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!

Do you have foreign holidays?

Agree that not working is atrocious advice! Your job is for the long term childcare is temporary. Similarly pension. Never reduce if you can possibly avoid it.

Not for many years another

re childcare, I suppose it will end one day, when they are teens perhaps!

daisy when I asked on here about opting out of my teachers pension I got FLAMED.

You're obviously living above your means, to be earning such decent salaries and barely getting by. Look at the basics... Cars, are they financed? Downgrade, switch for something cheaper and more economical. Phones, again, how much are your contracts? Switch to a cheaper tariff. TV? Are you paying £100+ a month for sky plus or something ridiculous? You know Freeview/Freesat are FREE once installed, and additional packages such as now TV, Netflix, are a few quid extra. Get a smart box, and pay for internet services through your mobile phone provider (added discount) you can save a fortune.
Is it worth going interest only on your mortgage for a while to clear some debts? I think the credit card debt is going to be the main issue holding you back, and right now while you're paying for childcare, which is a temporary but necessary measure, reducing you other monthly outgoings is the most important factor. Absolutely anything non essentially that you're paying a monthly fee for? Gym memberships, magazine subscriptions etc, it all adds up, and if it isn't needed, ditch it. You say you have a growing family? Are you overspending on groceries? Make cut backs everywhere you can. You're probably at the most expensive time shelling out for childcare each month and at least that is a temporary stage.
We only earn £40k between us, and seem to be able to live very comfortably, but currently only have one in part time childcare, eldest is at school. We moved house last year, and the move swallowed up all our savings, so in a bid to replenish, we have made huge cuts to our outgoings, and have realised how much we were unnecessarily spending. The main one for us was the TV/internet package, and switching our 2 financed cars for one un-financed one. Saved ourselves hundreds each money doing this.

I love how you said 'not a begging post' like anyone would seriously offer money to someone bringing home 85k.

It will get easier. Childcare is a huge cost when they are small - you'll have to budget in wrap around care when they start school but in my experience it's much less stressful finding the money for a few hours of care after school than it is paying out a fortune for full time nursery.

Obvious stuff like consolidate debt, meal plan, check how much you spend on basics. I got into a habit of spending £30 on shampoo and conditioner and convincing myself it was a necessity as it was 'only' shampoo and conditioner'! Ridiculous looking back but easy to happen! You start buying next brand up or even luxury brands and before you know it, you've added a fortune on to your shopping total but still only buying the same stuff, just 'better' versions!

OP how old are your kids? This could be a short term issue due to childcare fees as long as you’re not planning on sending them private.
I would chat to the bank about consolidation of debt to a more manageable payment.
Or try and condense working hours (5 days in 4) for both you and DP and cut your childcare bill.

Why can't you opt out of the pension for a year or so? There's no law saying you have to have one.

I can see that sort money vanishing if you have a large mortgage and childcare fees on top of debt, loan and credit cards.

@cherriesandapplesandberries i definitely know where you are coming from. DH and my income has fluctuated a bit from when we first moved in together to now. At the moment, we're the worst off than ever due to both moving careers and childcare costs, but even when we were doing better, I never felt flush. Thankfully we are both now on pay scales that will increase annually so in a few years we will be on more than we were originally and with better progression routes.

You're right in that the childcare costs are temporary. But it's easy to just spend what is in your account. The only way i have ever been able to do it is to move savings out of my account on payday.

Don't you have a shared income?

I really wouldn’t touch the pension contributions unless you’ve explored absolutely everything else.

That’s why I said it hadenough

No, not sending the kids private. One of the loans will be paid off in august and one in April so that will definitely help.

Childcare massively reduces when they’re both at school and then again at secondary - hurrah!

Thought y would be a teacher.

Opting out for most people is a stupid decision. However in your case as a short term thing I think you need to. Use the pension money to pay off the debt. You'll have about £300 pension per month I think.

I'm not sure what your AIBU is?

You know where all of your money is going and pay heavy pension contributions to save for the future. I assume you have looked at your flexible outgoings and minimised what you can't afford.

You have debt from previous spends which, again, I assume you have looked at the best way to clear those.

You don't want a money makeover as suggested by going to MSE.

Both the childcare and debt repayments will end at some point so you should be able to see when things will improve. As LajesticVantrashell said it's a case of head down get on with it.

You don't say whether you follow a budget and don't want advice. So do you want to hear someone else say yeh I have a good wage too and I'm skint? Because you already know there are many couples managing on a lot less.

OP I completely understand. DH and I are in a similar boat. Bit less coming in each year combined but it’s our high mortgage which is to blame. But we recognise we take the hit with the mortgage in return for living in a nice house, good area, great schools etc. But it doesn’t stop me going to bed at night getting stressed about not being able to afford the things we need (car repair work, new blinds, decorate etc).

Ok so this is a very temporary problem. The thing to focus on is not getting into more debt before they are paid off (is it this April or next?)

I was going to say I'd redirect the pension savings to paying down the debt. But if the debt interest rate is less than 4% or the redirected pension money would be taxed at 40%, maybe not. It depends on that facts.

I know sweet it is tough, we did similar with the house and I don’t regret it.

So if your own income is £50,000 then your take home should be £3,100 a month, not 2500. Take home of £35,000 is approx £2,300.

So between you there should be £5,400 per month.

£1,500 a month childcare
£500 debt
Where’s the other £1,100 going? And where is your husband’s £2,300 going?

£3,400 for petrol, food and bills is loads, but we don’t know how much your mortgage is. We don’t know about gym payments or kids activities or anything else.

Seems ridiculous to be servicing debt while paying extra into a pension - focus on getting the debt cleared and childcare paid then pile into pension when those situations improve

I think YABU. I live in the south east with two kids (3 and 6), mortgage (£1200 a month) and one car, on the same combined income (~85k, with me and DH paying pensions contributions of almost 10%, and I'm still paying my student loan off) and me and DH are very comfortable and most months have a fair amount left over for savings. Even when we had double nursery fees a couple of years ago we were still fine, less savings but no debt.

I think a lot of it is lifestyle choices, sorry. We go on UK holidays (one a year), run only one car, walk when we can, don't go out for meals very often (just birthdays) and budget with food etc. Also things like bringing in sandwiches/leftovers for lunch. I also rarely buy new clothes (buy secondhand and Ebay etc) and nor does my DH and we aren't into designer anything. The kids get new clothes but that's about it. We have treats and hobbies but they are mostly cheap ones (running, football, knitting etc. that don't cost much). The kids have swimming lessons and gymnastics lessons so they so extra curriculars too. We both work full time and walk to work rather than drive, so I can see commuting costs may differ but can't see that making up the whole difference.

We aren't stingy as such, just are careful with spending. I grew up working class, pretty poor and I struggled through university, had to support myself as my parents couldn't. It meant even when I got a great salary I was still careful with money.

I really think you need to sit down and work out where your money is going and what spending isn't necessary.

Personally I feel very privileged to be on the household income I am on now, my family are all on much lower incomes and always struggling for money and with debt etc.

I don't mean to sound harsh, its just on the income you're on I struggle to see how you could be scrabbling around for money every month like you describe.

Why do people always assume such tiny amounts for mortgage? I have a mortgage if £270k which is about as low as humanly possible for a family house in London, and have a legacy of a brilliant interest rate and it still costs £1500 a month. People have mentioned mortgages of £800k above, which is going to be thousands.

Op i think you have been given poor advice about the pension. Yes you need a pension but not at the expense of getting into debt today.

Not even close war, this is what I mean about people thinking we take home more than we do. I’m not getting into squabbles about pension, I’ve asked about this before and been told not to, mainly because if I die my children will benefit from it. In the future when they are over 18 maybe.

fantasies that this level of income buys luxuries

our family income significantly lower than the OP , with the childcare costs, and we all feel incredibly lucky, well off and able to afford any luxury we want

A lot of it is expectations (we don't want much, we know what makes us happy) and financial management( we grew up skint )