AIBU to not understand how any can afford to live?

[ploddingalong2023]

Firstly I get that everyone is in a different situation and we are fortunate to have a house.
however, I can’t help to feel that it’s really hard to understand how people can actually afford to live?

My partner and I earn around £3600 per month combined. Our mortgage is £1200 (which I appreciate isn’t bad and a lot less than a lot of renters)

Our outgoings are reasonable, mortgage, council tax, paying for 1 car, some credit card payments etc. literally nothing luxury! But in total our outgoings of just bills, without food, petrol etc. is £3200.

We don’t have things like Sky TV or fancy cars etc.

We are tight with our weekly shops, all own brand stuff, no big brands, maybe 1 takeaway a month.

Our weekends are mostly trips to the park, walks etc. we might get a coffee on a walk but nothing exciting. Our evening weekends treat as a couple are getting a bag of popcorn and a bag of sweets for a film evening, so again nothing “out there.”

We do have the odd social event, maybe one a month or a family birthday we need to budget for.

We don’t really go on holiday. We have a small 5 day break coming up, which is cheap as we have family accommodation so mainly flights and spending money.

We do have £700-£800 per month on childcare per month which really is the breaker for us but that is what it is.

but even with all of this, we tend to be in a minus every month, relying on credit cards for little things or the final shop of the month before payday.

I just don’t understand how even with us not living luxury, and a decent (I think decent?!) income are still relying on credit cards?!

I don’t know what I am expecting from this post, maybe just someone to say they are I the same situation and make me feel better 😂

We were the same in the childcare years. For a while we were paying over £1000 a month for 2 dc, and that wasn’t even full time - and it was nearly 10 years ago!

Now we only pay about £200!

childcare costs a bomb but it goes down over the years. It sounds like you’re doing fine and in future years you’ll have more money to spare.

Thank you! This is actually good advice!
we do use the 20% off childcare but could definitely spend more time on the cash back websites.
will take a look at the too good to go aswell.

@Xmasbaby11 thank you for the encouragement. We really are counting down to the free childcare, it will be a life changer

@XenoBitch
just realised I’ve not been replying to anyone properly 🙄I’m new to this lol

£3,600 not £3,200 after tax.

Let's talk about your credit cards. I think you're spending around £230 a month on repayments? Is that right?

How much do you owe on them?

Can you not get a 0% interest card, transfer the debt over to that, and pay that off over a couple of years so the repayment is affordable?

And stop using the cards. With the money you'd save, you could buy stuff on your debit cards.

Plus go on price comparison sites and get cheaper car insurance and life insurance.

So averaging £26k salaries each? Your bills/mortgage in my opinion are high for salaries like that.

@HenryCavillsWife

not loads on credit cards, we do transfer to 0% everytime we run out but the offers at the moment are not great.

would love to stop using the cards, but you need to money to pay them off entirely to have that spare money.

we are on it with comparison sites for everything. The £90 on car insurance is both of us so £45 each which is the cheapest there is.

Defo do look at the cheapest options for everything, savvy in that sense. Which makes it more frustrating, we definitely aren’t silly in that sense

not loads on credit cards

How much?

we do transfer to 0% everytime we run out

Are you maxing out credit cards then opening new ones?

would love to stop using the cards, but you need to money to pay them off entirely

The money you save on repayments becomes your spare money.

Repayments quickly swallow every penny, and force you to use the cards more. It's hideous spiral.

I hope your expensive childcare years will be over soon OP. Just hold on a bit longer. The years with know ds young are always so hard. As the kids grow up and leave home things become a lot easier.

If you've only got one car, why are you paying for 2 insurance policies? Surely it would be cheaper to have one policy for you, with your DH as a named driver on the same policy (or the other way around)?

Life is expensive. I don't run a car but do Ubers instead. My outgoings though are lower even allowing for no mortgage and no childcare

Council Tax - 120
Utilities - 200
Wi-fi/Cable TV / Netflix - 160
Mobile - 100 (pay for the kids)
Insurance - 100
Commute - 200
Ubers - maybe 100

I don't stint on things - like I have two Virgin boxes - but I'm not extravagant either

£120 a month on house and life insurance seems very high.

Could you do without a car for a year if you both wfh a lot?

Childcare, that's why! When do your free hours kick in? You'll be surprised how much that will help

If you are spending more than you earn you need to stop all non essential spending and let yourself catch up.

Cancel netflix, no more coffees out or short breaks or takeaways. It will make for a boring life for a while but try to spend within your means and clear the credit card debt. Scrutinise all the spending and food shopping to reduce your outgoings as much as possible in the short term to get back on track.

Ahh OP, I feel the same and it's the childcare for us too.

From December our childcare bill will be £1450pm, that's for Mon-Thurs after school care for one, and Mon-Thurs nursery for the other. And because I'm an unpaid (NHS healthcare) student we can't even apply for tax free childcare 😩

We're going to feel rich once we're no longer paying childcare. Until they go to university.

Im totally with you! My husband has his own business and I work part time teaching as well as running my own business on the side (every waking hour outwith work) and somehow we can’t even afford the most basic of things right now. I feel like we’re not the type to go to a food bank and we wouldn’t, probably just out of pride or something but we actually should be because we physically can’t afford a food shop. Our heating runs on oil and we can’t afford to buy any because it’s about £900. We have good jobs and I’m ploughing so much money from my business into the joint account but I’m now using up money that I need to pay my next tax bill so my business is always on the back foot. We just can’t seem to get out of this. It’s midnight and I’m just getting to bed because I’ve been listing all the kids old clothes on vinted for a couple of pounds each, even just to gather up £50 🙄 We’ve booked a holiday for the end of the year and it was 2 years since our last one but my husband hasn’t stopped going on about how we can’t afford it and the fact we need spending money for it. Life is meant to be for living but we’re just spending it in a cold house with an empty fridge at this point in time 😩

Is the 190 "car" a hpi/lease agreement or a loan where you will own the car when you are finished?

If the 190 is an ongoing thing I.e. when it is finished you start again with another the same or more that is £22,800 over a decade.

My car cost £2500. I have had it 8 years and it would not have cost me £200 each year in MOT, tyres and maintenance (most year it just passes it's MOT). (It's a little Kia Picanto) but for ease of calculation call it 10 years ownership and £200 a year maintenance that adds up to £4500 over 10 years. A saving of £18,300 versus continued payment of £190 a month over 10 years. If we repeat this pattern purchasing a new (second hand) car every 10 years the difference over a lifetime of driving is staggering - could be 100k!

But not everyone is going to manage with a Kia picanto of course. My husband bought a nice Touran for £4500 recently. It might not be expected to last another 10 years so let's imagine it lasts 7 years and costs £400 a year in MOT and maintenance. That would make the cost over 7 years £7,300. £190 each month for 7 years is £15,960 so less than half the cost. Again this could halve your car costs over a life time and save you tens of thousands.

We didn't have the £4500 upfront. We bought it on a credit card which we quickly transferred to a 0% balance transfer offer.

Do you look around for cheaper insurance, tv, phone etc rates every year or just renew automatically. My virgin package was going to be £90 a month but I negotiated it down to £45 a month. My car insurance, for me and my daughter on one car is just over £200 a year and my house/ contents insurance is £250 a year for a 3 bed detached bungalow. I never renew without looking for a better deal. I think you could reduce your monthly outgoings quite a lot but it does take time and effort.

But yes, childcare costs are a big chunk, I don’t need that any more thankfully.

Childcare a killer
Your car costs are on higher side. I think we pay £600 in insurance for the year.
Same with life and house insurance. Our life policy is £20 a month and house insurance for the year is £500 and that's with top end policy with all bells and whistles

I can remember when my youngest child started school, I honestly felt rich beyond my wildest dreams!

many of my younger colleagues at work seem to be using family for childcare for at least part of the week, so I guess that’s how some are better off.

Your insurances are really high, do you live in a shitty or do you just let it auto renew. I haggle every year with car insurers. I have been with the same company for years. I do a comparison every year and then cal, them and say I like you I dint want to change but x can do it for Y they usually can’t go quite so cheap but it some obscure insurance firm I have never heard of and don’t trust them but they don’t know that. So they give a discount. Just like I ring up my internet provider and threaten to swap and I would.

We can run our house on just over 1k per month that’s actual bills though not including if the car has an issue and we have no mortgage or childcare anymore. Your bills are really high.

This IS life.

Until the last 30 years or so, most people lived far more modestly. Flying on holiday was a fantasy. As were several other items in your budget.

Your kids are your luxury, as they should be on a burning planet losing valuable species every day and teeming with 8 billion humans.

What on earth do discontented people expect?

I have nothing left after paying my bills really
Did have a bit of a rant about it this week that working FT 40hrs should be able to afford a meal out or something
My two luxuries are a gym membership at £39 and now TV. This month I had £18 left so had a takeaway from the chip shop
No DC, live alone