To wonder what's going wrong with our finances!?

[pondering12345]

In the process of moving to a joint account with DH, so using this opportunity to review our monthly finances:

Income
DH take home pay £2600
My take home pay (part time) £1075
Child benefit £145
Total income £3820

Expenses
DH car loan £270
My car loan £160
Mortgage £645
Water £60
Gas and electric £250
Home insurance £15
Broadband £25
Council tax £190
DH credit card £110 (we each use our own credit card for any purchases for ourselves and pay off the following month)
My credit card £100
My phone £35
DH phone £35
DH car tax £20
TV license £15
Zoo membership £20
Apple Music subscription £15
DH contact lenses £40
DH haircut £15
My haircut £20 (£60 every 3 months)
My nails £30
Window cleaner £15
DH petrol £100
My petrol £100
Food £450
Takeaways (one per week) £150
Kids hobbies & swimming £100
Date night £50
Disposable income £500
Total expenses £3535

This leaves less than £300 per month to put towards tonnes of other expenses - annual car insurance, gifts, Christmas, holidays, kids clothes, home and car maintenance etc.

Where are we going wrong here!? I don't feel like we live a particularly lavish lifestyle.

Are you splitting a fish and chips between multiple people?

£40 on a takeaway would be cheap for us! The Chinese and curry places we order from add up to far more than that with mains, sides, rice, bread etc.

Cut the takeaways and food bills down.
We spend £250 a month on shopping and no takeaways. Similar spend on cars though.
You need to look at your fixed costs and then your variables to make adjustments.

Seems you are doing quite fine. You have manageable mortgage and other necessary expenses, can afford to work part time and have potential to increase earnings once children are at school.

In the same time, you have quite a lot of different elective expenses hidden under several points of your spending budget. Maybe worth checking which ones of them make you happy and which ones are just habitual or questions of peer pressure/perceived normal.

It's not about stepping back from your lifestyle, it is about understanding wich expenses actually define your feeling of good life (my guess is that windows cleaning and zoo card stay, as they are tangible and you specifically enjoy them) and which expenses are forgotten the moment you make them (probably some snacks and coffees out) and can be easily replaced without feeling like struggling.

Why on earth do you suspect that?

If your mortgage is that low what about putting more money towards paying it down Sooner?

what about pension?

You aren’t left with £300 at the end of the month. You are left with more but spend it, you have £500 disposable, £50 date night, £150 takeaway. So that’s £1000 a month that you use as fun money. Thats more than a lot of people earn, you just need to plan better if you want more of it to be saved.

I think possibly after putting money aside each month for annual expenses, we should pay anything we have left off the mortgage.

We both contribute to pensions and these are accounted for in the 'take home pay'.

We are going to sit down as a couple tonight and look at it all in detail, there are lots of helpful comments on this thread that we will discuss

Oh I missed some!
Plus the £200 credit card spends and £20 zoo you have £1200 at the end of the month.

There are other treat bits too.

You have an extremely lavish and frivolous lifestyle… lucky you !

£40 contact lenses….shop around that’s massive. Even with disposable varifocals I was paying £15 a month scheme and that included all appointments, checkups.

I was comparing the cost over 2 years, the length of time the phone costs is irrelevant. You said you were paying £40 for a fairly basic phone that you can probably buy for £2/300 yet you're paying far more for it.

That expenditure looks to me like the expenditure of people who have no real thought for the future and will have a much poorer retirement and be able to support their kids Les than they’d like in future.

Savvy expenditure involves not spending big on monthly car payments and things like takeaways or having nails done. Instead more goes into mortgage payments, pensions and things which build for the future.

The more you have on credit such as sizeable car loans, the more it’s costing you and over the years you’re talking about vast sums - money which could instead be used to fund a wonderful family holiday or build a deposit for kids house, or allow yourself to retire a couple of years sooner.

Think differently about today. Brand new cars every couple of years, nails done regularly, eating out and takeaways every week….it’s a waste of cash and something you can’t easily afford on your income. It’s better to take a bigger mortgage and be building equity in an asset which will increase in value and stocking up your pension. It doesn’t mean you have to drive a banger or never go out. My income is double yours and I’d never spend what you do on takeaways and going to the pub or beauty treatments. I would spend more on mortgages, pensions, kids’ savings, kids’ activities. I’d buy a 3 year old car every 8 years. I expect to retire by 55 and to find my kids through Uni/sizeable hosue deposit. It’s just different priorities isn’t it. We go out for a meal perhaps once a month and one of us will probably go with friends for another. We’d buy a ready meal as an easy treat for less than £10 rather than get takeaway. We shop around to get insurances and utility bills down and we have sizeable savings which mean we buy everything upfront and not on credit, getting good deals and no need to take costly insurances because of fears if not being able to replace items like cars.

The thing is it depends what you see as a good lifestyle. Lots of people do think it equates to lots of takeaways, trips to the pub and having a new car. They’d rather have that and buy their house with sated ownership or help to buy and cars on pains which mean over them years hugely bigger payments.

@Hesma really? Average cars that had to be financed, no holidays, no weekends away, low wages and credit card debt.

£150 per month on takeaway what only results in 1 a week
no way if I have 1 takeaway a week it’s under £40 per month

if you're not happy with your financial situation you just need to separate your expenditure into essentials (mortgage etc.) and non-essentials (takeaways, zoo etc.) then decide which of the non-essentials you can ditch.
You are spending quite a bit on 'indulgences' - and that's absolutely fine - but that's where your money is going.

When you sit down later tonight, try to classify all your spends as Needs vs Wants
needs are the essentials must have, can’t get out of paying- for all of those go hard line research to slash expenses where you’re paying over the odds…I pay £10 a month for my phone ..that’s it..payg..no contract..will move sim to whoever has deals.
cars are probably essentials but ask yourselves if you want or need cars that cost that much or could reduce expenses on one of them

on those things that are wants- stop. Really talk togther about your long term goals…children…bigger house…day dreams…retirement…set a game plan togther for next 5, 10 years, for your retirement .think about how to fund those ambitions…then set those savings you need to make against your current “wants” spends and prioritise between them

also I think there are lots of things missing here…clothes, kids pocket money, saving for uni costs for kids etc ..get very detailed to list down everything

oh and drop the spends on credit card as a budget item in itself…what are these spends exactly? Use credit cards only for bonus cash backs they give, credit rating or protection…and pay off in full each month. Those spends should be categorised into your budget in same way not a misc unknown card spend

Also, make sure you maximise your income and not just expenses.little things like aggressively chasing interest rates on any savings, investing in stock and shares ISAs whilst interest rates are still pants, utilising both your tax allowances fully, using credit cards or other sites for cash back on purchases, switching banks to get switch bonus etc . they’re little things but will add up over time as extra “free” money

"credit cards must be racking up debt and interest."

Why must they? They may have no interest payments and pay them all off regularly.

Forgot to mention tesco clubcard!

Also how does my child cost £3,600 a year?
Clothing/Shoes £600 (next/M&S prices)
Toiletries £144
Haircuts £84
School Uniform £300
After school football and swimming £800
Birthday (party/present/days out) £500
Christmas (presents/days out) £500
Family days out £600
= £3528

(actually we are paying for school hol costs about £500 out of another account forgot about that! The availability to put extra funds towards hols comes from DC receiving money from other relatives at xmas/bday, about £600 per yr)

Maybe consider working out something like the above for your two OP.

We do this too but surely life is for living ? I'd rather spend money on pub lunches and haircuts than paying mortgage off early .

Takeaway once a week, date night once a month and haircut every 3 months only. I don't see that as 'lavish' at all! Plenty of people do all those things more regularly.

The nails I find unnecessary because of my own personal taste that nails painted at home look just as good. I really wouldn't say the same thing about people who cut or colour their own hair.

Some of the responses on here are a bit odd. I’m not sure why people are cross with you!!

it’s okay to look at your finance and wonder how they compare. We all have an idea of what lifestyle we think we should have and it doesn’t always quite add up to real life!!

you seem to have a good lifestyle based on your income level. there are areas you could but back on if you want.

but ignore the nasty comments!

A glaring omission from your expenditure is childcare fees. Presumably with 2 very young children and you working at least part time, you must pay for SOME childcare?

"(probably some snacks and coffees out) and can be easily replaced without feeling like struggling."

Can they? This is what makes life worth living. It would be like being on lockdown for the rest of your life.

"I do one or more of these everyday and the cost is almost nothing. Maybe £100 a year on a couple of pairs of trainers, which come out of my quite modest clothes spend."

You also need sports clothes so there is a spend on those when you start out - leggings, tops, jackets. I buy at Decathlon, but it's still an expense.