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!

If you write out a budget and find that after paying your debts and bills (cutting back where you can) there is not enough money for essentials such as food and fuel (without putting it on a credit card) then you may need to investigate a debt solution.

If this is the case I agree that you should post on the Money Saving Expert Debt Free Wannabe forum (they will guide you to do a full statement of affairs) and if a debt solution is required (IVA , DMP etc) they will guide you with where to seek help and what to do. Please don't use any companies that charge a fee to help you manage your debts. There are organisations and charities that help you with this for free.

You really can make more of the free hours. Yes it's term time only and yes the nurseries that offer the full hours tend to be less flexible, but i used a school nursery and wrap around plus holiday club and saved a fortune. Am also going to get rid of the car and if we were really skint i would consider relocating to free up equity in the house.

Perhaps you need to do the more drastic things of reducing pension contributions, extending the term of your mortgage until childcare fees stop/massively reduce.

If you are only making minimum debt/credit card payments is your debt just spiralling?

A high % of the population is in the same boat, lots of people live to their means either because their income is very low, or they've over stretched themselves and are no in debt.

Exactly cherries. I know where mine goes too. Doesn’t help me. I suppose if you don’t know then a budget can help. People seem to think not buying takeaway coffee (I never buy it) and cancelling Netflix (less than £10 a month) will magically solve all problems.

It is normal to feel the pinch during the heavy childcare years whatever your salary . People tend to get the max mortgage they can and then have to find the fees for childcare and often there is also an income drop to deal with. Can you temporarily drop your pension or is it a scheme where you have to pay in x%?

How many kids in childcare. I was 1.5k a month on childcare until recently and earn less than half you do. So I sort of understand it’s a killer but your household income is double mine.

So why don't you say the net amount you take home a month. Are you reducing your loans or increasing your debt?

OP but as a family you take home more than that!!?? What happens to the rest??!

If your outgoings are too high then you need to reduce them.

You can't get out of the loans now so they obviously need paying off ASAP.

I think you're in a trap of poor financial decisions in the past affecting your future.

Purely from a money perspective, one of you giving up work is not bad advice if both of you working means a net financial deficit (which it clearly does from your OP), and one of you not working would have a net financial benefit to the family.

If your financial situation is that bad it is worth considering the options that would give you a net gain.

Wherever your money is going to, YABU for being permanently skint.
You should have a budget plan and stick to it so that you know the money will last to the end of the month and, ideally, pay off debts and then save.

Your problem is not your income or your outgoings. It's your lack of planning and financial awareness.

I have a friend whose family income is three times that and they are permanently skint to the point that she's just cashed in as much of her pension as she can to pay for this year's holiday.

This goes beyond poor financial management and I believe she needs some sort of psychological support as she and her DH have a spending addiction but she won't hear of it. It is all going to end very badly when they are older and unable to work as they have nothing to fall back on but she won't hear anything about seeking support, even though she's always moaning about having no money. I've stepped back from the friendship as I find it hard to sympathise.

Not working isn’t such terrible advice if one income is being swallowed by childcare. Could one of you take a career break or drop a day for a few months?

There's lots of good advice in the credit crunch section. There were some recent threads with tips for being frugal which were really good

Sit down and go through your outgoings in granular detail. DH and I came across £15 per month worth of subscriptions charges between us for music apps and some silly photo app which we had literally forgotten about. You might come across things like this which you had forgotten about

Here's a few more things we've done that's helped us a few quid;

Shopped around for a better mortgage and managed to get better interest rate which will save us £105 per month

Changed energy supplier; according to their calculations we will save £300 ish this year

Meal planning & batch cooking; I go for meals which use the same ingredients when planning /before going shopping

We now do 1 weekly food shop and 1 monthly household essentials shop.

We have a strict budget of £100 for our weekly food shop. DH is really good at sticking to our shopping list. I tend to impulse buy stuff so I am self banned from all supermarkets and he takes care of the shopping. We ran out of coffee the other week and we refused to buy more until our next shop (which we do on a Monday) he has put stuff back on the shelf if he goes over the £100 budget and we just make do without - it's possible!

Monthly shop is £150 for all toiletries, cleaning products, loo roll and nappies for 2 babies (2 under 2)

Can you shift some of your debt onto a 0% interest credit card? This seems to have worked out really well for some people

Don't spend ANYTHING for a week. Just the direct debits that have to go out obviously.

You quickly see where the non-essential spending comes from.

No coffee, no takeaways, no nipping to the shop, no magazines, just no spending... one week, not hard...

We got rid of one car - my job was walking distance, and if I needed to get anywhere a taxi SIX times a week (let alone bus journeys) was cheaper than owning/leasing my car. Anywhere further afield DH always drove anyhow.

There’s no point posting, asking for thoughts, then sniping at the first question. The point made in asking where the money is going is related to the nature of your post. 85+k is an awful lot of money and although it is well understood that the cost of living with kids is high, a bit of serious budgeting and maybe some relaxed expectations from life should set you in the right direction. My own first impression was, why on earth would a family on 85k need credit cards? Also, what cars do you drive? Could they be cheaper models, or do you even need 2 cars? You mention shoes and clothes, how much do you budget for that monthly? Family holidays, where and how long? Could they be cheaper ones? Do you eat out often? You mention a high mortgage not in London, are there cheaper options for slightly ‘less’ house for the money.
I don’t personally care about the answers, the point is if you want to solve the problem you yourself recognise, and are aware that some sacrifices will have to be made, then these are the questions you need to ask yourself.

But yes, I agree you shouldn't give up your job. The expensive childcare years won't last for ever. I am so glad I stuck with it through those years.

Interesting that you say you’ve mentioned your salary on here before. You’ve mentioned salary in your OP. You won’t put down a list of expenditures on a public forum - despite being anonymous. You won’t get a huge amount of empathy, because nobody will be able to understand how you’re in this position. Our take home is very close to yours and, quite frankly, we do not struggle. So unless anyone can see the differences between expenditure, what can anyone say? I’m not going to say to you that we bring home the same amount and are living comfortably so you must be an idiot, because clearly there must be different outgoings. People on this forum can have brilliant advice, and no doubt will have understanding of your position, if anyone actually knows what your position is. You’ve picked out a bit of crap advice as a reason why you don’t want to disclose more. That’s not really fair. If you canvass a huge forum like this, without offering any detail, you can’t expect to get precise and universal advice, can you? Oh, but you don’t want a advice you just want to moan. About your £85k salary. Ok.

Did anybody read my post over the page?

So my income is £2500 after tax.

1500 goes on childcare fees
500 towards loans
Leaving 500 for credit cards, food, petrol, mobile phone.

The debt and childcare will be the problem.

I have no debt or childcare costs and I have enough money left over from an income of £20k a year for holidays and days out etc.

I'd focus on trying to clear the debt, and yes childcare is a huge cost but it doesn't last forever.

@PumpkinPie2016 - who did you switch your phone contract to? I'm looking at switching at the moment; my mobile's not too bad, but broadband/landline is more than it chould be.

This is how I felt too, I realised it goes £1.20 on a coffee, £2.50 on a sandwich for lunch etc, it adds up and I don't budget for that and just think oh it's only £1.20 etc.
I learned the very hard way how to manage my finances as an adult as my parents just never taught me and it didn't seem to be taught at school.

No war I’m not moaning about my SALARY, I’m quite happy with it. However, I wondered if anyone was in the same boat. That’s all

I only mentioned it to avoid being accused of begging by stealth!

YNAB costs money! Yes it does, so does buying a book like Total Money Makeover, Meaningful Money Handbook, Your Money Or Your Life.

You need to invest in your future. It may cost less than you spend on eating out. Think about your priorities, what is important to you. If changing your mindset about money and becoming debt free is important to you then you will spend a little money to help achieve that goal.

There are lots of free resources:
www.DaveRamsey.com
www.MeaningfulMoney.tv
www.MoneyToTheMasses.com
and many more.

If you just make one change for next month, do a written budget of what you will spend money on in February before it is February. Plan ahead, decide what you will pay and what is not an essential.

Many people are in your situation. Many are finding that following a financial plan helps focus them on what is important to them.

What you are currently doing is not working... you have recognised that... so change... take suggestions from here onboard and try something different to what you are doing now.

Do you pay everything on your own OP- you husband is bringing in over 50k by your numbers - what’s he paying for that leaves him skint too?