To feel like I’m failing financially!

[RoughAndBumpy]

Disclaimer: I know how fortunate we are to have two incomes, a roof over our heads, a car, food on the table and more, when others don’t. I always try to do my bit to help and support those less fortunate.

DH and I are mid 30’s, have two children. DH earns £45,000, I earn £10,000. I’m doing a degree just now whilst working part time, whilst also parenting around school hours.

We have £20k in savings and I know we’re fortunate to be in that situation. However, we don’t own a house. I just feel so worried about it. I’m just panicking about the life we’ll have in future. We have access to cheap rent at the moment, and will do for the next 6 years or so, but I’m so worried about when that ends. Houses are just so expensive. And I don’t want to throw money away renting. Which is also really expensive.

i don’t know why I’m posting really. The worry about it is just weighing me down.

Would doing a bit of forward planning help? Presumably once you've finished studying and can work full time your income should increase significantly? Perhaps you could continue living on the £55k a year, putting everything else away? If I were you I'd be mapping out what deposit and costs I need and doing a high level year by year plan.

You still have time! £20,000 is a good start on a deposit and at mid 30s have enough time to pay off a mortgage before you retire. House prices are going down and your income can increase with a degree. £55,000 is sufficient to buy a house in many parts of the country. So keep going with your degree and as PP said, put a plan in place. You may have to consider moving to a cheaper area than you are in now if you really both want this, but the market is likely to move in your favour.

Thanks for the reply. I really want to do some planning, but there are so many variables. My husband is in the military, so the first thing is that we move frequently. For instance, I know that we’ll be moving this summer but don’t know where to. It will probably be in the UK but there is always the slight chance of overseas. I feel like this makes planning for the future near impossible. I just keep thinking “what if I’m always a low earner?” “What if we can never own our home?” Etc etc. It’s so stressful. I want a nice life for our family. I’m working so hard but just really have a fear we’ll never get there.

Bump

I now a few people in “the services”. One bought a flat in the same block as where his brother lived, and the council took it on for a fixed term of five years, they didn’t pay full market rent, I think he got 65%, and there were no increases, but his logic was that it was either somewhere to move into, a deposit for a house, or keep it for old age!!

Another army couple have a small terrace in their home town which when they leave the army, they will move into it. At the moment, a family member rents the smaller bedroom and they have kept the big bedroom for themselves and store some of their possessions there.

I don’t know what part of the country you are from, but if you feel you need to own a property whilst you are in tied accommodation, would buying a small property sort the itch?

Nothing wrong in being a renter

I'm a single mum earning 26,000. Until recently I worked 2 jobs but I almost had a breakdown. Only now starting to feel a bit more normal. I have my own home, not rented. I survive. I get to do nice things occasionally, but I'm proud of the fact I can do this myself. Take heart Hun, there is more money in your household. You can do this. Don't be worrying. Life is so short. I burnt myself out with worry but I pay my bills and my child feels so loved. We are all concerned about money right now. Just remember, you are not alone. Big hugs x

Buy a house to rent out do that you are invested in the property market

Also make sure pension provision is good

There’s more to life than buying. The second you buy, you’re responsible for all the repairs. If you fall upon hard times nobody will help you pay the mortgage. You still don’t own it anymore than anyone owns a car on PCP until you’ve paid the lender back in full. In other parts of Europe it’s normal to rent forever, no such thing as owning unless you’re very rich.

However, with your current position, boiler breaks? Not your problem. There’s a leak somewhere? Also probably not your problem.

I think if it’s cheap for you at the moment you’re in a better position. How old are the DC?

Have you thought about shared ownership. This reduces the need for a huge deposit (outside of London can be between 3-6k for deposit, plus legal fees of 1-2k). Then the house is yours and nobody could ever insist you move. You do have to pay some rent to the housing association but you’re building equity with the mortgage percentage, albeit a small amount.

I know it’s easy to compare but you have not failed!

you are doing fine! Just keep adding to the savings… we tried to save one wage for a year, and although hard (20 years ago so not as bloody hard as it would be now) but it was a good bump to savings and we knew us being Uber frugal had an end date.

good luck

You are in a very similar position as me. I am the same age as you and my DH earns 45k, I earn 10.5k (also studying for a qualification part time), but instead of 20k savings I have 27k equity and worried about interest rates rising and house prices falling - You will benefit from higher interest rates and house prices falling! I am living in an area I don't want to stay in forever too...

If you have to move often it is hard for you to buy and your only option is a buy to let - but is that the right thing for you? That has risk that needs to be balanced (I had to move for a job once when I was younger and rented out my house and it wasn't straightforward and I ended up selling it). The renting to the council idea sounds interesting though...). Is your husband leaving the military in 6 years?

I would focus on getting yourself in the best possible situation in 6 years. You will still be able to get a 25 year mortgage if you have to at that time, and I am assuming you can decide on a more affordable area to live based on earnings? Get your qualification and spend time with your DC and earn what you can and make the most of the low rent. Maybe work out what a mortgage will cost you at say 5% interest rates in an area you want to live and save the difference between your rent and your potential mortgage?

You have anxiety because there are a lot of unknowns? I would work on get comfortable with the fact you can't control everything but you can feather your nest.

Do you rent yourself? This is a very naive view of renting. It's not like Germany, where tenants get long leases and landlords fix things promptly. The reality is that renters in this country have next to no security. Leases are generally for one year and once you go beyond the fixed term, you can be given notice and have only eight weeks to find somewhere else to go.

If you fall on hard times, there's nobody to help you pay the rent either.

Owning a property means you can make it into your home by doing things like painting, home improvements, stuff you can't do in a rental.

If your boiler breaks in a rental, it is very much your problem, because you have no heating or hot water. And unlike when you own, you can't fix it at the first possible opportunity and are at the mercy of the landlord or letting agency.

Have you thought about buying somewhere cheap and getting tenants in until your DH leaves the military?

I know a few army families - the well off ones don’t travel around the UK. The ‘family unit’ is based in one location (spouse usually has an excellent job), and it’s the army officer who’s the one who moves around. If that’s possible eventually your options will naturally expand.

Hi, usually, if you rent and you lose your job. You can get housing benefit. It is a significant pro for renting

I certainly wouldn't want to bet on that remaining true in the future, and I definitely don't think it's a reason not to buy. Renting for life makes sense in many other countries but it really doesn't at all in the UK.

Yeah, I wouldn’t bet on it either. But, at least at the moment, it’s one thing in favour of renting

Really appreciating the support and advice. We have considered buying and splitting the family. So DH relocates every couple of years, and DC and I stay in one place. Eldest is a couple of years off secondary age so it makes sense for her education. Unfortunately, we don’t have a place that feels like home. I’m nc with my parents and worry a bit about being alone with DC in a new area without the military community. With no family support. Trying to work and do a degree without my husband to help. DH leaves the armed forces in 6 years. The other option is we travel with him until then, moving the children schools every 2-3 years. Then buy a property at the end. The other option is boarding school for the kids, but that’s something I’ve never considered. Ideally, I want us to be together, but I understand the importance of education.

The cheap rent allows us to continue saving for now. I just keep hoping some solution will just appear in the next 2 years before DD starts secondary school, but every now and again a wave of panic hits me that I have no plan.

Another thing to mention is that we also currently have Lifetime ISA’s, where we get a significant government bonus as first time buyers. We lose the bonus if we do buy to let. So that’s something else to consider.

There is the chance we could stay in one place for the next 6 years. DH could try to orchestrate that. But that part of the UK is so expensive to buy in and I worry that it would become home to our children and we won’t be able to remain there, so would need to relocate children during secondary education at that point anyway.

Listening with interest

If you can, I’d move somewhere cheaper.
Theres lots of 3 bedroom houses for £100k where I first bought - and I made it out alive!