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 😂

plus credit card payments and the odd extra payment.

Aside from the childcare, this is your issue. You must have relatively high payments? £250 a month? Are you only paying minimum payments or paying them off? You must stop using them. I know it’s hard. You need to save an emergency fund for the things that come up.

You might not feel like you live an extravagant lifestyle, but you’ve got a fairly expensive car payment, your house bills suggest you’re in a relatively high council tax band with the insurances and heating costs etc to go with that. You are living a bit above what you can really afford. You say your outgoings are ‘reasonable’, I say they’re on the high side.

Then you say you don’t go on holiday but you are going abroad, you don’t go out but you do go out for family birthdays etc, eat out once a month or so.

It’s not that those are unreasonable things to do, they’re not. But I think you don’t appreciate that you’re actually spending above average on a lot of costs (housing & cars) for your level of income. If you can’t cut costs, you need to try to up the income to pay off your debts. It’s only then you can properly get ahead.

Where are you getting this rule? Most experts suggest no higher than 28-35% of your pre-tax income or 45% of your post tax income. OP’s mortgage is balanced.

@pompomdaisy definitely not, also not born in the 00s.
We live in one of the more expensive areas of the South, the mortgage we have is one of the lowest we would’ve been able to find.

Yes we could have moved away but chose to stay locally as I think it’s important for our son to have his family around him

As others have said, you are on a low income and spending in areas including your phone and car could be reduced.

Definitely the childcare. It made a massive difference to us when we no longer had to pay it. It’s so bloody expensive.

A lot of people also have lower mortgage/rent payments. We earn a bit more than you and our rent is half your mortgage, so partner that with no childcare payments and that makes our disposable much higher for things like food, days out, holidays, etc. We weren’t in such a good position a few years ago so I totally get where you’re coming from. It all really adds up.

It's the time of life with childcare costs. We were just as tight when our kids were young.

When they were both at school money was easier, partly because I could earn more, partly because I paid less to nurseries and childminders.

It's wearing having to count every last penny though, never being able to have an indulgent treat combined with young kids being exhausting. It is a first world problem but I hear ya.

@Didimum by experts do you mean mortgage sellers? In which case 'well they are going to say that aren't they?'

No. Financial advisors.

https://www.forbes.com/advisor/mortgages/mortgage-to-income-ratio/

Over the last 6 weeks we have really really started to struggle with the rising food costs. We can’t go on like this much longer. We are now reduced to buying everything processed and frozen as it’s cheaper and it’s still crippling us. We both earn the same as you I think? We don’t own our home, drive an old banger, have no house insurance etc, no sky tv. I think we will just be living on beans on toast soon. We’ve had to quit everything healthy and fun in our lives, no more fitness activities. I’m working 50 hour weeks for this?

How much is your water bill exactly?

What car costs over a 1000 pounds a year to insure? That is insane.

Life and house insurance seems steep to.

agree with everyone on the phone comment. I was on a £10 sim only deal. My phone broke, partner tried to do a nice thing and get me a new one. Definitely shouldn’t have, I’d be happy with an older 2nd hand one but we are in it now so no getting out.

our life insurance is higher as I have a direct family history of illness. Shopped around, was the cheapest.

by evenings out, our only evenings out in the last 4 months have been our best friends weddings - couldn’t miss them 😂
1 other time have opted to have a couple of friends over for dinner instead to keep costs down.

100% agree shouldn’t be going on holiday. But also don’t think it’s unreasonable to want to go on a cheap 5 days trip after working all year with no breaks. Much cheaper than a weekend in the UK too.

We have two cars so that definitely doesn’t help. We are discussing getting rid of one and sharing. Not having at least 1 car isn’t an option as I work in the office and it’s in the middle of nowhere.

but 1 car is paid off, 1 is on a small loan not brand new or pcp etc.

just to clarify we aren’t running around in range rovers at £400 a month and wondering where our money is! 😂

I know we need to be tighter with the odd coffee etc. my point of this thread was more to see if everyone is living the same or if it’s just us.

find it mental we can’t afford to get a coffee on a walk when we both work our butts off! I know life is life and definitely a 1st world problem yes.

We had roughly your income in 2009, but just one earner, no childcare, 2 kids, one car, it was tight and we did sometimes end up using credit cards.

I think that is tight for a family to live on, especially if split over 2 incomes, so still needing childcare.

YANBU, some people on here don’t understand what it’s like

Plenty of cars cost over £1000. You have one claim, fault or not, and policy rockets up. If you’ve not renewed yours yet you’ll probably notice it’s more expensive next year anyway. We pay £150 a month for two cars. It’s how it is, inflation and all

£1200 for a mortgage isn’t necessarily a big house or an expensive area, interest rates are stupid RN

OP you have my full sympathy I hope you get your free hours soon but until then check if you’re entitled to UC x

@Didimum you do realise they are all talking about gross salary and not net right?

£6,600 per month net is the equivalent of a £137,000 salary.

And you're finding it "tight enough"?

Really?

Is there any chance one of you could take a second job in the evenings or weekends. Yes it would be absolutely shit but short term pain for long term gain and would help get the credit cards paid off.
Rather than trying to cut back on everything life might be easier if your income is increased. My parents and grandparents both had to do this.
Coming up to Christmas there will be temp jobs in retail and hospitality.

100% agree shouldn’t be going on holiday. But also don’t think it’s unreasonable to want to go on a cheap 5 days trip after working all year with no breaks. Much cheaper than a weekend in the UK too.

This is your issue though. You feel like you deserve holidays, meals out, coffees etc but the reality is that it is unreasonable if you can’t afford it. And you can’t afford it if you need to put groceries in credit by the end of the month!
You don’t have a massive income but you have relatively high outgoings. After your mortgage and childcare you still have £16-1700 per month for bills, food and spending. Honestly if you’re going into debt at the end of the month in that scenario it’s because you’re living outside if your means, not that you don’t have enough cash to get by.

This amount is easily done, ours is more like 4600 but our mortgage is much higher than OP.

OP I am not sure anyone has much left over these days, we are all just riding it out the best we can

You need to learn how to get money savvy! Few tips that's halved my spending.

Don't take bank cards out with you, just cash; that was a big saver for me. Can now go 2 months without going in a shop (do online a shopping no impulse purchases). If you do go in a shop and see something you rally like, ask 'do I need it' if, no, don't get it.

I pay arounf £6.60 per month for my phone. Good phone (out of contract) tesco sim card (run via EE network) via, quidco (https://app.quidco.com/raf/ax2v - money back and save as you spend from clothes, to cars, white goods, essentials etc).

Check MONEY SAVING Expert - no matter how good we think we are with money, their emails can teach you things to save money you didn't know existed (like quidco!)

I got my broadband package down from. £48 to £17.

I buy household essentials in bulk, despite living alone, like 48 toilet rolls for £9, swap. To washing powder instead of tablets - big box, 120 washes, £7.99.

Can cut your water usage in loads of ways, same fir gas and electric.

See if you're due any tax back, many reasons why you may be eligible.

1 takeaway a month is 1 too many. I know it's a treat, but just 1 meal worth all that cash?

Good luck

Yes, and OP’s net monthly income is £3600. Her mortgage payment of £1200 is under 35% of that.

Once your childcare bill goes you'll have loads more money. But yes you're not on high wages between you both, and you are probably overspending each month, I know you say you deserve these things but you can't have it all whilst having a hefty childcare bill. So that's a call you'll have to make if you want to keep increasing your credit card balance or if you want to cut things out whilst the childcare bill is there.

Why is it frustrating? Do you expect someone to care for your children for free? I think good childcare is worth every penny, personally.

I will add, however, that aside from mortgage payment, I agree OP’s other debt is too high on balance with that mortgage payment, at presumably £300-400 on cars and credit cards. Our mortgage is a similar % but we have no other debt.

We have Similar income to you and expenses.
£3500-4k income monthly depending on monthly bonus, £1200 childcare,£1600 mortgage and bills, £5-600 food and petrol and ten the rest just disappears on extra stuff I need to track better.

We use topcashback, chase bank and jamdoughnut to get cash back on everything we spend to build up treat pots.

Chase is 1% on most things debit card spend and has amazing savings pots and 4% interest.

Topcashback is a bit of a faff but cash back on insurances etc via gocompare and sometimes other things. (DM for link as has my name in url so don't want to share)

Jamdoughnut bit of a faff as need to buy vouchers but good cash back levels on most food places and then other too. Ref Code 4ZCM

We use cash back to build a treat fund for summer/Christmas.
Referral links in post if helpful. Probably made £200 this year so far which went to some days out for kiddo in summer and now stashing cash back for Christmas nice foods.

Use them If they help.

OP draw up your battle plan for Xmas. I used to get further bogged down through last minute preparation.