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.

If this is a serious thread and not a stealth boast, then you must realise you live a relatively lavish lifestyle compared to many others. The nails, the haircuts, the date nights, the take-aways, the expensive phone contracts? If you want to save money, get rid of these. If you're happy with the way things are, jog on.

I think this kind of thread must be quite jarring for people who are genuinely struggling with financial hardship, and can hardly afford a basic food shop. let alone all the treats and luxuries you take for granted.

I wouldn’t say your expenditure is lavish at all.
It funds a very comfortable lifestyle though.

My DS’s are older than OP’s DC but we spend way more than £100pm on DS’s clubs. Between them they do scouts, football, tennis, rugby, athletics, music lessons.

Why do people think this is a stealth boast? Sure, it'll be a lot of money to some people, but objectively, he's on an average salary and she's barely bringing in a grand a month. Where are people seeing boasting? Because she gets her nails done?

I agree that you need to shift your mindset about what's a luxury/disposable and what's not, OP, but I can't understand how anyone is reading this and thinking it's some kind of brag. Even when I was in dire straits, while this income was far more than I had and entirely manageable, it would be clear it's not yachts and champagne.

YABVU

you spend £500 a month on “disposable income” plus £150 on takeaway! And still have £300 to save for big expenses.

get a fucking grip! Loads of people are worrying about whether to pay for food or electricity. If you want to save more than cut back the spending on crap. Simple.

"And, finally, down grade meetings with friends. We now meet up in the local park with a takeaway coffee. Or we head to the beach or park, bring a bottle or two of wine between us, someone gets nibbles, someone will bring some cup cakes or something and we'll have a girls day picnic instead of a girls night out.
Socialising doesn't have to be in a restaurant or pub, nor does it have to be at night. Just going for a walk in the country with mates can be lovely - take a packed lunch each and just enjoy the friendships."

This depends on all your friends being onboard. Mine definitely wouldn't be.
I do have one friend who hates spending money. I see her only occasionally and not with other friends.

@StrictlyAFemaleFemale for perspective; DDs dance is more than £100 alone. Then there’s piano, horse riding and our other 2 Childrens clubs.

"Loads of people are worrying about whether to pay for food or electricity."

Please go over to S&B where people think nothing of recommending dresses that cost £100 and talk about buying bags worth 1k.

£2600 a month net is not average salary

www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/timeseries/kab9/emp

About £600 a week = £31,200 a year - that's £2600 BEFORE tax etc - about £2000 after taxes

The media varies across the country - I think some people forget what 'average' salary is - and average lifestyle is for many people

*median (not media)

Thank you for the link and the stats.

I'm still not seeing a hugely inflated income though, especially given OP's salary. It's a few hundred per month over (if the average two-adult house has both people working full time, they'll be under average household income). Certainly should be enough given their mortgage and living costs but even at my lowest ebb, I wouldn't have looked at this OP and thought she was showing off their fabulous wealth.

You have £500 of disposable income allocated after already budgeting £150 for takeaways and £50 for date night. So you are spending £700 a month just on 'treats', and that's not even counting on what you allocate for zoo membership and kids hobbies.

Basically you need to go out less!

lots of people get free childcare from grandparents.

I am sure if OP was paying hundreds of pounds a month in childcare she would have included it

This thread is really interesting. The differences between what people think is a)a lot of money and b) necessary expenditure are huge.

For example, £100 on kids’ clubs seems really cheap to me - I have 2 DCs who are teens - martial arts which is £55 a month, swim squad fees are £120 a month, plus music lessons which are £300 a term x 2. That’s only 2 extra curricular things each but it adds up quickly. Similarly, a takeaway for 4 people is NEVER less than £60 where I live (south east) - £15 each? A curry alone (without rice, just literally the curry) is about £9-10 from our local takeaways so no way you’re getting change from £60-70. Similarly £20 a month for hair seems pretty good - I pay £60 every 3 months too for cut & colour which a friend does - in a hairdressers it would be twice that much at least! also I don’t think £450 on food is excessive? Probably bang average.

Obviously if the OP feels she is running out of cash there are areas she can cut down (takeaways are def a luxury, even if they aren’t posh ones!) & the car payments seem a lot but she’s hardly living like a queen on £60 haircuts every 3 months. Some Mumsnet competitive under-spending at play here I think.

Having your nails done and having a take away every single week is what I would consider a lavish lifestyle in the current economic climate.

This is the Minimum Income calculator - it's based on the Minimum Income Standards and calculates what income people think is needed:

The Minimum Income Standard for the UK shows how much money people need, so that they can buy things that members of the public think that everyone in the UK should be able to afford.
Figures are based on public views about a minimum standard that nobody should fall below
It shows how much income is needed to buy a 'basket' of goods to let someone participate in society

www.minimumincome.org.uk/

And for reference

www.jrf.org.uk/income-benefits/minimum-income-standards

In 2019/20, more than a quarter (27.7%) of all individuals in the UK were living in households with incomes below MIS, compared to 26.7% in 2008/09. The proportion of individuals below MIS has fallen in the latest year and is at its lowest since 2009/10

Off the bay, it looks like you are spending a lot on things like takeaways, car payments, nails, etc. All of those things are technically not expenses, they come from your disposable income. If it were me, I’d draw up your budget to prioritise spending how you would ideally like to have it; you could use the 20/30/50 rule as a guideline. According to that, you should be saving 20% of your income straight off the top. Then, at about 50% should be going towards your needs and about 30% should be going towards wants.

Looking at your expenditures, you are spending a lot on transportation relative to your income. You are spending about 465/month more on ‘essentials’ than you ideally should be, and I think that’s largely down to expensive communications and running two cars.

Can you move down to one car? If you got rid of your DH’s car, that would chop off almost 390 straight away in tax, petrol and repayments, which is more than half your mortgage. That money could go toward holidays, christmases, etc. You also spend a lot on little bits that add up on I quite a lot, like takeaways and nails. I guess it depends what you prioritise, but I think it would be a good idea to review what you ACTUALLY want to be spending on and make a full-on budget to account for everything you intend to spend down to the last penny. It might help you see where you are happy to trim one thing in order to be able to afford something else you would like to have.

I'm not saying you should do without these things OP, but your list of outgoings includes all the things which others would be spending their disposable income on. You therefore have about 3 times as much "disposable" income than you think you do!

A lot of people would say that you do have a lavish lifestyle. You hundreds of pounds every month on discretionary items and list things that I would consider essential expenses at the very bottom. It's interesting to see how people's ideas of what is essential and what is lavish are so different.

Things I would consider essential/ a priority which you haven't mentioned under 'Expenses":

Life insurance/ critical illness
Childcare costs
Children's clothes, shoes, school uniform, house and car maintenance
Regular savings

All of these are unnecessary but you list them as 'expenses':

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- you could find a cheaper deal
DH phone £35
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
Takeaways (one per week) £150
(Kids hobbies & swimming £100)
Date night £50

Cut out getting your nails done.
Cut out the window cleaner.
Find a cheaper hairdresser, mine is half that cost in the south east.
Downsize the date night to a cheaper option. Eg cinema.

It was the two car loans that jumped out at me most of all.
Your combined take-home pay is almost double that of mine and my DHs, yet we bought both our cars outright, cash. We always buy secondhand, when a car is 3-4 years old. As soon as we buy a car, we begin actively saving for the next one with a £20 a week direct debit to a savings account. We drive each car pretty much into ground before replacing. As long as they're safe and road-worthy, we're okay with it.

I am amazed the variation of costs for standard 'things'
My phone is 2 years old now, I pay £11 a month, 5000 minutes 5000 texts 2gb data with Tesco.
When I was also paying for the phone it was an extra £8 i think. (Samsung galaxy, not an unknown brand) Why do others pay £35+, what are you paying for extra to what I have?

And take aways, here we tend to get Chinese for 3 people, so 3 mains, 1 rice, 1 noodles, 1 chips (because dc insist) comes to about £20-25. Pizza is admittedly more costly. This is a South East City, so not a cheap area.

There is tons you can get rid of!

nails. Take away. Credit cards.(if you pay them off each month you don’t need them).

cheaper cars. Apple subscription. Zoo subscription

Suggest scrapping work you're not earning much and the car and petrol is 30% of your earnings for 1 car, excluding insurance and maintenance. Assume you need the car for work.

Not really worth working if the car is taking 40% of the money or more if repairs needed or you damage on HP agreement. Go full time or lift share or find a wfh job. You can't afford two cars.

We are high earners and wouldn't dream of 2 loaned cars. Buy a cheap one outright our second car was £400 from Chelmsford a Y reg.

Don’t quit work OP just so you can sell one car 🙄
The OP clearly can afford these cars as she’s living a lovely life by the sounds of it. If you want to save more then it’s the £500 disposable income that I’d imagine is the easiest to cut back on.