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.

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.

Maybe take those expenses from this:

Disposable income £500

The £500 would surely cover all of that, so I don't understand why it's "disposable" if it can be used towards "tonnes of other expenses".

OMG this post 😂. Nothing is going on, you are just spending a lot of frivolous things yet still have money over!!

Do some research

contact lenses - cheaper online
Cars - if you have savings buy one and you’ll save the £160 a month I’ve never had a car on credit
Braodband could be cheaper
same with phones, a decent iPhone plus monthly subscription would be cheaper
check your insurance and bills - see if there’s better deals out there - bet you’re wasting ££££
Take always - I’ve learnt to cook a decent curry, chicken friend rice, pasta, Indian, etc - once you’ve had a go it’s quite easy! And 1/4 of the cost.
Stop spending unnecessarily - my kids loved a picnic, and I would carry bananas and milk for snacks, treat would be sweets on a Friday. It’s so able if you want savings

Reported the piss taker

Do you not have sky or Netflix?

when was last time you went on holiday? Plans for holidays?

I think it's all about reframing your priorities.
As other's have said you have already allocated a lot of your "disposable" income so you need to look at where that's really where you would prefer to be spending it.

For example, if you have zoo membership then that surely covers a lot of family days out and really a 3 and 1 year old are ecstatic to go to a local country park with a picnic so all you need pay for is parking and an icecream. And spending £100 on children's hobbies for children that age is a lot! What are they doing?

We don't have takeaways because we don't find them good value for money. But we do eat out every couple of months on the money we would have spent. We also do things like use Tesco vouchers to bring the cost down. Point is that we can't do both, so we make the decision on which is most important. OP needs to do similarly to understand her priorities.

I suspect it was intended as a stealth boast for what the op thought was a very good income, and fact she works part one on it and that she thinks they spend a lot on “luxuries”

but in reality most of us are saying… your income isn’t high and you simply can’t afford the few luxuries you do have.

added to which you seem a bit thick when it comes to money.

so it has rather backfired on the op!

I am surprised posters think £35/month is high for a phone contract. When my contract expired in 2020 I was struggling to find plans under £40/month, and I don't have a new model, top-of-the-line flashy phone! It's one of the more basic ones from a less popular brand which came out a few years ago.

There are lots of things I think the OP could cut, but the phone isn't one of them.

Similarly, the cars. If possible I would certainly cut down to one car, which is cheaper and better for the environment. However I pay £290/month for a Ford Fiesta which is several years old. I don't think the car payments are outrageous in that context. I would guess OP and her partner are not driving around in high-end sports cars.

To be honest it's the car loans. We only ever had one car and bought outright (yes they were old when I was young!) I've never spent £60 on a haircut, mine charges £25 and I go annually. I do spend on my nails though.

My tip is to to look at all the little spends, they seriously add up - I started taking coffee to work, ditched the pastries etc and the money piled up in my bank account

There are obvious savings- you have two high car payments, takeaways every week and get your nails done.

Hi Op, not going to repeat everything that has already been said. Don’t think you are doing anything wrong as such, everyone has different opinions, priorities etc.

Recently I just made a list of all our outgoings, split into essential such as building & contents insurance, council tax, utility bills etc. i.e. things you have to pay. I then listed everything else, pet insurance, SkyTv, Netflix, British Gas Homecare, etc.

Decided that pet insurance is actually essential, because if our cat got ill, it could cost a lot (our previous cat developed Hyperthyroidism, medication was nearly £200 a month in the end). We pay a fair bit for the British Gas Homecare package, but again if we have a water leak, problem with electrics etc. it is very expensive & difficult to get a plumber etc., so again decided that is essential. We have had a problem with our toilet, and an electric socket already this year.

I now have a list of things we don’t really want to cancel, but if things got tight we could, i.e Audible, Readly, Disney+. Husband and I don’t go out a lot, so TV subs etc. are our entertainment.

We do spend a lot on food, so now after doing this exercise (been noting down all food spends for last couple of months), I can start to cut down where I can. Husband and I are not struggling, but as we only have one wage currently I wanted to be aware of how much we were spending, and on what.

We have less than half the income of you and do fine:

Expenses:
Car loan - buy a cheap car outright
Credit card - dont have them
Phone - Sim only contract + second hand phone
Zoo membership - why on earth do you need this?
Apple Music subscription - Youtube is free
Haircut - I get a trim to maintain, no need to spend £60
My nails - no need to get nails done, £1 for a nail buffer from poundland
Window cleaner - do you need a monthly window clean, more than is actually recommended (unless you live on the ocean front)

most shockingly though:

Disposable income - considering your list includes all living costs + zoo, takeaways, music, datenight, kids hobbies, hair/nails, expensive phones, Credit cards etc... what on earth could possibly require £500 disposable income???

You could do SIM only on the phones and have 2 phones on the one account. I have 4 phones paying less per month and it's got a huge data plan too.
Apple Music - quite expensive for what it is. Do you already own the music or could it not be cheaper to download/purchase so not continually paying?
Contact lenses can be expensive on a monthly plan. I don't wear mine all the time but my glasses / lenses aren't cheap either but still work out less than £40 per month over the amount of time I keep them for.
Zoos are very expensive. How many times a year do you actually go to make this worthwhile?
Cars - I'd not say 10% of take home salary per person is that bad. Ours is the same but they are our only major expense. Cheaper cars can be a false economy when things start to go wrong too.
One takeaway a month would do too, weekly is a lot financially and also health when considering the amounts of salt and fats that go into them.
Nails - definitely look into DIY

Late 20s

Who is the piss taker?

I am surprised posters think £35/month is high for a phone contract. When my contract expired in 2020 I was struggling to find plans under £40/month, and I don't have a new model, top-of-the-line flashy phone! It's one of the more basic ones from a less popular brand which came out a few years ago

You're being ripped off. £10 a month will get more allowance than almost anyone needs and even £25 a month on top is £600 over 2 years which is a lot of money for the phone and that's if you replace it that often.

I paid £100 for a really good Motorola smart phone over 3 years ago and its still running perfectly well. My phone costs average less than £15 a month so £35-40 seems extortionate to me, its hundreds of pounds a year extra.

I am surprised posters think £35/month is high for a phone contract.

You buy a cheap handset (or simply keep the handset you've bought on a previous contract) and go SIM only. We spend less than £35 on 4 of us doing it that way.

Our local chip shop works out less than £3pp for chip shop options or £5pp for pizzas... I have NEVER spent £40 on a takeaway.

Spent nearly £30 for 4 of us at a new takeaway theother day and was pretty shocked, it was really good though.

Stealth boast!?
I'm well aware that our household income is average at best.
I was genuinely interested in how our expenditure compares with other households.
The question has arisen from us merging our finances into one joint account which has triggered us to evaluate all our expenses. Previously DH paid all bills/other expenses, and I paid for food and saved a set amount of £800 per month. After merging the accounts this was our new plan, leaving only £300 to save, so was wondering where I was going wrong.
Certainly has not backfired at all, as I have had some excellent advice.

I’m shocked this is a serious question. Between date night and what you put on credit cards and your spends the pair of you blow nearly eight hundred a month just entertaining yourselves and that’s before you add in your take aways making it nearly a grand. You are quite low earners, and spend nearly a third of your incomes just enteraining youtselves.

Your income is pretty average and therefore you can expect a pretty average lifestyle. You can afford the necessities and to eat. You can also afford some extra luxuries, but you can't afford all the luxuries you would like, and that naturally feels difficult because you see the people around you prioritising different luxuries. But you shouldn't forget that takeaways, nails, cars on finance are all luxury items - I make different choices. I do my own nails and get a v cheap haircut (£15 every 3 months). I own my 12 year old car outright. We never get takeaways. But I do spend on holidays. If you saw me you might think it was unfair that I could afford holidays, but it's important to realise I "can't afford" lots of the things you spend money on, because of the holidays.

I think takeaway depends where you live in the UK. At a Yorkshire seaside town not long ago fish and chips were £5 a head and were the best fish and chips I have ever tasted; probably expensive for where we were and there were 7 of us. Here in Surrey they are about £8 and not nearly as good. £35 compared to £56.

I can buy a whole salmon for less; it takes virtually no cooking and serve with new potatoes and salad/asparagus and it feels like a real treat with lots of leftovers.

I'm talking about a phone contract, not sim-only plans which are much cheaper. £35/month is on the cheap end of phone contracts. Sim-only plans are great if your phone lasts, although sadly nowadays most of them aren't built to last more than a few years.

I remember when I was looking in 2020 contracts for the lastest iPhones, Galaxies etc were £70 a month plus! Which is totally obscene.

With a 1 and 3 year old, the op's mortgage costs are also very low and they are very lucky in that respect. Most of DS's young couple friends, no dc yet, are paying around £1400 to £1800 on rent for a one bed flat in Centralish but not smart parts of London.

Just to add to this, the main thing you need to do is cut back on all those unnecessary expenses and then reformulate your budget something like this (have adjusted a few figures slightly for phones and food):-

Total income: £3820.00

Necessary 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
TV license £15
DH contact lenses £40
DH haircut £15
My haircut £20 (£60 every 3 months)
Window cleaner £15
DH petrol £100
My petrol £100
DH car tax £20
My phone £25
DH phone £25
Food £400
Total: £2390.00

Remaining expenditure budget: £1430.00
(£17,160pa)

Children: £600.00/month (£7,200pa)
(including clothing, family days out/activities, hobbies, holiday childcare, school stuff, birthday party/presents and Christmas presents, gifts for bday parties etc with residual funds going towards annual holiday.

Household maintenance
(1-4% of homes value)
For a home of £200,000 this would be £167.00/month (£2,000pa minimum)

Car costs
Car insurance £470 x2 = £940.00pa
Car maintenance £273 x2 = £546.00pa
Total: £123.83/month; £1486.00pa

www.leasefetcher.co.uk/guides/car-buying-guide/car-running-costs

Holiday
U.K. about £1500.00 (£125.00pm)
Abroad £3000.00 (£250.00pm)

Gifts for other people/yourselves
£1,000

At top estimate this would leave you with £2474.00
(Probably a bit more as you may hand down items from the older to younger child, you will receive gifts yourselves and there will be residual money from kids allocation that can go to holiday. Even if you don’t spend the money on house/car maintenance it is better to save it for when you need something done rather than end up in debt)

£2474.00/12 = £206.17pm for you and DH to spend on clothes, socialising, hobbies etc.

I would get the cars paid off, or consider having only one car, cut back everything possible until that is done - and consider working more if you want more money for yourselves than this. Kids are expensive.

Incidentally, we save about £2,000 a year using loyalty cards (particularly boots advantage cards). We do all shopping online going via TopCashback first and always search for discount codes on top of this - if I can’t get at least 15-30% off I don’t buy!