one other needs of a family" is meaningless - are you talking about a pair of shoes or horse riding lessons?

And if one of you is earning £20k and one of you £75-80k, your combined income will be different to if you both earn nearly £45k, which will make the value of both working different. Are you getting child benefit for example?

Debts loans and credit cards implies bad financial planning and a lax attitude towards budgeting.

No one can help you unless you provide actual figures.

You could have large mortgage repayments or car finance and obviously the debt. I think it’s the big things not coffee if we’re talking struggling on £85k.

Check out Dave Ramsay.

We have a similar income to you, but we have to budget, or we too get ourselves into trouble. What a pp said about letting a good income lead you to overcommit yourself is true, or it was for us.

We have used YNAB (you need a budget) for the first three years. We are still paying down debt and it feels like a slog sometimes, but, as I said to DH this week, we have completed three full years now of cash flowing everything and not taking on any more debt. We don’t have child care costs, but we do have two teens and a preteen so the food and activity bills are sky high. We wanted to give them the opportunity to try new things, so we have had to make trade offs - we only have one car. Our holidays are mostly camping in the UK. All of the other advice on this thread, such as meal planning & online shopping really helped us too.

You can do it. There is no short term fix, unfortunately, but you’ll get there. Good luck.

Erm, do you live in the South East by any chance? We have a similar income (only DH works but will bring home similar after tax hit etc) and it took us a while to realise that we actually had to be very careful to live within our means (despite what sounds like a great income). It probably does sound ridiculous to some people on here, but when you can’t buy cheap houses, get a cheap commute to work etc, even high incomes don’t stretch far.

Things we have done to take the reins are:
Budget carefully
Choose ‘wants’
Only buy essential clothes
Buy most kids clothes 2nd hand
Keep phones etc for as long as they work
Buy a coffee machine and take coffee/lunch out with us
Shop as much as possible at Lidl (fine for veg, snacks etc)
We really think before buying anything
Delayed all home improvement
Took a ‘no credit’ unless it was essential approach
Buy rather than lease - we have an 11 year old car which has proven really reliable and saves us huge leasing fees.

In your situation, childcare is probably the killer. It is very expensive.

It is very easy for people to say you spend too much’, but when there are constant messages that similar incomes are ridiculously high, it’s also easy to believe you have loads of money. Instead, you need to become very mindful of spending, and work a way to pay of the debt.

You need to swallow living frugally for a while to clear your (non-mortgage) debts. When you prioritise clearing them, it’s amazing how fast they go.

That’ll mean skipping holidays, tech upgrades, new clothes for a couple of years. Effectively anything genuinely non-essential.

Being debt free is a better gift to your kids childhood than a week at Disney or the latest console. Short term pain, long term gain. You’ll feel so relieved.

Its easy to do. We have a combined income of about £45k but DH pays maintenance for his son (as he should), we have to run 2 vehicles for work (although DH has a motorbike which reduces costs) but we've also had a wedding and 1 mat leave to pay for. I've found that having separate accounts has really helped - add up all your DDs and keep that amount in your current account. I then take out £500 for my monzo account for food/petrol/misc expenditure. Its shown me actually how little we have to play with and how easy it is to overspend. We're also considering the costs of childcare because although we are lucky to have family support it means a lot of driving for me and very long days (5am starts). Its about having a plan which for us is trying for DC2 and me then looking at self employed work.

The fact is that with debt and child care you should probably be budgeting but you're likely spending as if you had the same salary without those.

You can probably find cheaper clothes, cars, internet and phones.

The first thing is to put aside a given amount for savings, then take unavoidable bills and that's the amount you have available. Then see where it's going and where you can reduce costs.

Do you tend to buy things on credit cards?

I can certainly understand how you wouldn’t remotely feel “rich” on that income.

But “skint”? Scrabbling around for coins?

We live in the SE btw with public sector jobs (sw and IT) but babe to really live quite frugally and then cut back some more!

I'm sorry but you both just be shit at money management .
Your mortgage just be too high , or you are living in too big a house.
If your house is big enough , get a live in nanny. You are saying a whole salary is taken up in childcare ?
A nanny would be cheaper.
Look at phone contracts , car costs , eating out , overspending - clothes, treats , holidays, takeaways.

If you listen or watch The Dave Ramsey Show (on youtube, podcast/spotify/alexa, and has a phone app) then you will hear the same story from other families. It is quite common for people to have a good income but no money. The problem is often cars and debt. Occasionally it is too much house but it's more commonly an issue of spending more than you earn and using debt to cover that overspend.

To fix that, get on a written budget, reduce the expenditure and tell the money what you want to spend it on. Sell expensive cars and get lower cost ones.

I track transactions using Monzo and a spreadsheet that I got from MeaningfulAcademy.com financial foundations course. You don't need to do a course, it's not rocket science but if you struggle with budgeting then there are courses available and apps - YNAB is popular.

I’d be concerned about your mention of debts, loans, credit cards, etc. It’s not “normal” to have these on that sort of income especially. Eg, we have never had any debts or loans, and the credit card is paid off in full every month.

I totally get you OP. Mine goes on kids’ hobbies, kids’ shoes, lunches while kids are doing hobbies. Two cars as needed for jobs. The hobbies get much more expensive the older they get. Add in gym membership and days out and it is gone. Anytime we come close to getting better it is a child’s birthday, summer holidays, Christmas, etc. Or a domestic appliance breaks. Without significantly compromising our lifestyle I fail to see how we could change it. I already shop at Aldi and buy clothes secondhand/ rarely.

I made a budget and it was totally pointless. It told me what I already know. Money goes on kids’ activities and hobbies, food, childcare and the big costs of Christmas, domestic appliances etc.

I know that pain OP. We've been in the same boat (but rent instead of mortgage) the only way to tackle it is to sit down with bank statements and work out a budget, all you incomings - all your essential outgoings and then things that can be changed like groceries/entertainment/clothes etc.

We realised we were spending £200 A WEEK on food due to being careless and unorganised (not getting thing out the freezer or meal planning for instance) that was an easy fix, with the money saved we paid off all the credit cards and catalogue bills (hit the biggest interest one first) and then we're able to get into a much better way of managing our finances.
I bet you'll be surprised at how much you spend on things you don't need to, every coffee, cake, magazine, chocolate bar etc adds up to quite a lot over the year.

Also does your work place support childcare vouchers? That was helpful to us too.

ok so your take home is approximately 5k a month for both of you. I am assuming 42k each but if not it could be slightly more or less.

one wage goes on childcare so 2500 a month on that leaving 2500 for the other otgoings. I am going to guess the following amounts

mortgage you say is big so - 1500 is my guess
electricity/gas - 100
food - 450
running cars - 120
cc - 100
loan - 100
mobiles - 40
media - 30

if this is the picture I can see why your skint but without the actual breakdown its hard to help