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.

OP, there’s so much money floating around in your OP, you just have to decide what to do with it: if you want to finance holidays and Christmas, allocate that £500 spending money to a savings pot. If you want a rainy day cushion, cut back on the nails and takeaways and haircuts.

Definitely.

We decided to just get better with money a few years back, take more note of where it was going and what we wanted to do with it, and I really recommend that approach. I know where my money goes now. There's nothing wrong with spending what some people might deem a silly amount on nails and/or takeaways, as long as you know you're doing it and you've decided that's the best use of the cash.

I do also think the points about running two cars are good ones. You may need to do it, I don't know, but that's clearly something that's about to become much more difficult to pull off for middle income families who could in the past have run two vehicles as fairly standard. It's something that's going to cost you.

I don't think you lead a particularly lavish lifestyle but yes, lots of "nice to haves" on that list that could be cut back if necessary.

We have similar take home money and the thing that jumps out is definitely the car payments, seems like a huge chunk of money.

The easiest cut back would be takeaways, even if just reducing to once per fortnight rather than weekly

I also don’t think your car loans are expensive. If you’re both in work it’s pretty likely you need two. At £160/month, you’re not driving a Porsche are you 😂 only using a tank of fuel a month each is pretty frugal travelling.

Op IIWY I would:

sell the cars and the children
downsize to a studio / hovel type place
shave your heads to save on silly hairdressers bills
make do with landlines, nobody needs 2 mobiles
definitely stop the takeaways, in fact, could you get a second job in the chippy?

There are quite a number of luxuries on your list. I would say proportionally a bit too much fir your joint income. There should be more savings in case something happened. Nothing for home repairs/maintenance, temporary liss of job, health issues.

You are prioritising luxuries over security. It's OK to enjoy some luxuries on your joint income, but I'd say the amount you put towards them would be more appropriate for a joint income of about 1/3 more than yours.

First of all OP, brilliant that you've done the exercise. Many don't.. so at least you now have good visibility in order to pressure test and make decisions.

A good financial strategy to aim for is:

1/3 for fixed cost needs: roof over your head, heat, electricity and food. These you can shop around for best deals, but they're kind of essential so you can't do without.

1/3 for wants: cars, holidays, grooming, nights out, clothes, treats. These make life fun, but you can apply a lot of discretion in these areas when required - this is where you cut your cloth accordingly.

1/3 for the future: basically savings and pensions. Pensions come before tax, so you'll need to factor this in your calcs.

Worth also saying that these spilts change during life stages. With a house move / starting a family etc, you'll need to increase the needs %. But when you're in middle years with kids gone, mortgage smaller but higher in your career, you can increase the savings %.

Anyway, we're all different, so hopefully food for thought. Thinking about and actually having a financial strategy is the first step to achieving your goals. But all of our goals are different, so long as you're happy with it and you're thinking short / medium / long term, that's the main thing.

Have you never been on a shopping thread? Plenty of people on here spend way more than that weekly!

You spend a lot on card imo. Plus you are probably spending more than £200 combined on petrol? That’s about a tank and a half each month? Sounds too low to me assuming you drive nearly every day?

If you cut one car and tried to manage on one… and let’s assume it’s your car that has to go, because that’s how it works, let’s face it…

The added public transport costs, the extra fuel that gets used in the remaining car (it doesn’t just cease…) and the PITA that would be managing with one… I’d pay an extra £200/month just to avoid it being a PITA.

This is an example of how the rise in energy bills and fuel is going to affect lots of people not just the poorer families, average earners who have fairly lavish lifestyles are not going to be able to keep this up so places like nail parlours, eateries, etc. will struggle. A lot of people with big discretionary spending will be average earners

Of course it's OK to have nails done and to get takeaways, but if you're trying to save then it's an unnecessary expense which can easily be stopped, like the zoo membership etc.

There's nothing wrong with spending your money on luxuries if that's what you want and you're happy. Spend your whole salary on designer shoes and hair extensions if it pleases you. But if you want to save and you're worried about money then you're probably going to need to cut down on non-essential outgoings.

The car payments to me are a lot of money. We have very similar outgoing and salaries to you and would really struggle to afford big car loans so buy fairly old cars every few years so our car loans combined are £150. We put £400 a month into savings but that gets dipped into a lot as like you we still struggle financially and never seem well off even though our mortgage is small and on paper our money looks good. We each have about £400 a month for 'spending' after all kids activities, bloody private braces, childcare on top of things you've said (no credit cards either) but we quickly run out of money - we are terrible for spending a lot on treats at the start of the month and being skint last ten days of the month

Yeah, that was one of the more easily understandable parts. £450 a month is about £110 per week, for four people. The takeaway is probably one meal a week, date night looks to be once a month, perhaps they have another meal or two out most weeks. Let's say perhaps 17 meals per week per person for that budget? Certainly there are people who do it for less, but it's hardly last of the big spenders.

I don't understand why the £220 credit card money and £500 'Disposable income' aren't being added to your remaining £300 a month?

In reality you've got over £1000 a month there that you are doing 'whatever' with. Look at that and cut back.

You are also spending ridiculous amounts on cars.

OP goes out for multiple meals every week, has two cars, has take away once a week, some how spends around £150 a week on 'disposable income', kids go swimming, have zoo membership, a window cleaner, gets her hair cut more often than most, nails done every few weeks, still has a fair few hundred left over spare... And she works part time.
There's a grey area between "basic necessities" and "lavish". I don't see cutting hair or maintaining nails as a luxury, or an odd takeaway. No idea about the cars, but my commute to work on public transport is more than OP's car expense. Probably also extravagant, could have walked for 4 hours.

I would go over to the Money Saving Expert forums and do a proper budget.

There's a lot missing from yours that might not be monthly spending but should be included. Car repairs, house maintenance (boiler check for example), holidays etc.

Allocating it monthly will help you get a better understanding.

You are fortunate in that you have a lot of incidental spending so have areas to cut back if required

Yes I think that's right. Some of the commonest suggestions for cutbacks here are what will almost certainly be local small businesses. It's not unreasonable advice either, but it's worrying taken across the whole economy when you think what a lot of people are going to have to do.

I hope to be able to keep supporting that kind of setup, as my household expects to continue having reasonable disposable income, but if costs go up more than income does people are going to have to spend less. There'll be no choice.

The contact lenses seem very expensive! I pay £13 pcm for mine through Specsavers.
Zoo membership £20 seems a bit of a luxury. Have you worked out your cost per visit? Is it really worth it?
Takeaways, £150 this could easily be cut down.if you choose to. It seems such a lot!
Nails £30 this should really be allocated as your personal spending and come from that budget. Could you get a gel kit to use at home and do your own instead?
The cars are a big chunk of your spending. I'd be re-examining how to cut cost there.
I would get rid of the credit cards, or only use them for protecting payments on purchases (not as additional money). If you cut down on expenses above you could allocated you and DH £100 pcm budget for personal spending. If you spend 1/3rd of yours on Nails?
How are you spending the £500 disposable income?
If you don't already (as wasn't on the list). I recommend that you get/budget for life and critical illness insurance especially as you have children and a mortgage. I'd also put money into pensions and savings wherever you can.

I don't think that budget is a realistic reflection of what you need spend. There are a lot of categories missing like Christmas, birthdays, kids clothes + shoes, school uniform. I would go through past statements and find a more accurate view of what you spend.

You have no long term goals like holidays or savings. Try and plan these into your budget using some of the savings people are suggesting. You are frittering money away today at the compromise of your future.

Wow! You are doing great! Don't know what you're worried about. You have loads of treats (takeaways, nails, date night, kids hobbies), are paying off a car loan, £500 pocket money, and STILL have some left to save. What's the problem?

We both work full time and bring home about 3500 between us.
Mortgage 800
Council tax 200
Childcare 400

No car loans/ credit card.
Haircuts similar. Own brows and nails.
Kids' activities etc
Stopped the zoo.
Rare takeaway.
Probably similar food bill each week.
I know we have too much telly- nf, Disney and amazon.
Amazon music, but I travel a fair distance to work and I run. Music is the backdrop to everything I do and before streaming, I would have been buying it.

We certainly don't have 300 a month left. Dh is doing overtime and I'm doing examining and tutoring to try and give us a cushion.

Have you taken into account friends and family tax? All those 10 quids here and there for bday presents etc.

Cut down the luxury spends, increase paying off debt & mortgage over payment. Plus, add more to your savings because a bigger utility price hike is coming this autumn. Start saving for your pension because you're wasting £1k on luxuries.

And petrol is getting tough. I do about 200 miles a week communing. Dh does about 150. That's a lot of petrol. I walk everywhere I can at weekends, but unfortunately kid activities aren't in walking distance.

You can get cheaper phone contracts - I never pay more than £27 a month, if it will cost more I wait for a deal. I get either the previous model or the one before that. After 2 years repaying phone I spend 1-2 years on SIM only for £10 a month.

Water seems high, you should easily be able to get that down to £45

Gas and electric -again even with rising costs that seems very high unless you live somewhere very cold or badly insulated. I am paying £85 based on meter readings, and I work from home. My supplier thought I'd need to pay £130 but I don't.

Zoo membership is a lot, do you use it or do you regard it as a charity donation to help them keep running?

Contact lenses - I don't use contacts but it sounds a lot - are there cheaper ones online?

Your haircut is cheap so the nails might be a luxury but you aren't paying much for your hair.

Takeaways - that is incredibly extravagant. I maybe get one every 6-12 months and even then it's £20 or so. I don't think takeaways are affordable when you have kids.

Date night - I think that's important and you should keep it but you could look for lower cost things - eg go to the pub and play a card or board game, walks in park down by river, cinema and get tickets through Meercat discounts or something?

Apple music - is that a household subscription that everyone can use? If so that's not a bad price.