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 😂

Then you move to somewhere cheaper. Around here £1600 would rent a mansion, and it's by no means a dodgy area - it's just not in the South.

your household 'running' costs are huge and your salaries aren't. is the car on a payment plan, can you switch to a cheaper one? are the debts historical - what are your CCs being used for now? stop using credit, consolidate and speak to a debt charity if necessary.

your mortgage is also pretty big, did you do all the calculations carefully before taking it on? is downsizing an option?

I think for the years you are paying childcare, you need to adjust your thinking a bit.

You have a mortgage. You're paying childcare. You're running two cars, one of which isn't paid off yet. You're paying off credit card debt, you've got a decent phone, you're going on an overseas holiday. You buy coffees when you're out (sometimes). On your take home pay, it sounds reasonable.

One interesting exercise is to work out how much take-home money you earn each hour/30 minutes/15 minutes. Once you know that, then consider how much you want that coffee whilst your out, or want that new pair of shoes. Once you know how many hours you have to work for something, it's perceived value to you can often change.

£3,600 net is at least £62,000 gross, even if only paying 5% into a pension.

I don't think it's that common for 2 people in a household to be earning that much each in the north at all.

£60k is top 10% across the whole UK, let alone in the north.

Private sector professionals in their 40s (i.e. with established careers) is a group that you'd expect to be in (or nearly in) the top 10% though. For professionals, your 40s is often your period of peak earnings.

Also, people often partner up with someone who has a similar level of qualifications to them, so they tend to self select partners of similar earning potential.

I'm not saying that's a low or even average income - it definitely isn't! But it's also not incredibly rare or unusual. Top 10% means 1 in 10 people have an income that high, which is a lot of people.

From reading your replies to people - your extra money is going on -

Car loan/second car
Credit card repayments
Phone contracts
High mortgage
Life insurance

3 of those things can be sorted easily - car loan/second expenses ,phone contracts (get PAYG) and cancel the life insurance.

Get some advice on your credit card debts (call CAB).

Look at moving to a cheaper area.

£3600 take home is a lot for 2 adults and 1 young child.

gotomomo: Op said her mortgage is £1200 and childcare £800 so add that to your 1k bills without mortgage and childcare and you can see how it adds up to 3,200 quite easily.

@FlyingSoap I will never be well off enough to buy a £200k house. Mine was valued at £65k when I took out my mortgage 6 years ago. I know almost everywhere else is more expensive but this is why the idea of owing £1200 a month as a single parent would be scary, we're not used to or paid for high house prices here.

Where do you live?

I haven’t read all the posts etc but yeah your childcare bill is horrendous. Is there anything you can do about that? An au pair/ nanny / swapping f hours around so you and dp are off and can do childcare to save a bit. Compressed hours or something? X x

North Lincs.

Thanks

It sounds pretty reasonable to me. I used to pay £600 a month for 3 days a week for 1 child 20 years ago. A friend who is just coming to the end of mat leave is paying over £1K a month for 4 days a week, which is pretty par for the course where we are.

Considering you jointly earn less than two average UK salaries, you’re doing well to own a house in the south.

For those saying your insurances are high, they’re really not. If you have any kind of illness or family history, your life insurance will cost more. If you have a flat roof or have had to make any house insurance claims, your house insurance will be more. We have a flat roof and no claims; the cheapest we could renew for this year was £39/month.

I don't mean to sound mean but bring your own flask out with you on trips to save wasting money on frivalties.

My own DM says she never has money but always seems to have money for her hair to get regularly cut and coloured? Doesn't make sense. They do have money but just choose to spend it unwisely 🤷🏻

Whereas I get my hair cut three times a year usually. Saves a fortune in comparison.

You need a better paid job! £3600 between two people is not much. No wonder you are skint.

I make more than that just on my own and my husband makes more than double my income. Im not saying this to brag but to give you context why others can afford a lot more and I have only recently started to earn much higher wages until I really applied myself to earning more.

You need to find a way to earn more money so you’ll be more comfortable as there’s as you are already bare bones already with your current expenses.

Her childcare bill is ridiculously cheap! Ours is £2k a month for 1 child full time. That’s the average cost of childcare with no govt support in the south of England

Similar here. Joint income £4000, no childcare but bus passes and school meals at £300 a month, plus £100 for activities (4dc) and £150 regular vet bill excess and pet insurance. Council tax and utilities slightly higher than yours, but food for 6 is a major expense At around £700 a month. What was à comfortable income has become uncomfortable as food, fuel and mortgage increase.