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!

This might not be a popular view, but is it worth you both working full time if childcare costs uses up a whole salary?
I think this is terrible advice. Childcare costs are only for a finite amount of time, but it can be difficult getting back into the job market once unemployed, and that's before even thinking about the gap in NI contributions etc.

OP the cost of living has risen a lot in recent years, but wages have not caught up to reflect this, so if you are still maintaining the same lifestyle you did 5-10 years ago but your wages have not significantly increased, then I can see why you are struggling. So it sounds like you need a complete overhaul of your outgoings to see what and what isn't working anymore.

Yes I looked at YNAB. It is expensive and hugely time consuming. I couldn’t even figure out how to set it up, let alone use it.

YNAB does cost money but it is worth its weight in gold - has saved me thousands in the long run by changing my attitude to money and budgeting

My incomes similar - I budget well and am definitely not skint.
Take home £4.3k a month, mortgage £1.1k, Other bills £0.9k, No car loan, no debts, £2.3k to spend. 15% into pension inc employers contributions.

I don’t think the issue is that we don’t know where the money is going, we do, of course we do. You don’t notice a grand and a half disappearing out of your account in childcare fees every month and not notice!

Plus, stating the obvious here but £85 is before tax, pension contributions and so on. In take home terms it’s more like 55.

YABU. Sorry.

You have debts and issues but from what you've said it doesn't sound like you're sorting them, rather you're just accepting them.

1. Cut down any TV packages you have to minimum. Look at nowTV, Netflix etc

1. check comparisons for your insurance, gas, elec etc

3.check renewals for phones and look online instead of sticking with current provider

1. Consider moving to a smaller house or when mortgage is up, make sure you go an advisor with no fee

1. Budget your shopping and limit takeaways

1. Consider giving up work if your childcare is the same cost. You will save on fuel/travel, expenses like lunches etc - so may actually save money for you

1. Consolidate debts asap. Get them on 0% and on these pay the minimum so you can focus on clearing those where you can't get a cheaper rate. Once they're cleared get on to clearing the other debts

1. Look at free days out rather than costly onea

No, YANBU. I get it. SW here, relatively decent income of £75k split pretty evenly between me and DH. Relatively low mortgage as were in shared ownership. But £1k childcare costs per month kills us. DS just about to turn three so the 30 free hours will help but only to the tune of £200 a month (not completely free as people seem to think!) plus £5k of debt still to pay (loan from in laws for us to buy the house) means we have to be very careful too.

We run two cars, old bangers so no lease costs going on here. I have an iPhone with a cracked screen which hasn’t been upgraded for years. I don’t drink coffee so no superfluous spending there. Yes we have Netflix but at £6 a month I think that’s acceptable. We holiday once a year at Haven, this years holiday cost us £240. I mean plan religiously, do click & collect so I’m not tempted by unnecessary items but we’ve got £73 to last us until the 19th.

Yes, I get that we’re in a massively privileged position compared to some, and some don’t even have that for a month, but I honestly thought we’d be better off the higher up the ladder we climbed. But in two years we’ll be debt free and DS will be in school, so for me it’s just a case of head down, get through it.

Stating the obvious but once your children are in school, and childcare fees drop things will get much much easier.

This is why I don’t post for advice, because to be honest so much of it is either stating the obvious (look for free days out) or really, really bad advice (give up work) so I’m really not looking for that. I’m hoping in the future things will be more stable when we’ve paid off our debts and the children are older. But in the meantime it would be nice to hear from those in a similar boat.

But everyone pays tax and NI, so it's a given that any comments and advice take that fact into account. No-one thinks that you have £85k pa available.

I know snow although there will still be costs involved they won’t be anything like they are now.

85k is a huge amount of money. You plainly have a very different definition of skint than me - I am a single parent, am a carer for my mum, have recently had to go to working part time due to that and am paying a mortgage and until my ex decided to stop paying for our youngest son - which we are now fighting over - just about coping with paying off a car loan and credit card.
I'm now on a debt management plan but if I had the amount of money you have coming in I'd be over the moon

But not everyone makes such heavy pension contributions as I do barbara, I know when I’ve mentioned my income before on here people always assume I’m taking home a few hundred more than I am.

Yabu to think there is a way of being less skint without making lifestyle and spending changes. Yanbu to have a little moan, find some other people who are as poor as money management as you are at the moment and swap stories of woe. It's up to you.

Those suggesting budget, money makeover etc. How will it help, genuinely?

Well if you don't know where your money is going then that's a recipe for disaster, surely? Especially if you just keep spending?

Wouldn't it make more sense to say, ok we have £X coming in. These are our fixed costs (mortgage, childcare, repayments) and this is what's left over. If we want to get rid of the credit card debt then we need to find an extra £Y to throw at it every month for however many months. Then look at the discretionary spends to find the shortfall.

Otherwise you are just in a perpetual debt cycle.

We earn similar to uou jointly. We aren't permanently skint. You must be wasting a lot of money on things like take out coffee etc. We don't live frugally but we still have enough left over monthly to save. Sit down and write out what you actually spend it all on and something will be glaringly obvious that you can change.

Yes, YABU
HTH

How old are your children? Are you going to benefit from free hours any time soon? I strongly recommend you rejig things so that you can. I have a similar income to you. No debt except the mortgage (£1500 a month) and much reduced childcare these days and don't feel rich, so i can see how if you are paying a lot in debt and childcare you could be skint. You say you don't want advice so it is hard to say much more.

Those suggesting budget, money makeover etc. How will it help, genuinely?

Have you tried putting all your outgoings on a spreadsheet?

We all want to give our children what we didn't have, but they don't have to be on a million expensive activities.

You can say that it's expensive to move, and it is, so you'll have to save elsewhere, but when making such an expense think how it will affect your budget.

The reality is that child years are very different from being childless or when they move out. We need to budget and save.

So why do you want to hear from people in a similar situation

Oh, yes, we have no money at the end of the month... no, don’t want to actually do anything about it, just grumble... there you go.

You could cut back on the pension contributions to the minimum while you are struggling with high childcare costs, and make them up later, because otherwise you're effectively putting them on the credit card and losing the advantage of tax relief due to the interest charges.

I do know where it’s going, but the fact is, if it’s going on essentials then what can you do? So my YNAB comes back and tells me that out of my take home £2500, £500 goes on paying back loans and £1500 on childcare, leaving me with £500 to put towards my credit cards, fill my car with petrol, buy food for my children, pay for my mobile phone and so on. It isn’t being splurged on takeaway coffee.

It's hard for anyone to know without more of a picture of your outgoings

I think you need to look at your debts, loans etc - where did that money go. You keep saying on kids, cost of living etc but if that’s true then surely things are only going to get worse until you stop paying childcare.
If you making enormous pension contributions then maybe you need to look at stopping them in the short term and focusing on your debt. Obviously wouldn’t be sensible in the long term but rather than getting yourselves into more debt it makes sense in the short term.

If at least £1000 is on paying back debt then I think that is your problem. Why did you accumulate so much debt?