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.

It’s surely not that unusual to have a car or cars on finance? When I read threads like this and see how many people are agog at the thought of paying £300pm for a car it just doesn’t tie up with the reality of what I see around me. Which is a huge number of fairly obviously financed cars. Also someone said people only used to have one car - well probably less families had two working parents then. It would be physically impossible for both my DH and I to work without having a car each and would just make life so difficult in other ways too.

Also the nails etc. You just need to look around to see its perfectly normal to spend money month to month on things like that.

I do think that the OP has the priorities of her budget wrong and needs to work from essential to non essential but I do think that what she’s listing are pretty normal expenses. I think OP is probably wrong to expect to have masses left over still after all of that though.

As a caveat to the above there probably is a wider issue with how lots of people are spending their money but I just can’t pair what I read on this thread with reality.

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.

Paying a professional £30 to do your nails is definitely a luxury, lol.

OP has more than the "odd takeaway" - she spends £150 a month on theM and goes out for multiple meals as well.

No idea about the cars, but my commute to work on public transport is more than OP's car expense.

But her listed car expenses don't include insurance, her car tax, her MOT, annual service or things like new tyres. She's spending almost £400 per month just on car finance and petrol - her DH is doing similar. That's a huge amount of money just "gone".

Yes, for many people a car is a necessity (I need mine) but I spend maybe £150 per month on fuel, £30 on insurance and maybe another £20-30 averaged out over the year on MOT etc. Thats half of what OP spends and most of that is fuel!

I'm a bit torn on this. It's about balance
We don't care about cars so we buy them outright and spend about 4 grand on one and keep it for about 5 years. That said we definitely have the worst cars in our street, friendship groups and kids are probably embarrassed. But I hate spending out on things like that. Both of our cars are cheap to run and insurance is about £400 a year for both which we pay annually
We also don't spend much on ourselves so beauty and hair. We do spend a lot on food but mainly normal food shopping as we are a family of 6
It is nice to have nice things and spend money on family things
Lots of people scrimp and save and don't like splashing out at all and I find that a bit odd
We go abroad every year which we save for as that 2 weeks is important for us.
But if we spent like you did we wouldn't be able to
I have a family member who tuts and moans every time we go away and says "I wish we could afford to go abroad, alright for some" that sort of thing. But then they have at least 2 takeaways a week. Both have cars on finance. Spend loads in costa, both buy lunch at work every day. We don't so we can afford to go away and to save
I definitely think there are areas where you can cut back. If you could save £100 or more a month from your list, then with the £200 odd you have left you could put this into savings and start building up money
Then when you increase your hours (if that's the plan) then add that extra straight into the savings pot. Don't be tempted to put it into a bigger loan for a better car
Things were really tight when ours were really young with childcare etc but since then we have both had payrises and saved the extra while keeping our essential costs the same
The kids do clubs, we spend a lot of birthdays and Xmas and holidays but we don't spend loads on the little bits

Car loans are such a money pit but I appreciate once you are tied in that it's hard to get out. £430 for cars a month is a lot more than half your mortgage. Most families I know have one 'good' family car and one cheap banger run around if they need a second car. If you got rid of the more expensive one and both had whatever the cheaper car is at £170 per month each you'd have an extra £100 per month at least. Or even better if you could find away to buy a car outright (take money from the mortgage, borrow from parents, bank loans better than car finance) you'd have £270 per month, you could save half of that to put toward the next new car which would be nearly £5k in 3 years and £130 extra cash per month.

Mobile phone contracts are expensive. Next time you renew think about purchasing a reconditioned phone and getting a cheap sim only contract. Mine costs £8.50 per month.

How often do you go to the zoo? I know zoo entry is pricey but ours is abou £50 for a family ticket so you'd need to go at least 5x a year to make it worth the £240 you pay. My kids would get bored of it that many times. National trust membership is only £133 for a family for a year and you can use it all over the UK plus pay for a zoo trip at some point and still be spending less.

We earn a bit more than you, bigger mortgage but no car loans and I think that makes the biggest difference.

£800 a month you have left - that's £500 disposable income plus £300 spare

That's nearly £10,000 a year
You're fine.

Absolutely this. If I have £120 disposable income , I'm happy.

I can't see the problem either. Your takeaways, zoo, food seems a lot.
We spend a lot on food, less on takeaways, and don't have car payments because ours are bought outright, but generally I'm lost as to what the issue is.

Haven’t read the full thread but 35 pounds on a phone is crazy. Are you paying off a contract? These days you can get a monthly sim free contract for 8-12 pounds with all the data you need if you have the phone.

What everyone else said. Cut back on a lot of the non essentials and that will free up money for things like a holiday, Christmas and car repairs.

Also, are you sure about the amount you spend on food and petrol? Lots of people just add up the weekly shop and forget about top up shops. Obviously petrol has gone up hugely so have you accounted for this?

Can you keep the cars after the loans finish and save up for the next ones or are they on a PCP deal where you have to pay a balloon payment or start a new agreement or else you will be carless?

Do you use the zoo membership? If you go a lot and take your own food and drinks to avoid paying £££s when you're there it could be a good idea but if you only go a few times a year and it would be cheaper to just pay on the day, then probably not.

What is the OP doing for exercise don’t see any sports or fitness related costs. Simple spend on your health and not save till you drop dead is what I would say

As a PP pointed out, you spend a lot of money on things that other people would class as luxuries.

You should be prioritising the car insurance, Christmas, Birthdays, and house repairs, car repairs, holidays etc and putting money aside for those.

Then you see what you have left and if you can afford it, you can have some luxuries like hair, nails, meals with friends, takeaways etc, because those should be things that you only do if you can afford it.

A lot of people get into debt because they don't live within their means and they want what they think everyone else has got. Well done for not getting into debt, but you do need to overhaul everything because you do seem to be looking at your priorities wrong.

You can't complain that you have no money for essentials when you spend so much on non essentials each month.

I save money each week towards holidays, house repairs etc, and that means that I don't have to worry when something needs doing, like I am just getting the exterior painted and that is £1200 and I have that money sat there now.

in a similar position and can completely understand your point. Haircuts are pretty much a necessary to keep us maintained. Nails not so much. Tv subscription of some kind - absolutely. Considering the amount of time we spend at home in front of the tv saving money on going out, then yes it’s essential and equates to pennies per use really.
takeaways could be cut down. Stop the window cleaner and use quarterly when the windows really need going over or do it yourself if you can. Kids swimming is too important.
The cost of living is high and climbing and salaries don’t often match what we need to maintain a comfortable life.

The issue is that they're spending thousands a year on a lot of non essentials, probably have no savings so would struggle to repair a car or replace white goods.

Plus there's a few essentials missing from that list like car and home insurance.

OP what's DHs sick pay entitlement like? What if he couldn't work, would he still get paid?

There's a programme on channel 4 called secret spenders. That might give you some ideas about rearranging your finances.

Also look at the budgeting section of Moneysaving Expert and get the weekly email to get ongoing tips to keep you on the right track.

I don’t think you should stop paying for DH contact lenses as others have suggested! I’d put that in the same category as a prescription personally.

Mine are £90 a month and I couldn’t function without them. It’s a health cost in my eyes especially when you can cut down in so many other areas

some of those expenses are totally unnecessary. Get a cheaper handset and pay a monthly contract (£7 a month). do your own haircuts. ditch the nails. takeaway once a fortnight instead of weekly. clean your own windows etc etc.

not hard to make savings.

Running is free or very low cost as is walking or exercise like pilates with you tube videos.

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.

What I meant Barbara, by saying I couldn't see the problem, was that as every other poster has said, it's not hard to make huge savings easily on OP's spending.

You will get lots of people unpicking what you spend your money on - and you will know yourself that you have a lot of non essential items there. But it’s up to you what lifestyle you enjoy.

the question is why do you think it’s going wrong? Do you have a savings cushion?

It’s surely not that unusual to have a car or cars on finance? When I read threads like this and see how many people are agog at the thought of paying £300pm for a car it just doesn’t tie up with the reality of what I see around me. Which is a huge number of fairly obviously financed cars. Also someone said people only used to have one car - well probably less families had two working parents then. It would be physically impossible for both my DH and I to work without having a car each and would just make life so difficult in other ways too.

I don't think one is unusual, no. Finances and leases are very normal now, especially the way second hand car prices have gone in the last couple of years. Two is a lot, hence the raised eyebrows.

(Although I do also find that people who have a second hand car they maybe got 5 years ago and haven't clocked what's happened in the second hand market since then don't necessarily realise that the decent looking 4 year old model they got for 4k in 2018 would be more like 9k now. Leases and the like become a lot more attractive in that market. There may be some of that happening here).

That's not to say two cars won't be a practical necessity for some households of course, although we have no idea if it for OP or not. But the spending here is £650 a month on running two vehicles, more than a sixth of their income, and it's going to increase. That is a big part of the answer to where OPs money is going and 'do you actually need two cars' has got to be one of the first points made in response to OPs question about how to manage their income going forward.

We don't do takeaways - partly because it's a 10 mile round trip to get to one and partly because we are usually disappointed in them. What we do instead is treat ourselves to a nice piece of steak or fish - still a higher cost than normal everyday meals but far cheaper than a takeaway and much healthier. And both of those take less time to cook than a trip to the takeaway or waiting for a delivery.

You need a savings plan every one does

For me personally takeaways are probably classed more under the mental wellbeing spend rather than purely food or degustatory pleasure. A break from the daily grind in the kitchen.

Depends how much you are spending. Agree with pp that contact lenses are more a medical thing than a luxury. And a haircut is the norm. And a takeaway is worth it to me, to cure the monotony of not cooking, just a break from preparing one more meal - one more bloody spaghetti and meatballs yet again.

£30 a month are probably 2 sessions at £15 each. No, it is not an incredible luxury, it is quite a normal self care spend. Same as haircuts, dental hygienist, annual medical check, gym or fitness memberships. Not strictly necessary for survival, no. But hardly something from the world of filthy rich, and something that should be easily affordable on the average household income (where OP is).

I have no idea re cars, I don't have one, getting an uber when I need to is much cheaper and less hassle.

Most of these things are pretty normal and unremarkable things in themselves, they're just not all affordable collectively if the OP would like more of a cushion.