Am I stupidly poor? Or living in the real world?

[Chunkythighss]

Just off the back of another post…
people commenting that they will have to live off £1900 AFTER paying the mortgage and how this is going to be a struggle.

nearly £2000 a month extra.

This is more than I earn a month and pay rent, bills, etc… yet people are saying they’d struggle to live on this after bills?

Am I massively poor or is this normal? 🙈

I realise that there isn't an easy alternative but the ONS definition of disposable income is:

"Disposable income is arguably the most widely used household income measure. Disposable income is the amount of money that households have available for spending and saving after direct taxes (such as Income Tax, National Insurance and Council Tax) have been accounted for. It includes earnings from employment, private pensions and investments as well as cash benefits provided by the state."

I.e. it doesn't take into account whether you have children. Children mean higher costs - childcare costs or losing an income - plus higher housing costs. And that's not even thinking about food/clothing/etc. We had much more disposable income when we earned 50k each before kids than we do now, even though our salaries are higher.

It's not a criticism of the ONS, there's only so much they can do but these high level stats can't tell the full story

@AxolotlOnions

You don't HAVE to have the big house, you don't HAVE to send your children to private school, you don't HAVE to have your hair done at expensive salons every month, you don't HAVE to have the expensive gym membership/iphone/horse riding lessons/car/holidays. And if you lose everything due to poor financial planning it is your own fault.

100% this. ^ There is something seriously wrong if your household is on 6 figures and you can't afford to get by, and deeply resent people getting help from the government (who ARE actually on a much lower income.)

That's really harsh. There may be some twats people that think that way, because you get twats in any environment, whatever your income, background etc. But there are lots of people who don't look down on people who are in jobs that aren't fairly remunerated.

Also there are a lot of people in traditionally middle class jobs that don't earn fortunes either.

It would be hard for anyone to overnight change their entire lifestyle, which is the point. It doesn't mean that people can't adjust over time. But you can't sell your house and reduce outgoings in a day.

I know others have pointed this out but reality is it’s not about ‘mortgage’ it’s about total combined bills. Our mortgage is £780 but once council tax, utilities, nursery for two toddlers…etc are included it’s about £2500 and I’ve included sky/Netflix/prime in that but nothing else ‘optional’ like kids classes or gym (not that either of us go) so that’s not us living some extravagant lifestyle.

We have circa £1300 ish left each month which will increase quite a bit when funding kicks in for the kids. We have savings which mean we are pretty comfortable but we do dip into them most months atm. I would estimate that we spend approx £700pm on food (high because DS and I have allergies requiring free from food), nappies, cleaning products …etc
£200pm on petrol,
£100pm on kids activities
£100pm on kids clothes/shoes

Then there is the rest of life 😂 it’s crazy expensive

You don't need health insurance, savings, gym, presents, dry cleaning, holidays, days out, pets or charitable donations

Yes you can dispense with lots of these but how do you get out of ever buying presents? Ok you don't need to lavish diamonds on people but if your DC gets invited to a party you can't rock up with nothing. If a relative has a new baby, you can't go over to meet them empty handed. If it's your DC's birthday, you can't get them nothing at all.

@Theelephantinthecastle there's also

ifs.org.uk/tools_and_resources/where_do_you_fit_in

Where you can compare for your household size.

As an example of the disproportionately wealthy MN demographic, it says that, for a family of 2 adults and 2 children, £80k is more than 90% of comparable households and £100k is more than 95% of comparable households, even though many on here say they earn a lot more and even £100k is 'not that much'.

Yes, 100%. My point is that without context, the statement of “£1,900 after mortgage payment - is that a lot or not?” is meaningless, regardless of the absolute value that £1,900 represents. It’s not disposable income funds after all essential bills, it’s after housing costs.

I don’t think many are saying ‘poor me’, they’re just saying that £2k soon goes.

Its very normal to have outgoings of
£1200 on childcare
£500 on bills at least
£600 on food and toiletries
Then travel costs to work and clothing etc.

Not really living in luxury, it’s just the necessities.

People keep talking about spending £2k+ on nursery bills as if it's a normal expense.

How much do they think people who earn average wages spend on childcare?

They might get some help, but they certainly aren't sending their DC to full time nursery at that cost because they simply don't have the money. They use a childminder, beg favours from relatives, use informal childcare that may or may not be strictly legal, they work opposite shifts with their partner, sometimes they have to give up work because childcare costs more than they can earn.

So like everything else, being able to use a nursery is the expensive option that isn't available to a lot of people due to cost.

You can look at local or National data that gives a real indication and then you have anecdotal evidence amongst your peer group and sites such as this.

On anecdotal evidence amongst my peer group no one is having issues. Amongst DH and mines friends no one appears to have any problem but we are all older and had really decent careers. During covid about a third of my friends retired early in their fifties.

People get sucked in to anecdotal evidence.

Actual data gives a very different view. I was involved in a study locally when setting up a charity. There is an estate in my town that has roads in the poorest decile in the country.

Birds of a feather flock together.

That's interesting - putting in the OP's situation, she is in the bottom 20% of the income distribution.

She started this thread because she doesn't think that is poor. I think putting food on a credit card and not being able to afford the dentist is poor and the stats seem to bear it out.

I am one of those with a much higher household income (c. 150k) and I wouldn't deny that I am well off. Not as well off as people assume - we definitely make compromises, we choose a nice house and holidays over running a car or pets - but I definitely feel well off.

ifs.org.uk/tools_and_resources/where_do_you_fit_in

Use this tool on the Institute of financial studies site @Chunkythighss it gives an indication of your income in relation to the entire country.

Hey op, I don’t think you’re looking for solutions, but I think if you need to borrow money to eat some months and another baby on the way then it could get a lot,tougher.

im surprised you aren’t entitled to benefits but of course we don’t know your families income or outgoings

the only suggestion I have is could your husband work more? Ie if he does weekends now, could he do weekday evenings too or vice Versa? Could he work full time when you’re on maternity?

I understand it’s difficult but not being able to feed yourselves , two adults and a 1 year old, when the children will become more and more expensive as they grow is something that needs urgent attention, as I am sure you know. Is there anyway you can access food banks instead of borrowing on your credit card to feed you all ?

im sorry you’re in this situation, it sounds very tough indeed.

It depends doesn't it. Thankfully our mortgage is currently affordable and locked in for another 2 years but the rest of our bills have done the following in the last 6 months:
Nursery (4 days a week) from 1200 to 1450 a month
Energy £200 > £320
Water £20 > £35
Council tax £180 > £200 from next month

Our essential bills have increased from £1600 to £2005 a month. We'd have been tight with £1900 left over before, we'd now be in debt each month and I'd be looking at giving up my job or changing hours to reduce nursery costs.

Fortunately we have more of a buffer than that because we didn't push ourselves to the limit on housing but its still going to be a killer when DC2 is also at nursery next year.

People do live to their means and gradually luxuries get seen as essentials. If we needed to drastically cut back I’d be much better at it than my husband.

Childcare does seem to be the big kicker though. We’ll be coming to the end of nursery fees in September and it will feel very different. It is quite empowering to know that that massive fixed cost to enable us to work will go. It is quite clear that affordability of childcare is a massive barrier to people working during the early years which has a longer term impact on earning ability etc.I agree completely with a previous poster that I have been fortunate to have a job the earns enough to make nursery viable even if I moan about the costs.

Hmmm🤔😂

I can't see anyone saying poor me poor me with 2 k left over. This is me and i'm grateful i'm not living hand to mouth (and actually i have struggled massively before so do know what it's like)

what I'm saying is it doesn't usually buy you a luxury lifestyle - private school, caribbean holidays, ski trips, spa weekends, ponies etc the sort of things being thrown around in this thread - these are not on my agenda and i cannot understand how they are achieved by someone in my wage bracket unless they are in credit cards or they have a large savings pot

No, I think that all people should plan. If you have £8k a month after your mortgage, you can live a pretty good life AND put away £1k every single month (you could put away £4k every month and still have enough for a foreign holiday every month!) At the end of the year you will have enough to cover the mortgage for 6 months with no real loss to your extravagant lifestyle.

I'm on a low income and I have enough savings to cover my rent for 6 months if necessary. It's just the sensible thing to do.

It would be very interesting to know what your own income is, which part of the UK you live in, @Chunkythighss and how you budget.

I'm assuming you are relatively young if you have a 1 year old child.
And also assume you have done the maths, and your partner working p/t is better than him working full time and paying for childcare.

Does your job have a career path where you can expect to earn more?

Private school aside, some of those things are affordable to many. Not all of them, all the time, but enough for people to have 2/3 a year if they don't spend all their income on an expensive house with expensive bills.

Perhaps they chose not to borrow to the max when they got their mortgage, bought somewhere less expensive to heat, spend less on groceries than the MN standard £200 pw on protein and unlimited imported fruit etc?

So they would have a reasonable disposable income to spend on holidays, trips away, hobbies etc.

Some people just don't seem to realise or acknowledge how massively overprivileged they are.

Is it being 'overprivileged' to have got a good job, with long hours, often after years of study and student-poverty?

Some people don't understand the hours you have to work to earn £100K.
Most people don't earn a high income by working 9-5. They've often studied for masters degrees, worked their way up, and work 12 hour days.

Or understand that 50% of that income goes back to the treasury to pay towards other people who don't earn as much.

I don't have any savings its not always possible

I’m highly qualified, I have worked my tits off, often doing loads of unpaid overtime and I am no where near £100k, I will never see £100k.

You don’t understand the real world from this comment at all. You seem to be suggesting that people on lower wages don’t slog their guts out or aren’t educated - well I am all the things you said, working more than 12 hour days, being ‘on 24/7’, I even worked on my maternity leave, and I do not and will never earn even close to that sort of money. This is a very snobbish and unfair view.

Ok after the mortgage is paid we have £1900:

For groceries for 6 to be honest £100 a week is becoming lucky. I never used to spend so much. Call it £500 on groceries for every item for 6. I never spent that, but it’s risen sharply. This does cover all packed lunches, everything we eat every day. No take away etc added on

£250 council tax

£260 travel to work

(boom, there’s the first thousand)

other travel £100

gas and electric about £180

internet £30

water £40

thats £1350

no childcare listed, or car finance costs in that

That’s £90 a month each, for clothes, any clubs etc, days out. unexpected costs are taken out of that like boiler repairs. So it can be less. I haven’t even factored in insurance for the house.

I’m really not living the high life on it.
For a family it’s actually pretty tight

1900/month would not even cover our basic expenses, let alone touch pension and savings. We spend about 2300/month for a family of 5 on our basic bills and maintenance, and that’s not counting any of the bigger direct debits like mortgage, savings, pension contributions, or charity donations. We live in Europe, not in the UK, so costs for some things like insurance, food, and car maintenance are a bit more expensive, but it’s not a budget that’s rife with things like flower deliveries and leased vehicles. We own one 12 year old Ford outright and our kids are in state school. This doesn’t include holidays or extracurriculars or new clothes or streaming or anything. Those are ‘wants’ and are a separate category. Our breakdown is:

home insurance: 60
council tax/rubbish/water: 200
auto insurance: 100
health insurance & costs: 200
life insurance: 60
gas and electric: 250
groceries, toiletries, house essentials: 800
road tax: 15
car maintenance and repairs (2500ish spread out over the year): 200
petrol: 200
phone: 35
internet: 55
home maintenance and repairs: 150

I’m not pleading hardship by any means—I know we are very lucky and comfortable—but you can see how things add up. We’d need to make some serious lifestyle changes—i.e., get rid of our car—to live below that.