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 it depends where you live for sure. Our mortgage is £1200. One car on finance £350 per month. No childcare costs because I work part time over the weekend and my DH is the main earner. We live very comfortably and can afford luxuries and savings but it hasn't always been that way. In our early 20s it was hard work. We're now 10 years on. I guess it all pays off!

[quote ovensoff]@vivainsomnia IME well-off people pay a lot into pensions, those who are not pay the minimum or nothing.[/quote]
Nowadays with pension auto-enrolment, employees (earning more than £10,000) have to actually opt out of a pension. Do people do that?

@TwoAndAnOnion sick leave and going to the doctor aren’t necessarily linked though - even if they sign you off just don’t tell your employer if you want to carry on working anyway. On the other hand going to the doctor means you’ll probably need less sick leave if you’re getting treated rather than just ignoring a problem and potentially letting it get worse for the sake of £9. I have a physical disability and a chronic health condition so by no means a charmed life in terms of health but I know that if I want to continue to be able to work (and as I am the breadwinner, continue to pay for things) then I need to look after my body.

Live in a cheap part of UK so smaller mortgage.
Save up for a car rather than rent one that you can't afford. Paying £7k+ a year for a car you could buy one outright.
One partner works part time so less childcare. Obviously offset by lower income but childcare costs can be zero once children are at school.

IME well-off people pay a lot into pensions, those who are not pay the minimum or nothing
What about the majority that falls in between? Spending 600 pounds a month for new cars is utterly mad if you are not already paying into a pension.

Nowadays with pension auto-enrolment, employees (earning more than £10,000) have to actually opt out of a pension. Do people do that?
That's why I'm confused that it's not mentioned. If people talk about a salary of 25k and that's after tax AND pension contribution, they are not doing badly at all and earn above average.

@vivainsomnia having a household income of £64k puts you in the well-off category. The average household income is £29k.

That's why most single parents are in poverty though, because it isn't possible on one wage and we have a shockingly bad child maintenance system

I allow £1000pcm for food and spends. Just me and dh at present. Food, including toiletries, cleaning stuff, beers/gin, etc is about £400 to £500. We eat well but never have a takeaway and at present have not been eating out. The rest goes on petrol, parking, hairdresser, birthdays, coffees, the odd book, cosmetics, bits and pieces, treats for the grown up dc, occasional theatre tickets, garden plants, vet bills, etc.

Appreciate it's a nice position to be in.
In addition to that I pay for mine and dd's phones, save into my car fund, cat insurance, trips to see dd, my pension, clothes, stuff for the house and various savings plans.

We are old and there is no mortgage or childcare to pay for but we live well. I cannot spend my salary if I try and neither can dh but that's our stage in life. It wasn't so long ago that the school fees were about £3500 pm from taxed income.

OP can you clarify is your 40k income is gross or net and is after pension deductions?

DH is a high earner and I got a decent inheritance when my DM died suddenly. Therefore we've had no mortgage since early 40's.
I've worked since the DC were four months old too. After the initial years of hefty childcare fees it's paid off. Money going into pensions and holidays.
But I have no extended family now I ever see.

I really don't think 1k a month for food, petrol, etc is extravagant.

Live within your means? That's how people do it. I've never had a car payment in my life as I will not borrow anything beyond mortgage and then I will borrow as little as possible

We probably spend £2k per month on mortgage, bills, food and everything. One salary of £35k will cover it (£27.5k after tax). The other person stays at home to look after DC and maybe works part time when they go to school.

I’ve only read the first two pages, but I presume most don’t even think about more than the minimum for a pension?

Also a lot of parents, especially with young kids, have to claim tax credits or universal credit, when childcare and things are the most expensive, then when they kids are older they earn more and expenses go down, so there is a lot of buying things on credit when they are little.

Then there are all the people who are gifted a lot from family, have inheritance, money for cars and house payment, help with everything from baby equipment to childcare fees. Many have family who help with childcare to reduce the cost too.

Of course loads of people do not have it all. 4.3 million children were in poverty before the pandemic, I dread to think the numbers now. 130,000 children are 'hidden homeless' in temporary accommodation. That's just the tip of the iceberg as regards people who don't have it all. It doesn't take into consideration those in council or housing association, or rentals who will never own a property or who will never earn more than minimum wage or just over.

Most people can't afford it all, and that comes out years later when they lose their house, hidden debts get uncovered during a difficult divorce and they end up without a pension pot or a pot to piss in leaving their DC to care for them whilst juggling their own high debt full time working both adult households until the pressure leads to yet more divorce.

Average waged people cannot afford it all. Some of them are just better at creating that illusion than others with the help of credit or at the expense of other peoples time and money

General living? Another 800-1k

Depends on what this encompasses, it seems that many people spend a lot more on takeaways, instant food boxes like Gusto than they used to do.

@vivainsomnia I count mine after deductions (pension comes out of wage as does student loan)
So my actual money I get in my bank is about 20k depending on commission (can be as low as £1300pm or as high as £1900pm)

@TulisaIsBrill

I’ve only read the first two pages, but I presume most don’t even think about more than the minimum for a pension?

We both pay around 7% into our pensions. My employer than adds 20% and my husbands 10%. My husband is also lucky enough to have 2 final salary pensions from his previous 2 jobs that should pay an annual pension of around £14k per year. I quoted our income as £58k but this is gross. We take home about £3600 a month after tax ni and pensions plus we get approx £250 a month child benefit for 4 children

DH earns well above average about 65k per annum before tax. I was on 37k per annum but ill health means I was retired on a decent enough pension a couple of years ago.

Vivainsomnia by the time I retired I had almost 28 years of pension payments as I started when aged 21. We both started pensions at a young age. My pension planning ended up being a saving grace.

How does our 'average Joe' family manage it?
A modest house with a far cheaper mortgage than in your example.
No cars - we manage fine on public transport.
No childcare costs - DH works in the day, I work in the evening.
This leaves us with plenty for savings and general living.

I mean, we do it by earning a lot more than that. Bought our secondhand car outright & an eBike so we never drive it. We also got lucky on the London property ladder with our first flat & came out of it with £500k. We moved countries so we both earn more, pay less tax and housing was less expensive. Flip side, we pay £2.5k a month for childcare (nanny) because nursery places have a 3 year waiting list here.

Well depends on a lot of factors but lots of your post seem quite off. My mortgage is a little more than half of what you mention and our main car finance is only £120pm ins £25pm and we have another car which is just a banger we bought very cheap for cash so just £25 ins to pay on that. Not sure where the living costs you mention go. We don't pay childcare now but when we did I was in a very low paid job and did get some help through tax credits. To be fair though what you've described there isn't a low income though so you should be ok. Myself and dh prob earn that amount combined now. Lol

The answer is in the responses: We...we...we...we. If you are in a couple and you will be much better off.

It's the single adults and especially single parents who are really screwed and will have the most difficulty getting by.

Our mortgage is £300 a month, rates £50/month.
I work from home opposite shifts to DH so no childcare costs.
We only have one car which we bought outright for £500.
We go on camping staycations rather than foreign holidays.
Our kids (were possible) wear hand me downs.
Our extra money goes into the kids clubs (3 kids, each does swimming, dance, music, sport and Taekwondo) and day trips - pre-covid we did a big family trip every Sunday.

You can have it all if you cut your cloth appropriately and put your money where your priorities lie. We can't afford a fancy car(s), or a big house, foreign holidays, expensive clothes or other luxuries because we put all our money into our days out and the kids hobbies. We definitely couldn't afford the hobbies if we were paying for childcare.

Everyone has a different set up, different priorities and different opinions on what luxuries are for them. I think having 2 cars is excessive, but someone looking at my family quite probably would think the number of clubs/hobbies/lessons my kids have is excessive.