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 😂

Never understand why people say cancel Netflix, it's 19p a day pretty much the cheapest entertainment you can get its cheaper than a tv licence.

Yeah we are in same boat too, joint income around 90k but have huge childcare costs for our young family (and have done for years) and partner also has older children so there is additional child maintenance (no problem with that!) as well as student loans - so all of that comes out before we’ve even cleared our salaries.

We have a relatively low mortgage thankfully and don’t run new cars. Not massively social so it’s only occasional events.

we are counting down until both kids in school full time and old enough to walk home because wrap around is still 30£ a day :/

It's the debts. Car, credit cards and a mobile on tick. If you can chomp away at those you'll be much better off. My mum is a millionaire and happily drives a £2k estate car! Obviously nursery doesn't help either and you'll be out the other side before too long, but I would focus on getting out of the habit of spending money you don't have.

Well if you earn £3600 a month and your outgoings before food an petrol are £3200, then that only leaves you £400 a month for food, petrol and everything else. So of course you will be struggling on that.

Why are your outgoings so high? Your mortgage is £1200 and childcare £800 so that's £2000.

What are the other £1200 worth of bills? That seems a lot - is there anything you can cut back there?

£1200 is a terrifyingly large mortgage. £260 council tax suggests quite a big/higher end house which probably costs more to heat, light etc? So that could be where you could cut back. But I totally get that you may not be able to or want to. It's all relative to your area and income too (I live in one of the cheapest parts of the country).

We have the same income. Our mortgage is £800 and we don't have childcare costs. We are running out at week three too! Completely see why you are

😂 terrifyingly large?
You couldn’t buy a house for £200,000 without repayments of at least £1200 a month. Interest rates are crap.

Insurances and phone/TV are very expensive, you need to shop around and do some deals to get them lower. You can get monthly sim only deals for less than a tenner - check that you move at the end of a phone contract to a cheap sim only deal instead of continuing to pay or replacing the headset with a new one.

Presumably the car will be a 3 year loan or HP, so that will end eventually and then just keep the car rather than replacing it with another expensive monthly payment.

What kind of car is it to cost £90 per month for insurance - that's over £1k per year. We've got a £33k 1 year old car and we're paying less than £500 for fully comp insurance and that's for 3 of us, one of which is a 21 year old lad!

Our house insurance (contents and building) is £20 per month inc accidental damage, legal cover, etc.

But your list doesn't total £3,200, so what else are you spending if your £3,200 doesn't include food or petrol?

I almost spat out tea at this too?? £1200 is a dream mortgage…. In fact that’s how much ours has gone up with the rates!! Hahahahaha

not sure what you could own here with that amount!

I am beyond this life stage but it makes me sad that things are so tough for families. It’s wrong and because we have been so poorly governed 😞

The nursery years are the hardest financially - could you accept that you are going to run up a small deficit each month, then once they go to school and some money is freed up, pay it down as quickly as you can? Selling one car and keeping the one that’s fully paid off is a good option.

As for coffees out, do invest in a decent thermos flask and your favorite coffee. My local cafe sells the same coffee beans they make their brews from. You have to be a little more organized but it will still be a treat.

It’s the way you talk to yourself about money-related and lifestyle stuff that you need to change, in order to change your perception that you’re not doing well enough.

You’ve got a large-ish house I assume, from your council tax and running costs. That’s a choice. You run 2 cars, that’s a choice. You’ve said about the phones etc - that was a choice. You can’t make the childcare cheaper, that is what it is. These are the things you’re choosing to spend your money on - if your day-to-day running costs were lower (smaller house, only 1 car, no debt to repay) then you’d feel more flush with disposable income.

The upside is that you can probably cut some costs, childcare will go down in time, and you’re building wealth by paying your mortgage.

This comment absolutely cracked me up! Not heard that one before 😂

I agree. £6.99 is decent value.

Even when childcare ends if your children go to Uni it will restart. I budget £800.00 a month to help my son in Uni. He’s on a 5 or 6 year degree too 😀. I have saved the capital to help him but I’m trying to conserve that and facilitate the £800.00 into my monthly budget. It’s as hard as the nursery days.

People have different outgoings is the simple answer.

My income is less than yours, around £2.2k a month and I'm a single parent. But I have low outgoings - my rent is £500pm, I don't own a car, have no debt whatsoever, no childcare costs as DS is too old to need it now.

My disposable income after all my bills and food is about £1000 a month, which is plenty and DS and I have quite a nice life on that, obviously we are not dripping in designer clothes and flying first class but I can afford a couple of holidays a year, nice presents for DS at Christmas and birthdays, a gym subscription and coffee or a meal out when I fancy it.

A few people have mentioned the life insurance is expensive. I imagine your life cover may include income protection or a bit of critical illness cover hence it’s more than just life insurance and more expensive. Stopping that could be a bad move if you become sick - you may save £50 a month now but if you became unwell/long term sick and lost a wage the income protection will pay your wage. Personally I wouldn’t take a mortgage without long term income protection especially if we couldn’t manage on just the lower earners salary for all bills etc.

Is your council tax over 10 months? If so I’d bank the 2 x ‘free’ months in feb/March and lump that off the credit card. When the credit card is gone I’d use that to pay the house insurance or car insurance in full (if you get a better deal by paying it annually).

Why does he need £800 a month???

Totally agree with this. We scrimped so much when our kids were young, everything was second hand from charity shops ( pushchairs, sofas- nothing all brand new like young people expect today). We both worked all hours around each other I did nights and weekends, bank holidays etc and never saw each other, whilst the other looked after the kids on their own. Things picked up when the kids were teenagers and we were better off and had a couple of foreign holidays and a nicer life. Now we are back to square one - 2 kids at Uni at the same time and trying to help them both. Health is not great for either of us, for me probably worsened by working a stressful shift work job for years on end. neither can even consider retiring until the kids finish Uni unless health forces us too. We just plod on as best we can and thankful the mortgage is paid off.

But there are several threads about uni. Average amount parents contribute is £149 per month. Look it up. Why are you having to spend so much on uni?

Are they unable to work at uni?

OP I think most people regardless of income are finding they have less. It’s really unfortunate for people where time they have young kids and high childcare costs is just as inflation went a bit crazy. It will get easier as your childcare costs decrease.

Ha. I certainly won't be doing this. DS will have to get a job.

Student loan available is dependent on what parents earn. If they are middle-high earners suspect the loans won’t cover basics like housing and course texts etc.

That’s not a particularly high household income for 2 people working. A lot of people earn that each.

My company pays a life insurance package for us which is quite good, it doesn't include critical illness though so I pay a seperate one for that.