To wonder how ppl do it...afford it all?

[wishywashyy]

How do ppl (I mean the average joe!) afford everything? I know, I know situations are different BUT in general
Mortgage
Car payments (usually 2!)
Childcare
Savings
And general living

It doesn't add up
Mortgage/council tax on average would be what? 700-800?
Car payments x2 600?
Childcare (let's just say one lot) approx 1000
That's 1400 alone at least!
Saving? I suppose that's depending
General living? Another 800-1k
So That's 2k
Then there's other bills which would be 500ish
That's 2.5k in total

That's a take home of about 40k! Gone! And no savings!

I'm baffled and freaked out at the thoughts!!!

I think a lot of people don't save regularly (or ever), and also most people I know have bought used cards outright rather than paying monthly. Cars around the 3k mark, not newish.

I also agree with some PPs who have said they don't know many with children in FT childcare. The only person I've know in that situation are senior people to me in various workplaces, who would all have been earning at least £70k+ just on their own. All of my friends who earn more averagely have done a mix of cutting their working hours, grandparents and nursery for max 2 days.

What I don't understand is the holidays people manage to take! I see so many going to Disneyland Florida or other super nice locations, with kids in the school holidays and just think wow....that must cost thousands! That's something we could never afford.

as I don't understand why people are happy with high monthly car payments and wasting money on jobs/ childcare which they could (or should?) be doing themselves.

Dammit, those pesky nurses not working from home FT and caring for their toddler DC at the same time! Shocking behaviour, get them on a PIP.

@starlight13

We have always bought properties to add value and moved up every 5/6 years. We put the hard work in by doing a great deal ourselves and have done this 3 times so far. Currently living in a £900k house on a £415 mortgage. We always buy second hand cars, so all in the car costs for both of us are probably £300 max. No childcare costs as I work full time from home and take care of the children. We keep bills as low as possible - heating very low in the winter, save bath water etc. We don't buy meat and we mostly shop in Lidl/ Aldi etc. It may sound extreme to some but we still have £2k spare each month to go into savings. I am baffled by the opposite to you op, as I don't understand why people are happy with high monthly car payments and wasting money on jobs/ childcare which they could (or should?) be doing themselves.

I agree with you regarding car payments, but the rest....not many people are in the financial position to move that often when factoring in fees, stamp duty etc, and also obviously need to have the money to put down on a property in the first place.

Many people don't even take home 2k, let alone have it leftover to save after paying everything else.

Also, you're very lucky to be able to manage working full-time from home with pre-school aged children - which I am guessing you are otherwise the childcare savings wouldn't be as relevant? I could wfh and manage school runs, but I couldn't wfh with a baby or toddler every day.

What I don't understand is the holidays people manage to take! I see so many going to Disneyland Florida or other super nice locations, with kids in the school holidays and just think wow....that must cost thousands! That's something we could never afford.
We did Eurodisney two years ago as our holiday of a lifetime, first time the kids were one plane and we joined it with going to Germany to see relatives. Cost thousands and still paying off the bank loan we got but totally stand over it. Won't go abroad for years but that's fine. I don't know anyone who goes on a yearly holiday abroad but I do know when everyone I know does finally get on one they always get the same -'aren't you lucky to be able to afford to go abroad' We only went to X years ago- and they say 'but that's us too!' (Have heard it from brother, sister and have spoken to loads of friends about it).

@stayathomer

What I don't understand is the holidays people manage to take! I see so many going to Disneyland Florida or other super nice locations, with kids in the school holidays and just think wow....that must cost thousands! That's something we could never afford. We did Eurodisney two years ago as our holiday of a lifetime, first time the kids were one plane and we joined it with going to Germany to see relatives. Cost thousands and still paying off the bank loan we got but totally stand over it. Won't go abroad for years but that's fine. I don't know anyone who goes on a yearly holiday abroad but I do know when everyone I know does finally get on one they always get the same -'aren't you lucky to be able to afford to go abroad' We only went to X years ago- and they say 'but that's us too!' (Have heard it from brother, sister and have spoken to loads of friends about it).

Yes true, I guess many people do do it with bank loans or credit cards. I always assume people actually have the money in the bank to go but that's probably not usually the case.

Some people rely on top ups from benefits, some people have a %of their rent paid, some people have council properties, some have tiny mortgages, some have family members who chip in with childcare.

Some don't have car payments, some don't have savings, some live on a shoestring after their most basic bills are paid.

The thing is, it's more expensive to live than we ever assumed. I remembered thinking anyone earning 40k a year would be throwing money about like no tomorrow. The truth is, it provides a fairly standard living for a family.

The childcare years are hard and expensive, after that, it becomes less so but I'd also assume, there aren't many professional people who are not earning that sort of money singularly a few years into their career.

@Bluntness100

The average salary in the Uk is 32k op. Eighty percent of mothers work. So easily affordable if you earn the average.

No. The average salary in the UK is about £26 K. Before tax.

Yes true, I guess many people do do it with bank loans or credit cards. I always assume people actually have the money in the bank to go but that's probably not usually the case

Not always, as has been stated it'll be down to priorities as well as disposable income. We have fairly average incomes and are in the lucky position of having disposable income as our outgoings are relatively manageable (not an expensive area, little to no commuting costs and next to no childcare) and we prioritise holidays above everything except the essentials, so we can afford Florida (albeit not annually!) I understand others on our wages couldnt/wouldn't pay for it, but we will sacrifice a lot else first to ensure a healthy holiday pot.

It's all relative really and depends on so many factors, including where you live. We have a monthly household income income of about £7k but a family home where we live (bog standard 3 bed) costs £800,000 - £1 million. My 2 bed flat without a garden was most recently valued at £500k.

When the DC were in FT childcare we were paying £1500 a month. I have friends up North/Midlands who were paying less than half that for the same number of childcare hours and own beautiful homes for £260k - £300k.

We did have an annual holiday abroad (pre-Covid) but tended to go for cheap self catering options in Portgual or Spain. A holiday to Disneyworld or similar wouldn't have crossed my mind yet I know there are families where incomes are considerably less than ours but will spend £10k - £12k on a holiday to the US. This is not a judgement, just a commentary on the priorities. I throw away an embarrasing amount on takeaway coffees each month and I think most people would shudder if they saw what I spend but for me it's a 'need to have' to get through the day.

My car is 8 years old, second hand and I drove a third hand £500 Nissan Micra for 10 years prior to my current one. On the other hand, I spend a fair bit on clothes - mainly because I hate shopping for new clothes so buy pricier bits that I know will last longer.

All this to say that everyone prioritizes things differently and there are large variations in the cost of living across the country so it's very difficult to generalise about individual families abilities "to afford it all".

I think many people confuse what they would like, with what they need. The availability of finance encourages this. Always look at what finance will actually cost you in total, not just per month. Wherever possible buy outright.
Phones, cars, holidays, make up, clothes are all items it is really easy to economise with.

@tukanada I think you’re right there; I watched a documentary on payday loans not so long back and they were secretly filming in the fake shop they’d set up. People actually came in asking for a loan, we’re quoted weekly repayments and then the interest rate at 1000% or something (definitely over 1k% but I’ve forgotten the actual figure they used) and the unwitting customers were saying ‘that’s good’ ‘oh good we’ll go for that one’ and things like that.

My eye balls were popping out of my head.
It wasn’t isolated either, there were many customers coming in and saying the same thing, a select few went ‘phwoarr that’s a lot’ but they were the exception.

I was surprised at the lack of understanding of credit in general from the show, that’s what they were trying to highlight though, I’ll admit.

I guess it's all sums at the end of it all. We have very little in savings, no credit card and a 9 year old car that we bought new and will only replace when it literally won't move anymore. 2 children in 6.5 days at nursery and the rest is family help. We both work time and have a massive mortgage but live in an expensive area so in comparison our mortgage is quite small. Not being allowed to go abroad has helped but we would once a year. But we hardly drink, don't smoke and we have relatively inexpensive tastes and hobbies.

@FTEngineerM Interest rates are meaningless for short term loans. If you lent me £100 today and I gave you it back next week, along with a £5 bottle of wine to say thank you, the cost in terms of interest rates would be more than 1000%, but no-one would think the token extra bottle of wine was disproportionately costly. Plus they're a commercial service that needs to actually make money, has admin to cover etc.

Pay day loans are only a problem when people take them out repeatedly, often because they don't have sufficient slack in their budget to deal with peaks and troughs. But in some cases, a pay day loan could be cheaper than using a bank overdraft with an £x per day fee, although they've been outlawed now.

If they really understood credit, they'd use a credit card, which gives at least a month worth of credit totally free if you pay it back in full each month - there are starter cards available with small limits available to just about everyone.

@BarbaraofSeville I think I used the wrong term; it was one of those pay £5 a week for the rest of your life type of things. I’ll see if I can find it, it was interesting.

Having pre-school children is an expensive business. We both had well paid jobs, but while our kids were preschool and in childcare full time (about 6 years - no routine family help available, parents too old and far away), we never ate out - not even cups of coffee, packed lunches (leftovers) every day for work, took sandwiches everywhere for the family, shopped around for everything, no new clothes for adults (we were a bit scruffy), most outings were to playgrounds. Socialising was family and friends, at home or their houses. It was a choice - at one point over half our income went on daycare, but I elected to stay in work as a long term investment (for my children's further education and even longer term for pension purposes - I am pretty sure your earning potential is permanently reduced by significant carer breaks). But it is all over soon, it suddenly all gets better when they are in school (we still needed after-school care but that was a lot cheaper and two for the price of one). And we had a lovely time with our little kids, who learned to socialise really well at nursery, so it really was fine. I look back happily on those days when we had to watch every penny!

Cutting your cloth accordingly was what I was taught.

We have one car, paid for, and one work van, paid for, we have three children in school and support two young adults, we don't claim anything, pay our mortgage and all bills and save every month, I don't work husband earns 30k a year. We live well within our means.

I think what is not often discussed is that small savings do add up and over time, living frugally makes things a lot easier. A small amount of savings mean car insurance or suchlike can be paid upfront, avoiding interest charges. Over time, with each small gain, there is more money in the pot. Waiting to buy, without using credit or loans, will mean that your disposable income increases over time. Those small gains do start with avoiding take out coffee etc. much as some may scoff.
That would apply with cars ( start with an old banger and work up instead of wasting money on monthly repayments), furniture etc.

I do not know of a single person who spends that much on car payments. It all depends on how much you want top spend and want to save versus where you live. Living costs vary and you can be well off in one area with an above average income but close to the poverty line elsewhere. When I 1st started working my mortgage was over 50% of my wages but now it is a lot less.
That said I too wonder how people can afford some stuff

I imagine some people remortgage here and there clearing debts/home improvements that way.

Our car payment is £178 per month - used personal loan of 10K over 5 years instead of the eyewatering finance packages from garages.

Also high childcare is only for a short space of time - ours is now less than £200 per month.

Never had a car on finance!

I would buy a 2nd hand car outright as that will save you £000's. The general living cost seems high as it doesn't include your food shop either, so maybe cut down on some expenses there. Cut down on socialising and you will save quite a bit.
Myself and dh mortgage payments were double what you pay, but we always overpaid our mortgage every month with what ever savings we made. We bought our second hand card for £2500.00 - 8 years old and it runs like a dream. We cut down on takeaways and only had these one or twice a month if that. We cut down on eating out and now only do this a couple of times a month. I cook from fresh and now much prefer my home cooking to take aways and restaurants and it is much cheaper. We still manage to go abroad twice a year. Oh and I have 2 teens at uni so have all the costs related to that.
Last year we managed to pay off our mortgage 8 years early and we are in our early fifties. Our household income is £75000.00 and we live in London but we managed to buy our house a lot cheaper than what it is worth right now.
Me and dh can now finally really start to enjoy ourselves as we made the sacrifices to be able to be in this position.

Well we dont have any car payments or childcare costs so you cant assume everyone does.

We have also done Florida twice, first time was some money we came into, then we saved for 2 years to go back.